We have seen the interest rate market calm down in the last week where as 30 year money is back in the 5.25% – 5.375% range, 15 year 4.75% – 4.875%. I expect this trend to continue and we should see rates settle back to 5%. This past week we saw foreign investors purchase nearly 60% of the U.S. treasures or debt issued by the U.S. Government. That is a big number and a positive indicator for lower rates.

Demand Strong for Treasury Debt

With major economic data, large Treasury auctions, and a Fed meeting on the schedule, it was a busy week for mortgage markets. In the end, it was the Treasury auctions which had the greatest impact on mortgage rates. Demand was very strong at the auctions, which pushed mortgage rates lower. Wednesday’s Fed announcement and mixed economic data were roughly neutral for mortgage rates.

Much of the rise in interest rates we saw in late May and early June was due to concern about the enormous supply of debt the government needs to issue to pay for all the stimulus programs. The question was whether investors would require significantly higher yields to continue purchasing bonds. Strong demand from both domestic and foreign investors at this week’s Treasury auctions eased those concerns for now and helped mortgage rates to reverse some of their recent increases.

As expected, the Fed made no change in the fed funds rate. However, investor expectations varied widely for the Fed’s statement, but the statement revealed no significant shifts in policy. In particular, there was no change in the timing or the quantity of future MBS and Treasury purchases. In addition, the statement contained no discussion about exit strategies to eventually unwind Fed stimulus programs. Overall, the Fed simply held the course, and mortgage rates were nearly unchanged after the news.

In the housing sector, May Existing Home Sales rose 2.4%. It was the first time since September 2005 that Existing Home Sales increased for two months in a row. The inventory of unsold homes declined to a 9.6-month supply from a 10.1-month supply in April. A NAR survey revealed that 29% of sales were to first-time homebuyers, helped by the $8,000 tax credit, low mortgage rates, and favorable affordability levels.

Weekly Mortgage Update Courtesy Of:

Darrin L. Kresevic, Sr. V.P., Loan Officer, LPO Manager

First Place Bank          440 349 7550

6150 Enterprise Parkway – Solon Ohio 44139

Assistant – Janice Zabish Direct – 440 349 7562

 Lending seventeen years of Mortgage Banking experience

To reach Darrin and many other outstanding business people in our community,

please look at our website:          business and services section

Jim & Joan Norbuta

Realtor

RE/MAX TRADITIONS

Serving the communites of Aurora, Auburn, Bainbridge Township, Chagrin Falls, Solon, Twinsburg, and all of the Chagrin Valley.  Call us for referrals to outstanding RE/MAX agents in other communities.

HGTV has brought together some of the top real estate experts to compile the definitive list of the biggest mistakes we all make when buying and selling our homes.

Do not buy a house based on its current decor.

25. Buying a House for Its Decor

Remember that you are buying the house, not the things inside it, so make sure you see beyond the decorations and look at the bones of the home. Focus on the floor plan and the square footage. You also might want to measure the dimensions and graph out how that’s going to work with your belongings.

24. Not Providing Easy Access for Showings

Make your house easily accessible to potential buyers. If there’s nowhere to park or it’s difficult to get into, buyers may just skip it and look at someone else’s property.

23. Not Researching the Neighborhood

It’s absolutely critical that you research the neighborhood before you buy. Check out the area, amenities and the school system to be sure that your address corresponds with the correct school district. Also attend a community meeting, if possible. You’re not just buying a house, you’re buying a piece of that real estate and the land around it.

22. Losing Money With Auctions

While the starting bidding price for a house on auction might be a good deal, it doesn’t mean the final price will be. Make sure that you are very strict with your budget when you are bidding; do not go over your final price because you got wrapped up in the excitement of a bidding war. Another thing to keep in mind is that when you buy a property at auction, you aren’t able to get any of the warrantees or guarantees, and you are not able to do a home inspection. Find out if the auctioneer is going to add those charges on top of the sale price as well as if there are any liens on the property. You could be responsible for paying the property taxes on that house you just bought, which could make what looks like a good deal into a really bad deal.

21. Trying to Make the “Hard Sell” While Showing

If you are selling your house, you really shouldn’t be around at the open house. You might want to try to sell the place on all the reasons you think the house is great, but that might not translate to the buyer. If you leave, you allow the buyers to give unbiased objective feedback to the agent, which is only going to help you in the end.

You don’t have to wait until the weather is nice to put your home on the market. That’s a common real estate myth.

20. Waiting Until Spring to Sell Your House

Spring is the busiest real estate activity period, but that does not mean that people don’t buy houses 365 days of the year. That doesn’t mean you can’t emphasize your home’s seasonal amenities.

19. Treating Real Estate Like the Stock Market

When the real estate market is really hot and is appreciating really fast, people tend to look at it like it’s the stock market. But playing real estate is nothing like the stock market; when you invest in real estate, you really need to take a long-term approach.

18. Failing to Market Your Home in Different Ways

Don’t market your home with just a “for sale” sign. Explore other marketing tools as well. Talk to your real estate agent about the marketing that he or she will do. It’s something that should be set up from the initial signing of a contract with an agent. Some homes have virtual tours and photographs online. If you choose to go that route, don’t forget to include the floor plans. That way, people can see the layout of your home and know if it’s right for them.

17. Not Thinking About Resale

When you are decorating and renovating your home, you need to think about what is going to appeal to a broad section of buyers when it comes time to sell it. Buying houses and being in the real estate market is like chess: You always want to look two or three steps ahead in the game.

16. Buying Without Actually Seeing the Property

It’s really easy to buy a house without seeing it because of the Internet and virtual tours, but virtual tours can be deceiving. Plus, it’s really hard to actually get a sense and feel of a home by only looking at it online. You need to actually walk through the place yourself. If that’s just not possible, hire an inspector to go look at the property and provide you with an assessment.

15. Trusting Everything a Real Estate Advertisement Says

Don’t assume every ad is fact. Learn to decipher real estate lingo. For example, “cozy” means small, and “as is” means it’s a fixer-upper. If there are a lot of exclamation points in an ad, it’s because there is so little to say about the place. Follow the old adage: If it sounds too good to be true, it probably is.

14. Picking the Wrong Agent

Treat meetings with agents like a job interview because that’s really how it works. Keep in mind that the person is going to be working for you. Talk to your friends who’ve sold houses and had good experiences with their particular agent, and go to open houses and observe how that agent interacts with other people. It’s also a good idea to meet with the agent in their office. It allows you to see how organized he or she is, what kind of environment they work in and whether that’s conducive to being able to do a good job for you.

13. Not Hiring an Agent

There’s a lot more to selling a house than just putting a sign on the front lawn. If you don’t have an agent, you will not get on the multiple-listing service (MLS). That means that other agents are not going to know that your property is for sale. Another thing to consider is if you are willing to show the house each time someone wants to come by and look at it. If you do plan to sell your house on your own, be sure to have a lawyer present at the closing. It’s really important to have someone on your side who understands all the complexities.

12. Buying the Most Expensive Home on the Block

The most expensive house will only depreciate in value over time, rather than appreciate, which is what you want. Also, those houses are often not the first house to sell because they are usually overbuilt to the neighborhood. It’s absolutely critical that you research the neighborhood before you buy to find out what the price point should be.

11. Not Setting a Realistic Budget

Just because the bank prequalifies you for a loan amount of $400,000 doesn’t mean you can afford to make that payment every month. Before hitting the streets for a house hunt, you should sit down and make a monthly budget of what you spend every month. Come up with a number that you are comfortable spending on your mortgage payment, aside from those other expenditures. An easy way to do this is to take a third of your gross income and have that figure be the number you spend on the house. It is also a good idea to have six to nine months of mortgage payments in the bank, plus a little extra if you have any repairs that you might need to do.

10. Visiting the House Only Once

It’s important to visit a house more than once because the neighborhood itself may be very different, depending on the day of the week and the time of day. It’s also a good idea to go home and think about it, even sleep on it, before you go back again.

9. Not Being Pro-Active at Closing

The best thing to do when going into a closing is to get all the paperwork ahead of time. All that information should come from a mortgage broker or banker. They have what they call a HUD (Housing and Urban Development) One form that lists all the charges, and you can legally get it in your hands 24 hours before closing. Schedule the closing for in the morning, so you have a fresh mind and plenty of time to go over everything and to ask questions. The final walk-through is another imperative part of the process. You may want to have a home inspector accompany you.

Don’t feel like you have to tackle major renovations before placing your home on the market. Touch-ups here and there, especially outside the home, typically do the trick.

8. Doing Major Renovations/Remodeling Before Selling

Minor upgrades usually have a higher return on your money than tackling major renovations before placing a home on the market. The main reason? Huge construction projects always cost more than you think they will, and they also take longer than you expect. The best place to spend money is outside. Research shows that increasing the curb appeal often returns the most value on your money. It’s what gets buyers inside the house.

7. Skipping the Loan Pre-Approval Step

When you are pre-approved, the bank is saying, “we will give you a mortgage of up to this amount, so now all you have to do is find your home.” Some sellers only allow real estate agents to show their house if someone has a pre-approved letter. That indicates that the shopper really is serious about buying a home.

6. Falling in Love With the First Property You See

Many homebuyers, particularly first-time homebuyers, fall into the trap of falling in love with the very first house that they see. You need to at least look at three more houses in the area to get an idea of what the comparables are in that price range. You want your real estate agent to show you homes comparable to what you saw. At the end of the day, re-evaluate.

Be sure to hire a home inspector to thoroughly check out a house you are interested in purchasing.

5. Buying a Home Without a Professional Inspection

There are a lot of things a home inspection can reveal about a property that are not visible to the naked eye. Be sure to hire someone who comes with a good referral basis, who’s been in the business a while and knows what to look for. Look up the American Society of Home Inspectors and get a list of qualified home inspectors in your area. Once you find an inspector, insist that they compile a written report, complete with photos. Photographs are important because there are areas a home inspector will go that you might not look at.

4. Overlooking the Extra and Hidden Costs

Buying a home is not just about the money that you spend upfront; it’s about all the rest of the money you have to spend beyond that. Find out what the property taxes are, what your water bill might be and what a standard electric bill is in that home, especially if you have electric heat instead of gas heat. You also need to factor in furnishings you may need to purchase before you can move in.

3. Buying What You Want, Not What You Need

Look at the space that you are already living in. It will help you to realize what you have been missing and what you need in your next home. Make a list of those needs and then ask your agent to start shopping based on those needs. On average, Americans live in a house for about nine years. Remember, you can always trade up a few times before you find the ultimate home.

2. Setting Too High of a Sale Price

As a seller, it’s really important to do your research. To come up with your sale price, look up what comparable homes in your neighborhood have sold for. Figure out what the going price is and try to put yours right in the middle of that, unless you have something extra-special to offer. It’s always better to price a home that way than to start too high and have to reduce. Once you reduce, it always looks like something is wrong with the home.

1. Failing to Showcase Your Home and Making Small Cosmetic Changes

When you are selling your house, you have to really look at it objectively and think about it from the viewpoint of the house hunter. Make minor enhancements to the house and maybe hire a professional stager to come and arrange your furniture. Staging is about decorating your house for the buyers’ taste, not yours. A great place to start is with the front of the home and the main entryway. Home staging is designed to increase the potential selling price and reduce the amount of time the house stays on the market.

This is a very good article that we think you will find helpful.  In our opinion, here’s one that they missed:

When shopping for a mortgage, be sure that you understand your total cost, not just your interest rate… and you don’t want any surprises 6 hours before closing.  Ask a lender for a HUD-1 statement so that you understand the total cost of your loan.

Can you think of another that HGTV missed ?      We hope that you’ll share it with us.

Many Blessings,

Jim & Joan Norbuta

Realtor

RE/MAX TRADITIONS

Serving the communites of Aurora, Auburn, Bainbridge Township, Chagrin Falls, Solon, Twinsburg, and all of the Chagrin Valley.  Call us for referrals to outstanding RE/MAX agents in other communities.

Are you ready for this….it’s a possibility that we will see a $15,000 tax credit for ALL home buyers.  As reported in USA Today, there are many potential changes to the housing bill that currently gives first time buyers an $8,000 tax credit, depending on their income.

The proposed bill would change the amount of the credit to $15,000, eliminate the income restrictions, and give access to ALL HOME BUYERS. 

Along with the terrific interest rates that are still available, this would certainly give a boost to home sellers.  We do business on the southeast side of Greater Cleveland (Chagrin Valley), focusing on Solon, Chagrin Falls, Bainbridge Township, Twinsburg, Aurora, and Chesterland.  If you are relocating, check out the relocation section of our website.  We can also refer you to outstanding REMAX realtors in any part of Greater Cleveland.

Contact us if you have any questions.

This week’s Consumer Price Index (CPI) and Producer Price Index (PPI) data indicated that inflation is not a concern in the short-term. A significant decline in energy prices from one year ago resulted in a very low overall annual inflation rate. Even Core CPI, which excludes food and energy, rose at a tame 1.8% annual rate. However, the benefits from the favorable inflation news was offset by stronger than expected economic growth data. In particular, the Philadelphia Fed manufacturing index showed surprising improvement. In addition, May Housing Starts rose 17% from April, while Building Permits, a leading indicator of future activity, also exceeded expectations. This week’s data sets the stage for next week’s Fed meeting. With inflation currently low but at risk of increasing if the economy continues to improve, the Fed may be reluctant to introduce more stimulus, opting instead to wait and see how the economy performs.

President Obama this week proposed broad new rules for regulating the financial system. One proposal under the Obama plan would create a consumer protection agency which would have the authority to set rules for the mortgage industry. The details may not be known for quite a while, as the plan now faces a lengthy debate in Congress.

Also Notable:

• The -1.3% decline in CPI from one year earlier was the largest annual decline since 1950
• Continuing Jobless Claims fell for the first time in twenty weeks
• The Fed’s Bullard predicted that the economy will begin to improve during the third quarter
• The Fed purchased $20 billion in agency MBS during the week ending 6/17

Weekly Mortgage Update Courtesy Of:

Darrin L. Kresevic, Sr. V.P., Loan Officer, LPO Manager

First Place Bank          440 349 7550

6150 Enterprise Parkway – Solon Ohio 44139

Assistant – Janice Zabish Direct – 440 349 7562

Lending seventeen years of Mortgage Banking experience

To reach Darrin and many other outstanding business people in our community,

please look at our website:          business and services section

• the recent economic data has shown some small signs of improvement
• concern about inflation due to the substantial amount of debt the U.S government has issued / continues to issue
• and lastly, the big concern which is not heavily publicized….foreign investment or the lack there of.

Did you realize that foreign investors, namely China and Japan purchase up to 40% of our debt (U.S. Treasuries). One of the major fears the past few weeks is that foreign investors stop buying our debt. As of yesterday we are starting to see some stabilization in the interest rate market which is helping rates ease back down. Current 30 year rates are averaging 5.625% and 15 year 5.125%. I am willing to go out on a limb and say we should see an additional .50% improvement in the coming weeks/months.

For my readers who are realtors you may want to check with the lenders on your deals to confirm the rate lock. If closing dates are missed (which I have heard some buzz it is happening more often) it is possible locks will expire AND rates will be adjusted up to current levels. Don’t get me wrong, current levels are still historically outstanding just not the 4.50 – 4.875% that many may have locked into.

Week Ahead

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Tuesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Wednesday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Industrial Production and Housing Starts will be released on Tuesday. The Empire State and Philadelphia Fed regional manufacturing indexes will round out the schedule.

Weekly Mortgage Update Courtesy Of: 

Darrin L. Kresevic, Sr. V.P., Loan Officer, LPO Manager

 First Place Bank          440 349 7550       

6150 Enterprise Parkway – Solon Ohio 44139

Assistant – Janice Zabish Direct – 440 349 7562

 Lending seventeen years of Mortgage Banking experience

To reach Darrin and many other outstanding business people in our community,

please look at our website:          business and services section