Should you pay off your mortgage early as part of your retirement plans?

A recent article from US News talks about the things you should consider before paying off your mortgage early.

http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2015/12/03/6-things-to-consider-before-paying-off-a-mortgage-early

To me knowledge is power and to having options as you plan for the next stage in life is comforting.  

 


Posted on December 10, 2015 at 7:22 pm
Sue Lunsford | Posted in Uncategorized |

No Matter What the Groundhog Says… You Should Sell Before Spring!

Is spring closer than we think? Depending on which Groundhog you witnessed earlier this month you may have less time than you think to get your home on the market before the busy spring season.

Many sellers feel that the spring is the best time to place their home on the market as buyer demand traditionally increases at that time of year. However, the next six weeks before spring hits also have their own advantages.

Here are four reasons to list your home now.

1. Demand is Strong

Foot traffic refers to the number of people out actually physically looking at homes right now. The latest foot traffic numbers show that there are currently more prospective purchasers looking at homes than at any other time in the last 12 months, which includes last spring’s buyers’ market. These buyers are ready, willing and able to purchase… and are in the market right now!

2. There Is Less Competition Now

Housing supply just dropped to 3.4 months, which is under the 6 months’ supply that is needed for a normal housing market. This means, in many areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.

There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future.

The choices buyers have will increase in the spring. Don’t wait until all this other inventory of homes comes to market before you list to sell.

3. The Process Will Be Quicker

One of the biggest challenges of the housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. There is less overall business done in the winter. Therefore, the process will be less onerous than it will be in the spring. Getting your house sold and closed before the spring delays begin will lend itself to a smoother transaction.

4. There Will Never Be a Better Time to Move-Up

If you would like to move up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 23.5% from now to 2019. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate below 4% right now. Rates are projected to be a full point higher by the end of 2015.


Posted on February 12, 2015 at 5:06 pm
Sue Lunsford | Posted in Uncategorized |

What is the right amount of Earnest Money?

Understanding the purpose of earnest money – what it does and what is does not do is an important part of the home purchase and selling process.  Earnest money simply funds the liquidated damages provision of the purchase and sale agreement between the Buyer and Seller.  Basically, if Buyer defaults, Seller is damaged.  Seller had the property off the market during the pendancy of the agreement; Seller may have vacated the property in anticipation of closing, Seller may have made repairs or improvements to accomodate Buyer or as required by Buyer's lender, etc.  As a result, per the purchase and sale agreement when a Buyer defaults, Seller is entitled to a remedy.

An earnest money provision is a liquidated damages clause entitling Seller to the earnest money in the face of the Buyer's default.  So, what is the right amount of earnest money or Buyer's "skin in the game"?  !%-2% of the purchase price is pretty standard If the sale is scheduled to close in 20 days, all cash and the house is already vacant, the earnest money could be a low amount as Seller's maximum loss is 20 days of marketing time.  However, if the sale is scheduled to close in 60 days and the Seller must install a new roof or vacate early to replace flooring throughout the house, then Seller should demand a substantial amount of earnest money.  Seller risks losing 2 months of market time and, the expense of make repairs or vacating prior to closing, if the Buyer fails to close..

If Seller's remedies are limited to forfeiture of earnest money and if the earnest money is insignificant, there is no risk to Buyer for defaulting.  Calculating the :right" amount of earnest moneyshould take into account the Seller's anticipated losses in the event the Buyer defaults prior to closing.

Naturally the Buyer wants their earnest money to be the smallest amount possible.  For Buyers earnest money should be set .  in the confomty with the competetiveness of the market.  If Buyer writes a low offer, Buyer may want to increase the earnest money to make Buyer's offer more desireable and to compel the Seller to believe the Buyer fully intends to close the sale. In a strong Seller's market which we have today, Buyer may want to increase earnest money to distinquish Buyer's offer from the expected competing offers.

Earnest money is a negotiation tool to be used by both parties.  A Buyer who puts down less earnest money may be signaling less commitment in the purchase.

Setting the right amount of earnest money is alwasy fact-dependent and the client alwasy has the final sayas to the right amount of earnest money. 

 

 


Posted on February 5, 2015 at 5:41 pm
Sue Lunsford | Posted in Uncategorized |

FHFA posts housing price index data…

Yesterday, FHFA released their housing price index data for November which showed that house prices rose 0.8 percent from October on a seasonally adjusted basis.

That rate of growth is the highest one-month growth rate reported by FHFA since December 2013; it would translate into an annual price growth of 10 percent.

 While month to month data can be somewhat volatile, looking at the year over year data, we see a similar acceleration though not yet that strong.  From one year ago, home prices were up by 5.3 percent, according to the FHFA, very close to the 5.6 percent change reported in NAR’s median price in November.

Both FHFA and NAR data showed that the November annual growth rate in prices was higher than that observed in previous months.  Today, NAR will release December price and sales data, and we’ll get a first look at whether the acceleration in home price growth will continue.  As long as tight housing inventory persists, which we expect to see as long as housing starts remain at a subpar level, we expect to see upward pressure on home prices which adds an additional challenge to potential first-time buyers.

In addition to national data, FHFA releases data at the Census division level.  The most robust gains in FHFA data from a year ago were still in the West though other Census divisions were stronger than the Mountain division.  NAR data showed less strength in prices in the West.

According to FHFA year over year prices rose 7.5 percent in the Pacific division which includes Hawaii, Alaska, Washington, Oregon, and California and 5.6 percent in the Mountain division which includes Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, and New Mexico.  But divisions that make up the South region actually had growth in excess of 6 percent from a year ago.


Posted on January 23, 2015 at 6:53 pm
Sue Lunsford | Posted in Uncategorized |

Conventional Loan Limits increase to $517,000

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Effective with loan closings after January 1st, 2015 the conventional loan limits for King, Pierce, and Snohomish counties will increase from $506,000 to $517,500.  This is good news for folks who are looking to purchase with only 10% down as many Jumbo options require 20% down to get the best rates.  We expect FHA and VA to follow suit, but they have not made a formal announcement yet.


Posted on December 4, 2014 at 5:02 am
Sue Lunsford | Posted in Uncategorized |

NAR’s most recent Existing Home Sales Report – sales are up!

The National Association of Realtors’ most recent Existing Home Sales Report revealed that home sales were up rather dramatically over the past year.

See Keeping Current Matters article:

Posted on December 2, 2014 at 9:58 pm
Sue Lunsford | Posted in Uncategorized |

Buying or Selling: Now May Be The Time

 

Autumn Piggy Bank2As we enter the winter months, many expect the real estate market to begin to slow down. However, this winter there are many reasons that both buyers and sellers should consider moving forward with their real estate goals instead of waiting until the spring.

BUYERS

Waiting until the spring will probably mean increases in the two elements that determine the cost of purchasing a home: home prices and mortgage rates.

SELLERS

A seller will get the best price when demand is high and inventory is low. Demand will remain strong throughout this winter (see above) while inventory historically shrinks this time of year.

 


Posted on November 9, 2013 at 5:05 pm
Sue Lunsford | Posted in Uncategorized | Tagged , , ,

Shadow inventory keeps shrinking

 

Homes classified as “shadow inventory” fell to 2.3 million units in October, down 12.3 percent from a year ago but still representing a seven-month supply of homes, according to a monthly report from real estate data firm CoreLogic.

Homes with seriously delinquent loans attached to them made up 1.04 million of October’s shadow inventory. The balance included 903,000 homes in some stage of the foreclosure process and 354,000 bank-owned properties.

Shadow inventory refers to the number of distressed homes likely to hit the market soon, but which aren’t yet listed for sale in a multiple listing service or included in traditional pending supply metrics.

October’s shadow inventory tally represents 85 percent of the total 2.7 million homes identified by CoreLogic as having seriously delinquent loans, in the foreclosure proces or “real estate-owned” (REO). Seriously delinquent loans are defined as those overdue by 90 days or more.

“We expect a gradual and progressive contraction in the shadow inventory in 2013 as investors continue to snap up foreclosed and REO properties and the broader recovery in housing market fundamentals takes hold,” said Anand Nallathambi, president and CEO of CoreLogic, in a statement.

Given that a significant portion of the shadow inventory has not entered the foreclosure process, it won’t have too large an effect in the coming months because of long foreclosure timelines in many states, said Mark Fleming, CoreLogic’s chief economist.

The value of the shadow inventory in October was $376 billion, a 5.8 percent drop from October 2011.

The five states where serious delinquencies declined the most in the three months ending in October 2012 were Arizona (13.3 percent), California (9.7 percent), Michigan (6.8 percent), Colorado (6.8 percent) and Wyoming (5.9 percent).

In October, 45 percent of all 2.7 million distressed properties in the U.S. were concentrated in five states: Florida, California, Illinois, New York and New Jersey.
 


Posted on January 5, 2013 at 1:31 am
Sue Lunsford | Posted in Uncategorized |

Now is the time to sell or purchase!

 

Buyers closed on nearly 1800 houses in King County last month, 13% more than September 2011.  The median price of single family homes sold has been in the $375,000 to $380,000 range since June Distressed home listings (short sales & bank owned) are down 60% from last year.  The real estate tide has changed and the feeling of confidence has returned to Seattle!
There are more buyers than sellers currently in the market and inventory hasn’t been this scarce since at least 2000.  Buyers are looking again, lured back to the market by record-low morgtage interest rates, rising rents and home prices that appear to have stabilized.   Thinking of selling or buying?  Now is the time!


Posted on October 11, 2012 at 6:14 pm
Sue Lunsford | Posted in Uncategorized |

Confidence has returned to Seattle!

Did you know…The median price of single family homes sold in June 2012 in King County was $380,000, up 10.4% from June 2011.  The 1st double digit increase in nearly 5 years!  Distressed home listings (short sales & bank owned) are down 60% from last year.  The tide has changed and the feeling of confidence has returned to Seattle!


Posted on August 13, 2012 at 11:35 pm
Sue Lunsford | Posted in Uncategorized |

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