Computer home buying and selling?

There is a new service about to be launched that is being touted as a way for a buyer and seller to get together on a house deal on line. The details are in the news section on the right side of the BLOG (Current Real Estate News) and the company is called Real Umbrella.

Understandably people who have had a bad experience with a Realtor might welcome this approach. And, if both parties are seasoned real estate investors or people who have bought and sold many homes over the years, it might work out.

Even though you are hearing this from a Realtor, let me give you a couple of things to consider before plunging ahead with a computer house sale.

To protect yourself you are going to need several qualified professionals to help even if you don't use a Realtor. Two that come to mind immediately are a home inspector and a reputable title company.

The home inspector will alert you to potential or actual problems with the home that you might miss and the title company will ensure that you get clear title to the property (necessary for any mortgage).

Also, without a way to check on comparable home values or to see other similar homes that are for sale, you will miss out on really thoroughly shopping the market for possibly even a better deal. Besides, if you are a buyer, Realtor services are at no cost.

I'll keep an eye on this and let you know how it pans out.

Build a better mouse trap . . .

Richard

You May Not Need To Repaint

Sooner or later our homes begin showing signs of the humans who live there. One of these signs is scuffs and marks on the walls. Nothing serious, just dirty corners, wall marks from furniture and whatnots, you know.

Many homes come with flat latex paint in all but the kitchen and bath areas. This is the paint that marks the easiest. You can't wash it so you are stuck with the marks or doing a repainting.

Not necessarily.

I don't often talk about household products here but this one is good enough to mention. It works on flat latex painted walls, cleans up marks, fingerprints and scuffs. And, unless you rub really hard, it doesn't damage your paint. Just follow the directions on the package.

It is called Magic Eraser and is available in your local grocery store. Try it. I'll think you will be as surprised as I was. The old hacienda never looked better and no painting!

Richard

Will Fed Interest Rate Reduction Affect Mortgages?

Yesterday, the Federal Reserve voted to decrease the discount rate by half a point (50 basis points). Wall Street responded with a 300+ increase in the Dow Jones Industrial Average. (DJIA). Good news for the economy but is it good news for mortgages and the housing situation?

In a couple of words, not directly.

Mortgage rates are determined more by the Bond Market prices rather than the Stock Market (or interest rate reductions per se). However, when Stocks go up Bonds usually go down. This is because investors see a better opportunity to make money in the stock market and switch their money from bonds into stocks.

Also, when the stock market goes up, the value of 401Ks and other investments increase, improving the creditworthiness of potential borrowers.

So there is a beneficial effect but not a direct one.

It will take a couple of weeks to see how much of an effect the interest rate reduction will have on the availability of mortgage money. But it certainly is better than nothing.

Unfortunately, new home builders are still offering steep discounts on their new inventory homes if you can close quickly. Until that stops, resale homes will have to compete in this unusual market (see my post "Light At The End Of The Real Estate Tunnel?" on this Blog).

Comments welcome.

Richard

Preserving Your Water Heater

We often take our water heaters for granted. That is until they spring a leak or stop working for some reason.

One of the inexpensive things we can do ourselves to prolong the life of the water heater is to replace what is called the "Sacrificial Anode" in our tanks. This anode attracts the the rust that would otherwise attack the lining of the tank. It gets used up over a 2-3 year period and then stops working

This is a do-it-ourself task as these anodes are usually accessible from the side of the tank. They cost around $15.

You can also flush the tank (using the garden hose fitting at the bottom) to get rid of any corrosive debris in the tank - do this once a year. Be sure the electricity is off before trying this (do this at the breaker box for your house). Call a trusted plumber for advice if you have any questions.

If you get a new tank, they now have them with plastic liners that last a lot longer than the glass-lined steel tank we all have been using for years

Monitor Your New Home Construction

Buying a new home is an easy decision for some people these days. With huge discounts and other incentives (like paying your Realtor additional commission), many are opting for a longer wait to take advantage of these deals.

Its always a good idea to have your own Realtor representing you even with the helpful & amiable builder sales reps helping you out (I know this sounds self-serving coming from a Realtor, but it's true nevertheless).

The picture here represents a mistake in placing a bathroom drain that had to be redone after the main house slab had been poured. I took the picture at a client's home that was under construction by a reputable builder. "Well", you might think,"at least they got it in the right place".

That is true but all is not right here.

Your slab is one of the main termite barriers for your home. By filling in the cut with random pieces of broken concrete they have provided a direct pathway for termites to enter your home. This needs a repour of the concrete (and possible redo of the chemical barrier UNDER the slab) to restore that barrier to full effectiveness.

Subcontractors are not what they used to be. Keep a Realtor (and even a home inspector) in your back pocket even when dealing with a friendly new home builder.

Richard

Richard Haworth

Light At The End Of The Real Estate Tunnel?

With the bad news about real estate permeating the news lately and homeowners still waiting for signs that the housing market is nearing its bottom - here is a bit of good news.

The "free" land that developers have been enjoying for months may be coming to and end. That means an end to developers offering these insane deep discounts to lure buyers to their new home developments (and away from resale homes).

Here is the how"free" land deal for developers works. It takes about three years for raw land to go from "desert to doorknobs". So, land being built on today had to be purchased about three years ago. Developers have most likely written off the value of that land long ago to compensate for their profits in 2004 & 2005. They are carrying it on their books at "zero" value.

The average cost of a residential lot in the Phoenix area is about $50,000. Thus it costs the builder essentially nothing to offer a $50K discount on his new homes.

That supply of "free" land is about used up and hopefully builders will soon no longer be able to afford to offer homes at these deep discounts.

This is good news indeed for all of us residential home owners who have seen the price of our homes depressed by new home builder discounting.

Maybe there is a light (of sorts) at the end of the tunnel.

Richard

Richard Haworth
Coldwell Banker Residential Brokerage