According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 3.47%. Rates have remained at or below 3.5% each of the last 16 weeks, marking a historic low.
The results of countless studies have shown that potential home buyers, and even current homeowners, have an inflated view of what is really required to qualify for a mortgage in today’s market.
Nobody in Central MA can escape the fact that we are now immersed in the full-bore
election year media onslaught. You would need to be living under a rock not to have noticed and the rock would have to be somewhere out of earshot of radio and tv.
Fortunately, since this is a space where we discuss buying and selling homes in Central MA, we try as best we can to steer clear of politics; so let’s enjoy this island of non-partisanship or perhaps that’s impossible, because of the topic, which is too interesting to ignore.
Recently, a study came out of Stanford that answered an interesting question: do higher taxes drive wealthy people out of state? If you ever plan on selling a high-end Central MA home, the answer would be more than theoretical. Whether our own state’s position on the tax rate hierarchy could measurably affect high-end property marketability, that is, if the well-heeled set are beginning to allow changes in state tax tables to determine their home base is very much at issue.
So this investigation (it was sponsored by the U.S. Treasury Department), which focused on millionaires, came up with the statistical answer to the question (as Forbes put it) of “Do High State Taxes Drive Away the Rich?
For any agent running million dollar listings or for any multi-million-dollar property owner considering selling their home in Central MA anytime soon, that’s one fewer factor to have to address. The study found that U.S. millionaires who earn over $1 million annually (certainly not me) are actually one of the groups least likely to relocate to a new
state. It could be because their seven figure incomes are tied to their current locale; or it could be because in the rarified atmosphere mega-incomes provide, marginal tax rates don’t matter (I doubt that high income folks usually have plenty to worry about, and taxes are certainly in there).
Also interesting: the lower your household income, the more likely you are to move. In a mobile society like ours, that seems to make good sense and is somewhat reassuring. People are still chasing opportunity; are still motivated to go where jobs can be found.
So what does this mean for those selling a home in Central MA? Or buying one?
That depends, as it almost always does, on your individual circumstances. What is definite is that if you are thinking of buying or selling a home in Central MA this fall or winter, success starts with a solid, localized market analysis. Call me anytime!…..Realty Ace, LLC
There are many potential homebuyers, and even sellers, who believe that you need at least a 20% down payment in order to buy a home, or move on to their next home. Time after time, we have dispelled this myth by showing that there are many loan programs that allow you to put down as little as 3% (or 0% with a VA loan).
In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.
Something is being offered that is actually for free. No, really.
It is truly the case that lately some banks and credit card companies have been including a
new benefit for their Worcester County clients: free access to their current FICO credit score.
This isn’t the same thing as the ads we’ve been deluged with for years, the ones for “free” credit reports. Most of those wound up not really being completely free, at least not if you value your privacy (as in your email and other personal information). Most of them were bent on pitching you on surprisingly pricey subscription credit monitoring services. For anyone who placed value on the time it took to tell them “no” a half-dozen ways, these weren’t really “free.”
But if you are a lucky Central MA client of one of the outfits now providing continuous access to your FICO credit score, it IS interesting to click on it now and again. The score goes down and (we hope) up as various information flows into the FICO computers.
“FICO” is shorthand for the Fair Isaac Corporation, which is by far the dominant credit rating creator. But don’t be fooled: not all FICO credit scores are the same because there are three different companies (Equifax, TransUnion and Experian) who collect the data. They pay FICO to furnish their branded versions of the scores. Each one has FICO assign different weights to different parts of your history and the result is to create three different FICO scores.
That’s why when you read a headline like Tulia’s “Magic Number: The Ideal Credit Score For Securing A Mortgage,” you’re right to be a bit skeptical, since an “ideal” credit score for Equifax and TransUnion and Experian would be unlikely to be the same. Nonetheless, the number given as “ideal” was probably pretty much about the best rule of thumb number you could realistically come up with: 740.
If 740 or higher is the ideal FICO number (considered to be in the ‘perfect’ range for mortgages), another kind of correct number for mortgage applicants was 660, which they
thought was a credit score that would “land a better rate and avoid jumping through additional hoops” than would 620, the basic requirement “for many lenders” looking to originate a conventional home loan.
The “most lenders” qualification, along with the differences in the credit scores offered by the different companies, means that there is a lot of wiggle room that can affect not just whether or not an applicant is successful in being offered a loan for their new home, but what the terms of the mortgage will be. Given all that, it’s really impossible to take any one credit score number and say definitely what that will mean to your loan originator.
Who doesn’t appreciate being given free access to their FICO score even if you aren’t quite certain what the rises and falls are going to mean? The only time you actually get a real-world answer to that is when you are ready to buy a home and submit your application. Remember there’s more to getting a mortgage than just your credit score. That said, you can access your credit score for free once a year at AnnualCredit.com. Call me when I can help!…..Realty Ace, LLC
There are Top 10 Lists aplenty that detail just why any Worcester County homeowner
should think twice before planting one of those For Sale by Owner signs in their front yard. One of them is that when you sell your home all by yourself, the sheer amount of time you’ll have to devote to mastering processes that are already fully handled by full-time real estate professionals is a true waste of time. It’s one wheel that doesn’t need reinventing.
If you are among those considering how you will sell your own Central MA property this spring, since your time is important, let’s start saving it now by cutting those top 10 lists down to the Top 5 Reasons to Avoid FSBOs:
- You’re involved. It may sound like a good idea to be your own salesperson since you are the most intimately acquainted with the product, your house but logic rules against it if for no better reason that buyers will be automatically skeptical of your impartiality. Why? Because you aren’t! You also don’t get the benefit of a professionally trained pair of eyes helping prepare your property to appeal to today’s buyers, nor the benefit of honest feedback that buyers won’t share with a FSBO seller.
- Legal peril. Throughout this year’s political debate, a frequent refrain from candidates (both local and national) has been the need to cut down on over regulation. Without getting into those weeds, it is certainly the case that federal and state laws require a number of very specific disclosures. If you aren’t a real estate attorney, that lack of familiarity could make a FSBO sale an open door to after sale litigation. When that happens, there goes any commission dollars saved (if you actually saved money instead of having your efforts cost you money) .
- Expense. That’s right, one of the Top 5 Reasons to Avoid FSBOs is that a FSBO can actually amount to an extravagance. It’s logical, because most buyers take one look at your asking price, mentally subtract the commission, and proceed from there (wouldn’t you?). The most recent studies bear out the bottom line: only 8% of
successful sales were made via FSBO, and on average, they sold for 15% less than the agent-assisted sales.
- Marketing Oomph. We professionals market Central MA homes all year long, 24/7. As a result, we know which marketing approaches are currently bringing in results, and which are wasting time and money. We also have open channels with the media companies we deal with regularly, an advantage that FSBO sellers can’t hope to match.
- Expert Opinion. The open secret is that those who know the most about how to get the best results from a house sale tend to rely on expert help. A good example came in 2014, when Al Bennati, the CEO of the “BuyOwner” dot-com (“the strongest For Sale by Owner marketplace”) decided to sell his own St. Petersburg home. He listed it with a Realtor®.
There! Time saved already! Who needed a Top 10 list when you have these? I bet you agree: these “Top 5 Reasons to Avoid FSBOs” are more than sufficient reason to avoid the FSBO route…and to give me a call instead!…..Realty Ace, LLC
Looked at from one perspective, there has been a “bailout” of enormous magnitude. Okay,
maybe you have to expand the meaning of “bailout” just a bit, but if you do, many Worcester County homeowners can be counted among the most prominent beneficiaries. We home-grown real estate agents wouldn’t be complaining, either. As bailouts go, it’s the least controversial in a long time, probably because there are no politicians involved (so they aren’t quarreling about who’s responsible for what).
The colloquial term “bailout” has become a household word of late. “Bailout” comes from a straightforward nautical solution for a sinking ship: grab a bucket and bail as fast as you can. The odds of success increase if you can also stop more water from pouring in. Wikipedia’s definition is “providing financial support to a company or country which faces serious financial difficulty.”
It’s no exaggeration to say that after the last decade’s financial meltdown had driven residential real estate prices into the basement, many Central MA homeowners faced, if not actual “financial difficulty,” at least the threat that it might be on the way. If the amount outstanding on their mortgage was greater than their home’s market value, they were said to be “upside down.” Since bailing and buckets don’t have much effect on a boat that’s upside down, perhaps that’s why another term gained prominence.
They were “underwater.”
The coincidence of maritime imagery couldn’t be more apt. During the underwater days, if you were a homeowner wanting to sell or refinance, more likely than not the outcome left you feeling swamped. The banks were inundated with foreclosed properties. The market was flooded with bank auctions. Property values dropped like a boat anchor.
But finally, rays of sunshine broke through the storm clouds. The floodwaters receded, etc. CoreLogic has come up with some buoyant metrics about the current unambiguous state of the nationwide turnaround. A huge amount of equity has returned to the residential real estate market. The increase in homeowner equity in owner-occupied homes is now $6
trillion since mid-2011—$1.3 trillion in the last 12 months alone!
If that is a type of bailout, it’s one accomplished through the free market, powered by consumers reversing the previous spin. CoreLogic’s figures include the good news that 92% of homeowners no longer bear the burden of being “underwater.” A relatively short while ago, among those who didn’t own their homes outright, that designation tainted nearly a quarter of the nation’s homeowners.
For several years now, the return of high and dry Central MA homeowner equity has meant a more stable and blessedly predictable marketplace. Right now, some excellent property offerings, not to mention historically low mortgage interest rates make this an encouraging moment to call me to take a look at all that’s available! What’s your home worth?…..Realty Ace, LLC