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Are
We Headed For
A Buyer's Market?
In
January, the National Association of
Realtors® (NAR) reported that national
home inventories were at an all-time
low. Both the NAR and the National
Association of Homebuilders reported
record sales for 1998 and 1999, and
housing starts are once again on the
increase. That's made it pretty hard for
buyers to find homes.
Home
inventories and how quickly they sell
are a strong indicator of the national
economy, but they are also an effective
barometer for the local economy.
However, other indicators show that a
change may be coming. Will the
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seller's
market shift and begin to favor
buyers?
The stock market is beginning to
teeter with dizzying highs and
lows.
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Your
Credit Score Isn't A Numbers Game
Let's
say you've never missed a mortgage payment,
you've never been late on your credit cards and
are generally considered a no-risk, A-1 credit
consumer.
You want to
refinance your mortgage, but when the lender
pulls your credit score you fall below the magic
mark. So you decide to "fix" your
credit rating by paying off some small balances
on high-limit credit cards. Your broker suggests
you cancel those cards and shift the balance,
thousands of dollars, onto fewer cards in an
effort to show meaningful consolidation. You
apply again but score even lower.
As word gets out
that more and more lenders use credit scoring to
swiftly qualify applicants, uninformed consumers
who try to beat the system could end up with
results that are the opposite of what they hoped
for.
Offering the
widely used "FICO" credit-scoring
system, San Rafael-based Fair, Isaac and Co.
scores range from a low in the 300s to a high
above 800. The score represents a statistical
evaluation of how likely you are to default on a
loan. The higher the score, the lower the
probability you'll default.
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Which
Is Harder - Buying or Selling a Home?
Both
sides of the real estate transaction present a
number of challenges whether you are going
through it for the first time or have bought and
sold several homes. The dynamics of the market,
the real estate professionals involved and your
own reasons for buying or selling change
dramatically with every transaction. Your
experiences, good, bad or indifferent, add up to
a unique personal perspective.
What makes buying
or selling real estate so stressful? Is it
having to buy or sell under pressure? the
conditions of the market? the people with whom
you must deal?
Buyers have a
number of concerns based primarily on
intangibles and unknowns. Their first question
is will they get the loan and how much will the
lender allow them? Then they must come up with
ways to make the down payment, or if they are
the more daring types, to swing a bigger loan.
As they pass this
first hurdle, then they must evaluate the true
cost of the home. How much extra will be needed
to remodel, repair and decorate the home to my
satisfaction? Does the home meet the family's
needs in terms of space, storage and flow? What
about schools, services, and shopping? How easy
is it to get from home to work and other
destinations? What are the neighbors
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Putting
The "Fix" in
"Fixer-Uppers"
Mike
Goodnol, manager of Pacific Lumber in Pacifica CA,
recently went looking for a larger home for his wife and
two daughters only to decide to stay put and add onto
his home.
He found 30- to 40-year
old homes listing for about $300,000, but they required
$50,000 or more in upgrades and renovations. To add what
he needed to his existing home, he'd be out only $20,000
or $30,000.
"Some have no
insulation, there's mildew in the bathrooms,
single-glazed windows, no ventilation in the bathrooms,
cracked driveways and water problems in the
basement," Goodnol said.
Americans are expected to
spend a record $130.6 billion in home improvements,
maintenance and repairs this year, according to the
National Association of Home Builders and, too often,
the cash is being dumped into money pits.
In many fast-appreciating
sellers' markets around the nation, so-called
"fixer-uppers" are homes with functionally
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