Tag Archives: Swehtam

Existing Home Sales Up 3.9% [INFOGRAPHIC]

Existing Home Sales Up 3.9% [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • The annual adjusted sales are currently at a 5.36 million pace.
  • 14,684 homes sell every day in the United States.
  • October marked the 44th consecutive month of price gains.

Distressed Property Sales Hit New Low

Distressed Property Sales Hit New Low | Keeping Current Matters

The National Association of Realtors (NAR) just released their Existing Home Sales Report revealing that distressed property sales accounted for 6% of sales in October. This is down from 9% in 2014 and the lowest figure since NAR began tracking distressed sales in October 2008.

Below is a graph that shows just how far the market has come since January 2012 when distressed sales accounted for 35% of all sales.

Percentage of Distressed Property Sales | Keeping Current Matters

Existing Home Sales Up Year-Over-Year

Mortgage interest rates remained below 4% in October prompting existing home sales to stay at a healthy annual pace of 5.36 million. Year-over-year sales were up 3.9%.

Inventory of homes for sale remain below the 6-month supply that is necessary for a normal market, as they fell 2.3% to a 4.8-months supply. The shortage in inventory has contributed to the median home price rising an additional 5.8% to $219,600.

NAR’s Chief Economist, Lawrence Yun had this to say about the lack of inventory:

“New and existing-home supply has struggled to improve so far this Fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets.”

There is good news though, as Yun went on to say:

“As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago.”

Bottom Line

If you are debating putting your home on the market this year, now may be the time. Buyers are still out there looking for their dream home. Meet with a local real estate professional who can help you determine your best plan.

California Real Estate: Who Pays For What?

RE Fees

Customary Fees

In most areas in California, at close of escrow the buyer pays:

  • escrow fees (50/50 split)
  • title insurance fees (for 2 policies protecting the interests of themselves and their lender)
  • loan origination fee and discount points
  • miscellaneous doc drawing and courier fees
  • inspection and appraisal fees
  • loan closing costs, like prepayments of property taxes, interest, insurance and homeowner’s insurance or HOA dues, when the buyer is obtaining a loan with an impound account or as otherwise required by the buyer’s lender.

And the seller pays:

  • escrow fees (50/50 split)
  • broker commissions
  • a re-conveyance fee to their lender
  • buyers home warranty

However, ALL of this is open to negotiation. These are standard practices, but vary more and more in this market climate.

Also, be aware that with bank-owned properties the standard allocations are somewhat different. For example, banks often will pay for the buyer’s title insurance policy, assuming the buyer uses a title provider the bank chooses. Or, the bank may defer to the buyer to elect the title company at which point the buyer is responsible for title and escrow fees.

Also, costs like HOA transfer and documentation fees, city and county transfer taxes, and even escrow fees are often negotiated between buyer and seller. Additionally, many times buyers agree to “pay” their customarily allocated fees, but then negotiate a closing cost credit from the seller that covers some or all of that.

Loan closing fees vary significantly by loan type (i.e., FHA vs. conventional). Also, transfer taxes also vary widely in different California counties; I see transactions where buyers need to be prepared to pay anywhere from 2 to 6% of the purchase price in closing costs – depending on the location. Again, this can be reduced if the buyer is able to negotiate for the seller to pay some or all of their closing costs.

Millennials: What FICO Score is Needed to Buy a Home?

Millennials: What FICO Score is Needed to Buy a Home? | Keeping Current Matters

In a recent article by the Wharton School of Business at the University of Pennsylvania, it was revealed that some Millennials are not looking to purchase a home simply because they don’t believe they can qualify for a mortgage.

The article quoted Jessica Lautz, the National Association of RealtorsManaging Director of Survey Research, as saying that there is a significant population that does not think they will be approved for a mortgage and doesn’t even try. The article also quoted Fannie Mae CEO Tim Mayopoulos :

“I do think that there’s a sense out there in the marketplace among borrowers that credit may not be available, especially for people with lower credit scores.”

So what credit score is necessary?

A recent survey reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780.

In actuality, the FICO score on closed loans (as reported by Ellie Mae) is much lower and has been dropping over the last several months.

FICO Score Requirements | Keeping Current Matters

Bottom Line

Millennials who are considering a home purchase should get advice from a local real estate or mortgage professional now. They may be surprised how much the requirements for a mortgage have eased.