The property was not listed. It was built in 1937 and has seven bedrooms and nine bathrooms for Tom, Katie and Suri to enjoy. It also comes with a tennis court and pool.
The cruises have been renting previously but obviously decided to take the plunge and invest some serious cash in the Beverly Hills real estate market.
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One of the goals behind Housia is to help home buyers and sellers to get a better experience. And at the center is the choice of the agent handling your transaction.
Do not pick an agent at random or based on "someone that your buddy Dave knows". Probably one of the most overlooked aspects of picking an agent is to ask for references from her or his most recent clients.
A really good agent should have no problem giving you references from his or her three most recent transactions. Make those calls. Talk to the people that have used the agent before.
If the agent does not want to give you any references... then choose someone else. You will be glad that you did.
Best,
Ola
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Suddenly you start looking at 10 year treasuries and wonder what the market will do in the next 30 days. Your loan officer might offer some good or bad advice as well. So what to do?
There is really no way to predict where short-term interest rates will go. To time mortgage rates when you are purchasing your home is just not a good idea. Look at today’s rate and see if you like it… if you do then lock it in. The only time when you can time interest rates is when you are refinancing, not when you are purchasing.
The only exception to the rule is to wait until the afternoon or next day if there is already a repricing in effect by movement in the bond markets.
Many lenders and brokers do offer what is called "free float-downs" after you lock. If rates improve with a quarter of a point or half a point they can let you in on the lower rate. The lenders do build this into the pricing though so you will indirectly pay for the privilege. Ask your loan officer for details.
Good luck!
-Ola Edvardsson
P.S. Don't forget to visit our mortgage center for free mortgage quotes.
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While these agents greet buyers with broad smiles and generous, helpful attitudes, they represent the seller's interests in getting as much as possible for their property, not a buyer's interest.
If you are shopping around for a home to purchase, it's a good idea to avoid the seller's agent and find yourself a "buyer's agent" instead. Any licensed real estate agent can broker the sale of any property that is posted on the Multiple Listing Service but not all agents represent the buyer's interest in the deals they broker.
No matter how friendly an agent or seller is in a transaction, that agent is advocating for the best interests of the seller, not the buyer. Listing agents will happily show you numerous properties and over time, build a relationship with a serious buyer. Despite appearances, that agent still represents every seller listed in the MLS. Never forget this because they are also obligated, generally by law, to reveal any and all facts about the potential buyer to the seller. Nothing you say to them is confidential.
So, let the buyer beware, unless you seek out and find a buyer's agent.
There are agencies that specialize in representing buyers only. In the past, a buyer could hire a representative for a fee, plus retainer to help find property, arrange financing and make an offer to a seller. Today, real estate agencies that represent buyer's interest only abound in most parts of the country and they are paid a commission fee that has to be split between the seller's agent and the buyer's agent. This fee is negotiated between the two agents and is folded into the transaction.
Baltimore agent Jody Hudson says real estate laws and contracts are being rewritten in every state to allow buyers to be represented exclusively by their own agents. She says buyers are better represented in these deals and often save buyers thousands of dollars in better-negotiated deals, reduced closing costs and contract concessions these experts know enough to include in potential offers.
If you are in the market for a buyer's agent, be sure that you ask the people you deal with to make sure you are not talking to a seller's agent or a dual agent. In some states, dual agents are bound to be financially and legally loyal to both parties. This is often done when one agent in a firm has the listing and another agent in the same firm brings in a buyer. "Some people feel that "dual agency" is a conflict of interest," Hudson said. Some kind of conflict of interests just seems inevitable in this arrangement.
Hudson says buyer's agents come in two varieties, one only represents buyers. Other agents work both sides of the street in separate transactions, representing sellers in some deals, representing only buyers in other deals.
When Hudson represents a buyer, she says, "I will be your gladiator. I will do battle on your behalf, and at the expense of and against the interest of the seller and the seller's agent."
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While the listed price of this home is under $270,000, the actual cost of buying that home under existing money-lending rates will vary from lender to lender. What you pay to purchase this same home for the same price will depend upon the kind of mortgage instrument you choose to finance your loan and the kind of fees you are asked to pay, not the offer you make to purchase it.
When you are talking about the cost of buying real estate, the only thing a few factors really matter after the ink dries on all the paperwork. What are the fees attached to accepting the loan required to buy this particular home and whether the buyer can meet the monthly mortgage payments. While the purchase price won't change, what it will cost you real money to move into that house. Those costs will vary from lender to lender and loan to loan.
Know how to shop for the right loan to fit your circumstances. but make sure you shop for it.
Have every potential lender write down all the costs associated with the various loans they are offering, then try to negotiate for the best deal. The terms they offer are always negotiable, no matter what the loan officer who presents the deal tells you. Different deals can be obtained for buyers with the same qualifications because there are costs called "overages" built into the prices quoted to buyers for almost every kind of loan. These overages are where the purchaser has the "wiggle room" to negotiate a better deal and save money.
A mortgage is a product, not a gift.
Always consider these things:
RATES
* Try to obtain the lowest rate possible.
* Ask whether the rate you are being offered is fixed or adjustable. Rates for adjustable loans generally start out low but the interest rate and your monthly payments will go up too as general interest rates climb.
* Ask each lender or broker for a list of its current mortgage interest rates and whether these rates are the lowest for the day or week.
* Ask about the annual percentage rate or the APR. The APR is a barometer that takes into account a fee called points, broker fees, and other credit charges you may have to pay as part of a yearly rate. Find out in dollars amounts what the points add up to.
POINTS
Points are fees or the actual cost of certain loans. They are add-ons to what at first might look like a low interest rate and are usually tied to the interest rate. The more points you pay, the lower the interest rate. Points are fees paid by borrowers in return for a lowered interest rate.
To learn whether you are being asked to pay a fair market rate in points and fees or not in your area, check local newspapers for current points and interest rates. The internet and local newspapers offer current rates in charts that you should obtain to determine what the prevailing rates are in your market. The rates will vary from market to market. Once you've determined this, ask for the points being charged to be quoted to you in dollar amounts, otherwise you won't be able to calculate what the points actually cost.
MISC. FEES
There are many fees attached to every home loan. It is how banks, mortgage brokers, lawyers, paralegals and savings institutions earn a living. These fees include things like a loan origination or underwriting fee, broker fees, and transaction fees, taxes, settlement, and closing costs. Some of these fees are negotiable, others like taxes, common fees, can not be negotiated. Certain fees are paid at certain times during the loan application process. Some are paid when you apply, like the application fee and appraisal fees. Some lenders waive these fees, but are charging you other fees to compensate. Other fees are paid at closing when the final mortgage papers are signed. With some lenders, you may borrow money to pay these fees, others require you pay with seasoned money or funds that have not been borrowed. If you have to borrow fee money, the cost of borrowing this money ultimately raises your loan amount and the total costs of borrowing this money.
Always remember these three things when you are looking for a mortgage, shop, compare, negotiate.
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Good credit, bad credit, credit is like a fingerprint of your past, current and future purchasing power. Credit is king in a consumer society like America.
While there are all sorts of credit data collection groups and corporations, all compiling and selling credit information about you, something called the Fair Isaac Corporation (FICO) credit scores dominate the industry, according to the National Credit Reporting Association. The FICO established the first credit scores in the 1950s and these set the standards for most credit scoring models in use today.
All thorough credit scores contain information about the consumer's payment history, amount of credit available, credit in use, type of credit lines available and active attempts by creditors to collect past due bills.
These scores hold sway over just about every transaction a consumer makes. "Credit score use has progressed over recent years to the point where scores are now used as one of the most influential factors in the approval and pricing of a loan," the Credit Reporting Association wrote in a prepared statement delivered at hearings before the Federal Trade Commission. "…The lending community now defer to the credit score as an impartial indicator of whether to approve or deny a loan and what terms the consumer is offered without concern for equal lending claims," the report said. "Further, credit scores in the upper range (700 plus) can change the degree of scrutiny other documents in the fire receive, and the underwriting guidelines used for the loan,"
In recent years, these scores have become the bedrock of American commerce," the association said. Credit scores were the key to opening a new era in all segments of consumer lending and crucial to the introduction of an automatic underwriting system. "Cell phone applications, credit card approval, personal loans of all times and mortgage lending all now heavily rely upon automatic underwriting systems in their daily operations," the report said.
One thing that is essential to shoppers looking for mortgages is knowing your credit score. There are five parts to most credit score reports. There are many companies touting offers to provide consumers with free credit scores. The vast majority of these are offering estimates and use this offer as an opportunity to market credit-related products. A thorough credit report contains:
* Your payment history. This is usually about 35 percent of a FICO score. Have you paid your credit accounts on time? Late payments, bankruptcies and other negative items will hurt your credit score.
* How much you owe. FICO looks at the amounts owed in all of your accounts, the number of accounts with balances, and how much of your available credit are you using. The more you owe when balanced against available credit, will lower your score.
* Length of credit history. A longer credit history will increase your score.
* New credit. If you have recently applied for or opened new credit accounts, your credit score will weigh this factor against the rest of your credit history
* Other factors include having a mix of types of credit on your report like credit cards, installment loans like mortgages, car loans and personal lines of credit. This variety with longer credit history is a good thing and will increase your score slightly.
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The strength of the housing market and whether or not the real estate bubble is about to burst or grow across the country these days depends heavily on many variables, including whether you are a buyer, a seller. The section of town your listing is located and how much neighborly competition you face are just some of the regional factors that could mean a quick sale or a very long wait. In other regions, slow job growth, record numbers of adjustable rate mortgages and job loss are all factors which conspire to turn a booming real estate market into a busted one. In those regions While there is robust discussion about the real estate bubble bursting every where, the risk of this happening too varies from region to region and sometimes it changes from neighborhood to neighborhood.
While a once booming housing market has clearly slowed down in many parts of the nation as interest rates continue to climb, the US real estate market is not monolithic. The veritable strength of real estate "markets" across the country is littered with regional variables that all tell different tales.
In hot-to-trot markets of southwest Florida, speculation is high that steadily rising prices for new and existing houses was destined for a crash. The ride down there had been wild and crazy for buyers and sellers for a long time who saw the median price of homes double from $170,000 to $330,000 in just two years, according to First American Solutions. But now, that market is too ripe with sellers who are all probably trying to cash out their appreciation gains, among the highest in the country. An example of what can be purchased in this market for about $350,000 can be found at the
Bermuda Ridge condos.
It might be hard to believe but further west in the devastated New Orleans housing market, some real estate agents are seeing more than a recovery in a region that lost an estimated 350,000 housing units during hurricane Katrina last year.
"The city's biggest residential brokerage firm - Latter and Blum - reports that just this past week, buyers signed contracts for 673 properties. That compares to 544 properties the same week last year," according to National Public Radio. " John Hazard is in the market for real estate. He's an investment banker who sees post-hurricane New Orleans as an opportunity that needs to be seized. The New Orleans native is buying hurricane-discounted properties in the city's historic Uptown neighborhood, an area filled with shops and restaurants." The upscale Lakeview district of New Orleans was swamped when the 17th Street Canal gave way and flooded the neighborhood with 10 feet of water. A sprawling, eight-year-old, two bedroom home in the district subdivision of Eden Isles can be bought today for $295,000.
The market story in the San Francisco bay area is more somber. A number of convergent factors have come together in recent months to create a serious downturn for this region which has been hit hard economically in a number of ways.
House prices soared in the last fee years beyond any reasonable ratio to rents, salaries or housing value in the area. If you owned rental property, your property may have appreciated substantially in price or value but rents did not rise accordingly. The home buyer's market everywhere is now overloaded with risky adjustable rate loans and the San Francisco Bay Area is no exception. These rates are vulnerable to rising interest rates and mortgage interest rates are clearly on the rise now, so more than 80 percent of mortgage loans in the region are adjustable so look for a backlash that will shoot mortage payments through the ceiling and slow an already sluggish real estate market even more dramatically.
The old cliché' about location, location, location as the key to buying real estate investment, applies to the region for sure now. Times are tough here and promise to get even tougher. If you're looking for gains, cheap mortgage loans or bargains, another location might be the right choice. In a short period of time, the region has lost more than 300,000 jobs, the worst income drain here in the last 60 years, according to recent labor statistics. Analyst say its worse than the car manufacturing problems in Detroit or the oil bust in the Houston area in the 1980s. "People without jobs do not buy houses and owners without jobs may lose the house they are in," says an internet writer at http://patrick.net/housing/crash.html If you're bottom fishing, that seems to be the direction Bay area real estate is heading.
"According to the California Association of Realtors (CAR), the percentage of Bay Area buyers who could afford a median-priced house in the region plunged from 20 percent in July, 2003 to 14 percent in July 2004." The following year CAR then reported that affordability fell another 4 percent last year.
In the $350,000 - $400,000 range purchaser can fetch a modest condo like this one.
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The other day after some fried rice with Chicken from our local
chinese restaurant my wife opened her fortune cookie and found the following:
In terms of real returns, stocks have done quite better than real estate over the long run.
But don't bet against the fortune cookie writers.
They all played the numbers from a fortune cookie.
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David Lereah, NAR’s chief economist, said mild weather appears to be responsible for some of the gain. “Weather conditions across much of the country were unseasonably mild in January and likely were a factor in higher levels of buyer activity, which boosted sales that closed in February,” he said.
“Higher interest rates had been tapping the breaks, notably in higher-cost housing markets since mortgage interest rates trended up last fall, but we’re seeing signs of stabilization in the market now with the sales rebound. Home sales should level-out in the months ahead.”
NAR President Thomas M. Stevens from Vienna, Va., said comparisons with market performance over the last five years distort what people should expect from housing as an investment. “Housing is simply returning to a normal market, where annual home prices will rise a little faster than the overall rate of inflation,” said Stevens, senior vice president of NRT Inc. “However, in looking at total returns, you need to consider that the typical buyer is making only a modest downpayment but enjoys a return on the full value of the home, which is many times the actual cash investment. In other words, normal is pretty good for the typical homeowner, and that’s what we expect for the foreseeable future.”
Stevens noted that price appreciation has yet to cool significantly. “We’re still seeing double-digit annual price gains, but we should get down to single-digit appreciation fairly soon,” he said.
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So what is their service? Free online home estimates, called Zestimates by Zillow.com.
“…we landed on the ambitious goal of trying to place a value, what we cleverly call a “Zestimate,” on every house in the country and making this freely and anonymously available to anyone -- kind of a “Kelley Blue Book” for homes.” says company chairman Richard Barton on the newly launched company blog for Zillow.com
”Additionally, we have tools with which anyone can analyze home price histories (like analyzing a stock), look at “comps,” and refine our Zestimates with information that only someone who has been in the house could know.”, Barton continued.
Who doesn’t want to know the value of their home with just a couple of mouse clicks? There are already services like this online but Zillow.com. is the first to come out with a free model that does not require any registration.
For now Zillow is in beta test mode.
In an interview with WSJ.com's Walter Mossberg and Katherine Boehret (registration required) the company says that the service is best in metro real estate areas like Seattle, San Francisco, Phoenix, Los Angeles and
Cleveland. New York is a weak spot as of now.
Zillow is likely to be a very widely used tool by home owners and a great free way to get an initial ballpark estimate for house values.
We will keep you posted on the developments and come back with a more detailed review of Zillow.com.
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All the best.
Ola Edvardsson
Editor
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