Cindy's Blog

...that could come in handy in the current market.

1) Despite the news constantly saying the rates are going up, rates are still right between 5.5- 6%. We are definitely seeing more FHA loans, and luckily, fewer loans that are from strange, unknown lenders operating out of their cars on their cell phones. (that is definitely a good thing for all of us, even though some people may not be able to get a loan that they would have been able to get a year or so ago, but they arguable should not have been able to get it then.)

2) We are definitely seeing more FHA loans. What does that mean if you're a buyer? Slightly more paperwork, and a slightly longer processing time in most cases. Typically though, the reasons FHA loans had fallen a bit out of favor was because there were so many other options out there where folks could obtain 100% or in many cases 104% financing without having to go through the FHA process. With many of those loans gone, we're definitely seeing more FHA, since they allow a loan to be made with only 3.5% down- something many loan programs won't allow now.

What does it mean for you as a seller? Again, as with the buyer, there is a bit more paperwork. There is also an FHA appraisal, slightly different from the standard appraisal. In effect, the government, guaranteeing the loan, wants to make sure they get a solid house if the purchaser defaults on the loan and they own it. Thus, you may have negotiated the entire inspection addendum, and even made the repairs, but the appraiser can come in and ask for more repairs that must be done before the loan is out of underwriting and approved.

3) Just because the market has been soft, doesn't mean that every house can virtually be "stolen". While most sellers are in fact somewhat flexible, everyone has a different motivation, and the vast majority are not desperate.

Well, with summer here, and the heat in full force (or at least the humidity!) energy consumption is definitely at a high. We've of course all gotten so spoiled by our constant air conditioning that we hardly know what to do if there's not a deep chill greeting us when we walk in the door.

Regardless of your feelings on climate change, there's scarcely a leg to stand on in defense of our general energy wasting ways. You may have read or heard about (even here) about energy audits- what they are, and what they do, and how they can help you save energy in pretty much any season.

What you may or may not know, however, is that there is a growing trend (though probably very slowly growing this way- Richmond is a bit behind the times on things like this) for energy audits to be required for the sale of a home (typically for homes only 10 years old or older).

While San Francisco and Berkeley, CA have had these measures in place twenty years or so, things are definitely spreading, primarily in the Western states. Austin, TX is in the thick of things right now, having just passed a measure requiring an audit (but not repairs/ remediation as some of the other locales) before a sale takes place.

TheWall Street Journal did a piece on this this past week-(http://tinyurl.com/rbxg5y). The law in Austin doesn't require repairs to be made, but it does require that the items needing remediation be disclosed to any potential purchasers. This is obviously causing some issues with both homesellers and real estate professionals, but seems to be the wave of the future- even though there may be some growing pains along the way.

This has already been done in the UK, and of course the Californians are more familiar with the whole package. As the tax credits and "green incentives" grow, hopefully, this seems to me to be a great way to drag some of these homes into the 21st century, and help us all use a bit less energy.

I would be curious to know what the reactions would be in this area were this to come to fruition here. I'd love some comments here, from Richmond area residents/ homesellers/ other real estate professionals.

Well, once again, it seems, I must apologize for the long delay in postings, but things have fortunately been quite busy. Things are definitely picking up in the market- more buyers are out, more people are looking, and inventory is becoming more in line with the demand. However, it seems that (perhaps because of the media) people have a notion that sellers are so desperate they should accept any offer.

Hopefully that is also going to balance out soon as well. While we are still indeed in more of a buyers' market, every seller has their own motivation, and not everyone is terribly desperate. There are definitely more short sales and foreclosures in this market, but while most sellers do expect to receive a lower offer, there is still such a thing as an insulting offer. In many situations, a 5% reduction in the price is expected, but it seems recently more buyers are thinking a 20% or more reduction is reasonable, even when a home is priced accordingly.

All in all, there are still deals out there, and there is no doubt at all that it is a great time to buy, with the interest rates still quite low, more inventory and more motivated sellers, keep in mind that it is a good idea to look closer to the price you're able to pay, rather than assume you can look at homes well beyond your price range and get them for tens of thousands of dollars less than the seller is asking. (Not that this doesn't happen on occasion, but it's definitely the exception, rather than the rule).