Here’s some quick information for those who are unfamiliar with the “Blogging world” and how these sort of sites work. The fundamentals are the same as any site… the sidebars contain clickable links; the center section contains “posts” that will change as new information is presented. I’m not going to offer highly technical explanations because I’m not highly technical!

At the bottom of every post you have the opportunity to “comment” to any post Read The Full Story…

There are, of course some very legitimate reasons. But one big reason that would be hard to argue with is that you want your home to cost you more than it could if you buy now. There are at least three factors that nearly guarantee waiting will be expensive and you’ll get to pay more.

1. Mortgage Rates are very likely going to increase soon. There’s a consensus among the experts supporting this because rates have been artificially low for the past fourteen months. This is due in part to assistance from the Federal Reserve though the mortgage-backed securities purchase program. The feds have consistently maintained the program will end March 31^st. While predictions of the result are vague, most concur that a rise of .50 to 1.00% soon after April ^t wouldn’t be unreasonable.
2. First time home buyers have been receiving tax credits of up to $8,000 and repeat buyers up to $6,500. The “catch” is buyers will need to have a home under-contract by April 3oth (that’s only two and a half months away as of this writing) and close by June 30^th. Lenders are now suggesting it takes 45 days to close on all but strictly conventional mortgages. If you haven’t started looking, you might want to lay this out on a calendar. Unless you are counting on another extension of the program “times awastin’.”
3. FHA is also promising an increase in upfront costs effective April 5^th. The cost of the mortgage insurance premium (payable at closing) will increase from 1.75% of the loan amount to 2.25%. Yes, this can be financed. But remember you’ll be paying more to pay more since interest rates will likely have risen.

Without getting too complicated, let’s use a property requiring a $100,000 mortgage purchased after these programs run out. A 1% increase in mortgage rates will create a $62 increase in the monthly payment and will cost nearly $6,000 more during the first seven years. If the mortgage is an FHA loan, the .5% increase in the mortgage insurance premium adds $500 (we’ll assume it’s not financed—that would add more cost). A first time homebuyer has missed the $8,000 and proved the value of “waiting” a few months was worth nearly $15,000 in total.

Smart move?

The only financial argument would be that it’s a good bet home prices are going to drop further and offset the additional costs. In this example, you’d be betting the home price will drop at least 15% in the next few months.

Smart bet?

Obviously your numbers may be different, but one thing that would be smart is to sit down and figure them out—or get some help from a real estate or banking professional to see what makes sense for your situation.

The sooner, the better!

I’ve been reading a book based on a TV series about real estate. It’s actually fairly well written and in many cases downright funny.  But there are also a number of places where it is just plain wrong. That’s one of the joys of receiving advice (whether it’s from a book, TV show, or the agent you are working with). Sometimes it’s just plain wrong. (I chuckled a bit when a potential buyer called me recently to announce that she was ready to buy a house because she’d been watching all the real estate programs on TV and knew “how it worked.”

I envied her because I’ve been at this for a while and I still don’t know how it works. Not every time anyway.

Students in my real estate classes learn to remember that we have two hands and that should remind us to consider both sides of a question when giving clients advice. When a buyer asks, “Should I make a really low offer?” we do well when we consider both possible answers.

“Yes, because the seller might accept it. But on the other hand… there are some risks associated with really low offers…” In other words, you should be getting all the information necessary to make a decision that is ultimately yours.

If I could give a buyer only one “tip” it would be just that. Get all the information—the pros and cons—before making an informed decision. In simplest form the tip is “be a smart buyer” and that includes surrounding yourself with professionals willing to educate you.

In addition to being a smart buyer, here are some other recommendations—many of which will apply to sellers as well.

• Read every piece of paper and take everything seriously. This is especially important regarding the offer you sign. Don’t be intimidated into just signing and don’t be too proud to ask questions about any points you don’t understand. Keep legible copies of all paperwork in an organized file.
• Remember that a real estate transaction is complex. Be prepared to consult professionals: lenders, home inspectors, attorneys, accountants.
• Don’t just look for a house; look for a community or neighborhood. Unless you are a hermit, what’s around you will have importance. You can add a family room. Changing a community isn’t quite so easy.
• Be prepared to act quickly and be available to do what needs to be done. Taking a few days off to go to the islands might sound good, but remember your priorities. It’s actually a good idea to set a timetable. I once worked with a buyer who had been looking for seven years.
• It will sound self-serving, but have some loyalty to the agent you choose. In Maine, you should be given a one page “Real Estate Relationships Form” that describes various types of relationships the law permits and requirements for them. Selecting the agent and type of relationship is an important decision that should be made early in the process.
• Understand that there is an emotional and financial component to selecting a home to purchase. In the ideal world, these will be in balance. In the real world they’ll require some juggling. The home you fall in love with may not make the best economic sense. That doesn’t mean you should reject it. (Think, “On the one hand—on the other hand.”)

A study of economics usually reveals that the best time to buy anything is last year.
Marty Allen

I wish I’d been the one to coin this… and, unfortunately, when I wrote my note about it I failed to credit the source. So now I have to start with anonymous realtor who observed that he’s had several buyers walk in to his office with P.T.S.D. or “Post Traumatic Stress Syndrome.” His diagnosis was based on their demeanor which included an opening apology for a suspected personality disorder based on their previous realtor relationship. He cited examples of buyers saying they “must be too picky” or “too nervous” or have “unrealistic expectations” of their agent. (You don’t suppose the agent had any unrealistic expectations of the client, do you?)

If it weren’t so tragic, it would be funny. I’ve seen the same thing with sellers–now “former” clients of another agent who are convinced somehow that they are responsible for everything that went wrong with the last relationship and attempted transaction. Convincing clients they are to blame for failings is a skill I seem unable to develop, let alone Read The Full Story…

This article was originally written as a “Buyer’s Tip” for TheDailyME — an excellent source of local news and information in the “greater Dexter” area.

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If you are considering buying a home, it makes sense to be a little nervous. You’ve probably seen the ads or heard people say “it’s a great time to buy!” Like all generalities that’s true, but there are also some reasons to be cautious. Unless you’ve been out of the country of living under a rock, you know the economy and housing markets are uncertain. Just how much this uncertainty affects your decision making will depend on a number of factors all relative to your personal situation. If we change “nervous” to “cautious” we begin to see the need to make decisions deliberately. For some people in some circumstances it actually may not be a good time to buy.

One important consideration is how long you will own the home. Putting down roots with a long term commitment does suggest this is a good time to buy. If you expect to own the home for a relatively short period of time caution is in order. The reasons for that are beyond the scope of a short article like this largely because we’re again dealing in generalities.

One reason it’s an excellent time to buy is that prices are down to historic lows. As a buyer you might be attracted to the lowest priced listings. It’s important to understand the total cost of purchasing and owning a home as that should be your primary consideration.

Another reason it’s an excellent time to buy is mortgage rates are at historic lows. It is true that lending standards have increased, but most lenders have money to lend. The caution here is that it’s also a good time to “shop around” both lenders and loan types to be certain you are borrowing in a way that is most beneficial to your circumstance.

The theme here is “Knowledge is power.” The more you know and understand about your personal situation, loan programs, the market, etc. the more power you will feel. And that feeling won’t be an illusion; you’ll have power. The right agent will help you explore your situation, build a team that makes your purchase decision truly in your best interest, and find that power. One generality that can’t be argued with: this is not a “one size fits all” market. You want to work with people who are more interested in you than they are in selling a house.

The IRS has attempted to provide some additional information and answer questions about the Tax Credit for homebuyers. To review that information visit

 http://www.irs.gov/newsroom/article/0,,id=206291,00.html

One of my “Mooseprint” subscribers sent me an email that included this headline from a recent Maine Association of Realtors press release:

Maine Home Sales Up 48.55% in November 2009

He added that he was quite sure I’d be explaining this in my next newsletter. Given his penchant for satire, I replied that 48% of nothing is still nothing but pledged to do some further analysis and post it on my blog. Rather than write a lengthy editorial, here’s a few “brain leaks” on the topic.

1. My attempt at satire has a thread of truth in it… it’s important to remember that the economy was taking some of its hits a year ago—in essence we are comparing this bad year to a horrible year.
2. Yes, there are signs of some general improvement. One of the things that makes statistics such as these challenging is the very nature of real estate. Markets (and properties) are unique and local. Some markets are improving; some are not.
3. In smaller print the same press release notes the state wide median sales price is down 4.88% for the same period. So as previously noted, the low end market is where the action is–in general.
4. Our state-wide statistics are dramatically affected by York and Cumberland Counties. For the rolling quarter (September, October, November) these two counties account for 41% of the sales. What happens in these two counties will dramatically affect “state wide” statistics.
5. In the interest focusing a bit on local markets, the rolling quarter statistics show that Piscataquis County hasn’t fared so well with a 5.13% increase in unit sales and a 5.26% decrease in median price. Somerset County, however, shows a 48.65% increase in unit sales with a slight increase in median price.

Personally, I think it’s too early to predict what the impact of the expanded tax credit will mean… but, as noted above, there are some indications that activity is increasing. At the same time, however, interest rates continue to creep up—not a good sign.

Occasionally when folks ask me about listing property they end observing that I’m not very encouraging. I do think it’s important to have a realistic outlook and remember that your property and your situation is uniquely yours. Statistics and my “editorials” can perhaps make you think, but in the end it’s about a specific buyer and a specific seller. “In the history of mankind,” Tom Peters once observed, “a market has never bought anything. People buy things.”

Just a quick note to let folks know I’ll be traveling out of state and working a bit of a reduced schedule during the week between Christmas and New Year’s… I should be reachable by cell phone and email but it might require a bit of patience. If you have an immediate need, contact Dan Costain, Designated Broker (207 852-1932) or Sanger Davis (207 341-0140).  Dan in his role as DB keeps an eye on me anyway, and Sanger has much to recommend him–including the fact that we tend to work a lot alike. Just let them know how we are working together when you call.

While it has become traditional, it is not habitual! The holidays are a great time to say “thank you!” I’ve enjoyed your confidence and friendship this past year and it is satisfying to know that a lot of people—buyers, sellers, colleagues, affiliates and students—are achieving success as a result of our work together.It’s a great time to look back and a great time to look ahead—although looking ahead doesn’t necessarily make us feel all warm and fuzzy when it comes to the economy and the real estate market!

As a matter of curiosity I read back over the past few year’s letters I’ve written. My fundamental theme hasn’t and isn’t going to change. While I think it’s important to be aware of what is “happening” in the marketplace, the bigger question is “What are you—we—going to do?”As I said at this time  last year, my focus hasn’t changed, but it has increased and it continues to do so. Attention to detail has always been important; it’s now critical. Diagnosing problems and understanding clients’ needs has always been important; given the increasing complexity surrounding the buying and selling of real estate, now it is vital. Working with clients as partners and providing information and options is a major component of good real estate brokerage. Now more than ever you need a partner who knows how to learn and who knows how to teach.

Thanks for your confidence and the opportunity to work with you. Do let me hear from you… and have a meaningful holiday and a new year filled with health, happiness and prosperity. 

Three boys are in the schoolyard bragging of how great their fathers are. The first one says: “Well, my father runs the fastest. He can fire an arrow, and start to run, I tell you, he gets there before the arrow.”

The second one says: “Ha! You think that’s fast! My father is a hunter. He can shoot his gun and be there before the bullet.”

The third one listens to the other two and shakes his head. He then says: “You two don’t know anything about fast. My father is a real estate agent. He stops working at 4:30 and he is home by 3:45!”