Welcome to the "Z" Team!

Here’s our weekly update for home buyers or refinancers. Borrowing costs for home ownership just got a little cheaper as mortgage rates took another dip to new all-time record lows this week, Freddie Mac reports in its weekly mortgage market survey.

“Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week,” says Frank Nothaft, Freddie Mac’s chief economist.

Here’s a closer look at average rates for the week ending May 3:

•30-year fixed-rate mortgages: averaged 3.84 percent, with an average 0.8 point, reaching a new historical low. The previous record for 30-year rates was 3.87 percent, which was set on Feb. 9 of this year. A year ago at this time, rates averaged 4.71 percent.

•15-year fixed-rate mortgages: averaged 3.07 percent, with an average 0.7 point, another historical low. The previous record for 15-year rates was 3.11 percent set on April 12 this year. A year ago at this time, 15-year rates had averaged 3.89 percent.

•5-year adjustable-rate mortgages: averaged 2.85 percent, with an average 0.7 point, holding the same as last week. Last year at this time, 5-year ARMs averaged 3.47 percent.

Source: Freddie Mac

With signs of a housing turnaround getting stronger, we’re seeing buyers are finding several recent changes when they go to put in an offer on a home. A recent article at U.S. News & World Report highlights some of these changing “rules” for home buyerclients:

1. Lowball offers won’t likely stick:  Buyers may be better off asking for seller concessions, such as closing cost assistance or making home repairs, rather than making offers way below the asking price. “Keep in mind that a lowball number may turn off the seller and close down any chance at negotiation,” the U.S. News & World Report article cautions potential buyers.

2. Get pre-approved: Getting a loan isn’t easy nowadays as lenders have tightened their credit standards in recent years. Serious buyers should check their credit and get pre-appoved for a loan to determine how much of a home they can even afford even before they start their home search.

3. Get realistic about the market: Real estate agents can show buyers comparable nearby sales to help educate them about local market conditions. Transactions from the last few months are the most important.

4. Expect some competition. Housing inventories are dropping in many of our areas and spurring an increase in demand. Home buyers may face increased competition for the home they want, particularly among short sales and foreclosed properties, in which they may be up against investors who are making all-cash offers.

5. Conduct property research: Real estate agents will help guide clients on what all they need to do when they find a property they like.  Other important efforts nowadays: we recommend hiring a home inspector, verifying the accuracy of the property line (by asking seller for the survey or having your own conducted), and make sure all necessary disclosures about the property, required by various sources, have been made.

Source: “Traditional ‘Rules’ of Home Buying Return,” US News & World Report (5/1/12)

Update information for everyone to share! Data security experts suggests that you may be better off smashing your aging laptop or cellphone instead of donating it or selling it if you want to keep sensitive information you had on it safe.

Windows XP laptops and Android smartphones — even when reset to their original factory settings — were found to be the most vulnerable and still contained sensitive personal information that could be uncovered on the devices, Robert Sicilliano, a McAfee identity theft expert, told USA Today.

Sicilliano purchased 30 used devices off Craigslist. He found that half the devices were clean, but 15 of the devices still contained a lot of personal information. He was able to find bank account numbers, Social Security numbers, work documents, and court records on some of the devices.

Apple’s iPhone and iPad as well as Research in Motion’s BlackBerry were found to not pose the same risks as Android smartphones, Sicilliano notes (although he still recommends users reset the devices before giving them away).

Mary Ann Miller, financial fraud expert at Nice Actimize, told USA Today that device makers need to provide more guidance on how to responsibly get rid of old electronic devices to prevent security breeches.

Until then, Sicilliano says: “I would beat the thing to death.” What are your thoughts?

Source: “Discarded Digital Devices can Retain Sensitive Data,” USA Today (May 2, 2012)

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As housing inventories shrink, more buyers are reportedly finding their perfect home in properties that haven’t even been listed on the market yet. Our “Buyers Broker/Agent” objectives when working with clients are to seek and show these, FSBO’s, etc!

“Such back-pocket deals used to involve mostly luxury homes where buyers and sellers wanted to keep the sale hush-hush,” The Star Tribune reports. “But lower-priced houses are becoming a bigger part of the mix because even those are in short supply.”

As real estate professionals we are helping buyers sniff out these unlisted homes by working to identify sellers who would like to sell but are unsure if the market will give them enough on a sale. We find these sellers through referrals and also by home owners who once listed their homes for sale but removed their homes from the MLS after they lingered on the market. Please provide your objectives and we’ll work for you!

Source: “Impatient Buyers Target Homes Before They go on Sale,” Star Tribune (Minneapolis) (April 28, 2012)

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We hear many home buyers complain that one of the biggest hurdles they face is qualifying for financing. So here are some ways we find that home shoppers can ensure they qualify for a better mortgage deal — particularly one that takes advantage of the near record-breaking low mortgage rates.

Our suggestions are in line with a recent article at Money Magazine highlighting some of the following tips when shopping for a mortgage:

1. High credit scores count. The lowest mortgage rates go to home shoppers with credit scores of 760 or higher. Avoid opening new lines of credit or loans for at least three months prior to getting a loan. Also, on your open accounts, try to pay off those balances. “One large balance — even if it’s paid off at the end of the month — can ding your score by 20 points or more,” according to the article at Money Magazine.

2. Gather plenty of quotes. Most experts say shopping around can pay off. Gather at least six quotes from lenders on mortgage rates because they can vary quite a bit from lender to lender. Request quotes from local and regional lenders as well as national ones for comparison. Be sure to ask about estimated closing costs, too, which can be anywhere from 2 percent or more of the loan balance.

3. Ask about lock-ins. To make sure the rate doesn’t go up when you’re under contract, ask about a lock-in period on the loan, in which lenders agree to not raise the interest rate within a certain time period. Home shoppers should ask their lender and REALTOR® how long it takes to close loans similar to theirs and see how long they can lock a rate in for. Some lenders will charge several hundred dollars to extend a lock-in agreement, so experts recommend learning the lock-in terms beforehand when shopping for the best mortgage deal.

Source: “6 Ways to Get a Great Mortgage Deal,” Money Magazine (April 30, 2012)

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Great news to know about home affordability! Fixed-rate mortgages dropped slightly this week, nearing their average all-time lows and helping to lift home buyers’ purchasing power, Freddie Mac reports in its weekly mortgage market survey. 

For every week but one this year, the 30-year fixed-rate mortgage, the most popular choice among home buyers, has been below 4 percent. We recommend you check with a couple of  local lenders to see what your qualifying guidelines are before rates go up! 

Here’s a closer look at average rates for the “week ending” April 26: 

• 30-year fixed-rate mortgages averaged 3.88 percent, with an average 0.7 point, dropping from last week’s 3.90 percent average. A year ago at this time, 30-year rates averaged 4.78 percent. The record low for 30-year rates averaged 3.87 percent, a record reached in February. 
• 15-year fixed-rate mortgage averaged 3.12 percent, with an average 0.6 point, dropping from last week’s 3.13 percent. Last year at this time, 15-year rates averaged 3.97 percent. The all-time record low is 3.11 percent, a record reached recently during the week ending April 12. 
• 5-year adjustable-rate mortgages averaged 2.85 percent this week, with an average 0.6 point, rising slightly from last week’s 2.78 percent average. Last year at this time, 5-year ARMs averaged 3.51 percent.

Source: Freddie Mac

Although we see the foreclosure activity may be declining, the problem is far from over! There have been 5 million foreclosures since 2007, reports the Center for Responsible Lending, which estimates that between 3 million and 5 million more will occur over the next couple of years nationwide.  

Some of the consequences of foreclosures are obvious: family displacements, crime in vacant properties, ruined credit, and the loss of equity. Other, less obvious consequences have emerged as well. About 8 million children could be affected, including kids of home owners and renters who were evicted due to a foreclosure. Julia Isaacs of the Brookings Institution calls these children the “invisible victims” of the foreclosure crisis, as foreclosures not only can cause emotional trauma, but also interfere with a child’s educational development.

Researchers also have found a connection between rising foreclosures and an increase in medical visits for mental health, such as anxiety, or preventable conditions such as high blood pressure. Plus, let’s don’t forget possible job related problems. 

Our region is strapped because of a loss of property tax revenue caused by foreclosures, which can lead to cuts in services — including fire protection, senior centers, and local law enforcement. Please provide comments about your local market contitions. 

Source: “Three Hidden Costs of the Foreclosure Crisis,” MarketWatch (4/ 24/12)

24/7 Wall St. asked real estate experts and real estate organizations to weigh in on how sellers can get their house sold at the best price and in the shortest amount of time.

Here’s what they had to say as  the best ways to get the “sold” sign out this spring:

1.Pay attention to “curb appeal”: First impressions are critical, and homes with inviting landscapes and exteriors tend to sell better, my first recommendation. Pay attention that the driveway is in good condition, lawn well-kept, and the house looks freshly painted.

2.Set the right price: Real estate professionals know how to set the price and prepare a home for sale. We use comparable sales of homes sold in the last 90 days to help set the most realistic price for the sales price of a home. By setting a realistic price from the beginning, sellers should be reminded that this will prevent having to drop the price of the home several times before getting it sold and having it linger on the market.

3.Talk about energy efficiency: Many buyers don’t fully understand “green” homes but they understand savings. Sellers agents should point out these features — such as energy-efficient windows or appliances — that could save buyers money with utility costs.

4.Give the home Web appeal: Good photographs make a home stand-out online and help lure more potential buyers. Realtor.com says that more than 6,300 photos are viewed per minute on listings posted at its site. We use 12+ photos per listing!

5.Make it move-in ready: Fix any needed repairs, such as water stains, creaky doors, and windows that don’t shut. Flaws in the home — even if relatively minor — can distract buyers, and should be fixed before the home is even listed. Agents should recommend that sellers get a home inspection prior to putting the home up for sale, this helps sellers identifying any potential problems that could potentially derail a sale later on. Once a problem is uncovered, sellers or their agents are obligated to disclose it!

Read more ideas at 24/7 Wall St or visit: www.sierraproperties.com

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Last year, some of us complained about receiving really low offers on listed homes. Offers usually submitted by the buyer for 25 percent or more below the list price, according to a recent  National Association of REALTORS® survey of its members. That number has dropped by about the same percentage in our local market area.

According to a survey this March of 4,500 agents and brokers, no REALTORS® complained about low-ball offers. The main problem nowadays: The sudden drop in inventory of for-sale homes has led to fewer homes available to sell.

For home buyers who still think they have a chance of hitting it lucky with a low-ball offer, they’re finding in many markets that their offers are more often being rejected or countered closer to the original asking price, the Los Angeles Times reports. Please comment, is your local market reflecting similar changes?

Source: “Low-ball Offers Decline in Some Housing Markets,” Los Angeles Times (4/22/12)

Let’s look at the total picture of reality as it relates to today’s family home dreams!

 About 8 million children have been hurt by foreclosure, according to a newly-released report by First Focus, a bipartisan advocacy group for families. “Children are the often invisible victims of the foreclosure crisis,” says Julia Isaacs, the author of the report.

The report highlights the widespread affect the foreclosure crisis has had on the nation’s children: About 2.3 million children have lived in homes lost to foreclosure; 3 million have lived in homes at-risk of foreclosure; and another 3 million have lived in rental homes lost to foreclosure or currently live in rentals that are at-risk of foreclosure.

The foreclosure impact has been greatest on children in Nevada, where nearly one in five — or 20 percent — of children lived or live in a home that was lost to foreclosure or is at-risk of being lost to foreclosure. In Florida, 15 percent of children have been affected by foreclosure, followed by Arizona (14%) and California (12%).

Foreclosures have been found to hamper children’s performance at school. Children who have been affected by foreclosure often see math and reading scores drop as much as if they’d missed school for a month, Isaacs says. Please provide your comments.

Source: “Report Estimates 8 Million Children Hurt by Foreclosures”  USA Today (4/18/12)