Perpetuum Jazzile is an a cappella jazz choir from Slovenia. It’s hard to think of something further from an ‘80s rock band. But their version of Africa may best the original. The group has amazing voices.
The beginning of this video is really striking. Group members simulate an African thunderstorm with their hands. It’s really something to see and hear. (Turn up your speakers.)
Been paying your mortgage on time, even despite struggling to just to make ends meet? Are you already late on your payments and barely hanging on? If you're wondering where your "Bail-out" is, well here you go!
The Homeowner Affordability and Stability Plan, recently announced by the Obama Administration, may be the very thing that many of us have needed.
There are two separate parts to the plan: a refinancing initiative and a loan modification plan.
The Refinancing Plan allows some homeowners to refinance their loans that are backed by either Fannie Mae or Freddie Mac. Homeowners must owe between 80 and 105% of the property's current value and they cannot have been more than 30 days late on their mortgage payments for the last 12 months.
The Loan Modification Plan helps homeowners that are already late on payments and/or are in danger of going into default. If you have suffered a serious hardship such as an interest rate hike, high mortgage debt-to-income, a sudden decline in income, being upside-down on your loan (owing more than the house is worth,) or can demonstrate reasons why you might be in danger of going into default, you should qualify. (As long as you don't owe more than $729,750.
If you do qualify for the LMP, the government would lower your payment to 31% of your current monthly income. How's that sound? For some of us, this is an absolute Godsend.
Here's how it works: Your monthly payment is lowered to 31% of your monthly income (including taxes and insurance) and then every five years, the interest rate increases 1%, but never exceeds your current interest rate! In other words, you enjoy substantial savings now, when you need it, and don't have to worry about your payment ever increasing beyond what it is now.
The program is designed to help homeowners that did not knowingly purchase homes that they could not afford; rather, it is designed to offer assistance to those who made honest purchases and are now in need of help. Unfortunately, the program offers no help to those who are unemployed or for those who cannot demonstrate any means of making a reasonable payment.
Want another reason to buy a home in 2009? How about an $8000 tax credit? Buyers purchasing homes between January 1, 2009 and November 30, 2009 who make less than $75,000 per year (or $150,000 per couple) and haven't owned a home in the last three years (first-timers) can qualify for the credit. These buyers do have to stay in their home for at least three years or will be required to pay it back.
Got questions? Want to do a little research?
Here's a link to the White House where the plan is discussed in detail:
Of course, your current lender should be able to provide you with all the information you need to help determine if you qualify and how to proceed.
If you've been hearing about all the bailout money going to the banks and super corporations like AIG and have been wondering.."Where's my Bailout?", well this might very be the help you've been looking for.
Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified Realtor® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .
Sometimes we Real Estate people need to be reminded that the process of buying a home may not be a 100% clear to everybody, so that's what we're going to talk about today. The following guide is meant to spell out exactly what you need to do to buy a house from step one, to the final close of escrow, when the keys are in your hands and the house (and the mortgage) is finally yours. Here's the process:
Step One: Decide how much money you can afford to spend each month on your new home. Bear in mind that this is different than what amount of money your lender will approve (we'll get to lenders later.) Before you even consider a purchase price, what you need to do at this stage is to carefully consider your budget and decide what monthly payment you'll be able to afford on your mortgage. While you're at it, factor into that consideration that a new home will typically cost more for a lot of other things as well, like the electricity, gas, possible water and sewer charges, home owner's association fees, and other things that you may not have anticipated, especially if you're currently renting something like an apartment. If you don't take great care with this step, you might be in for a rude awakening once you actually purchase and are faced with a whole new set of bills rolling in that you hadn't expected.
Step Two: Shop for rates, talk to a Lender and get yourselfPre-Qualified for financing before you start to look at houses. If you're not sure where to begin, ask your local Real Estate Professional for recommendations. Having a letter in hand from a lender saying you're qualified and ready to proceed can be a tremendous tool that will strengthen your offer when your ready to buy. It will also take away an enormous amount of stress that you don't need in the first place.
Be careful with the financing. Interest Only, variable (ARM,) or other non-traditional loans often have enticing rates to begin with that might make a home normally out of your reach seem affordable. As has been all over the news lately, these types of loans can be trouble if taken out for the wrong reasons. Generally speaking, if you intend to remain in a home more than just a few years, a fixed rate, long-term loan is preferable. However, talk in depth with your lender about exactly what your plans are over the term of your loan. Know the details of any loan you're getting and the reasons why.
Step Three: Shop for a REALTOR®. Remember, not all Real Estate agents/brokers are REALTORS. Realtors belong to the National Association of Realtors and are bound by a particular Code of Ethics that sets them apart from just any agent. Once you've decided with whom you would like to work, bear in mind that your new Realtor has access to ALL the available properties for sale in the "Multiple Listing Service." What's that?
The Multiple Listing Service is a cooperative arrangement between most Real Estate Brokers to pool information about Real Estate for sale into a common database from which all cooperating members can access. When one company lists a house, that information is shared with all cooperating companies. In most cases any commissions generated by the sale of such a property are then split between the listing agency and the selling agency. It's a win-win arrangement that allows listings to be effectively shared amongst the membership.
In other words (and this is important,) real estate brokers don't just sell their own company's listings, they can sell any within their MLS. This is extremely important for the seller as well. Because information is shared among brokers and a broker is not limited to selling property listed within his/her agency, that broker is capable of doing extensive research via the MLS for his clients. Once you've decided on a Realtor, you can trust he or she will have access to every property available, relieving you from feeling the need to have more than one agent working at once.
By the way, 99% of the time, you don't pay a thing to that Realtor that represents you as a buyer. There are some instances when a buyer owes a commission, but generally speaking that's not the case, so as a buyer, don't worry about paying a Realtor.
Step 4: Go shopping with your Realtor, and find a house.
Step 5: Once you've found the house you want, the next step is to make an offer. We say "offer" because it's just that. A house may be listed at a particular price, but that asking price is not always what is paid in the end. This critical step is one of the reasons you will need a good Realtor to help you along. Just what is said at this stage, when it's said, and to whom and how, may involve important strategic considerations that your Realtor will need to help you with, so be very careful here.
Let's say the house you want is listed at $150,000. After discussing it with your broker, you may decide to offer say, $145,000 but with conditions. What conditions? Anything from inspections, to repairs, to having the property's corners marked, might be included with your offer as a condition. Or, you may decide to make an offer without conditions; it's really up to you.
Once your offer is presented, the seller can accept your offer, reject that offer, or, as is often the case, return to you what is known as a "Counter Offer" stating just what they are willing to accept. Once this "Counter" is presented back to you, the very same options of accepting, rejecting or countering back are now in your hands. Offers and counter-offers can go back and forth indefinitely until both sides come to terms that are satisfactory. We call this stage "Mutual Acceptance."
One thing I didn't mention was the Earnest Money that is usually included with your initial offer. Earnest Money is consideration included with your offer in order to demonstrate to a seller just how serious you are. This money is, in some cases, non-refundable to you and is meant as compensation to the seller in return for taking that home off the market while all the details are settled prior to actually closing the deal. In other words, you need to make double-darned sure you want that house before submitting an offer, otherwise, without good reason, if you back out of the deal before it closes, you could lose that money. Now, don't get worried; if the seller rejects your offer, or presents a counter that isn't acceptable to you, you'll get the earnest back. Your earnest money is refundable in some other cases when a deal fails as well, but exactly when, and when it is not, is something you need to discuss in depth with your Realtor.
Step Six (ESCROW): Escrow is a general term that describes where the deal resides between the time you have a mutually accepted offer, and the time you actually close the deal. When we say a deal is "in escrow" we are saying that we have a deal waiting to close once all the necessary components have been gathered and investigations (or due-diligence has completed.) Once you have a mutually accepted offer, copies of all the paperwork and the actual earnest money is placed "in escrow" with a title company. The Title Company acts as a neutral third-party in all instances and is an essential and important player in the process. The Title Company conducts what is known as a "title search" to research what is necessary to make a clean transfer of the ownership of that property from one party to another. Who knows, there may be liens, lawsuits, or other "encumbrances" tied to that property that may prevent a clean transfer, and often these so-called encumbrances are unknown by either party until the title search is actually conducted.
Step Seven.. "The Signing" (sometimes confused as "The Close"): Once all the title searches are completed, all the paperwork is gathered, financing is finalized, etc., the Title Company usually acts as the facilitator of the signing. At the signing, you will then be, well, signing a lot of paperwork and sometimes presenting money for closing costs. Closing costs vary greatly depending on how your deal was structured and what your lender may or may not require. In Oregon, you may, or may not sign when the opposite party signs. As a matter of fact, you probably won't even see the other party at all. Once each party has signed, the deal has not "closed" necessarily. That comes next.
Step Eight... "The Close": The close refers to the point in time when the actual transfer and recording of Title has occurred; which doesn't necessarily happen at the time, or even the day of the signing. We Realtors are often guilty of referring to the signing as the "the close" but that's an unfortunate practice that can sometimes lead to problems. I made that mistake with one of my very first deals, and have never forgotten the trouble I almost caused my client who expected to move in to his house directly after signing the paperwork. The close can happen the day of signing, but don't ever count on it. Your Realtor, and/or the Title Company will always notify you immediately, once the deal has funded and recorded, marking the time when that home has officially become yours.
Eight steps is only the briefest summary of all that is necessary to put you into a house. The fine details to consider, such as the timing of offers, when they might expire, how long you have, or do not have, to complete inspections and other "due-diligence" items, how to deal with third parties, Title Companies, Escrow Officers, etc., etc are the kinds of things that only your Realtor can fully explain. If you're considering buying a home, talk with your local professional; you'll be glad that you did in the end. Finding a Realtor that works for you is set at step three here, but it may turn out to be the most important step in the process.
Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified Realtor® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .
Hire a local Real Estate Professional. You'll be glad you did in the end. Your local Real Estate professional is your advocate in every regard whose job is to provide you with all possible information and/or services that will be of benefit throughout the transaction. A lot of footwork is needed during any Real Estate deal, and you will need and appreciate the resources that can be made available to you via your local Broker. These days, especially if you're selling, you need a REALTOR® now more than ever.
Shop for loan rates and Pre-Qualify for financingbefore you start to look at houses. If you're not sure where to begin, ask your local Real Estate Professional for recommendations. Having a letter in hand from a lender saying you're qualified and ready to proceed can be a tremendous tool that will strengthen your offer when your ready to buy. It will also take away an enormous amount of stress that you don't need in the first place.
Be careful with the financing. Interest-Only, variable (ARM,) or other non-traditional loans often have enticing rates to begin with that might make a home normally out of your reach seem affordable. As has been all over the news lately, these types of loans can be trouble if taken out for the wrong reasons. Generally speaking, if you intend to remain in a home more than just a few years, a fixed rate, long term loan is preferable. Conversely, if you intend to be selling within a couple years anyway, (and hopefully at a profit) it doesn't make sense to spend more cash than is necessary every month on a fixed rate loan (generally.. however, rates are crazy low right now, even on fixed 30s.) Talk in depth with your lender about exactly what your plans are over the term of your loan. Know the details of any loan you're getting and the reasons why.
Long term loans shorter than 30 years will pay off your home much faster, but be careful. Instead of locking yourself down into a 15 year loan (for example) in lieu of the traditional 30, get a thirty year loan and double up your payment, or at least make a practice of paying extra money each month toward the loan "principle." (Do the math.. it's amazing.) By using the extra-to-principle method, you will always have the optional safety valve, during hard-times, of simply paying the actual amount due on the your loan (and not the accelerated amount) when or if cash ever becomes hard to come by. If you lock yourself down to say, a fifteen-year loan, that monthly amount due is set.
Don't buy more house than you can afford. Most of the time, with good credit, the majority of buyers can be approved for more loan, and consequently more house, than they can really afford. Don't let anyone push you past your financial limits. The combination of excitement, loan approval, outside pressure and sheer good old-fashioned impulse, is often a classic formula for financial disaster.
Don't buy less house than you can afford, or worse nothing at all.I know that sounds like a contradiction of the above but it doesn't make sense to buy less house than you can afford or no real estate at all. Keeping in mind what I said about not buying too much house, try to reach just a little. As long as you can afford it, in the long term, as with all investments, generally the more you invest, the greater will be your corresponding return.
Buy what feels right. Don't get talked into buying a house that feels wrong for any reason. If it's a significant-other doing the pressing, sit down and have an honest talk about your feelings. Even if you can't quite put your finger on why you feel ambivalent, unless you're 100% certain about a potential purchase, don't do it.
Do your homework. In most cases, a home inspection for structural, electrical, and plumbing issues is good advice before closing, but that's not all you should check out. What about Insects and Dry Rot? Asbestos, Lead Paint etc? These things are not part of a normal inspection, so don't just assume that they are. What about the lot lines? Are you certain that the fence you had been looking at is a good indicator of the property line? Does the property have Home Owner's Association dues? Has the escrow company given you a clean title report? Have you checked the local neighborhood Covenants (CC and R's?) Perhaps your beloved horse or other pet simply isn't allowed in the neighborhood. Check out all of these things well in advance.
When selling, get a Comparative Market Analysis (CMA) from a local Real Estate professional who knows the neighborhood in order to get your house priced properly from the very start. Over or under pricing your home can cost you time and/or money that you don't want to lose.
Try to have fun. Think positively. Buying or selling Real Estate can be among the most stressful exercises in life. Most of the time, however, given the right circumstances, it can also be a lot of fun. Let your Real Estate Professional carry as much of the burden as possible (not you) and try to remember that when and if things go a little sideways, that it is that very awkwardmoment (or more) that will make the happy times to come all the more satisfying. Almost every Real Estate deal, is in the end, a sweet and unparalleled happy Champagne-popping experience.
Once it's over that is! See you next time!
Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified REALTOR® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .
I've got two more terms to be added to everyone's "Everything you didn't want to know about lending in 2009 because you were afraid to ask" vocabulary list: "Alt-A" and "Option ARMs." Don't know what they are? Well, you will, soon.
It seems that a second mortgage shock is heading for the economy at high speed and without brakes. That's right, just as many of us suspected from the beginning, the first "sub-prime" bailout was only the beginning salvo in a battle to protect us from the bloodiest and most damaging financial crisis of our lifetimes.
The initial 700 billion approved by the congress last fall will only be a down payment on a whole new wave of loans that are apparently in danger of defaulting behind the sub-primes..."Alt-A" and "Option ARMs."
That's right, we're not done. I'm not talking about a measly little 34 Billion to bail out the big three auto manufacturers; we're talking about needing perhaps another 1.5 TRILLION dollars of additional bailout money that will become necessary to prevent the U.S. lending industry from complete collapse.
Yep, the silliness didn't end with the sub-primes, a whole new wave of loans that had initially lured borrowers in with tempting teaser rates are due now to "reset" behind the sub-primes. What might have been a nice comfortable mortgage payment of say, $800 a month, is, in all likelihood, going to change to something on the order of double that. Many, if not most, borrowers finding themselves in this situation will not be able to save themselves, so stand-by.
What? Are you kidding? It's sad but true. Even so-called "highly qualified" borrowers got sucked into the trap. But how did this all happen?
It's simple really. When the collateral value of an asset soars through the roof, the viability of the borrower becomes increasingly less important. Or so the argument goes. When housing prices just kept climbing higher and higher, borrowers believed that refinancing before their adjustable loans reset was a normal course of business and an option they fully expected to exercise. In other words, "Alt-A" and "Option ARM" borrowers believed they could refinance or resell their properties (at a profit - of course) before the higher payments on their loans became due.
But then the market hit the skids. Oops.
In a strong market, even the sprinkling of bankruptcies and loan defaults that would normally occur, didn't matter to the banks either because, chances were that the resale value of that foreclosure might actually exceed the original principal value of the loan. At the peak of the housing boom, a poorly qualified borrower became less important. Wow. That's how so-called "liar's" or "stated-income" loans actually made it through underwriting because the borrower had become a far less critical variable in the lending equation. Although I wrote about this phenomenon last year in my "All Bow to the Almighty FICO" and "Got a Job? Decent Credit? You can buy a House!!" articles, I never in my wildest dreams thought that what we're looking at now would ever actually come to be.
So there we have it. Now what?
Well, lending has tightened. Buyers who are in the fortunate position to be able to purchase now are enjoying spectacular deals, but with a lot more money down and with a far higher level of underwriting scrutiny than perhaps ever before. You'll need a little cash (sometimes more than a little) and your credit score will need to be a smidge higher than back in the heyday if you want to buy. But what incredible buys there are now! I know I keep saying so, but the situation just keeps on getting better for buyers out there.
Recently I was very lucky to have found a bank-owned property that had, in '05, sold for $495,000. My buyers just closed and walked away with that very property for $260k. That's nearly half what it had been, and there's a lot more out there where that came from, believe me.
Spectacular opportunity for buyers aside, many still seem, understandably, a little gun-shy about pulling the trigger on a Real Estate transaction. With what may be a greater than two-year supply of inventory languishing on the open market, the current glut of homes for sale seems destined only to continue to grow, and when a house won't sell, what's an owner to do? One option may be to put the property on the market for rent. The following list is a sampling of companies available to help manage homes for rent in our vicinity:
REMAX Sunset Realty / Long Term Property Management - 541 536 0117
Village Properties - 541 593-7368
La Pine Property Management - 541 536-1114
Accord Property Management - 541 536-1165
Ernst Brothers LLC (Gilchrist / Klamath CO) - 541 433-2610
As you may have noticed, Sunset Realty is happy to announce that we have added our company to the above list and will become operational by mid-January offering long-term property management services in addition to an already established vacation rental and RE Sales divisions. All of the above local companies have excellent reputations and we look forward to working with them in the growing rental market to come.
In the mean time however, we in the industry have got a lot of houses to sell and buyers out there couldn't have better opportunity. Oh, and lets not forget interest rates. Last fall I mistakenly proclaimed that if you hadn't bought by then, you might have lost tens of thousands of dollars due to rising interest rates. I'm very happy to say, however, that rates are now back down and could conceivably hit the mid fours! Considering all the trouble we've gotten into with adjustable loans now coming due, how's a nice thirty year fixed sound at 4.5%? Let's see... buys of the century, record low interest rates.. Hmmm... sounds pretty great to me.
Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified Realtor® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .
The last few weeks of financial turmoil have reminded me of school and an econ class I took once upon a time. I can remember trying to wrap my head around how the Federal Reserve decides to lend money to the banks and at what rates of interest, and how those kinds of decisions theoretically translate into this-or-that kind of "multiplier effect" or not, supply curves here, demand curves there, yadda-yadda, blah-badee-blah. I've got to be honest, after a while it all seems like voodoo to me, the way things are done. How money literally gets simply printed and pumped into the system, or stuck onto the national credit card is where you've lost me. I don't get it. I didn't get it 20 years ago, when I should have been paying more attention, and I especially don't get it now. I sure hope somebody does because it's affecting all of us now, not just Wall Street.
Can anybody out there explain to me what exactly a "derivative" is? I've looked it up but it doesn't help. It looked like something more akin to calculus rather than finance or economics. But what do I know? Actually, never mind, I'm not sure I have the energy. 700 BILLION DOLLARS (actually 840) more placed on the national debt?? I am completely lost.
One of the reasons I really like dogs is because they don't carry wallets, or wear watches. Residing within a seemingly blissful and carefree "eternal-now," our canine companions can certainly teach all of us about focusing on that which is truly important and rejecting that which is not.
My Dog Barney doesn't even have to worry about haircuts because his constant shedding (that he doesn't worry about either) keeps his coat perfectly coifed, and looking shinny and clean all the time, without, I might add, the need of a daily shower. And unlike his master, however, whose head begins to resemble a dirty old mop if he's even attempted to skip a day, my best friend lets neither that problem, nor a whole lot of other so called "issues" even enter his consciousness...like money, or even worse these days, money tied up in Real Estate.
Dogs don't carry wallets or even have any concept of time outside of dinnertime, but unfortunately we do. After all, like I tell Barney every day when I walk out the door, "I've got to go out and bring home the dog food Buddy." He doesn't; have to bring home the dog food, or anything else, that-is, with me around anyway. As much as I admire those who are able to separate material needs from their consciousness, it's not the best survival strategy in the long run for us normal humans, unless you're already swimming in it, or have a best pal or loved one that's willing to take care of you.
That must be the answer. In order for me to attain a higher level of consciousness and bring my Real Estate career to a higher plateau, I'm apparently going to have to find me a Sugar Momma. Last month I was soliciting for a job, this month I'm skipping the nonsense altogether. That way, I can focus on Real Estate and serve my client's that much more effectively without the mental clutter of having to deal with my own issues. Yep, that'll work.
But alright-already, I'll get serious and get back to Real Estate. After all, these are serious times with life-changing challenges facing our entire country these days. Over the last several weeks I've had to help my clients deal with the kinds of decisions that will make huge differences in their lives. Should we sell now? Can we wait? If we sell now, how should we price it in order to compete in an extremely competitive market? What if we have to sell for less than we owe the bank? Should we simply walk away from our property?
These are serious questions that are difficult enough to deal with alone. However, combined with an explosively volatile stock market and the threat of the collapse of our entire financial system buzzing in the background, the whole package doesn't make anyone feel any better. Our entire financial system is globally intertwined and that which affects one element will seemingly reverberate to the other, and on and on. "Globalism" is such a new concept that my Office 2000 flags that word as a misspell, but it's real and, like it or not, we're now faced with an economy that is not only affected by international influences, it is apparently dependant upon the good financial health of the world. I admittedly don't get much of this, but it seems to me that those who are concerned about a country like China "calling in there loans" should stop worrying; after all, as the primary consumer of their goods, a collapse of our economy would seemingly trigger the downfall of their own.
So what do dogs that carry neither wallets nor watches have to do with Real Estate? Nothing I suppose, other than perhaps to serve as a reminder to all of us that we're not always going to have all the answers and that's not always so bad. Sometimes we just have to let it go, take a deep breath and trust that it's all going to work out. I mean what else are you going to do sometimes? Personally, I'm still carrying my wallet and can tell you what time it is, but I'm going to do my best not to sweat a dwindling stock portfolio, listings that aren't selling, or the lack of a Sugar Momma in my life. Barney and I are determined to carry on. That's at least a start.
Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified Realtor® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .
One of the most beautiful things I've ever heard. Real Estate can wait...
Wilhelm Kempff playing Beethoven's Moonlight Sonata movement 1. Wilhelm Kempff (November 25, 1895 – May 23, 1991) was a renowned German pianist. Wilhelm Kempff was born in Jüterbog near Berlin and grew up in nearby Potsdam where his father was a royal music director and organist at St. Nicolai Church.
His grandfather was also an organist and his brother Georg became director of church music at the University of Erlangen. Kempff studied music first in Potsdam and then in Berlin. He was also a composer. Kempff toured very widely in Europe and much of the rest of the world.
Between 1936 and 1979 he performed ten times in Japan and a small Japanese island was named Kempu-san in his honor. Kempff made his first London appearance in 1951 and in New York in 1964. He gave his last public performance in Paris in 1981 and died in Positano, Italy at the age of 95.
Wilhelm Kempff recorded over a period of some sixty years. He is celebrated today for his recordings of Schumann, Brahms, Schubert, Mozart, Bach, Liszt, Chopin and particularly, of Beethoven.
For Buyers who may have been waiting for the market to finally bottom-out, that time may have already passed. As a matter of fact, the decision to wait may have already cost the average buyer 50 thousand dollars or more.
Last Spring I argued that there couldn't possibly have been a better time to buy:
"If you're waiting for prices to decline to an ultimate low, you may be missing the boat by overlooking other variables that should be entered into the equation at this time...
..It's a great time to buy Real Estate now and not just because of the recent downturn in prices. Added affordability combined with historical lows for rates in the lending industry, huge selection due to massive increases in available inventory and market forces that are pressuring sellers to be more flexible than ever, are factors now allowing buyers to be nearly ideally positioned..."
Unfortunately, it now appears that the fence sitters who may have stubbornly waited for an even better time to buy than last winter or spring, will now be faced with not only significantly higher monthly payments, but tens of thousands of additional dollars being paid out over the course of their mortgages.
Interest Rates have gone upand they're more than likely to continue to rise.
Here's how rising interest rates may have impacted a potential buyer and their purchase:
Source: Bankrate.com
In January 2008, the average interest rate (nationally) on a thirty year fixed loan was approximately 5.4% for customers with good credit. Now, (late July 2008) the rate hovers around 6.4 % and will more than likely be higher by the time this article is published. Principal and interest payments on a $250,000 dollar home would have been around $1400 per month; now that same home will cost the buyer around $1563 a month. Amortized over thirty years, that amounts to more than $57,000 dollars of additional expense. (And that's not even considering the lost investment potential of that $150+ per month over thirty years .)
Although we're all feeling the financial pinch of a slowing economy and rising prices, the efforts made by the Federal Reserve to slow inflation by raising interest rates, may be the very thing a struggling Real Estate market needs least.
The Wall Street Journalrecently stated:
"...A major economic policy move could come in the final weeks of the U.S. presidential elections. Traders are betting that before November, the Federal Reserve may execute an interest rate hike.."
Also from Forbes.com July 16:
"..Federal Reserve chairman Ben Bernanke said a 'top priority' for the central bank is to bring inflation to an acceptable level.
'We're going to be responsive to conditions as they evolve,' Bernanke said in testimony before the House Financial Services Committee. He noted concern about commodity-related inflation bleeding into headline inflation... "
The point is that we should expect interest rates to go up with the inflation of other items, and because of that, anyone considering the purchase of Real Estate should carefully factor that into their decision about when to buy.
Prices are down, and may continue to fall, but, pricing alone should not be the only factor influencing a buyer's decision. When considering that selection is huge, seller flexibility is nearly maximized, and the price of money is still relatively cheap (but getting more expensive,) the potential overall return on investment on Real Estate available RIGHT NOW, is quite possibly at its very zenith. Whether you're a casual buyer or a full time investor, delaying a purchase now may prove to be a regrettable decision over then next few months and years.
As I said in March, if your waiting for the best time to buy, please allow your local Real Estate professional to explain why now is probably the best time to be helped down off the fence. Ten years in the future, when you see the results of a good investment made now, we're confident that you'll be pleased with your decision.
Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO certified REALTOR® associated with RE/MAX Sunset Realty Sunriver / La Pine. He can be reached directly at 541 598-5449 orfred@fredjaeger.com .More of Fred's material is viewable at fredjaeger.com .
Last year I wrote a story entitled "Support your Local Starving REALTOR." It was meant to bring to light that not all real estate brokers are getting rich.
"..The vast majority of Real Estate professionals are not paid a salary and live purely on commissions.. for every day in, and every day out, for every phone call made, every fax or email sent, every hour of research spent compiling information, every mile driven with both real clients and those who just want to kick tires, your local agent is paid nothing until the deal has closed escrow...
..That theoretical six percent commission generated by the sale of any given property is split typically between the both the buyer and seller's respective agencies and brokerages 50/50, THEN the broker only gets a percentage of that agency's 50% by in many cases, half again between the actual agent and his/her office. In other words, the six percent that was paid by a seller originally becomes often only 1.5% paid to the agent procuring the sale in the end. All that work, all that time, all those endless late nights, for just a pinch of the proceeds at the end.." And that's before taxes, signage, and other overhead like GAS, desk fees, MLS Fees, and on and on.
Although I meant to point out that the industry is a lot more difficult to survive in than many may realize, I never thought that my words would ever ring so true as now. Several good friends of mine, all highly effective professionals that I admire, have made the decision to get out due to the recent slowdown of the market. Offices are closing right and left, and good agents are giving up their licenses. Wow.
It doesn't take an expert in microeconomic analysis to realize that too much supply, coupled with not enough demand, leaves prices with nowhere to go, but down. The hope is however, that with lowering prices a corresponding increase in demand might be realized over time. Over a lot of time apparently, because it just ain't happening in my market as of yet. The current saturation level evidenced by mutiple "for sale" signs visible on each and every street, surely proves the point.
Although I've had several so-called buyers this summer that have been more than happy to drain two or three $150 tanks of fuel with me while looking, precious few are actually pulling the trigger on an actual real estate transaction... and that, my friends, is a highly effective formula for the death of a Real Estate Salesman.
I've been the first to point out that "The Real Estate Market is in large measure, perception driven..." and "All the market needs to recover is the belief that it has..." so I'll have to ask to be forgiven this time within a "member's only" post for my need to vent this time, just a tad. The exiting of good friends, from the industry chills me and leaves me shaking my head in disbelief.
There are those who proclaim now that the Darwinian notion of a thinning of the herd was a necessary evil and that those whom are left behind will be only stronger in the end. That kind of logic strikes me as something similar to the idea that an occasional fire is beneficial to the forest. The problem is that I, among many, am wondering just who among us will prove to be ponderosa and who will be tinder.
Fred Jaeger is a licensed Oregon Real Estate Broker and an e-PRO Certified Realtor® affiliated with RE/MAX Sunset Realty Sunriver/La Pine. He can be reached directly at 541 598-5449 or fred@fredjaeger.com .
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y west about 9 miles from my home in La Pine Oregon.
t I had failed reach all summer..
be the very thing that many of us have needed.
Sometimes we Real Estate people need to be reminded that the process of buying a home may not be a 100% clear to everybody, so that's what we're going to talk about today. The following guide is meant to spell out exactly what you need to do to buy a house from step one, to the final close of escrow, when the keys are in your hands and the house (and the mortgage) is finally yours. Here's the process: 
Hire a local Real Estate Professional. You'll be glad you did in the end. Your local Real Estate professional is your advocate in every regard whose job is to provide you with all possible information and/or services that will be of benefit throughout the transaction. A lot of footwork is needed during any Real Estate deal, and you will need and appreciate the resources that can be made available to you via your local Broker. These days, especially if you're selling, you need a REALTOR® now more than ever.
I've got two more terms to be added to everyone's "Everything you didn't want to know about lending in 2009 because you were afraid to ask" vocabulary list: "Alt-A" and "Option ARMs." Don't know what they are? Well, you will, soon. 
worry about either) keeps his coat perfectly coifed, and looking shinny and clean all the time, without, I might add, the need of a daily shower. And unlike his master, however, whose head begins to resemble a dirty old mop if he's even attempted to skip a day, my best friend lets neither that problem, nor a whole lot of other so called "issues" even enter his consciousness...like money, or even worse these days, money tied up in Real Estate. 
;)
;)
