Don't Get Fooled By Tricky Terms When Purchasing Real Estate

When looking to buy or sell Maple Grove real estate, confusing terminology can leave you feeling somewhat uneasy.

From a multitude of numbers to marketing jargon, property listings can provide you with an overwhelming amount of information — and it's hard to know what's important.

So, brush up on the terms below and don't get fooled this April.

Sale-to-List Ratio

This is an important number to pay attention to when choosing a real estate professional to sell your home.

The percentage is calculated by what a home was initially listed for, divided by the actual sale price.

The closer an agent's percentage is to 100, the better.

If it's low, that could be an indication that they routinely list homes too high, or you may be in a slow market which would favor the home buyer.

On the other hand, if it's high, it could show that your agent markets their listings well and your market might favor home sellers.

Median Days on Market

The median days on market is the midpoint of how many days it took for homes in that area to sell.

If it's 30 days, then half of the homes sold quicker and half took longer than 30 days.

If you compare the real estate you're considering to its area's median days on market and you find that it's been on longer, the sellers might be willing to take a lower offer.

Distressed Property

Properties are listed as distressed when the owners have defaulted on their mortgage loans or are about to.

As a buyer, you might be able to get a good deal on a short sale or a foreclosure, as banks many times list them below market value to try and recoup some of their loss and clear the property from their books.

An Active Versus Pending Status

If you find your dream home and then notice that it has a pending status, brace yourself for disappointment.

An active status on a home means the owners are accepting offers, while a pending status indicates that they've already accepted an offer.

If you know it's the one for you, you can still place a bid in case the first offer falls through.

While there are many new concepts and terms you will learn when purchasing your new home, the benefits of home ownership far outweigh any fear that you may have.

If you're looking to purchase a new home soon, please contact a licensed real estate professional who can cut through the jargon and find the home of your dreams.

Simplified Home Loan Modification Program Recently Announced

The Federal Housing Finance Agency (FHFA) recently announced a new, streamlined home loan modification program to help Minneapolis home owners who are behind in their payments or own a home with a mortgage that is under water.

The purpose of the recently announced program continues to focus on helping troubled borrowers avoid foreclosure and stay in their homes.

Simplified Modification Criteria Creates More Opportunity For Home Owners

Beginning this summer, on July 1st to be exact, the new Streamlined Modification Initiative will be available to home owners that meet certain criteria.

Interestingly, this new program will require home loan servicers to provide eligible home owners whose loans are owned or guaranteed by Freddie Mac or Fannie Mae with a 90 day trial modification without requring financial or hardship documentation.

The terms of this new program have been disclosed as a way for borrowers who are at least 90 days past due on their mortgages to convert their home loan to a fixed rate mortgage with the term of the loan extended to 40 years for the lowest amortized monthly payment.

Eligible borrowers will receive this short term modification program in order to show "good faith" by making 3 on-time monthly payments.  

Upon successful completion of this trial modification period, the Streamlined Modification Initiative will direct the loan servicer to extend the home loan modifcation permanently.

Home Affordable Modification Program Still Available

The new home loan modification program was developed to become an alternative to the already established Home Affordable Modification Program (HAMP).

One important note is that homeowners who continue to investigate all loan modification options with their loan servicer may save even more than the savings offered through the new Simplified Modification Initiative.

Potential For Principal Reductions

Language in the Streamlined Modification Initiative mentions that some home owners who are under water with regard to their mortgage may be entitled to principal reduction as a component of their home loan modification.

The specific details and criteria for these principal reductions have not been specified, although contacting your trusted, licensed mortgage loan professional would be an excellent way to uncover the details.

 

5 Top Tips For Purchasing Your New Home

It's a great time to buy a new home because there are quite a few Maple Grove homes for sale and interest rates have continued to stay comparatively low.

Whether it's your first time purchasing real estate or you're a seasoned professional, here are a few tips to make shopping for a new house more pleasurable.

1. Get Help

Searching through all of the available properties on the market can be mind-boggling.

Find a professional real estate agent to help guide you through the homes for sale and select one that meets your family and financial needs.

2. Start Looking Now

Finding the perfect house can take longer than you might think, especially if you're looking in a competitive market.

If you're looking at getting a good deal on a foreclosure or short sale, then these transactions can take even longer because you're likely waiting on the bank to make the final call on your purchase transaction.

Try to be patient. The more thorough you are in your search, the happier you'll be in the long term.

3. Don't Settle For The First Place You See

Searching for a house can be extremely emotional.

If you think you've found the one, then take a step back, consult your real estate agent and go over your housing checklist one last time before writing an offer.

4. Weigh The Pros And Cons

Almost any property will need a few improvements; even newly constructed houses usually need improvements like landscaping.

Sellers are more savvy now about how to make cosmetic changes to catch a buyer's eye, so look carefully.

There will still be things you want to change, so weigh the difference between the cost of those repairs and the sales price of the home.

If you really want a house even though it's going to take a lot of work, make your offer accordingly.

5. Make Sure Your Financing Is In Order

Having financing done in advance makes the process of buying homes for sale much easier because you'll know how much you can afford.

Your loan officer can also help you determine what your monthly payments will be based on how much money you borrow. 

A great first step is to consult with a licensed mortgage financing specialist to go over the available programs and terms available in the area.

 

Home Prices Accelerate In 2013 WIth Double Digit Growth

Last week, the S&P/Case-Shiller Index showed home prices gaining 8.1 percent during the 12-month period ending January 2013, marking the largest year-over-year increases since the summer of 2006.

The Case-Shiller Index measures changes in home prices by tracking same-home sales throughout 20 housing markets nationwide; and the change in sales price from sale-to-sale.

Detached, single-family residences are used in the Case-Shiller Index methodology and data is for closed purchase transactions only.

All 20 Case Shiller Index Markets Show Growth

Between December 2012 and January 2013, home values rose in all 20 Case-Shiller Index markets, with previously-hard hit areas such as Phoenix, Arizona leading the national price recovery.

Another notable gainer was New York, which posted the first year-over-year increase following 28 straight months of negative annual returns.

The top three yearly “gainers” for as of January 2013 were:

• Phoenix, Arizona : +23.2 percent
• San Francisco, California :  +17.5 percent
• Las Vegas, Nevada : +15.3 Percent

Other year-over-year double digit gainers in home value were Atlanta, Detroit, Los Angeles, Miami, and Minneapolis.

Broader Numbers Support Widespread Housing Recovery

These strong annual home value increases continue to support the overall housing recovery.

There have been year-over-year double digit increases in home building permits and new housing starts as of February 2013 as well.

And foreclosure filings have fallen to only three-fourths of their previous annual levels.

It should be noted, however, that the Case-Shiller Index is an imperfect gauge of home values.

First, as mentioned, the index tracks changes in the detached, single-family housing market only. It specifically ignores sales of condominiums, co-ops and multi-unit homes. 

Second, the Case-Shiller Index data set is limited to just 20 U.S. cities. There are more than 3,000 cities nationwide, which illustrates that the Case-Shiller sample set is limited.

And, lastly, the home sale price data used for the Case-Shiller Index is nearly two months behind its release date, rendering its conclusions somewhat out-of-date.

That said, the Case-Shiller Index joins the bevy of home value trackers pointing to home price growth over the last year. 

A good next step for getting up-to-date home values in the Maple Grove area is to contact a qualified, licensed real estate professional.

What's Ahead For Mortgage Rates This Week: April 1st, 2013

European Market Jitters Continue To Affect The US Economy

Mortgage rates fell last week as investor concerns over the European economy grew.

Fears of growing differences between wealthier European nations and European nations needing economic aid brought higher bond prices and lower mortgage rates.

Positive news for Cyprus came when an agreement for an EU bailout was reached, but strict terms indicate that Germany and other nations are growing less enthusiastic about bailing out the banks of EU nations with shaky economies.

Meanwhile, the Italian government has not been able to agree on a coalition government, which reduces the chances for economic reform in the EU's third largest country.

European trade with the U.S. could fall as the result of the EU's ongoing economic challenges; this in turn would likely reduce U.S. inflation, which is good for lower mortgage rates.

Low inflation could also prolong the Fed's commitment to its quantitative easing program that is designed to keep long term interest rates, including mortgage rates, lower.

Last Week's Economic News Quiet, No Major Surprises

On Tuesday, New Home Sales for February were released, and came in short of investor expectations of 420,000 home sales on an annual basis.

February's figure came in at 411,000 new homes sold as compared to January's revised reading of 431,000 new homes sold.

Winter weather conditions are one reason for the decline in new home sales, which was the largest decline since February of 2011.

The National Association of REALTORS® released its Pending Home Sales Index for February on Wednesday; pending home sales reflected the results for New Home Sales with a reading of -0.4 percent as compared to expectations of a 2.0 percent reading.

January's reading for Pending Home Sales was also higher at 4.5 percent.

Home prices and mortgage rates move according to supply and demand; if demand for homes falls, home prices are likely to do likewise as are mortgage rates.

But as demand for homes increases and prices rise, mortgage rates typically rise as well. Would-be buyers who have been waiting for their best deal may want to get into the housing market now, as strong signs of economic improvement are in play, but home prices and mortgage rates haven't yet gone through the roof.

In other economic news, Thursday's Jobless Claims Report fell short of Wall Street projections and came in at 357,000 new jobless claims against expectations of 340,000 new jobless claims.

The previous week's jobless claims came in at 336,000 new jobless claims.

Analysts typically view a four-week rolling average of jobless claims as a more accurate indicator for the economy as jobless claims can vary widely week-to-week.

Consumer Sentiment for March was released Friday and came in at 78.6 and exceeded expectations of 72.5 for March.

The current reading also surpassed the prior reading of 71.8 percent. As consumers gain confidence in the economy, they are more likely to buy homes.

This week, the European Central Bank (ECB) meeting scheduled for Thursday and monthly Employment Data set for release Friday are among anticipated economic news events.