5 Things You Should Do to Prepare for St. Louis Home Buying

It’s almost spring and the peak home buying season is almost upon us. What you can do to be prepared:

1. Get Your Financing In OrderWhen Buying a St. Louis Home

   
   Know what you can afford and what you are comfortable with for your mortgage payment. Speak with a lender and get pre-approved … not pre-qualified.  Finding out what you qualify for makes shopping for a home easier and will help you manage your expectations.  (Remember more expensive homes always look nicer)

2. Determine the Most Important Factors You Want in Your St. Louis Home

   Do you need more space, a certain school district, a bigger yard, a shorter commute to work, a certain number of bedrooms, etc.  Trying to determine these things upfront will help you eliminate the homes that don’t fit your needs.

3. Know Whether or Not You Want to Purchase a St. Louis Foreclosure or Short Sale Home

   Foreclosures and Short Sales can take a lot of time and usually require minor to extensive repairs completed before moving in.  Make sure that when you see the verbiage “Needs some TLC” that TLC doesn’t mean Tons of Loving Care!

   

4. Have a Heart-to-Heart Talk with Your Spouse or Significant Other

   If you are buying a home with your spouse or significant other, sit down and find out what each others wants and expectations are before you jump in to the hunt. Communication is key to relieving stress and minimizing conflict during the home buying process.

5. Get Professional Help

   No, we’re not talking about marital counselors or psychiatrists! Seriously, even though the Internet provides easy access to MLS data and listing information most buyers are better off using a professional agent. What kind of agent? Someone in my family, from my church, on a for sale sign, etc.? (Keep Reading)

Get a St. Louis Exclusive Buyer Agent Working for You

Articles keep appearing in the media about the wisdom of using an Exclusive Buyers Agent in your home search.
Kiplinger, Smart Money Magazine, CNNMoney, along with the department of Housing and Urban Development are suggesting this approach.  Why?  Because an Exclusive Buyer Agent only works for Buyers and never for the Seller.  This is one of the best ways to insure that your home buying experience will receive the highest level of protection and representation.  Your Exclusive Buyer Agent only works for you at all times and can help you avoid many common pitfalls experienced by home buyers.

If You Are Planning to Buy a Home in the Next 60-120 Days 

Call Finding Homes for You before you call a traditional real estate agent or the agent on the for sale sign. (636-532-4200)  We can help you find a lender, building inspector, discounts on title insurance and save you time and money. We will position you to win this spring and summer.  Call Now for Details! 636-532-4200  We are Exclusive Buyer Agents who only work for you!

Call 636-532-4200 today or email us at mark@findinghomesforyou.com

Related articles

• HUD Endorses Exclusive Buyer Agency
• Financial Media Outlets Recommend Exclusive Buyer Agents
• CNN Money Top 10 Tips for Home Buyers
• House Hunting in St Louis-Don’t Fall for These Tricks

“I have been waiting for more than five years to offer this advice. It is now time in most cities across the country to buy a new home or refinance your existing home with thirty-year fixed rate mortgage debt.” So says the author John R. Talbott of The Coming Crash in the Housing Market which was published in 2003 predicting the crash. In 1996 he called the absolute peak of home prices when he released his book, “Sell Now! The End of the Housing Bubble.”  He’s known in some circles as “The Real Estate Prophet.”

Here’s his reasoning:

Home Prices Relative to Peak Prices During the Bubble

Home prices are off anywhere from 10-60% in cities across the country.  He believes there’s no reason to believe that prices were “fair” during the bubble since prices were driven upwards by loose and aggressive lending by banks and non-banks. Real prices, adjusted for inflation, are almost in line with prices in 1997 before questionable lending was rampant.

Home Prices Relative to Construction Costs or Replacement Costs

Homes in many cities across the country are now selling for as little as $60-$70 per square foot.  Depending on the quality of construction and land value, this represents a 50%-65% discount to the costs you would incur if you tried to build a similar home today in these cities.  It gets down to simple mathematics: if you can buy an asset at half of the cost of building them … buy!

Home Prices Relative to Incomes and Rents

In the peak of the real estate bubble some cities had home prices at 11 times the median income of a family in that area. In St. Louis, with a median income of $53,894, that would make a typical house cost $592,834!  As of today, according to local statistics ,the St. Louis median asking price is $139,900 which is under 3 times the median income of St. Louisans.

Mr. Talbott goes on to say, “Now, with homes trading at more reasonable multiples or rents, houses can be purchased that are immediately cash flow positive in year one and enjoy all the upside of any appreciation that will incur as inflation returns.”

Home Prices in Real Terms, Not US Dollar Terms

A concept you won’t hear on the evening news: He believes it’s “silly” to talk about home prices in dollar terms since the dollar has lost almost 98% of its purchasing power in comparison to a more stable asset like gold over the last 50 years. The chart below shows that average homes, measured in number of gold ounces it would take to purchase are now trading at 40 year historical lows.

One could argue this philosophy because the price of gold is so high today.  Mr. Talbot, however, argues that the purchasing power of gold has changed very little over time and that it is the dollar that is depreciating giving the appearance that the price of gold is rising. It is the dollar that has the volatility and declining due to the US funding our deficits by printing more dollars!

Where is the Real Bubble?

The real bubble on the horizon is US Treasuries and 30-year fixed rate mortgages for homebuyers. With our national debt equaling 4 times the amount of money taking in, when will we have to pay the piper in higher interest rates and inflation?  Maybe homes will not appreciate a lot over the next 20 years, but they don’t have to if inflation comes back.  You as a buyer could do really well on your investment as your 30 year debt becomes worht less and less in real terms.

Many economists believe that when inflation comes back the only perfect hedge is to be a borrower, not a lender or investor.

So the man who many say is a Real Estate Prophet, ends his article with the following statement: “So, run, do not walk to your neighborhood banker and either finance a new home purchase or take out the maximum amount of money he or she will lend you on a home equity loan and buy hard assets, not financial securities, with the money. Shakespeare said “Neither a borrower nor a lender be, ” but they didn’t have huge government deficits and the risk of future inflation back in the Bard’s time.”
Click here to read the entire article

If you would like to take a peak at some current St. Louis real estate market trends or target foreclosures continue your visit or call Finding Homes for You at 636-532-4200.
Finding Homes for You is an Exclusive Buyer Agent company which only represents Buyers and never the seller. See Video

Related articles

• Hope for the St. Louis Real Estate Market (media.findinghomesforyou.com)
• John R. Talbott: Homes – Buy Now! (huffingtonpost.com)

Buying a Home with a Friend

If you’re single and you want to buy a home, but your income isn’t enough to purchase what you want, you could consider a buying partner. Especially in large, more expensive cities, there’s a growing trend these days for friends to team up and purchase property together.

Buying More for Less

Drawing on two incomes, friends can buy a larger home with more amenities, while cutting their expenses for maintenance, repairs and improvements in half. To obtain financing, of course, both parties to the transaction must qualify for the loan. Make sure to read our previous post on New Regulations from Fannie Mae that Can Delay Closings for Home Buyers. The credit market has tightened up and you and your partner will need to be united in your approach to buying a home.

Precautions You Should Take

The biggest concern is what happens if one person decides to get married, moves out of the area, loses employment or simply stops making his or her share of the payments. Such questions should be answered long before they come up with legal arrangements that spell out specifics covering a myriad of possible situations. Not only should the transfer of property ownership be considered, you should have an agreement on the disposition of furnishings. Discuss what you’ll do with decor, repairs and remodeling costs. Decide in advance how any disagreements will be handled.

In most cases, unrelated homeowners will want to hold the title as “tenants in common.” That way if one person dies, the decedent’s share of the property will go to his or her heirs (rather than to the buying partner). They should also consider buying the property as two individuals rather than by creating a partnership (which might require higher interest rates and fees on a loan). Most importantly, consult an attorney before entering into the final agreement.

Give us a call at 636-532-4200 to discuss your situation, or if you would like to be referred to a local, trusted lender. Who really knows when the economy will improve?  However, this approach could be your way out of throwing money away on rent and start building equity … even if it is shared!

Half of something … is better than half of nothing!

Related articles

• Should you risk buying a house with friends? (confused.com)
• Home Sharing
• First-time homebuyers lean on bank of mom and dad (business.financialpost.com)

First-Time Home Buyer Grants Up to $5000 for Down Payment for  Active and Veteran Military Members

Do you know someone who has served their country in our military?  There is a new grant being offered for up to $5000 which can be applied to a mortgage at any financial institutions made possible through the Dream Makers program.  The not-for-profit Pentagon Federal Credit Union Foundation is offering assistance to make first-time home buying possible for our nation’s finest.

St. Louis Military Personnel Who are Eligible for the Dream Makers Grant Program

1.  You are a military individual (Active Duty, Reserve, National Guard or Veteran), a Department of Defense employee or a Department of Homeland Security employee.

2.  You are a first-time home buyer, or you have not owned a home for the last three years, or if you’ve lost your home through divorce or disaster.

3.  Your gross household income, including allowances, that you use to qualify for your loan is a maximum of $55,000 a year or a maximum of 80% of your community’s median income based on your family size.

Dream Maker Requirements

1.  The home must be owned for 5 years from the time you purchase it.  If you sell it before the 5 years are up the grant must be paid on a sliding scale basis.

2.  Your mortgage must be a 30 year fixed rate with a maximum of 97% financed if you made a down payment of 3%.

3.  If you sell your home because of a permanent change of station (PCS) or transfer by your government job before the five years are up, you do not have to repay the grant. If you are PCS’d or transferred and keep the home, you may rent it while you serve in your new duty station.

4. The property must bye a 1-4 family unit dwelling including townhomes and condominiums.

Please Help Get the News Out to Members of the Military

Do your personally know anyone in the military that could use a helping hand in getting their first home?  Please share this post with them and any other organizations you may know.

Apply online by clicking here or call Finding Homes for You at 636-532-4200 for a referral to a local lender who can provide you with more information.

Click here to see what Dream Makers will contribute to your home ownership

Finding Homes for You is a specialty St. Louis Real Estate company who only works for you, the buyer.  We never represent the seller and have found a way to bring you a new level of representation in the home buying process.   The real estate market can be a jungle.  Don’t go into it by yourself.  Find out about the “rules of engagement” and who the players are! Click here to find out more about our services

Monthly Survey Reports Opinions on Home Ownership, Renting, and Household Finances

Fannie Mae has a new monthly consumer attitude report offering a peek into the sentiments of Americans across the country. What are people feeling about owning a home, whether it’s a good time to buy or sell, and people’s outlook on home prices and whether they’re heading going up or down. The survey polls 1,000 of your fellow citizens every month via a live telephone interview to get a feel for what’s going on in the court of public opinion.

Homeowners and renters are asked a long list of 100 questions which are used to track attitudinal shifts. The results are then compared to the same survey conducted every month since June 2010.

So how is the attitude out there in the country?  Please continue to the next page to see the full report …

Consumer Opinions About Home Ownership, Renting a Home, and Household Finances

Here are some of the areas reported on:

• Will Home Prices Go Up, Go Down, or Stay the Same in the Next 12 Months
• If You Were Going to Move Would You Buy or Rent
• Will Mortgage Rates Go Up, Go Down, or Stay the Same in the Next 12 Months
• Is it a Good Time to Buy, Is it a Good Time to Sell

So how about you living in the St. Louis area? Is this how you feel? Do you see the glass half empty or half full? We will admit it’s pretty tough out there for sellers. But if you are a buyer (and that’s who we work with) it is an awesome window of opportunity.

Warren Buffett- “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”

If you are a potential buyer who would like to take advantage of this buyer’s market call us at 636-532-4200.  Click here if you would like to see some St. Louis Market Trends

How the Monthly Cost of a FHA Mortgage Will Increase After April 18th

You’ve probably heard of the “Golden Rule.”  Have you heard the other version?

He who has the gold … makes the rules!

FHA has the gold.  Their loans are one of the most popular loans due to the fact that they only require a 3.5% down payment.  The FHA recently announced that their monthly Mortgage Insurance Premiums (please do not go to sleep or let your eyes glaze over at this point) are going up .25% starting April 18th.

What’s That Got to Do With My Home Search?

Actually… a lot, depending on the size of your loan.  This price increase will impact you directly every month you make that lovely mortgage payment. You need to know the deadlines.

Continue with the rest of this post to see how much it would effect someone purchasing a home for $160,000 and what you can do to avoid paying something … you might be able to avoid.

How the upcoming FHA price increase will increase a monthly mortgage payment

John and Mary Homebuyer have been on the Internet looking at homes for months.  They have focused in on a couple of areas where they might want to live.  A home costing around $160,000 would fit within their budget. They have decided to go with the FHA loan because they could only put together a 3.5% down payment.  How this increase will  impact them.

You read it right.  An increase in their payment of $33 a month … every month.  Or look at it as almost $400 a year … for quite a few years! Keep in mind that this monthly rate could be higher or lower depending on the size of your loan.

What You Can Do to Avoid the Price Increase

All lenders have to file an order to FHA for the loans they are processing.  The Lenders deadline is April 18th which is a Monday. To be on the safe side, you should try to have an accepted contract on your new home and financing settled with your lender before this date.  Ideally, we would recommend having everything ready  by April 14th.

THE  BOTTOM  LINE

You will need to have found your home and have an accepted contract no later than April 14th to have your best shot at avoiding the upcoming price increase.

Call Finding Homes for You,  your real estate rapid response team today at 636-532-4200.

We only work for buyers, have a stream-lined team of professionals assembled who can kick start your home search and help you meet this deadline and save you money!

Click here to learn about Exclusive Buyer Agents and what we can do for you

What the government recommended about choosing a real estate agent

]]> http://media.findinghomesforyou.com/2011/03/03/st-louis-home-buyerscost-of-fha-loans-are-going-up-in-aprilwhat-you-can-do-now/feed/ 0 http://media.findinghomesforyou.com/2010/10/15/five-mistakes-st-louis-home-buyers-make/ http://media.findinghomesforyou.com/2010/10/15/five-mistakes-st-louis-home-buyers-make/#comments Fri, 15 Oct 2010 21:11:59 +0000 Mark Richert http://media.findinghomesforyou.com/?p=860

1.  Snubbing the Real Estate Agent

St. Louis home buyers, without the weight of having a home to sell, can definitely benefit from this current “buyer’s market” and historic low interest mortgage rates.  But woe to the overconfident buyer.  Here are five common mistakes buyers tend to make.

With a wide variety of web sites offering tons of data on listings, some people think, “who needs an agent?”  Finding a home and figuring out comps (the price of comparable homes on the market) is getting easier.  However, managing the nuances of offers, inspections, financing and all the other important steps to buying a home is where many buyers tend to get tripped up. You’re not buying a plasma TV at Best Buy.  This is the biggest purchase you will probably make in your life!

2.  Guesstimating How Much You Can Afford

Many buyers take a do-it-yourself approach to financing.  They use online calculators to estimate how much house they can afford, jump into the home search, then get a kick in the face when lenders refuse to qualify them for that amount.  Lenders are not only reading loan applications closer than ever before, they’re running credit checks multiple times during the loan process.  New Laws from Fannie Mae Could Delay or Deny Closings for St. Louis Home Buyers

Make an appointment with a mortgage broker or banker before you get serious about your search.  We can recommend some sources for you that have performed well for our buyers over the years.  Keep in mind that the costs of buying and owning a home go well beyond the sticker price.  Online calculators can take into account property tax and insurance, but you will have to calculate maintenance costs, moving fees and home owner association dues which will vary according to the home and neighborhood. (Continue for mistakes 3-5)

Five Mistakes St. Louis Home Buyers Make

3.  Making Arbitrary Offers

With so many homes on the market at record low prices and so many sellers desperate to get out from under them, it may be smart to hold out for the right house and the right price.  But … when you find that perfect home, please do not assume that you can make an incredibly lowball offer or make unreasonable demands.  Even in hard-it markets, nice houses in desirable neighborhoods are getting multiple bids.

If the potential home has been on the market for a long time (check with your exclusive buyer agent what’s considered a long time for that neighborhood) you may not have to worry about other buyers standing in line behind you.  Make your offer based on recent sales for comparable homes, market trends and start the bidding on the low, but not insulting, side.  If the house is new on the market; the seller may not yet be ready for your lowball offer.  If other buyers are circling around the block, put your best foot forward but don’t get pulled into a bidding war.

4.  Focusing on the House, Not the Neighborhood

Have you ever heard this old saying? 

“A wise man learns by his mistakes, but a wiser man learns from the mistakes of others.”

Some buyers wish they had researched their new potential home just a little more to really get to know all the perks, quirks, and hassles of living in a particular area.  You can always repaint a room…but there’s no easy fix for super strict homeowner association rules, long commutes to your work, or weird, loud neighbors.  As a first-time home buyer, you may not be aware of all of the things that are not about the house.

Try and spend some time in your future neighborhood on different days and times.  Check out the grocery store, local restaurants, and test drive your potential commute to work.

5.  Letting Charm Cloud Your Judgment

It’s easy to fall for the charms of an older home.  But unless the home has been thoroughly remodeled, or you’re prepared to pay for repairs and upgrades, that old, charming house can quickly lose it charm.  We help our clients negotiate ample time after the building inspection time to get estimates from contractors and back out of the deal if need be.  If you’re looking at newer homes, be careful with “staged” homes as they may be hiding something.
Don’t be Fooled by Staged Homes in the St. Louis Real Estate Market

Exclusive Buyer Agents-Your Guide in the Home Buying Process

There is a lot that can happen in the home buying process.  It’s not predictable like going to the mall to buy a sweater.  If you have questions about any of these home buying mistakes, please contact us.

Finding Homes for You is here for you the buyer.  We do not take listings and never represent the seller.  Our entire focus is on helping you navigate the twists and turns of buying a home.  We hope that you will take advantage of our experience.

Learn more about what an Exclusive Buyers Agent can do for you

New Rule from Fannie Mae Could End Up Ruining or Delaying Closing on Your Future Home

If you’re not very careful, a new rule just enacted June 1st by Fannie Mae, could put an end to your dreams of owning a home.

Fannie Mae has implemented what’s called “The Loan Quality Initiative (LQI). (Don’t you just love the names they come up with?)

The LQI is designed to make sure that the mortgage loans bought by Fannie Mae comply with its underwriting requirements.

What’s important to you is that this will require mortgage companies to double-check your financial information right before your closing. What they are going to do is “refresh” your credit report to look for any new debt or a lower credit score.

Some banks are checking this out just 2 days before closing!

Translation? Even though you may have been approved for the loan a month or two earlier, changes in your finances could cause the mortgage company to delay or deny your loan just as you are about to close on the home.

Read On for 4 Things You Want to Avoid Before Closing:

Closing on a Home? Do Not Do the Following

1.  Say No to New Credit: You do not want to get any new credit cards, loan for that car you’ve been thinking about, that special at Best Buy, etc. Zero, Zip, Nada!

2. Don’t Charge Up Existing Credit: Buying a home often leads to debt in other areas of your life. A common example people often purchase new furniture on credit anticipating their upcoming move.  Others borrow money to help pay for repairs on either the home they are trying to sell or their new home.

However good the reason, this new debt results in higher debt, a higher debt-to-income ratio, and quite possibly a lower credit score. When the lender rechecks your financial info before your closing, these negative marks could result in a denied mortgage application.

3. Do Not Change Jobs:  If at all possible, try to avoid any change in your job status or income until after your home purchase has been settled.  The loss of income before closing will raise your debt-to-income ratio, which could result in a bad credit decision.  At a minimum, a new job will likely require the mortgage company to re-verify job status and income, which could delay your closing.

4. Don’t Hurt Your Credit Score: Finally, if you want to be “King of the World” and secure your palace, don’t do any thing that could lower your credit score. You do not want to be like the couple in this picture whose moment was ruined.

Make sure you pay your credit cards, car loans, and other bills on time and keep your credit debt well below your credit limit.

It’s important to note that how new credit, a late payment, or other negative marks will affect your credit score depends in part on what your credit score is to start with. So if you have to do something that could lower your credit score, talk to your lender first to discuss alternative options and the affect your decision could have on your mortgage application.

We have more helpful tips and resources for you on our First Time Buyer page and Buyer Resources area.  If you have not heard this news yet than you probably not heard of the Exclusive Buyer Agent strategy for buying a home. Find out what other educated and savvy home buyers are finding out and why they are switching to Exclusive Buyer Agents.

Below is some timely information that just came in to us courtesy of Eileen Dalhoff from First National Bank of St. Louis

Top 10 Credit Donts-During Loan Process-By EileenDalhoff

Mortgage Rates Decline

Home Buyers Get Surprise Drop In Rates Below 5%

Here’s some news that is surprising a lot of people-mortgage rates have dropped below the 5% level.

The housing industry had been bracing for a season of rising interest rates brought on by the end of the Federal Reserve $1.25 trillion (yes, trillion) mortgage-securities purchase program.

Instead, many in our industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of climbing up to 6% as economists projected.

Translation? Lower payments for buying homes or refinancing.

Find out how the financial problems going on in Greece and all of Europe is actually helping you the buyer …

Home Buyers Get Surprise Benefit from Financial Crisis in Greece and Europe

The Wall Street Journal recently reported that this unexpected drop in rates are happening as a result of the financial problems in Europe.

As the European markets continue to become more unstable, international investors are putting their money into the U.S. as a safer haven for their investments. This inflow of international investor money has pushed our mortgage rates in the U.S to the lowest levels of the year … and near 50-year lows according to the WSJ.

Until 2003, rates on 30-year fixed rate loans hadn’t dipped below 5% since the 1960s. We know that rates cannot stay this low forever.  Now may be a historical window of opportunity for potential home buyers and those wanting to refinance.

If you would like to take advantage of the times, call Finding Homes for You at 636-386-0659.  We only work for you, the buyer, and we can put you in touch with reputable local lenders for both refinancing and purchases of St. Louis Real Estate.

You probably know your Social Security number, some of your passwords, usually your PIN number. But do you know the number that will cost — or save you thousands of dollars?  Look how your credit score number can impact your monthly payment:

Better Score = Cheaper House

If a family put a 3.5% down payment on a $172,900 four-bedroom house, they would take out a loan for $166,850. Here’s what their true bottom line would look like.

Credit Score of 760+ yields a rate of 4.981% with a monthly payment of $893.75

Credit Score of 680-699 yields a rate of 5.380% with a monthly payment of $934.83

Did you get that?  The guy with the credit score in the range of 680-699 ends up paying approximately $41.00 a month MORE than the guy with a 760+ credit score!  That’s every month!

Bottom Line: You will end up paying $15,000.00 MORE for the home over the life of the loan!

If your credit score is less than 620: It will be tough to get a loan at all.

Read more about your credit score and how to get an idea what it might be …

Your credit score is a number banks use to determine whether you qualify for credit and how much interest they will charge you.

• How is your score calculated?

• What impacts your credit score?

• How can you improve your score?

Find these answers and how lenders are likely to rate your score in a recent article provided by the Readers Digest.

If you have any questions while you are searching for St. Louis Real Estate give Finding Homes for You a call at 636-386-0659. If you need help finding a lender let us know and we can offer some suggestions from lenders our clients have used.