Mortgages made simple…

All of the indicators, experts and swamis are telling us that mortgage rates will be on the rise soon.  Mention the word “mortgage” and people’s eyes glaze over and the yawning begins.  So let’s make this simple.  Assume for a moment that you want to purchase a home for $250,000. (I was an English major and math was never my strong suit so I’ll use round numbers.) Due to stricter lending guidelines, for every .25% (1/4 of a percent) increase in interest rates, the income that you need to earn in order to still qualify for your loan needs to go up by 3%. Let’s go with an even more eye opening example: every time rates go up a quarter of a percent, it ends up costing you $9,518 more over the life of the loan.  If you think that you’re going to wait a bit before you buy, think instead of the $38,072 that it will cost you in extra interest over the life of the loan if rates go up by a full percentage point before you decide to buy.   Ouch.

World Alpine Ski Championships? Yes, please!

The world has come to Vail, and the races are underway!  The weather has proven a bit tricky, but we live in a ski area, so won’t complain about new snow.

Perennial crowd favorite Lindsey Vonn captured a bronze medal in the Women’s Super G event.  Facing challenging conditions, including wicked wind, Lindsey was a fierce competitor, and a fabulous role model saying, “To come away with a medal is awesome.”  She also had high praise for winner Anna Fenninger, saying that “Fenninger skied exceptionally well and she definitely deserved to win the gold medal today,”  Lindsey is a class act, indeed.

The Men’s Super G is currently underway, with American Bode Miller skiing strongly, but crashing as only Bode Miller can- in a truly spectacular way.  He suffered a deep laceration on his calf, but knowing what a fierce competitor he is, he’ll probably come back as a force to be reckoned with in the Downhill event.

Don’t forget that when the races and training finish, we’ve got fantastic concerts in Vail, following the medals ceremonies.  Avon is hosting apres events as well.

For sale by owner? Think again.

Your home is likely your biggest asset.  The staging, marketing and sale of this asset can be done by a homeowner, but there are very valid reasons to use a real estate professional.  Sharon Starke, a mortgage professional in New York, summed it up very nicely in this article:

Here are five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies which work for the buyer and will almost always find some problems with the house.
  • The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

  • 43% on the internet
  • 9% from a yard sign
  • 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $208,000 while the typical house sold by an agent sells for $235,000. This doesn’t mean that an agent can get $27,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.


From the local paper:

Local real estate recovery

As the local real estate market continues its recovery from the 2009 collapse, 2014 is looking like the best year since the boom times in terms of both transactions and money generated by those sales.

Sales volumes, the amount of money generated by those transactions, is more than 30 percent more than 2013’s totals through the end of July.

So what does that mean?  If you have been on the fence about buying, the grass might be greener on the other side of that fence, but it is going to get more expensive the longer you wait.  Combine our current recovery with interest rates that are still relatively low, and you are going to get more “bang for your buck” now.  For sellers, it means that your property values are increasing, but waiting to list your home until prices go up may not be the best strategy.  Buyers now have the aforementioned low interest rates, which will allow them to afford more than they originally thought.  Selling now will allow you to, in turn, move up the property ladder and move into something that will make you happy for years to come.