Wednesday, July 24, 2013
The housing market is getting hot this summer. And that is changing the market for home buyers and sellers.
As Karen Blumenthal reports at WSJ.com, existing home sales were up 15 percent in May compared to the previous year. Mortgage rates are above four percent for a 30-year fixed rate loan. So here are some tips Blumenthal has for those trying to navigate this market:
1. Cash matters. It helps to have a bundle of cash to put down. A down payment can range from 3.5 percent for a government-backed loan to as much as 40 percent for homes over $1 million.
While a typical down payment is 5 to 10 percent, don't be surprised if a loan bigger than $417,000 may require you to put down 20 percent or more.
2. Get pre-qualified. Potential buyers will be more attractive if they've already been carefully scrutinized by a mortgage lender. You'll have to pick a lender and provide pay stubs, bank statements and other records.
A credit score of at least 640 will help you get that loan. And the higher you go over that number, the better your interest rate will be.
3. Get connected with a real estate agent. You want an agent who knows the area of town you're interested in. One who keeps track of recent sales and knows what improvements are needed to make the house attractive to a buyer.
4. Prepare for auction. If you get multiple bids, be prepared to reject all the offers and ask each bidder to submit a final and best offer by a specific deadline so the bids can be compared.
Buyers should offer their best terms, as well as price, including any contingencies. Sellers might choose a lower price in favor of a buyer who appears more serious.
And remember, not to get to emotional about all this. It's business.
For a link to the complete article by Karen Blumenthal, click on the link.