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We are working on getting members involved in our group. If you are interested or know someone that is, contact us at deblica34@aol.com.
Motivational Words:
In ancient times, a King had a boulder placed on a roadway. Then he hid
himself and watched to see if anyone would remove the huge rock. Some of
the king's wealthiest merchants and courtiers came by and simply walked
around it. Many loudly blamed the King for not keeping the roads clear,
but none did anything about getting the stone out of the way.
Then a peasant came along carrying a load of vegetables. Upon approaching
the boulder, the peasant laid down his burden and tried to move the stone
to the side of the road. After much pushing and straining, he finally
succeeded. After the peasant picked up his load of vegetables, he noticed
a purse lying in the road where the boulder had been. The purse contained
many gold coins and a note from the King indicating that the gold was for
the person who removed the boulder from the roadway. The peasant learned
what many of us never understand!
Every obstacle presents an opportunity to improve our condition.
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SAN FRANCISCO (CBS.MW) -- Interest rates are still near 45-year lows, but
predictions they'll head higher could turn this spring into a frenzy of home buying.
"Eventually the Fed is going to have to increase rates on us," said David Lereah,
chief economist with the National Association of Realtors.
While nothing suggests rates will rise this spring, some consumers will likely jump at the opportunity to buy a home ahead of any rate hikes. "Will consumers think that rates will increase and jump off fences? Probably a certain percentage of consumers will do it," he said.
As it is, spring is usually the busiest time of the year for home sales as winter
weather recedes and families eye the end of the school year. But this could be a
"particularly busy spring," Lereah said.
That could spell trouble for homebuyers in some already hot markets across the
country, as limited supply and increased demand potentially push prices even higher.
Of 117 metropolitan areas nationwide, 31, or about 27 percent, logged double-digit
increases in median home prices in 2003.
Still, markets don't glitter forever. Boston's median sales price rose just 5
percent last year, after years of double-digit increases.
While 5 percent still exceeds what the National Association of Realtors considers
normal price appreciation (usually inflation plus about two percentage points), the
possibility of a market topping out should give buyers pause.
Buying in a topped-out market
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A buyer who jumps in at the top of a market is likely to witness a painful price
drop in the initial years of homeownership. But those who plan to stay in a home for five years or more will likely ride that out, experts said.
"As long as you're in the home for a normal timeframe, most people get out with a
healthy gain even though they go through a period of temporary price correction,"
said Walter Molony, spokesman for the National Association of Realtors. Home stays average six to seven years, he said.
If you're among those who may want to sell in the near term, a market that's topping out "really amplifies the need to get the best value for the money," said Ron Phipps, of Phipps Realty and Relocation, based in Warwick, R.I.
"If there's a choice between a great location and good location, I would reach for
great location even if it's a more modest property," he said, to help ensure the
property retains value in a flat market.
Also, "you want to buy at the bottom end of the market (though) not necessarily the
least expensive house," Phipps said. "There are more people that can afford a less expensive house," when it comes time to sell.
But, for most homebuyers, "the property is still providing you with shelter and it
needs to be looked at as a long-term investment rather than as a stock," he said.
"When you couple the advantage of owning an asset that over time appreciates and you have financing that has income-tax advantages, even if the market is neutral, it's a win-win to be in a homeownership situation versus a rental," he said.
But it's a win-win that can be hard to attain in a hot real estate market. The
following are ways to successfully secure the home you want in a seller's market.
1. Humanize yourself
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In a multibidder situation, make yourself shine brighter than the rest. Consider
submitting your bank statement with the bid so the seller sees you have cash and are ready to proceed (cover up your Social Security number first).
Perhaps write a letter to the owner. Phipps said an owner recently accepted $2,000 less than the highest bid simply because the buyer wrote a letter that said: "We are a young family with a child on the way. We would like to raise our family in the house the way you raised your family there."
Still, that's not a foolproof strategy, Phipps said, and will depend on the owner's
personality.
One foolproof rule: Don't be rude. If a buyer "talks about how terrible the
decorating is, that buyer is not going to win points with the seller if there are
multiple bids," Phipps said.
"Often just tone can be destructive," he said. For instance, he says "enhancements" rather than "improvements."
2. Drop the contingencies
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Don't be the difficult buyer. "If there are four offers on a house and you're making
an offer contingent on your home selling, it's not going to work," said Nancy
Arndorfer, a Realtor and senior executive associate with Lyon Real Estate in
Sacramento, Calif. "You have to go in there without contingencies."
While you're ridding yourself of encumbrances, position your bid to meet the
seller's needs. Tell the seller you have a home inspector ready to complete the
inspection within three days, she said.
And consider the seller's timeline, Phipps said. "What is the absolute best day for
the seller to close? What other conditions can I eliminate to make it as crisp as
possible?"
3. Get the expert
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Find a real estate agent ready to "find you something before it hits the market,"
Arndorfer said. "Ask the agent: 'Are you willing to send letters out to a
neighborhood we're interested in? Are you willing to knock on doors and talk to
people?'"
Also, make sure you get along well with the agent in an interview. "If it doesn't
feel right, research other people," Phipps said.
Interested in more than one location? Call more than one agent. "Agents don't like
to hear that but it's the truth," said Valerie Torelli, owner of Torelli Realty in
Costa Mesa, Calif. "You wouldn't go to the heart surgeon for your eyelift."
4. Cough it up
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For the house you can't live without, pay more money. "If $5,000 is standing in the
way of making your transaction, just do it," Torelli said, provided the house is
competitively priced.
For Phipps, a bid that defies mainstream thinking is often key to beating out other
bidders. On a house listed at $280,000, he'll offer $281,750. "No one's going to have that kind of a bizarre number."
Still, offering a flat-out "I'll beat your best offer" is not the way to go. "I
don't advise buyers to do that," Arndorfer said. "You're writing a blank check."
5. Pre-approval is all
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Get pre-approved for financing. "In a seller's market, the seller is going to look
and say 'who do I have the greatest opportunity to go to closing with?" said Paul
Fein, senior vice president with GMAC Mortgage.
"It's the person with the pre-approved loan, not just prequalified," he said.
Don't worry about revealing to the seller the figure for which you qualify,
Arndorfer said. Buyers must show the total, but that doesn't mean their offer has to
be as high.
6. Know the market, and thyself
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Figure out what you want. "Buyers have to be prepared to react quickly," said
Michael Young, president of Coleman Realtors, based in Providence, R.I.
"They should decide what their real needs are before they go out: Number of
bedrooms, style of the house, location, so they can find what they want and react
quickly," he said.
To determine what's available in your market, search online for the Multiple Listing
Service in your area, where you can "check out what's actively on the market and what the listing prices are," Young said.
Call your local board of Realtors or state association of Realtors if an Internet
search doesn't elicit an MLS, he said.
Also, know all the financial resources available to you. "If there are family assets
they may need to draw upon those, a parent who can co-sign or loan or gift money," Phipps said.
Current homeowners should evaluate how much equity they have. And, check your
credit. "A score in excess of 700 is extremely helpful," Phipps said. "It will impact
rate, and that's going to impact what they can afford."
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