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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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