May

22

Challenges to Getting a Short Sale Done

Filed Under Long Island Short Sales, Sellers | Comments Off




If you are struggling right now with paying your mortgage, you may be wondering what challenges exist when trying to get a short sale done in order to avoid foreclosure. Among many things, you of course may be in disbelief that this is happening to you and you may also be worried about things like where you’re going to live once you have to move out.

All things like this are tough to think about and I have spoken to enough homeowners, young and old, that have poured their feelings out to me over their situation. One thing I want to make clear though is, this challenge in your life is not just going away.

When I meet with homeowners who have lost their home to foreclosure (after the bank has foreclosed and the homeowners become “occupants”, no owners), I always ask them why they didn’t consider a short sale, even as a last resort. Almost all say that they just thought the problem would go away or that somehow, things would change.

When homeowners call me to discuss negotiating a short sale with their lender, I try to be the voice of sound mind. I try to present the facts and stick to them.

One of the facts about negotiating with your lender to sell your home for less than what you owe on the mortgage is, putting the package together. There are many challenges to getting a short sale done. And here’s the thing about that.

It’s tough enough for families to experience the scenario of losing their home. The last thing you want is to hire a real estate agent and an attorney who do not know what they’re doing when it comes to completing a short sale. They may sound very nice and listen very intently. The agent might even offer very kind words of encouragement and offer a warm smile.

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May

13

Is Now a Good Time to Buy a Home?

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Recently, Gallup conducted a poll asking, “Is now a good time to buy a home?” The respondents overwhelmingly stated that it was. Over 72% of Americans feel that now is a great time to buy.
Gallup Poll says 72% of Americans think it is a good time to buy a house

So what does that mean to you as a buyer? I would say that it doesn’t mean much at all. Who cares if nearly 3 in 4 people think it’s a good time to buy. They’re not going to be paying the mortgage!

But let’s dig a little deeper and find some reasons that do make sense. Let’s start with the cost of price.
Cost Vs Price
In this example, the cost of a $200,000 loan in 2003 would be $1232.74. That same loan amount today would cost $1087.13. That’s a difference of $145.61. The cost is your out of pocket expenses for borrowing money to pay a price. Prices are down nearly 40% from peak.

The real beauty of this real estate market, even for sellers, is that the cost of borrowing money is so cheap in comparison to “normal” mortgage markets. That’s a real reason that makes this real estate market great. Prices are at or near 2003 levels, so as you buy today, you’re paying at or below 2003 levels (seven years ago) and the money you borrow is cheap!

Real Estate Prices at 2003 levels

The more I speak with buyers, the more I get a sense that many are still worrying about whether or not now is the time to buy. And I’ve been saying the same thing since 2008; With rates so low and the market down, anytime you buy now, is a good time to buy.

And now that prices are down even further and mortgage rates are still historically low, it shouldn’t take a “salesperson” to “sell” you on the idea that it’s a good time to buy, the salesman in your head should be screaming at you, “Buy now!”
Average Mortgage Rates

With all this information at your hands, let’s continue digging to see more evidence that helps you understand why now is a good time to buy. I want to talk about the average mortgage rates or “normal range” of rates. Since 1995, the average mortgage rates are between 5.83% and 8.05% (Source Federal Reserve). That’s a 6.94% average mortgage rate, meaning that’s the average mortgage interest rate since 1995. Wow!

With mortgage rates currently at around 5.10% for prime buyers, that’s a difference of 1.84% in the rate. That’s incredible. As I type this article, I’m thinking of the words to describe the advantages of such a low rate and the only word I can come with is ‘incredible’.

Now of course, the party must come to an end. I’ve been talking about how the federal government has stopped purchases of Mortgage Backed Securities which was helping keep the mortgage rate low. Since they’ve stopped it, we’ve seen the rate go up fairly quickly.
Mortgage Rates Since December 2009
What does this mean for you?

If you’re a buyer, it means you’re going to pay more and I suggest looking at the impact that will have on your buying power.

If you’re a seller, it means the buyer(s) looking at your home will pay less as the cost of the money they borrow goes up. Just as you would expect, if you went in to buy a home now, you would ultimately look at what you can afford in terms of monthly payment. The more the payment goes up, the less you can afford. Thus, the less buyers can afford overall will drive down the price of not just your home, but all homes.

Of course you’re home is only worth a monetary number, when you call me and want to sell it. Otherwise, it’s your home and you live there and the “value” is experienced not monetarily but in reality. However, I’ve seen many homeowners say in 2007, “I don’t need to sell.”

And then in 2008, they call me and said, “I really want to sell”.

And then in 2009, they said, “I have to sell”.

And the end result was…they lost nearly 35% of their value…monetarily speaking.

If you’re thinking of selling, my message has been the same since 2007. If you really, realistically, need to sell your home, waiting will not do you any further good. For every 1% the mortgage rate goes up, prices will need to adjust 10% down.

Once again, I hope the information I provide here on my website was helpful. I go out of my way to keep it honest and I do my best to get only the most accurate information and valid sources to bring you valuable insight.

If you’re thinking of selling or buying a home or both, please contact me at (631)831-9048.

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(c) Copyright 2010 www.tommcgiveron.com
By Thomas M. McGiveron, LSA

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May

1

Long Island Real Estate Market At 2003 Levels…With 5% Int Rates!

Filed Under Buyers | Comments Off




These video’s feature me discussing the Long Island real estate market being at 2003 levels and the relationship to the benefit of buying now, even after the tax credit ending. I’m discussing the interest rate and the savings you’ll benefit from, by taking seriously, the buying power you have today.

Part 1

Part 2

Call me with any questions or to schedule an appointment – (631)831-9048.

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