Even Uncle Sam Sez So

The years go by, and some things never change. Public opinion polls seem to repeat the news: the general public thinks very poorly of real estate agents as a profession. And I mean VERY poorly. Most people hold real estate agents in low regard. The reasons vary, but the result is truly unfortunate. An unrepresented seller or buyer of real estate can perhaps muddle through a transaction, but at a very high cost (both financial and emotional).

But it's not just ME trying to educate people on the value of finding and using a trusted real estate agent; Uncle Sam also "gets it." In a recent FHA e-newsletter (February 15, 2010), the notion of hiring an agent is promoted as the wise thing to do. To quote: "Most of the fears that buyers have about realtors are just plan false." And then this quote: "...your real estate agent's job is to represent your interest only. They want to get the deal done for you! If you are a happy client, you are likely to refer business to them for doing a good job." Sounds reasonable, right?

The article continues on to suggest that most folks simply don't understand how an agent's role can benefit them. So it seems the FHA and I are promoting the use of a licensed, ethical, and trustworthy agent. Sure, there are some less-than-stellar agents in the ranks, just as there are in any profession. Ever meet a teacher you thought was sub-par, or a doctor? You see my point.

Subscribe to the FHA newsletter for free, read the weekly article, and learn. To find a terrific agent, start asking your friends and neighbors who they would recommend, based on personal experience. Just because a local agent has spent lots of dollars on marketing their brand does not translate into good service to you. It's the person who can serve your needs, not the face in a newspaper ad or on a grocery store cart.

Home Values Just Keep Getting Better!

Shopping for a new home anytime soon? Aren't you the smart one! The prices keep falling in these parts. I noticed today that a nice condo in Evanston that was selling due to a corporate relocation has yet again dropped in asking price. It started on the market in August 2008, at $205,000. Today it is going for $166,000, nearly a 20% reduction. Similar units in that building (on Central Street in Northwest Evanston) were selling in the $220,000's back in 2006.

Values are very good for buyers right now. The key to buying well is to buy "smart." First things first - talk to a lender to find out exactly where you stand on getting a mortgage if you need one. Yes, there is mortgage money to be loaned, IF you are qualified. Condo loans have become more difficult of late, with most lenders requiring at least 10-20% downpayment from the buyers. Smaller downpayments are available if the building you are fancying is FHA approved; those loans require only 3 1/2% down. And today my in-house mortgage expert sent out a message that my company's mortgage division can now offer 95% financing through a special program on conventional loans.

The second step in buying "smart" is to find and work with an experienced agent who can guide you through the process of home buying, whether it is a condo, a co-op, or a single family house. The expert agent will be able to research pricing history for you, the background of the specific property you fancy (is the seller in pre-foreclosure, for example), any local issues that impact your decision, local grapevine chatter amongst the Realtors in the area that can shed light on your decision making, and more. So how do you find that good agent? Recommendations are King! Don't just react to fancy ads and boasts of the volume of listing any agent has sold in the past. What kind of service does the agent provide? There's the criterion you need to choose a Realtor!

And finally, look to your agent for guidance in selecting a terrific real estate attorney, home inspector, and other local service providers to make the final days of your transaction and moving experience a good one. Homebuying is typically stressful; that's a given. But with the right help, it can also be productive and exciting.

ARE MORTGAGES ALIVE IN CHICAGOLAND?

Times are uncertain, no doubt. We are all watching the stock market every day and groaning, watching the Congress actions and the US Treasury Department actions as they attempt to turn our credit market around.

And the underlying question still remains: can you still get a mortgage loan?

Yes.

You betcha!

I check every few days with my in-house mortgage specialist on this very question. Today she said "Absolutely there is mortgage money available." If the borrower is qualified for the loan, the loan can be had. The interest rates are still historically low, including conventional (around 6.25%), FHA (3% downpayment!), and jumbo (5.5% for a 5/1 ARM - wow!).

Waiting for the home prices to fall further before you buy? That's what so many buyers are telling their Realtors lately. But that begs the question: "When will the prices hit bottom? And how will you KNOW that they are at the bottom? And what will the loan interest rates be when the bottom comes - at today's rates, or higher, or lower?" Nobody has that crystal ball to tell us how to "time" a real estate purchase. In the long run, real estate has always been a good investment over time. The benefits of home ownership can far outweigh the difference of a few dollars every month in a mortgage payment for a home purchased at one price versus another.

Have you delayed making a home purchase this year? Have your friends delayed a purchase? Let me know what you are thinking, how the current state of affairs has molded your decision.