Posts made in August 2015

Where are the Sellers?

MIBOR just released numbers for July, and I havta’ ask, “Where are all the sellers at?”

You see, it just doesn’t make any sense…

#1 Sales are up- 14% from July last year.

#2 Inventory of houses available to buyers is limited- as in 17% less than a year ago.

#3 The average house is selling for $155,000— up 7% over a year ago.

#4 Mortgage rates are holding in the 3’s & 4’s- something unheard of the past 60 years.

So help me out here, what’s holding people back from wanting to put a For Sale sign in their front yard?

When an owner prepares to sell their home, the biggest question to answer is what price should they ask? All too often they come to their conclusion based on how much they “need” to walk away with the profit margin they want OR they arrive at their answer after looking at data that doesn’t really give them the full picture. Neither approach does anything to helping them sell their house fast— or for the most money.

Here’s a much better approach:

#1 Look at what similar houses in similar neighborhoods have sold for during the past six months. And look too at what nearby houses have sold for in the price range you think your house might fall into. This info will tell you what has recently happened. And unless something has changed in the market, this info will give you a very good idea of what your house will could sell for.

#2 Look also at the same type of houses as above, that were offered for sale during the past six months and were removed from the market because they didn’t sell. You may find that these were priced too high, or that the owners started with a pricetag way to high and scared everyone away. Or you may find that they were priced too high for their condition or location.

#3 Review carefully each house currently for sale that will be a competitor. Obviously you want to be priced lower than those competitors that are larger, more updated, etc. than your own. And, you’ll likely want to be priced higher than those your house is “better” than (so that you don’t leave any dollars on the table!).

If you’d like help digging out this data and making heads or tales of it- just let me know.

Why Can’t I Get that Rate?

It’s a question I sometimes hear when buyers are shopping for a mortgage loan. They’ve seen a mortgage rates advertised on a reputable website like bankrate.com— yet when they start talking with lenders they find that none of them are offering anything close to the advertised rate. What gives?

Well, mortgage money is sold (by lenders to borrowers) and the greater the amount being sold, the lower the price (rate). Like everything else, money is sold with discounts for volume. If you think about it, it makes sense. A lender has to do the same amount of work whether they’re making a $100,000 loan or a $600,000. So, naturally a $600,000 loan is going to sell for a lower rate than a $100,000. And here in central Indiana, the average home sales price is $140,000— a far cry below prices on either coasts where they range from maybe $400-900,000. So, rates in Indiana are going to tend to be a little bit higher.

Here in Indiana, rates are better up close to the program ceilings ($295,550 for FHA and $417,000 for Conventional & VA programs) when compared to an average size loan.

Other factors weigh in when a lender is quoting you a rate. In addition to the loan amount, things like your credit score, whether you’re self-employed or not, and the size of your down payment all make a difference.

Not to worry though… mortgage rates are currently running in the 3-5% range. And that’s a far cry lower than anything we’ve seen in the past half century! (Btw, if you’re looking for a mortgage, I know a guy!)