home owner seminar what you need to know about today’s real estate market click to advance to the...

Home Owner SeminarWhat You Need to KnowAbout Today’s Real Estate Market

Click to advance to the next screen

2008 Century 21 Real Estate LLC. CENTURY 21 Is A Registered Trademark Licensed To Century 21 Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each CENTURY 21 Office is Independently Owned and Operated.

Today’s Agenda

As a result of today’s session, you will better informed on the following:

•The differences between national market summaries and local market opportunities

•The state of the market

•Taking advantage of today’s market

•Buying a Home

•Selling a Home


Everyone Has A Perception…

Copyright © 2008 Century 21 Real Estate LLC. All rights reserved.Slide 4

Buyer


Seller


Appraiser


Insurance Agent


Tax Assessor


The Forecast In Our Market…

Based on NAR

Report Dated

9/25/07 Existing Single Family Home Sales


The Reality

• Real Estate remains a good investment– With the market correcting and ultimately stabilizing, home

prices are expected to rise again• More Selection

– With more available homes on the market it has never been easier to find what you are looking for

• Demand Continues– The population continues to increase, people will always

need a place to live• Home Prices have Increased Significantly

– Home values have seen dramatic increases in the last decade

Source: National Association of REALTORS® (NAR) “It’s A Great Time To Buy Or Sell A Home brochure”

Copyright © 2008 Century 21 Real Estate LLC. All rights reserved.Slide 11

The Reality

• Mortgage Rates Are At Historic Lows

– Mortgage rates have trended down from July 2007 to January 2008.

– As of January 24,2008 the average 30 year fixed rate mortgage was 5.48%*

• Mortgage rates continue to remain low

– Since 1971, the average 30 year fixed rate mortgage rate has ranged from 5.23% to 18.45%. Current rate still remains near 35 year low*

• Demand for Affordable Loan Programs Continues

– Century 21 Mortgage® has attractive loan programs for financially responsible buyers

*Source: FreddieMac (http://www.freddiemac.com/pmms/pmms/pmms30.html)


4 Fundamentals for a Strong Market

• Strong job growth and low unemployment

• Wages continue to increase

• Low interest rates

• Increased housing inventory


Other Things to Consider

• Baby Boomers are retiring at record numbers

• Marriages and joint living arrangements are still happening

• The population is growing at a rate of 1.1% per year*

* Source: U.S. Census Bureau, International Data Base (http://www.census.gov/ipc/www/idb/worldpop.html)


Success in Today’s Market

• Informed consumers are able to capitalize on the current market conditions

• For the past 3 decades, home values have increased an average of more than 6 percent every year, and home values nearly double every 10 years.*

• Home prices typically beat inflation by one or two percentage points.*

• Homeowners in this situation have the opportunity to upgrade to their ideal choice of home (dream home)

• Now is the time to invest in areas that have historically seen strong growth

* Source: The National Association of REALTORS® HousingMarketFacts.com website


Buy Up Scenario

Source: Realtor.org, “Buy Up Strategy” by Walter Sanford, Industry Expert

Market has fallen 10%, sellers want to sell the existing home and purchase a home in a depressed market

They want to sell the existing home for $200,000but they can only get $180,000 with $80,000 in equity

Their $325,000 dream home price has also fallen 10%, it is now $292,500.

The sales agent negotiates $290,000 for the “dream home” and has just saved the sellers approximately $35,000 on their long term investment.


Be Aware…

• Higher consumer debt has resulted in lenders tightening credit requirements *

– Borrower’s income verification and credit scores

– Higher scrutiny

– Fewer options

– Longer review and approval time

• Consumers are being asked “tougher” questions, the criteria has become more stringent

• Being informed is the best defense

* Source: Washington Post, “More Hoops for Borrowers” by Dina ElBoghdady, December 29, 2007


Buyers Protect Yourself

• Check your credit report for accuracy and completeness

• Use the Internet wisely, be careful who you share your personal information with

• Educate yourself about mortgages and mortgage fraud

• Hire the right real estate professional to estimate property value, negotiate the deal and coordinate the closing process

• Look for real estate professional designations

– Accredited Buyer Representative (ABR)


How FICO® Credit Scores Work

• Each consumer has three FICO® scores, one for each of the three credit bureaus – Experian, TransUnion, and Equifax.

• Used by lenders to evaluate the risk they’d take by loaning money.

• The scores affect both how much and what loan terms (e.g. interest rate) lenders offer.

• Improving your FICO® scores can help you qualify for better rates and lower monthly payments.

Source: myfico.com: Credit Education: How FICO® Credit Scores Work


How FICO® is Calculated

15%15%

10%10%

10%10%

35%35%

30%30%

Source: myfico.com: Credit Education: “Know your FICO® Scores, Improve Your FICO® Scores, Save Money”


Mortgage Basics

• Two basic payment categories

– Fixed-rate (Typically 15 or 30 year loans)

• Higher initial payments

• Steady and predictable payment and rate over time

– Adjustable-rate (Typically 3/1, 5/1, 7/1 or 10/1 loans)

• Lower initial payments for the first three, five, seven or 10 years, followed by rates that adjust annually thereafter

• The interest rate and monthly payment move up and down as market interest rates fluctuate

• Two factors are how predictable the payments are and how affordable they are


The Charges

• Banking is a business, they want to make money

– Interest rate

– Term

– P&I

– Amortization

– APR

– Points


Qualifying Potential Borrowers

• The four Cs

• Ratios

• Loan to Value (LTV)


Financing Options

• Conventional

• Government

– FHA

– VA

• Fixed

• Adjustable

• Jumbo

• Mortgage Insurance


Obtaining a Loan

• Origination

• Processing

• Underwriting

• Closing


Feeling the Financial Crunch

• Many people are having trouble paying their mortgage

• The housing boom led to record homeownership rates of nearly 70% *

• Many homeowners are now faced with difficulty making their mortgage payments

• Adjustable rate mortgages (ARM) had a low introductory rate followed by a significant increase

• “Payment shock” results when the borrower doesn’t anticipate the dramatic increase of the loan payments

* Source: U.S. Census Bureau, Homeownership Rates for the U.S. and Regions: 1965 to 2007


Help on the Horizon

• Our sales associates are in the business of understanding the real estate process, they are a great resource

• Often, the best and least expensive option is to work with your current lender

• If your current lender is not able or willing to help, contact one of our sales associates to help you find a responsible lender in addition to other resources


Selling in a Buyer’s Market

• Pre-owned homes are competing with new homes

• Pre-owned home needs to be in “move-in” condition

• Bring in a contractor or home inspector to review your home’s condition

• Home sellers without home decorating savvy may want to hire a “home stager” to assist with maximizing space

• Curb appeal must be taken into consideration

• A real estate professional can lend “fresh eyes” to your situation

Source: mysanantonio.com: “Selling in a Buyer’s World,” by Creighton A. Welch. October 26th 2007


Doing It Yourself

• Sellers who try to sell their own home without the help of a real estate professional will encounter the following:

– Median home price for sellers who sell it themselves is 16 percent lower* than when sellers use a real estate agent

– Home sale typically involves more than 20 steps

– Selling a home takes time and focus

– Seller disclosures NEED to be done accurately

– Home needs to be priced competitively, especially in a buyer’s market

– The listing must be marketed effectively, especially on the Internet

– Proof of buyer pre-qualification needs to be obtained

Source: NAR Consumer Protection Tips 2006: Protect Yourself. Consumer Protection Tips for Home Buyers and Sellers from the National Association or REALTORS®


Why Use Internet Marketing?

• Internet usage in the home search process has steadily increased

• Get the word out ASAP

• Provide detailed information to BUYERS in Real Time

• Communicate to seasoned real estate professionals in the market

• Perception of professionalism and quality


Sellers Protect Yourself

• Know your home’s value (CMA)

• Sales Associate can suggest strategies for preparing your home for sale

• Don’t allow random strangers to view your home

• Understand the purchase contract and seller disclosures

• Median home price for sellers who use a real estate agent is 16 percent higher versus For Sale By Owner (FSBO)

Source: NAR Consumer Protection Tips 2006: Protect Yourself. Consumer Protection Tips for Home Buyers and Sellers from the National Association or REALTORS®


Preparing A Home for Sale

• Polish the front door knob, clean the storm door and sweep the front steps.

• Remove clutter to make your home feel more spacious.

• Open windows daily for a few minutes to freshen the room.

• Open drapes and blinds and turn on a couple of lights to make your home more inviting.

• In areas that need painting, keep colors neutral and light – white, beige and gray are the most popular exterior colors, while shades of white, off white are the safest choices for the interior.

• Place a vase of fresh flowers in a bathroom and remove all personal care articles.

• Organize cabinets and closets to demonstrate roominess.

Maximize Your Home’s Appeal


Pricing Your Home to Sell

• First step is to conduct a Comparative Market Analysis (CMA)

• Buyers today are educated and will have done research on the Web

• Our sales associates are experienced with CMAs

• Other factors to be considered are:

– Available financing for buyers

– Loan terms and conditions

– Qualities of competing properties


Tax Implications for Sellers

• Consult an accountant, or tax advisor regarding potential tax penalties from the sale of your home

– Capital gains tax rate

– Determine amount of income you can gain that is not considered “taxable income”

– How long (in years) home must be principal residence

– Tax exclusions may not apply to second homes or vacation properties

– No more than one sale or exchange can take place every two years (Internal Revenue Service). State laws may be different.


Summary

As a result of today’s session, you should now be better informed on the following:

•The differences between national market summaries and local market opportunities

•The state of the market

•Taking advantage of today’s market

•Buying a Home

•Selling a Home

©2007 Century 21 Real Estate LLC. CENTURY 21® is a registered trademark licensed to Century 21 Real Estate LLC. Equal Housing Opportunity. Each Office Is Independently Owned And Operated.

WHAT QUESTIONS DO YOU HAVE?

home owner seminar what you need to know about today’s real estate market click to advance to the...

Documents

real estate llc

reality real estate

todays real estate market

equal opportunity company

equal housing opportunity

home slide

registered trademark

home brochure slide