Piatt County Real Estate

How VA and FHA Appraisals can affect the price.

2007-01-18T08:12:00.000-08:00

Home appraisal inspections on FHA and VA loans are a little more detailed than on conventional loans (and more expensive). The appraisers are required to perform certain minimum inspections as well as evaluate the market value of the property. Although these inspections are not as detailed as a professional home inspection and should not be considered a substitute, sometimes repairs are required.

These are additional costs the seller would not be obligated to pay for someone obtaining conventional financing, so your offer should include a maximum figure for these repairs. Otherwise the seller is signing the equivalent of a blank check, and they do not want to do that.

At the same time, whatever figure you put in will most likely affect the seller’s willingness to negotiate on price. If you put $500 as an estimate, the seller may be $500 less negotiable on their price. If no repairs are required, you may have been able to get the house for $500 less than what you and the seller agreed on as the price.

The solution is to add a clause to your offer that goes something like this. "If required repairs cost less than the maximum amount allowed, the excess will be credited toward buyer’s closing costs."

Currently their are 124 homes for sale in Piatt county. See them all at www.piattcountyhomes.com

When buying a home, consider the condition.

2007-01-10T11:13:00.000-08:00

Since you have toured the property you are interested in, you should know how it compares to the general neighborhood. All you have to do is put the home in one of three categories - average, above average, or below average.

When evaluating a home’s condition, there are a number of things you should consider. Structural condition is most important - items such as walls, ceilings, floors, doors and windows. Then paint, carpets, and floor coverings. Pay special attention to bathrooms and bedrooms and whether the plumbing and electricity work efficiently. Look at the fixtures, such as light switches, doorknobs, and drawer handles. The front and back yards should be in reasonably good shape.

The missing ingredient will be information on the condition of the homes from your comparable sales list. Provided you chose the right agent to represent you, they will have actually visited most of those homes and be able to provide key insights.

Find your next home at www.piattcountyhomes.com

Home Buyers Play With Things....

2006-12-26T12:47:00.000-08:00

Are You Getting the House Ready to Sell?

Do not do anything expensive, such as remodeling. If possible, use savings to pay for any repairs and improvements – do not go charging up credit cards or obtaining new loans. Remember that part of selling a house is also preparing to buy your next home. You do not want to do anything that will affect your credit scores or hurt your ability to qualify for your next mortgage.

When looking at a house, prospective home buyers often do not really know what to do. So they play with things. They flick light switches. They open everything with a handle. They turn on all the faucets and flush all the toilets. Having nice shiny fixtures makes an impression.

All your sink fixtures should look shiny and new. If this cannot be accomplished by cleaning, buy new ones. If you don’t buy something fancy, this can be accomplished inexpensively. Make sure all the hot and cold water knobs are easy to turn and that the faucets do not leak. If they do, replace the washers.

It sounds like hard work, but it's pretty easy -- even for the inexperienced.

Check to make sure you have good water pressure and that there are no stains on any of the porcelain. If you have a difficult stain to remove, one trick is to hire a cleaning crew to go through and clean your home on a one-time basis.

They seem to be wonderful at making stains go away. And of course, then call your favorite Realtor... Call Corey@ 621-8034.

Real Property -vs- Personal Property.

2006-11-28T08:02:00.000-08:00

When selling or buying a home, you need to think ahead about what you are actually selling along with the property and the house. The general rule is, "if it attached to the structure or the ground, it is real property and stays with the house."

This confuses some people, especially when selling their first house.

For example, as a renter you may have been used to removing your curtains and taking them with you when you move. Since they are probably "attached" to the wall in some manner, the buyer may assume all window coverings are staying with the house.

This can cause a disagreement. Disagreements in real estate spread like viruses, moving from minor issues to more major issues. Emotions rule and logic melts away like a scoop of vanilla ice cream on a black asphalt playground in August. It can become an ugly sticky mess.

Disagreements have the potential to become "challenges" .

The point is that you need to think about these things in advance. If you have to unscrew a screw, claw out a nail, detach anything from the interior or exterior structure, or uproot anything from the ground -- and you want to take it with you when you move -- put it in the contract.

That way there are no possible misunderstandings later.

There are currently more then 125 homes for sale through out Piatt County.

To see them all visit www.piattcountyhomes.com

Now Is A Great Time To Buy Or Sell A Home

2006-11-14T13:24:00.000-08:00

Consider These Facts:

Interest Rates Near Record Lows: Interest rates are comparable to 40 year lows, offering many homebuyers a once in a lifetime opportunity.

Large Inventory Wont Last: There are currently more then 2300 homes and properties for sale in central Illinois. There has been a record number of homes and property on the market in recent months, offering you the consumer the greatest choice in decades.

Prices Overall Have Stabilized: Contracts for home sales in August were up 4.3 percent and locally the outlook is for home prices to increase again next year.

Positive Outlook: Former Federal Reserve Char, Alan Greenspan recently said that housing prospects are looking up. “Most of the negatives in housing are probably behind us. The fourth quarter should be reasonably good, certainly better then the third quarter.” According to industry estimates, 2006 will be the third best tear on record for home sales.

Real Estate Is A Great Investment: Homeownership is a safe, secure way to build long term wealth. The national median price of homes bought ten years ago has increased 88 percent.

The number of US households is expected to increase 15 percent during the next decade, creating a continued high demand for housing.

Don’t Delay: Now is a great time to buy or sell a home. Call us today and we will make you our next success story.

Piatt County Has 126 Homes Currently Listed For Sale. See Them All At www.piattcountyhomes.com

Why Close At The End Of The Month?

2006-11-02T07:48:00.000-08:00

Mostly, this has to do with lowering your out of pocket costs by minimizing the amount of "prepaid interest" you pay on your mortgage at closing.

Interest on your mortgage begins running from the date your transaction closes, but most loans are due on the first day of the month. So when you close, you "pre-pay" the interest between the closing date and the end of the month..

For example, if you close on the 29th of October, you prepay one day of interest to cover the rest of October's interest. Your first payment will be due December 1st, when you will actually be paying November's interest.

As a different example, if you close on the 6th of November, you prepay 24 days of interest. This means you have to bring in more cash to close your real estate purchase than would have been required by closing just eight days earlier.

However, the benefits of a late-in-the-month closing are only short-term.

With the October 29 closing, your first payment due-date will be December 1. With the November 6 closing, your first payment is not due until January 1.

It just takes less cash "out of pocket" to close near the end of the month. That is the major benefit.

When Your Selling Price is too High, Beware!

2006-10-23T07:32:00.000-07:00

So you’ve decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with three local listing agents who’ve been hanging stuff on your front doorknob for years. Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend a specific sales price.

Amazingly, a couple of the Realtors have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more.

When you interview the third agent’s figures, they are much more in line with your own anticipated value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.

A Sales Practice Called "Buying a Listing"

If you’re like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right?

After all, everyone else does it!

The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing." He "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.

Why do some agents "buy" listings this way?

There are basically two reasons. A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home’s value. On the other hand, there are some agents who engage in this sales practice routinely.

10.22.2006 Piatt county has 119 homes for sale.
See them all at http://www.piattcountyhomes.com/

Make Your Home "Anonymous"

2006-10-09T09:56:00.000-07:00

If there is a new home sales tract near your home, go visit. It doesn't matter what size the homes are. What you will find are some wonderfully (but sparsely) furnished homes that anyone could live in -- with the emphasis on "anyone." They are anonymous. There may be a baseball glove in the boy's room, but no family photos on the walls.

There may be "personality" - but no person.

The reason you want to make your home "anonymous" is because you want buyers to view it as their potential home. When a potential homebuyer sees your family photos hanging on the wall, it puts your own brand on the home and momentarily shatters their illusions about living in the house themselves.

Put away family photos, sports trophies, collectible items, knick-knacks, and souvenirs. Put them in a box. Rent a storage area for a few months and put the box in the storage unit.
Do not just put the box in the attic, basement, garage or a closet. Part of preparing a house for sale is to remove "clutter," and that is the next step in preparing your house for sale.

10.9.2006 Piatt county has 130 homes for sale.

See them all at www.piattcountyhomes.com

Buying A House? Don't Move Your Money Around.

2006-09-22T15:46:00.000-07:00

When a lender reviews your loan package for approval, one of the things they are concerned about is the source of funds for your down payment and closing costs. Most likely, you will be asked to provide statements for the last two or three months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts.

If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them.

The mortgage underwriter (the person who actually approves your loan) will probably require a complete paper trail of all the withdrawals and deposits. You may be required to produce cancelled checks, deposit receipts, and other seemingly inconsequential data, which could get quite tedious.

Perhaps you become exasperated at your lender, but they are only doing their job correctly. To ensure quality control and eliminate potential fraud, it is a requirement on most loans to completely document the source of all funds. Moving your money around, even if you are consolidating your funds to make it "easier," could make it more difficult for the lender to properly document.
So leave your money where it is until you talk to a loan officer.

9.22.2006 Piatt county has 145 homes for sale.

Why Buying A Home Is A Good Idea.

2006-09-11T07:44:00.000-07:00

As a fairly general rule, homes appreciate about three or five percent a year. Some years will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region.

Five percent may not seem like that much at first. Stocks (at times) appreciate much more, and you could easily earn over the same return with a very safe investment in treasury bills or bonds.

But take a second look…

Presumably, if you bought a $200,000 house, you did not pay cash for the home. You got a mortgage, too. Suppose you put as much as twenty percent down – that would be an investment of $40,000.

At an appreciation rate of 5% annually, a $200,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $40,000. Your annual "return on investment" would be a whopping twenty-five percent.

Of course, you are making mortgage payments and paying property taxes, along with a couple of other costs. However, since the interest on your mortgage and your property taxes might both be tax deductible, the government is essentially subsidizing your home purchase?

Your rate of return when buying a home is higher than most any other investment you could make. As always, I encourage you to consult a tax advisor for more specifics on the availability of tax deductions.

So much doom and gloom....

2006-08-31T19:02:00.000-07:00

According to the newspaper articles, the market is slowing down, and you here people asking... "Why won't my house sell?"

There are five main conditions to selling quickly. Location, condition, marketing, the market, and the price. If you have a great location and your home is in good condition, you probably know it. Your agent shows you their marketing efforts, at least the stuff that is visible. Of course, a lot of marketing I do occurs behind the scenes. Your reading one now.

Assume all those are just fine.

There are two things left. The market and the price.

Obviously, the market must be slowing because it can't be the price! That just...isn't....thinkable. Everyone is selling for higher prices. People are getting rich selling their homes!

In just the last six months, the median priced home has continued to increased.

We've still got six months to go. If this price-growth trend were to continue, we could see our 22nd consecutive years of single digit housing appreciation in the local market.

I don't believe there is a local bublle. I am still selling homes, still supporting my family and still helping people find the perfect home at the right price.

Houses were never meant to be liquid investments. Whether you intend to live in the home or rent it out, you buy it...and you hold it. Stocks you can sell in a day. A house can take months to sell in the best of conditions.

How to look at homes that are for sale.

2006-08-20T15:04:00.000-07:00

Looking at homes for sale via the internet is fun and exciting.

At first.

After a while, it gets a little frustrating, but you've learned a lot. You have a general idea of what homes look like in the area, prices, differences in costs for numbers of bedrooms and bathrooms and you have ideas about what community you want to search.

Looking at homes online helps provide a context for what comes next.

The "real" home hunt.

Who do you take with you?

If you’re married, you take your spouse. There is always the chance you’re going to find something perfect and you cannot make a decision without your spouse. Well, you can…but you’ll probably pay for it later.

If you’re a couple, then take your partner for the same reasons.

If you’re single and buying on your own using your own money, then you can take a friend, but it isn’t necessary. You will make the final decision on your own.

No matter how old (or young) you are, don’t take a parent with you.

Apologies, and there are exceptions to the rule because parents really do want the best for you and want you to be successful. Buying a home is part of being successful and they wholeheartedly want you to buy a house, but…

…not this house, and…

…not that house.

Some psychological “thing” just does not allow your parents to totally let go (regardless of your age), and this trait exhibits itself by diluting their enthusiasm when you start getting specific about what home you want to buy.

Parents don’t do it on purpose. They can’t help it, and you can’t blame them. Yet it happens.

Oh yes. There is one other person you take along with you (hint, hint) – your experienced, capable, professional, friendly neighborhood real estate agent. That's me, and I can be ready to help you on a moments notice... just call (217)621-8034.

Thumbs Up – Thumbs Down

The first thing you see when house hunting is the view from the street. “Curb Appeal.” Do you like the house or don’t you? That’s an easy decision. If you don’t like it, drive on. Don’t waste your time because it is better spent looking at homes you do like.

If the home passes the “curb appeal” test, go inside and take a quick look around. Not a detailed look, just go from room to room and decide if you could imagine yourself living there. Does it meet your “wants and needs?” Don’t worry too much about paint color, carpeting, window treatments, and so on. Not yet.

If there is something obviously wrong…

…can you fix it?

Do you want to?

If you don’t like the home, then it is "thumbs down."

Tell your agent why. One of the most common frustrations about the house hunt is when agents continue to show you houses that you just aren’t interested in. The major reason that happens is because your agent does not know enough about what you want.

They will ask, and often. It may be easier to articulate exactly what you like and don't like while you are out hunting for homes.

If you give the house a “thumbs up” on that first preview, it doesn’t mean you are ready to make an offer.

It means the house deserves a “second look.”

Get out your checklist, your notepad, your digital camera or your (even better) video camera and go back inside.

Your agent, Me (another well-intentioned and humorous hint), will tell you what to look for.

And when you do find the ideal home, make an offer, and reach a deal...? Keep your agent's phone number handy. Do you remember it... (217) 621-8034?

You've just done the easy part.

The Wealthy Home.

2006-08-17T10:08:00.000-07:00

In America, the most common way to accumulate wealth is through home ownership.

At the time of a survey conducted by the National Association of Realtors, the "average" homeowner has $50,000 in "unrealized wealth" in their home. Those families with incomes over $75,000 averaged $100,000 in "unrealized wealth." Families with incomes less than $40,000 averaged $40,000 in unrealized wealth.

"Unrealized wealth" just means your house is worth more than what you owe on it. This is also called "equity." Savings. You own an asset that appreciates in value.

Over the last year, the "average" house increased in value. Since the "average" house is worth $153,300, that means in one year the "average" homeowner accumulated wealth -- by doing nothing more than making a mortgage payment (plus taxes and insurance). Since interest and property taxes reduce your taxable income, the federal government is subsidizing this increase in "home wealth."

Three out of four homeowners say their "home wealth" is greater than their "stock wealth."

The most common way to "tap in" to unrealized wealth is to refinance and pull cash out of the home, get a home equity line of credit or sell your home. At least forty percent of those who sell their home use some of the money to buy a bigger, better, or newer home.

Renting does not accumulate wealth.

Home Buyers... You Have Clout!

2006-08-14T16:28:00.000-07:00

Home buyers have more clout now than they've had for years. So, they are more discerning, and focus only on the best houses at the best prices. If the seller won't negotiate a satisfactory deal, buyers would rather walk away than overpay.

The incidence of failed transactions appears to be rising. Last year, buyers couldn't buy fast enough. Many paid over asking price, overlooked property defects and bought "as is."

Today's buyers are cautious going into a transaction and less likely to accept full responsibility for correcting defects found on inspections. When a resolution can't be reached on an inspection issue and the buyer decides to search for a better deal, the seller is left with two options: He can either put his property back on the market, or he can wait for a friendlier market.

The second approach is risky if you want or need to sell in the near future. Although the current market won't last forever, it may be some time before we see a market that's better for sellers than it is today.

HOME SELLER TIP: Before letting a deal fall apart, sellers should seriously consider their chances of negotiating a better deal with another buyer. Depending on state disclosure requirements, a seller might be required to disclose the inspection issues to future buyers.

Disclosing newly found defects to a subsequent buyer could affect how much he'd pay for the property. Also, remarketing a property is a hassle, it takes time and it might be no more lucrative than the first deal. In fact, it could be worse.

Putting a property back on the market in a rising inventory environment can be challenging. Rekindling enthusiasm is difficult because most buyers focus their attentions on the new listings coming on the market, not than those that are back on the market.

A listing comes back on the market because something went wrong. If there are plenty of new listings to choose from, there's less incentive to narrow in on a listing that someone else didn't buy, even the listing is back on the market for a reason other than the condition of the property. For instance, a certain number of transactions fail because the buyers were unable to secure financing.

Last year, buyers were less inclined to withdraw from a purchase over inspection issues. The listing inventory was so limited that they were afraid it would be difficult to find something else to buy. According to the National Association of Realtors, inventories nationally now represent a 6-month supply at the current sales pace. This puts inventory levels in balance for the first time in years.

The primary reason there are more listings back on the market is that some sellers are reluctant to accept that the market has changed. It has often been said that when the market changes, sellers are the last to know. This is understandable. No one likes to hear that a valuable asset is worth less than anticipated.

There are sellers who realize weeks after they let a deal fall apart that they made a mistake. If you find yourself in this situation, consider a price reduction to send a message to prospective buyers that you've changed your stance.

THE CLOSING: Sellers can keep further negotiations over inspection issues to a minimum by providing presale inspections reports and disclosure statements to buyers before they make an offer.

Find Your Own Realtor.

2006-08-13T20:39:00.000-07:00

Finding and Using Your Own Realtor

Actually, the best thing for you to do when you see an advertisement in the paper is to call your own Realtor and tell them about the ad. Since addresses usually do not appear in advertisements, your Realtor will call the listing agent and find out the MLS number for the property. If the listing is on the internet, it probably already provides the MLS number.

The MLS number allows the agent to access the listing directly on the Multiple Listing Service computer. That reveals a lot more information than what is available to you on the web.

The house may turn out to be a great home for you, but it may also be a property the Realtor has already disregarded because it backed up to a busy noisy street and you have told your Realtor you wanted a quiet neighborhood.

You Have to Find an Agent. How do you do that?

If you're reading this, you're probably on the Internet. One key to a successful relationship between a real estate agent and their client is that, in addition to representing your interests competently, they educate you about the process as it unfolds. So don't simply look for property on the web - look for an agent that informs you about the process.

Referrals are always a good way to go. Perhaps a friend, co-worker, or family member recently bought a house in the same community and had a good experience. However, if they bought a house twenty miles from where you want to move, it may not be a good idea to use the same Realtor.

You want an agent who knows the area in detail and has already previewed many of the homes available for sale in that community. Community knowledge should be important to you because you are not just buying a house. You are buying a home in a local neighborhood in a specific community.

Every Realtor can show you every property available for sale in the Multiple Listing Service. Since that is true, you can call any real estate office and find a Realtor willing to show you houses for sale. The problem is that you do not know if you are talking to an excellent Realtor or an average one.

Oh and by the way... I am an excellent REALTOR!

What If You Would Have Bought A Home Back Then...?

2006-08-12T07:41:00.000-07:00

Are you trying to make up your mind whether to "move up" to a bigger home or purchase your first house?

...but it's too darned expensive?

What's the price?

$100,000? $200,000? $500K?

If you had bought that $100,000 house or condo ten years ago, national averages say it would have cost you around $56,000. Locally, some markets have experienced even more price growth.

In 1994, today's $500,000 house would have cost about $280,000.

That's because the national median sales price ten years ago was 56% of today's price.

Once you buy a house, your payment remains stable. If you get a fixed rate loan the payment will remain exactly the same throughout your mortgage. Rates are averaging in the mid-6% range right now (August 2006).

Maybe those examples are too old, too long ago. Five years ago, a $100,000 house would have cost $70,000. A $400,000 home would have cost $280,000.

It doesn't make sense to rent. Rent keeps going up. House payments don't.

Plus, houses appreciate.

If you were paying off your thirty-year mortgage today, on schedule, the median average home price when you bought your home was only $32,000.

No one can predict the future, but since 1968, houses averaged an appreciation rate of 6.34% a year.

That doesn't sound like much?

If you buy a $250,000 house today, no one can tell you what it will be worth a year from now or five years from now. Based on 6.34% annual appreciation, a home kept in good condition in a solid location could be worth $1.5 million 30 years from now.

That's not a promise, though.

The Fed Pauses And Mortgage Rates Dive.

2006-08-11T08:48:00.000-07:00

Mortgage rates dropped for the third consecutive week after the release of a disappointing labor market report and the Federal Reserve's subsequent decision to discontinue its interest-rate hikes, according to surveys conducted by Freddie Mac and Bankrate.com.

In Freddie Mac's survey, the 30-year fixed-rate mortgage fell to an average 6.55 percent this week, down from last week's average of 6.63 percent. The average for the 15-year fixed-rate mortgage also sank from last week, falling from 6.27 percent to 6.2 percent.

Points, which are fees charged by lenders for loan processing expressed as a percent of the loan, averaged 0.4 on the 30- and 15-year loans.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 6.21 percent this week, with an average 0.4 point, down from last week when it averaged 6.27 percent. The one-year Treasury-indexed ARM average remained at 5.69 percent, with an average 0.8 point.

"The weaker-than-expected jobs report combined with the Fed's decision to pass on raising rates at its last meeting led directly to lower rates this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Interest rates for fixed-rate mortgages have dropped to levels last seen in the spring of this year.

"Lower rates may bring about a rise in refinancing activity as homeowners with ARMs getting ready to reset decide to take advantage by locking into a fixed-rate mortgage now rather than waiting until the adjustment date when rates may be higher."

In Bankrate.com's survey, mortgage rates declined for the third week in a row and the fifth time in the last six weeks, as the Federal Reserve held interest rates steady for the first meeting since May 2004. The average 30-year fixed-rate mortgage fell to 6.57 percent, the lowest since April 19, according to Bankrate.com's weekly national survey of large lenders, and these loans had an average of 0.32 discount and origination points.

The average 15-year fixed-rate mortgage, popular for refinancing, dropped by a similar amount to 6.25 percent, Bankrate.com reported. On larger loans, the average jumbo 30-year fixed rate declined to 6.79 percent. Adjustable-rate mortgages also backtracked, with the average 5/1 ARM sliding to 6.32 percent and the average one-year ARM retreating to 6.01 percent.

News of slower economic growth, such as a disappointing number of new jobs added in July, reinforced the Fed's assertion that a cooling economy and the 17 interest-rate hikes already implemented would be enough to tame inflation, Bankrate.com noted. As a result, the Fed's record streak of 17 consecutive interest-rate hikes is over, buying the Fed some time to see if that scenario plays out.

With the Fed casting aside inflation concerns and focusing on a slowing economy, the Fed followed the lead of the bond market. Yields on long-term government bonds, to which fixed mortgage rates are closely related, had been declining in anticipation of the Fed's pause. But with inflation still very much an issue, this trend may not hold much longer.

Bankrate.com reported that fixed mortgage rates have fallen more than one-third of a percentage point since the Fed last hiked rates at the end of June. At the time, the average 30-year fixed mortgage rate was 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.57 percent, the same loan originated today would carry a monthly payment of $1,051. With the recent pullback, fixed mortgage rates remain an attractive refinancing alternative for adjustable-rate borrowers facing sharp payment adjustments, Bankrate.com said.

Courtesy of Inman news