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3 Questions To Ask Before You Buy Your Dream Home

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If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interests at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Ask yourself the following 3 questions to help determine if now is a good time for you to buy in today’s market.

1. Why am I buying a home in the first place? 

This is truly the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

For example, a survey by Braun showed that over 75% of parents say, “their child’s education is an important part of the search for a new home.”

This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. They are:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in May (the latest data available) was $252,800, which is up 5.8% from last year. This increase also marks the 63rd consecutive month with year-over-year gains.

If we look at home prices year over year, CoreLogic is forecasting an increase of 5.3% over the next twelve months. In other words, a home that costs you $250,000 today will cost you an additional $13,250 if you wait until next year to buy it.

What does that mean to you?

Simply put, with prices increasing each month, it might cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy. 

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.

The Mortgage Bankers Association (MBA), NAR, and Fannie Mae have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:

3 Questions to Ask Before You Buy Your Dream Home | Keeping Current Matters

What does this mean to you and your family?

Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

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Appraisals Are a Problem Again. By Dan Polimino.

Here is a fantastic article that I whole-heart-idly agree with…

(excerpt… )

When the market crashed in 2008, you heard story after story of homes that were priced at $500,000, but appraised at $425,000. There clearly was a shift in the market. The buyers picked up on the shift right away, the appraisers followed behind shortly thereafter, and it took about two years for the sellers to get the message. Eventually, sellers came to terms with the loss in the value of their homes and started pricing more at market value. Buyers were still buying, appraisers were doing their best to stay ahead of the curve, and real estate agents were getting their listings appraised at purchase price. Once everyone embraced the shift, we stopped hearing about appraisal problems and the industry leveled off. Fast-forward to present day and most of us now know that there is another market shift in Denver. This time, it’s a seller’s market in some price ranges. With people bidding on homes for over asking price, home values are rising quickly and once again, appraisers are trying to stay ahead of the curve. I am hearing stories about homes under contract for $15K over asking price, but appraised for $5k below asking price. Here is my advice: Buyers: I understand that there is a lack of inventory out there and when a good home comes on the market, you do not want to lose it. Be careful in your bidding. Yes, you can offer 15K or more over the asking price; just understand that if it doesn’t appraise, the lender is going to ask you to bring more cash to closing to cover the difference between the appraised price and the purchase price. They will only lend on appraised price. Agents: Once again like in 2008, we have to be sure about our pricing and comparables. I know it’s tempting to stretch the price on the high side on behalf of your seller. After all, you are trying to get them the highest price possible, but if it doesn’t appraise, it will likely be a deal killer and that won’t help any seller in the end.Sellers: I know you see dollars signs after the last four years of getting beat up by buyers, but beware. Ask the question to your agent, “What happens if it doesn’t appraise for that purchase price?” Happy house hunting!

Read the Full Original Article Here-

via Appraisals Are a Problem Again. By Dan Polimino..

Rising Home Prices: Coming to a Market Near You | Trulia Pro Blog

Rising Home Prices: Coming to a Market Near You | Trulia Pro Blog.

One month ago, we introduced the Trulia Price Monitor and Trulia Rent Monitor as the earliest leading indicators of how asking prices and rents are trending nationally and locally. So what happened to prices and rents in April?

April’s Price Rise Makes a Three-Month Streak

Nationally, housing prices have bottomed and are on the rise. Asking prices on for-sale homes were 1.9% higher in April than one quarter ago. A 0.5% month-over-month rise in April, on top of month-over-month price increases in March and February, makes for three months in a row of rising asking prices, after adjusting for typical seasonal trends. In fact, prices have been stable or rising for the past eight months, except for a dip in December 2011. This marks a new milestone: asking prices were 0.2% higher in April than a year ago. Before April, prices were still falling year-over-year.

Trulia Price Monitor - Line Graph - April 2012