Lebanon, Berks, Schuylkill, Dauphin and Lancaster Pennsylvania PA Homes, land, acreage, and commercial real estate for sale:

November – December 2011

Happy Holidays to All!

Why Do You Buy a Home?

Are you in the market to buy a home of your own? If so, you should ask yourself one question: Why do you want to buy?

Although it seems like a simple question, it may not be.  Experts are predicting that, in several markets, prices may continue to moderate.  This seems to have caused many buyers to stay on the fence in hoping to buy at a more optimum time. If the reason you are buying is to do a quick ‘flip’ of a home to make money, waiting most definitely makes the most sense.

But what if the reason you are considering buying isn’t about finances though. Does it still make sense to delay a purchase? That depends on why you are buying. What if your purchase is more about improving the quality of life for you and your family? Or moving into a school district where your child’s talents could be made best use of? Or is it being closer to friends and family? There could be a cost to delaying any of these decisions.

While everyone wants to make a sound financial decision no matter the actual reason for moving, postponing in hopes to ‘time’ the market right might not make sense. ran an article that addressed this issue, written by John E. Girouard. He wrote:

“Trying to time the housing bottom is as much folly as trying to time stocks or any other investment vehicle. In fact, it’s greater folly because if housing prices do fall further, it’s likely to be because mortgage rates are rising, which would mean that over the long term that slightly lower price you may have paid could end up costing more in carrying costs than you saved.”

And he went on to say:

“My answer to those who ask whether now’s the time to buy a house is that the American Dream is and always was alive and well. It has nothing to do with the direction of housing prices but everything to do with your financial situation, income stability, ability to shoulder the costs, and if the home you have your eye on is your version of the American Dream-a home you love that you hope to live in for an extended period.”

In the End

You should likely not make buying a home solely a financial decision. What other reasons do you have for owning and are they more important than money? As always, only you the buyer know that answer.

Time To Buy The Home?

Current Mortgage Interest Rates

With current 30 year mortgage rates, housing payments are at historic lows as compared to personal income.

Freddie Mac reported that mortgage rates had fallen to an average annual level of 3.94%. Assuming the use of a fixed rate mortgage with 20% down, this would make the median mortgage payment on a single family existing home just 6.9% of per household personal income, compared with an average of 14.4% since 1966.” 

Price to Income Ratios

A good measure of housing values is the ratio of personal income to home prices.

“Since 1966, the median price of an existing single family home in the U.S. has varied between 150% and 251% of personal income per household. However, roughly three-quarters of the time it has been in a relatively narrow band between 185% and 230%. In September 2011, the ratio was just 153%, implying that to get back to an average price to income ratio, home prices would have to rise by about 27%.”

Rent Versus Mortgage Payments

Is it less expensive to own or rent a home? The answer to this question should help families make the decision whether or not to buy a home.

“By the third quarter of this year, we estimate that the implied median mortgage payment had fallen to just 78% of the median asking rent…”  

In the End

“The numbers on housing have an important message for American families today, and particularly younger families setting out on life’s great adventure: Five years ago, at the peak of the home-buying euphoria, it was emphatically a time to rent. Today, when home ownership is depreciated more than ever before, the numbers tell us it is a time to buy.”

Reasons People Buy Homes

1. A good and stable place to raise children

2. A physical structure where your family feels safe

3. More space for your family and belongings

4. You control what you do with your own space, such as renovations and updates

Preparing your Heating System for the Winter

Maintenance requirements for modern heating systems may not involve as much of a homeowner’s time and effort as years ago, but there are still some basic maintenance issues that need to be addressed to help ensure your system will operate properly when needed.

Ideally all heating systems should undergo a preseason maintenance check. Some steps are relatively simple and can be handled by any reasonably competent homeowner; however, with the extra controls and safety devices used with modern systems, most systems should be serviced annually by a qualified heating or plumbing serviceperson.

A trained serviceperson is equipped with the tools, instruments and training necessary to inspect your system, complete regular maintenance tasks or needed repairs, and adjust the burners and other components of the system for optimal and dependable performance.

While you may already have started up your system for the heating season, it is always best to arrange this servicing well before the season starts. Wait too long to schedule an appointment and you may find that you are on a long list for service – well below all the “emergency” heat calls on the service technician’s list.

For many homeowners, if their system turns on that first chilly day of the season, they tend to assume all will go well for the rest of the heating season. It’s not that the system can’t undergo servicing during the season, it’s just that doing so means you’re likely to have to pay more for the service — and worse, you increase the chance of a cold, heatless day.

Whether your system received a professional seasonal launching or not, if the system doesn’t come on when the thermostat is turned up, there are a few steps to take that might get it going before you have to call for help:

  • Check the thermostat for any obvious signs of physical damage.
  • Make sure the day, time and ON-OFF settings are correct.
  • If the thermostat was moved or removed for re-painting or a new wallpaper project, check to make sure the wires were reconnected (with power off).
  • Check to make sure the power switch for the heating system is on. (This switch is typically located on or near the unit, or if an older house, it may be located at the top of the basement stairs or on the wall of the garage.)
  • Replace the thermostat battery with a fresh one.

Note: if the power switch was turned off or the battery died, the programmed settings may have returned to the factory default settings and a full reprogramming to your desired settings may be needed. Look on the back of the thermostat cover for basic instructions; otherwise refer to the manufacturer’s instructions. If these are not available, try contacting the manufacturer through its website. Instructions may also be posted online. If you can’t immediately figure how to change the settings, look for a manual override (usually UP-DOWN arrows) to raise the setting to at least manually get heat if needed.

Interest Rate Trends:

30 Year fixed: rate 4.19% – APR 4.28% – Change + 0.017%

15 Year Fixed: rate 3.45% – APR 3.60% – Change + 0.019%

15 year- Home Equity Year – fixed: rate 7.04% – Change + 0.75%

For more information on FHA and VA rates, visit:

Featured Listings

915 Skyline Drive, Lebanon PA 17046 – MLS 186655

Jonestown, PA 17038 Home – MLS 183098–Monroe-Valley-Area-Jonestown-PA-17038

354 Timber Lane Mt. Gretna, PA 17064 – MLS 182343


429 N 7TH AVENUE LEBANON, PA 17046 – MLS 182543

300 W WATER STREET ANNVILLE, PA 17003 – MLS 180840

130 CASSADEE LEBANON, PA 17042 Lot # 6 – MLS 167825

174 Furnace Court, Lebanon Pa 17042 – MLS 184657

September 2011

Natural Disasters and their Effects on Real Estate

In the wake of past week’s hurricane Irene and Tropical Storm Lee, let’s look at the occasional disasters (natural and otherwise) that can befall a real estate transaction. After the hurricane and storm, many transactions were put on hold, awaiting inspections by buyers, appraisers, engineers and even insurance companies. The assessment of damages can and has left many transactions in limbo.

Does a buyer want to risk some structural damage or even mold problems? How long will it take a seller’s insurance company to respond, pay and complete repairs? Some homes were even damaged beyond repair. No one really could have prevented these issues, but some other “disasters” could have been averted. For example, issues such as:

  • Appraisal Issues – sellers who engage real estate agents often neglect one of the most important roles an agent can play….the sales person to the appraiser. Agents can have some influence on the value that appraisers establish, by providing the best possible comps, thereby saving the appraiser time and energy. A well prepared agent is huge. An agent who can help make a home look more appealing through staging is invaluable in exciting buyers and appraisers.
  • Title Issues – chain of title, past mortgages, judgments, foreclosures, old tax bills, certificates of occupancy, and other thorns in the side of closings often can be dealt with much earlier in the process. The attorneys, agents and lenders who are proactive in attacking title challenges are not the norm. Making sure you have them on your team can save you a lot of headaches.
  • Credit Issues, Asset Issues, Employment Issues – home buyer’s loan applications are under more scrutiny than ever. Buyers who work with a loan officer who is a coach (properly structuring loans, optimizing credit scores, explaining deposit and job abnormalities) are buyers who can avoid some of the biggest disasters.

In the end, some problems are unavoidable, but many pitfalls can be avoided if you have the right people around you. Whether you are buying or selling, you need the most able professionals! Seek them out and hold onto them because they are rare. And don’t forget to refer them to those you care about.

Good Tips for Flood Clean Up

Tips on flood cleanup including such as avoiding mold, addressing damage to appliances, and use of wells and septic systems.

Q. My home was flooded in the recent storms. I’ve seen conflicting information and been given differing advice as to what I need to do for the cleanup to prevent future mold problems. Can you provide some guidance?

The main issues is to remove and dispose of any absorbent building materials or possessions as quickly as possible and to dry out and clean all non-porous surfaces that have gotten wet. Your local health and/or building departments should be able to provide some guidance base on local conditions. The U.S Environmental Protection Agency (EPA) has issued a Flood Cleanup Factsheet that will provide some guidance as well. Agencies like FEMA or the Red Cross also provide guidance.

Q. If my heating system ended up partially submerged after my basement flooded, do I need to replace it?

According to the Gas Appliance Manufacturers Association (GAMA), in many cases heating, cooling and electrical appliances – or at least certain components – may need to be replaced, rather than repaired, when exposed to flooding. Anytime the gas or electric components or controls are submerged, immediate damage or latent effects are likely.

GAMA advises against do-it-yourself repairs, since the typical homeowner is not able to determine whether flood damage has occurred in many cases. Potential damage to controls on oil, gas and electric equipment present an increased safety risk. Exposure to flood water or other water that seeps into a home, and the dirt and other possible contaminants that might be in it, can led to the corrosion of controls and other components, the malfunction of safety sensors, a build-up of dirt/debris in gas lines, valves or burners, and a short circuit in electric components.

Even though appliances exposed to flooding may appear to be operational, the eventual movement of dirt through a gas line or valve, or slow corrosion of electric components over time, can render control and safety devices inoperative and create a risk of an explosion or fire.

On other hand, if only the base of the equipment cabinet has been was submerged, the primary components may be intact and only a cleaning of the cabinet will be needed. So before a contractor advises replacement, implying that you might get it eventually paid for by insurance – make sure it was submerged and damaged. Basic homeowners insurance will not cover flood damage.

Q. If my well head cap was not submerged by floodwater is it likely safe to drink?

Any water system that directly or indirectly may have been contaminated by flood water or other contaminants should be tested before use to be safe. Certainly direct contact with flood water through an unsealed well head would be a concern for bacteria. Many other contaminants can find their way into the water source as well.

Contact your local health department or a private lab to have the well water sampled and tested. If the health department or lab issues sterile bottles for you to collect samples, follow all instructions carefully. Even if no problems are identified after an initial test, retest at regular intervals, particularly if it is reported other wells have been contaminated. .

Note that well disinfection will not provide protection from pesticides, heavy metals and other types of non-biological contamination. If such contamination is suspected, due to the nearness of these contaminant sources, special treatment will be required.

Q. I was told I should not use my septic system for weeks after my yard was flooded. This doesn’t make sense to me since the wastewater is already contaminated? Do I really have to not use it?

Contamination of your system from the flood water may or may not be a problem, but contamination from your system to the surrounding area becomes an issue. If the yard is or was flooded, that means that the soil has been saturated. If the soil is saturated, that means your septic drain-field is saturated and new wastewater flowing from the septic tank can’t be absorbed properly and may become an additional source of pollution. It can also lead to a backup in your home.

The only way to prevent this backup is to relieve pressure on the system by using it less. In addition, as long as the drain-field is below water or saturated, the wastewater will not be treated properly. If there is any question about the use of your system, it would be best to have it looked at by a qualified inspector/contractor.

The Main Reasons people Buy Homes

1. Having a good and stable place to raise children

2. Having a physical structure where your family feels safe

3. Having more space for your family and belongings

4. It allows you to control what you do with your own space, such as renovations and updates to your home

Current Interest Rates:

30 Year fixed: rate 4.07% – APR 4.48% – Change – 0.045%

15 Year Fixed: rate 3.29% – APR 3.74% – Change – 0.012%

15 year- Home Equity Year – fixed: rate 6.30% – Change – 0.13%

For more information on FHA and VA rates, visit:

Real Estate definitions & Terms explained:

Appraised Values – An opinion of a property’s fair market value, based on an appraiser’s knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price

Home Owners Insurance policies – An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents, but does not typically cover damage from floods

Flood Insurance policies – Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas

Featured Listings

Web Sites and YouTube videos: 

Jonestown, PA 17038 Home – MLS 183098 – &

354 Timber Lane Mt. Gretna, PA 17064 – MLS 182343 –

26 PATRICIA DRIVE LEBANON, PA 17042 – MLS 178649 –

 429 N 7TH AVENUE LEBANON , PA 17046 – MLS 182543 –

300 W WATER STREET ANNVILLE , PA 17003 – MLS 180840 –

130 CASSADEE LEBANON , PA 17042 Lot # 6 – MLS 167825 –

August 2011

Home Owner Tax benefits Must Be Preserved, Says Realtors

Any changes to the mortgage interest deduction now or in the future could threaten recent progress toward stabilizing the housing market, critically erode home prices and values, destroy middle-class wealth accumulation and hurt economic growth.

That was the message delivered by National Association of Realtors® NAR Chief Economist Lawrence Yun during today’s Rethinking the Mortgage Interest Deduction forum, where he joined a panel of experts to debate the future of the MID. The event was hosted by the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institute, and the Reason Foundation.

“As the leading advocate for housing and homeownership, NAR firmly believes that the mortgage interest deduction is vital to the stability of the American housing market and economy,” said Yun. “The MID facilitates home ownership by reducing the carrying costs of owning a home, and it makes a real difference to hard-working middle-class families.”

Yun argued that now is the worst possible time to discuss changing the tax laws, which could further impair the housing market’s fragile recovery and a broader job market recovery.

“One thing that is indisputable is that eliminating the MID will lower the homeownership rate in the U.S.,” he said. “While we must ensure that the conditions that led to the artificially inflated home ownership rate of the bubble years do not resurface, we also need to create the conditions for sustainable home ownership, which has been shown to provide myriad social benefits for families and communities.”

During the debate, Yun challenged recent proposals calling for changes to the tax code, stating that it’s a misplaced argument to say the MID was a cause of the housing market bubble and is suddenly part of the deficit problem, when it’s been part of the federal tax code for more than 100 years.

Reducing or eliminating the MID is a de facto tax increase on homeowners, who already pay 80 to 90 percent of U.S. federal income tax. Yun said the share could rise to 95 percent if the MID is eliminated.

“Doing away with the MID shouldn’t be thought of as removing a tax break for homeowners, but rather increasing taxes on the middle class,” he said. “Furthermore, housing equity has been a major source of funds for small businesses, and any change to the MID will greatly hamper their ability to create jobs.”

Yun also asserted that it’s a misconception that only the wealthy benefit from the MID, when in reality it benefits primarily middle- and lower income families. Almost two-thirds of those who claim the MID are middle-income earners and 91 percent of people who claim the MID earn less than $200,000 per year.

Other panelists at the Rethinking the Mortgage Interest Deduction forum were Seth Hanton, director of fiscal policy, Center for American Progress; Dean Stansel, adjunct fellow, Reason Foundation; and Eric Toder, institute fellow, Urban Institute, and co-director of the Tax Policy Center. The event was moderated by Edmund Andrews, managing editor for economics, taxes and budget at the National Journal.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Stabilizing the Housing Market Key to the Economic Recovery

Stability in the housing market will lead to a quicker and greater economic recovery, according to the National Association of Realtors®. In a letter to Shaun Donovan, secretary of Housing and Urban Development; Timothy Geithner, secretary of the Treasury; and Gene Sperling, director of the National Economic Council, NAR offered its recommendations for helping stabilize and revitalize the housing industry and economy.

“As the nation’s leading advocate for homeownership and housing issues, NAR understands how integral homeownership is to the nation’s economy. A strong housing market recovery is essential to the nation’s economic strength,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “The housing market is in a fragile recovery, and our goal is to ensure that regulatory or legislative changes help lead the way out of today’s economic struggles and not jeopardize the recovery.”

In its letter, NAR cautioned that recent proposals could make a near-term housing recovery almost impossible, not to mention making it harder for millions of hard-working families to own their own homes. Phipps said more regulations and legislation that tighten access to credit and affordable safe mortgages are not the solution to righting the housing market and economy.

“We want to make sure that any legislative and regulatory changes don’t jeopardize a housing and economic recovery, so that anyone who is able and willing to assume the responsibilities of owning a home has the opportunity to pursue that dream,” said Phipps.

NAR urged support for policies that ensure qualified borrowers can obtain safe and sound mortgage financing. NAR called on regulators to revise the unnecessarily high down payment requirements of the Qualified Residential Mortgage (QRM) exemption from risk retention requirements under the Dodd-Frank Act. A broad QRM definition will encourage sound lending and reduce future defaults without delaying or denying homeownership to millions of creditworthy borrowers.

NAR also asked regulators to reduce the overcorrection in underwriting standards for mortgages from the Federal Housing Administration and government-sponsored enterprises because the now-too-stringent standards are preventing qualified borrowers from getting loans.

“Mortgage availability remains a concern, and borrowers continue to find it increasingly difficult to find affordable mortgage options. Requiring a higher down payment does little to reduce default risk, and only strips home buyers of their savings and increases the number of borrowers who are unable to purchase a home,” said Phipps. “We cannot have a viable housing market and economic recovery until creditworthy borrowers are able to obtain mortgage financing.”

NAR also recommends extending the FHA and GSE mortgage loan limits, which are critical to providing liquidity in today’s housing market. Reverting to the statutory limits on October 1 would reduce limits in 669 counties and 42 states and territories the average decline in loan limits will be more than $68,000.

NAR also firmly believes that National Flood Insurance Program is essential to a properly functioning real estate market, and urges Congress to pass a long-term reauthorization of the program before it is set to expire on September 30 for the tenth time in two years. The program ensures access to affordable flood insurance for millions of homeowners.

“We look forward to working with Congress and the administration to not only preserve, but also strengthen the American dream for future generations,” said Phipps.

Current Interest Rates:

30 Year fixed: rate 4.36% – APR 4.48% – Change – 0.35%

15 Year Fixed: rate 3.57% – APR 3.74% – Change – 0.37%

15 year- Home Equity Year – fixed: rate 7.03% – Change – 0.03%

For more information on FHA and VA rates, visit:

Real Estate definitions & Terms explained:

Closing Costs – Closing costs are separated into what are called “non-recurring closing costs” and “pre-paid items.” Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. “Pre-paids” are items which recur over time, such as property taxes and homeowners insurance. A lender makes an attempt to estimate the amount of non-recurring closing costs and prepaid items on the Good Faith Estimate which they must issue to the borrower within three days of receiving a home loan application

Closing – This has different meanings in different states. In some states a real estate transaction is not consider “closed” until the documents record at the local recorders office. In others, the “closing” is a meeting where all of the documents are signed and money changes hands

Clear Title – A title that is free of liens or legal questions as to ownership of the property

Chain of Title – An analysis of the transfers of title to a piece of property over the years

Certificate of Reasonable Value – Once the appraisal has been performed on a property being bought with a VA loan, the Veterans Administration issues a CRV.

Certificate of Eligibility – A document issued by the Veterans Administration that certifies a veteran’s eligibility for a VA loan

Featured Listings

Web Sites and YouTube videos: 

Jonestown, PA 17038 Home – MLS 183098 –

354 Timber Lane Mt. Gretna, PA 17064 – MLS 182343 –

26 PATRICIA DRIVE LEBANON, PA 17042 – MLS 178649 –

 429 N 7TH AVENUE LEBANON , PA 17046 – MLS 182543 –

300 W WATER STREET ANNVILLE , PA 17003 – MLS 180840 –

130 CASSADEE LEBANON , PA 17042 Lot # 6 – MLS 167825 –

July 2011

Is your Listing about to Expire?

A listing contract on a house for sale has a termination date. If the house reaches this date without being sold, it is called an ‘expired’ listing meaning it is no longer for sale under the previous contract. The end of June historically is a time when many listing contracts come to termination. There will be a record number of homes in this category this month as the housing market continues to struggle.

If you are one of these homeowners, you have a decision to make today.

Sale By Owner – This is usually not a good option. There were reasons you originally decided to use the services of a real estate professional. These same reasons probably still exist. If you truly want a third party to help with the transaction but are disappointed in the job your original agent did, perhaps you should choose a new agent. After receiving a bad haircut, we usually don’t decide to cut our own hair. We switch hairstylists.

Extend listing with Current Agent – The housing market has been tough. Selling a house has never been as difficult as it has been recently. Honestly evaluate the job your current agent has done. If they have been honest with their input and diligent with their feedback, you may consider extending the contract.  

Chose a New Listing Agent – You know the things the original agent didn’t do that disappointed you. You also know the things he/she did do that annoyed you. Keep both lists in your head and ask those you interview how they would handle the situations differently.

Taking the House Off the Market – Be careful! Of course you are disappointed it didn’t sell. However, before making this decision, remember the reasons you originally put the house up for sale. If these reasons still are important to you and your family, don’t let a slow housing market get in the way of moving on with your goals and dreams. Sit with a real estate professional and decide what is best for your future.  If your listing is about to expire, make sure you contemplate your next move before making a decision.

Bad Advice coming from the Talking Heads?

An interesting article in the Wall Street Journal on Monday, titled A Home Is a Lousy Investment, was written by Mr. Bridges, a professor of clinical finance and business economics at the University of Southern California’s Marshall School of Business. The concentration of the piece is that owning a home is not a good financial investment for younger generations. They indicate:

“Today’s young people would be foolish to imitate their parents and view ownership as the cornerstone of personal finance.”

We would like to counter some of the points made by the Professor. Unfortunately, he only looks back on California home values over the last thirty years and begins with a flawed assumption:

“If a disciplined investor who might have considered purchasing that median-price house in 1980 had opted instead to invest the 20% down payment of $19,910 and the normal homeownership expenses (above the cost of renting) over the years…”

We see many challenges with these givens. Let’s look at them. 

“a disciplined investor” – There is no doubt that discipline in savings is important. However, studies show that homeowners attain greater wealth because of ‘forced’ savings.

The Joint Center for Housing Studies at Harvard University released a study, America’s Rental Housing: Meeting Challenges, Building on Opportunities. They explain:

“In addition, renters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600-about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.”

“invest the 20% down” – The professor’s math supposes a 20% down payment. What about the people who put 5% down or 10% down. What about those who purchased a home with an FHA mortgage putting 3% down; or our veterans who used a VA mortgage to purchase a home with no down payment?

“Normal Home Ownership Expenses (Versus renting) – It’s great that Professor Bridges looked at data over the last 30 years. History is important. Foresight is much more valuable than hindsight however. In most parts of the country, homeownership is currently less expensive than renting. There is not MORE money to invest if you rent. There is LESS.

In their report mentioned above, Harvard University found:

“Rental markets are now tightening, with vacancy rates falling and rents climbing. With little new supply of multifamily units in the pipeline, rents could rise sharply as demand increases.”

Said on Trulia, in its second quarter 2011 Rent vs. Buy Index, stated that buying a home has become more affordable than renting in nearly four out of five (78%) major cities. Ken Shuman, Head of Communications at Trulia:

 “With home prices nearing a double dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying.”

The premise of Professor Bridges article doesn’t apply to the current market. Even some in the academic world agree that now is the time to buy.

Business School professors Eli Beracha of East Carolina University and Ken H. Johnson Ph.D. of Florida International University have done extensive research on which makes more sense financially: to rent or own a home. They published a sensational paper on this issue: Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise?. In their paper, they explain:

“Fundamental drivers now appear to be in place that favor homeownership over renting in the near term future…

This finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting.”

Their Conclusions – “Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

If Professor Bridges’ assumptions are incorrect, how much value can the conclusions hold?

In the End – The best advice given in that Wall Street Journal article was in its last paragraph:

“Owner-occupied homes will always be the basis for healthy and stable neighborhoods.”

In today’s market, a home is also a fabulous investment!!

Current Interest Rates:

30 Year fixed: rate 4.64% – APR 4.70% – Change – 0.005%

15 Year Fixed: rate 3.80% – APR 3.97% – Change – 0.007%

15 year- Home Equity Year – fixed: rate 7.07% – Change + 0.000%

For more information on FHA and VA rates, visit:

Real Estate definitions & Terms explained:

Cloud on Title – Any conditions revealed by a title search that adversely affect the title to real estate – Usually clouds on title cannot be removed except by deed, release, or court action

Co-Borrower – An additional individual who is both obligated on the loan and is on title to the property

Collateral – In a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust

Collection – When a borrower falls behind, the lender contacts them in an effort to bring the loan current. The loan goes to “collection.” As part of the collection effort, the lender must mail and record certain documents in case they are eventually required to foreclose on the property.

Common Areas Assessment – In some areas they are called Homeowners Association Fees. They are charges paid to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD) and are generally used to maintain the property and common areas

Common Areas – Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project’s homeowners’ association (or a cooperative project’s cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc

Common Law – An unwritten body of law based on general custom in England and used to an extent in some states

Community Property – In some states, especially the southwest, property acquired by a married couple during their marriage is considered to be owned jointly, except under special circumstances. This is an outgrowth of the Spanish and Mexican heritage of the area

Comparable Sales – Recent sales of similar properties in nearby areas and used to help determine the market value of a property. Also referred to as “comps”

Condominium – A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership

Construction Loan – A short-term, interim loan for financing the cost of construction – The lender makes payments to the builder at periodic intervals as the work progresses

June 2011

Is a Housing Shortage Coming?

Within the next decade, 16 million new housing units will be needed to meet population growth and shifting demands, according to Harvard University’s Joint Center for Housing Studies in its latest annual “State of the Nation’s Housing” report.

That means household growth, which has dropped drastically in recent years, will need to greatly reverse its trend to meet the forecasted spike in demand. From 2007-2010, household growth averaged about 500,000 per year–less than half the 1.2 million annual pace averaged prior from 2000-2007.

To absorb the current rate of foreclosed and distressed homes plaguing most markets, a more normal rate of household formation is critical, according to the report. However, household growth partially has stalled as young adults have delayed home ownership and immigration has slowed.

As such, in recent years, builders have drastically cut production of new homes.

“With inventories of new homes at historic lows, a turnaround in demand could quickly result in tighter markets,” the report notes. “Over the longer term, the number of younger households is set to rise sharply, supporting growth in the population that fuels growth in both new renters and first-time buyers. The path of the economy and evolution of the mortgage market will determine when and if this increased demand materializes.”

The report predicts a need for greater housing units for several reasons. For example, the report projects demand for 1 million new homes a year is needed to meet population growth in the coming decade. The report also predicts a surge in smaller homes, estimating that 3.8 million baby boomers will be looking to downsize their homes within the next decade. Also in adding to the increase in housing units needed, Immigration growth, the need to replace existing homes, and demand for second homes will contribute to rising demand, the report notes. Therefore, researchers conclude at least 16 million new housing units will be needed over the next decade.

Clear Capital Says Stability in future as Distressed Property values rise

The real estate valuation firm Clear Capital sees signs of market stability as we move into the summer months.  New data released Thursday by the company shows that U.S. home prices continue to fall, but the 2.3 percent drop recorded for the three months ending in May was half the decline seen in the previous month’s report.

Clear Capital says the median price paid for distressed properties has started to rise, indicating the REO market is seeing increased activity toward the upper end of the price range and helping to rein in the depreciating trend of the past several months. The “uptick in distressed sale prices, combined with the upcoming summer buying season, could stabilize home prices,” according to the Clear Capital report.

This follows the realization of an official double-dip seen in the company’s May report on its home price readings, which was based on market data through the end of April. One month after reporting a nationwide double dip in home prices, Clear Capital says “quarter-over-quarter home prices are showing signs of improvement as the deep winter lows were replaced by more stable spring prices,” suggesting “prices are stabilizing as the typically stronger summer buying season approaches.”

Based on historical patterns, the non-REO (“fair market”) segment increases its share of total sales volume in the spring and summer months, Clear Capital explained. The company says this is “critical” as its historical data has shown strong negative correlations between home prices and large REO sales volumes. The prevalence of distress in sales activity has now started to plateau, according to Clear Capital. Its latest study notes that REO saturation – the percentage of bank-owned homes sold as compared to all properties sold – has leveled off after climbing 10 percent since July 2010. The REO saturation rate slipped 0.6 percentage points in May to 33.9 percent.

Clear Capital says the present leveling of quarterly declines is “expected.” All spring seasons, even since the 2006 downturn, have seen an increase in fair market sales volume (14% on average), compared to the preceding winter. The company noted that the REO segment doesn’t typically follow a seasonal cycle because the release of distressed properties to the market is determined through the foreclosure process and sales driven by different marketing strategies. The seasonal rise in non-REO volumes is now merging with a new trend, according to Clear Capital. The company’s market analysis has found that since the fourth quarter of 2010, the median price for distressed properties crept upward 5.0 percent while REO sale volumes have moderated.

“This marks the longest gain in median price for REOs since the market correction began in 2006,” Clear Capital said. “This is a positive signal at minimum; it indicates buyers’ appetite for higher-end REOs. Even with elevated distressed activity, this introduces the potential for gains.” Regional quarterly price declines also softened across the nation, with the Northeast, West, and South regions all posting quarterly declines of less than 2.0 percent in May. The Midwest, though, saw a drop of 4.9 percent.

Detroit remains the worst performing market – a position it’s held on Clear Capital’s chart for five consecutive months. Home prices there were down 13.2 percent quarter over quarter in May. Detroit has an REO saturation rate of 58 percent. Washington, D.C. again held onto the title of best performing market, with a quarter-over-quarter price gain of 4.5 percent and an REO saturation rate of 17.5 percent.

Current Interest Rates:

30 Year fixed: rate 4.59% – APR 4.70% – Change + 0.005%

15 Year Fixed: rate 3.78% – APR 3.95% – Change + 0.001%

15 year- Home Equity Year – fixed: rate 7.13% – Change + 0.005%

For more information on FHA and VA rates, visit:

Real Estate definitions & Terms explained:

Credit Report – A report of an individual’s credit history prepared by a credit bureau and used by a lender in determining a loan applicant’s creditworthiness.

Credit History – A record of an individual’s repayment of debt – Credit histories are reviewed my mortgage lenders as one of the underwriting criteria in determining credit risk.          

Cost of Funds Index – One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home Loan Bank.

Cooperative – A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.

Conventional Mortgage – Refers to home loans other than government loans (VA and FHA).

Contingency – A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

May 2011

Buying or Renting

Many families question whether it makes more sense to rent or buy. In discussing a steadfast belief in homeownership, a quote from a study issued by an institution with no ties to the real estate business or mortgaging is below.

The Joint Center for Housing Studies at Harvard University released a study, America’s Rental Housing: Meeting Challenges, Building on Opportunities. The study discusses the need for a greater supply of quality rental units in America. We agree. However, there were a few nuggets of information found in the study we want everyone to know.

Most American’s Believe in Homeownership

There seems to be some feeling that homeownership has lost it’s luster and perhaps is no longer a component of the American Dream. Harvard explains:

To date, attitudes about owning have become only slightly more negative while attitudes about whether now is a good time to buy are little different than before the housing boom. In the latest Fannie Mae housing survey from October-December 2010, the vast majority of respondents-including renters-continued to believe that homeownership makes more financial sense than renting. In addition, nearly two-thirds of all renters surveyed reported their intention to buy homes in the future.

Creating Wealth through Homeownership

Because prices have fallen dramatically in many parts of the country in the last five years, some are too easily dismissing homeownership’s role in building family wealth over the last century. The study explains: 

In addition, renters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600-about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.

The recent fall in prices can’t wipe out the 100 year history housing has as a good long-term investment.

The End Result

The study was promoting the need for the construction of more rental housing for the average American family. However, when it came to a discusion on building wealth, Harvard offered:

“And for individuals as well as businesses, owning rental properties is an avenue for wealth creation.”

And how do these individuals and businesses create that wealth. Owning the real estate and collecting rent from their tenants to offset the mortgage payments. Build your family’s wealth – not your landlord’s. We believe OWNERSHIP almost always makes the most sense. 

Is it Time to Buy a Home – The Polls?

Looking at people’s feelings about buying a house, looking at recent polls and surveys that report on what people are actually thinking instead of taking the word of a ‘talking head’ on television or a newspaper trying to draw subscribers. A perfect example: the three separate surveys which have come out in the last few weeks discussing what Americans really think about the value of buying a home.

  1. The Gallup Poll which showed that 69% of Americans think this is a good time to buy.
  2. Fannie Mae’s National Housing Survey which reported that Americans believe that homeownership is the investment with the most potential. They chose owning a home over other traditional investments such as stocks, mutual funds and bonds.
  3. The Pew Research Center study Home Sweet Home. Still explaining that 81% agree that buying a home is the best long-term investment a person can make.

The end result

There are many experts telling us what people currently think about homeownership as an investment. We’ve decided to listen to the people themselves.


Current Interest Rates:

30 Year fixed: rate 4.71% – APR 4.82% – Change + 0.000%

15 Year Fixed: rate 3.93% – APR 4.10% – Change + 0.000%

15 year- Home Equity Year – fixed: rate 7.14% – Change + 0.000%

For more information on FHA and VA rates, visit:

Real Estate definitions & Terms explained:


Earnest Money Deposit – A deposit made by the potential home buyer to show that he or she is serious about buying the house.

Down payment – The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.

Discount Points – In the mortgage industry, this term is usually used in only in reference to government loans, meaning FHA and VA loans. Discount points refer to any “points” paid in addition to the one percent loan origination fee. A “point” is one percent of the loan amount.

Depreciation – A decline in the value of property; the opposite of appreciation. Depreciation is also an accounting term which shows the declining monetary value of an asset and is used as an expense to reduce taxable income. Since this is not a true expense where money is actually paid, lenders will add back depreciation expense for self-employed borrowers and count it as income.

Delinquency – Failure to make mortgage payments when mortgage payments are due. For most mortgages, payments are due on the first day of the month. Even though they may not charge a “late fee” for a number of days, the payment is still considered to be late and the loan delinquent. When a loan payment is more than 30 days late, most lenders report the late payment to one or more credit bureaus.

Default – Failure to make the mortgage payment within a specified period of time. For first mortgages or first trust deeds, if a payment has still not been made within 30 days of the due date, the loan is considered to be in default.

Deed-in-lieu – Short for “deed in lieu of foreclosure,” this conveys title to the lender when the borrower is in default and wants to avoid foreclosure. The lender may or may not cease foreclosure activities if a borrower asks to provide a deed-in-lieu. Regardless of whether the lender accepts the deed-in-lieu, the avoidance and non-repayment of debt will most likely show on a credit history. What a deed-in-lieu may prevent is having the documents preparatory to a foreclosure being recorded and become a matter of public record.

April 2011

Are Rental Costs About to Take Off – Judge for yourself!

We are often asked whether it is better to rent or buy in the current housing market. The answer to that question is: “It all depends”. There are certain situations where renting short term probably makes sense. It may make sense if you are retiring to a different region of the country and are not yet sure where you want to set down roots for the next 25 years. It may make sense if you have a one year employment contract which will probably require a move to another place upon termination.

However, in most other cases, renting right now makes little sense for several reasons.

Let’s take a closer look at the last reason. We have often said that the cost of anything is based on supply and demand. The number of widgets for sale and the number of widget buyers together create the price for widgets. That will also apply to rents. There is a much larger demand for rentals right now. The economy has forced many to leave their foreclosed homes and other buyers are afraid to plunge into homeownership.

At the same time, the supply of rentals is rapidly decreasing. Here is a graph from Calculated Risk showing the apartment vacancy rate in the United States:  When supply is rapidly decreasing and demand is quickly increasing, prices have only one place to go – and that is UP! That is exactly where rental prices are headed.

The End Result

Is now a good time to rent? We think not. You can buy a home today at a discounted price and get a 30 year mortgage at a historically low interest rate. You can set your housing expense for the next thirty years. On the other hand, rental costs are poised to increase for years to come.

Great Reasons to Buy Now!

As Dean Hartman said last week, the purchase of a home is a personal decision. However, we want to give everyone four great financial reasons why you should not wait before taking the plunge into homeownership.

Interest Rates Are Increasing

Interest rates have increased almost 3/4 of a point in the last six months. Most experts expect rates to continue to increase through the year. Interest rates along with price determine the overall cost of a home. Even with prices softening, if interest rates rise, it may be less expensive to buy now rather than wait.

The 30 Year Mortgage May Disappear

There has been much debate regarding government’s role in providing support for homeownership. There are several experts who believe If Fannie Mae and Freddie Mac’s roles are eliminated, or even limited, it may be the end to the 30-year mortgage. This concern is addressed in MSN Real Estate’s  Is it curtains for the 30-year mortgage?

Requirements could be more Stringent

Here are proposed changes to the requirements for a ‘qualified residential mortgage’:

  • Certain mortgage types would be eliminated
  • You would need to put a minimum of 20% down
  • You would need a minimum 690 FICO score
  • The ratios of income to both the mortgage payment and overall debt would become much more conservative (28% and 36%)

There would be loans available to purchasers who don’t qualify under the new rules. However, they will probably be more expensive to the buyer (both in rate and costs).

Rents are Expected to Increase

The supply of available rentals is decreasing and the demand is increasing. That will lead to an increase in rental costs throughout the year. The Wall Street Journal this week quoted a report by Reis, Inc:

“Expect vacancies to continue declining, and rents rising through the rest of 2011 at an even faster pace.”

The End Result

You may be waiting on the sidelines to see if prices will continue to depreciate before you purchase a home. The mortgage expense is a major piece in the overall financial picture of homeownership. Make sure you consider it when timing your decision.

Current Interest Rates:

30 Year fixed: rate 4.97% – APR 5.08% – Change + 0.019%

15 Year Fixed: rate 4.23% – APR 4.39% – Change + 0.012%

15 year- Home Equity Year – fixed: rate 7.15% – Change + 0.00%

For more information on FHA and VA rates, visit:

Real Estate definitions & Terms explained:

Equity – A homeowner’s financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage and other liens.

Equal Credit Opportunity Act – A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

Encumbrance – Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions

Encroachment – An improvement that intrudes illegally on another’s property

Eminent Domain – The right of a government to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation proceedings.

Effective Age – An appraiser’s estimate of the physical condition of a building = The actual age of a building may be shorter or longer than its effective age

Easement – A right of way giving persons other than the owner access to or over a property.

March 2011

Buyer’s Opportunities?

It should be pointed out that buyers should be more concerned about the “cost” of a home rather than the “price.” Price obviously is a component of cost. However, unless you buy all-cash, you must also be concerned about the financing of the purchase. The price and the financing together determine the cost of a home. Today, we want to look at only the financing piece.

Opportunities exist today as a result of recent government involvement. These opportunities may never again be available in our lifetimes. There has been much discussion about what role the federal government should have in supporting homeownership. We will leave our opinions on the debate for another time. However, we want to alert you to two advantages available to a purchaser today that may disappear in the future.

Opportunities such as:

  • Historically low interest rates
  • The ability to lock in these rates for thirty years

Interest Rates

Since the financial crisis, the government stepped in and instituted a series of programs which pushed mortgage interest rates to historic lows. If we look at 30 year mortgage interest rates before and after government intervention we see the impact these programs had (see chart below).

According to Freddie Mac, from 2006 to the start of the financial crisis (the fall of 2008), the average rate was 6.29%. Since then, the average rate has been 4.92%.  

A purchaser can still get a 30 year-fixed-rate-mortgage at approximately 5%. However, interest rates this low may soon disappear. The government has questioned its role in supporting homeownership.

Locking in a rate for thirty years

We must also realize that having the ability to lock-in a rate for 30 years may soon be a thing of the past.

There are a growing number of people who think that our mortgage industry should imitate those of other industrial countries around the world. If we do start limiting government support for the mortgage process, the 30-year-fixed-rate mortgage may disappear. Other countries, like Canada, only allow a purchaser to lock in a rate for a five year term. After that, the borrower must renegotiate a new mortgage at current rates. Could that happen here?

The End Result

The Price of a home is dramatically impacted by the mortgage component. Today, we can get a 5% mortgage and lock it in at 5% for the next thirty years!! Both of these opportunities may disappear in the near future. You should take this into consideration if you’re looking to purchase a home.

Sellers in any real estate market are looking to get the best possible price. If you are looking to sell in the next year, today’s price may well be the best price. Home values stabilized somewhat in 2010. Many hoped that was a sign that values had bottomed out and we would see price appreciation in 2011. Studies released this week have painted a different picture.

Would More Money be Available If I Wait?

If we look at CoreLogic’s January Home Price Index (HPI), it shows that prices are again beginning to decline.

National home prices, including distressed sales, declined by 5.7 percent in January 2011 compared to January 2010.

Mark Fleming, chief economist with CoreLogic, said, “A number of factors continue to dampen any recovery in the housing market. Negative equity, which limits the mobility of homeowners, weak demand and the overhang of shadow inventory all continue to exert downward pressure on housing prices. We are looking out for renewed demand in the coming months as the spring buying season gets underway to hopefully reduce the downward pressure.

They are not talking about the spring market increasing or even stabilizing prices. They hope it will “reduce” the pressure to drive prices lower.

The End Result

It seems that prices have again begun to fall nationally. With the overhang of existing and shadow inventory, prices will probably continue to decline throughout most of 2011. If you’re thinking of selling, now might be the best time. Check with a local real estate professional to see how this might impact your area.

Current Interest Rates:

30 Year fixed: rate 4.92% – APR 5.02% – Change + 0.00%

15 Year Fixed: rate 4.22% – APR 4.39% – Change + 0.00%

15 year- Home Equity Year – fixed: rate 7.22% – Change + 0.00%

For more information on FHA and VA rates, visit:

Real Estate definitions & Terms explained:

Equal Credit Opportunity Act (ECOA)

A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs


Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions


An improvement that intrudes illegally on another’s property

Eminent Domain

The right of a government to take private property for public use upon payment of its fair market value – Eminent domain is the basis for condemnation proceedings


A right of way giving persons other than the owner access to or over a property

Earnest Money Deposit

A deposit made by the potential home buyer to show that he or she is serious about buying the house.

Do On Sale Provision

A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.

February 2011

Great Reasons to Sell your House NOW!

Conventional wisdom when selling a home has always been to wait until the ‘Spring Buying Season’. Over the years, that has seemed to make sense and is now accepted as a good strategy for those who want to sell their house and receive the best possible price. This real estate market has shattered many previously held beliefs. The wisdom of waiting for a spring market is another belief that is about to fall. Here are five reasons why?

Your Dream Home Will Never Be Cheaper

If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.

Interest Rates Are On the Rise

Interest rates have spiked up rather dramatically over the last ninety days and are now over 5%. Initially, an increase in rates has a positive effect on the market as it forces buyers off the fence. However, it also eats into a buyer’s purchasing power. As rates increase, the mortgage amount a buyer qualifies for decreases. This will eventually have a negative impact on prices.

Buyers Are Out Early

There is mounting evidence that buyers are coming out earlier this year. A belief that now is a good time to buy coupled with the increase in interest rates has started the buying season early.

Pete Flint, the CEO of Trulia writes:

“We’re seeing a national resurgence of buyer and seller activity on In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth. We’ve are now experiencing 100,000 property views per minute.”

The National Association of Realtors just reported that the number of house sales increased 12.9% over last month.

Inventory Increases Every Spring

Every year there is an increase of inventory which comes to market as we approach the spring. Here is the number of listings available for sale in 2010.

  • February – 3,531,000
  • March – 3,626,000
  • April – 4,029,000

We believe there will be an increase in these numbers in 2011 as there is a pent-up selling demand created by the weak market of the last few years. You won’t have to worry about this increasing competition if you sell now.

In the Eye of the Foreclosure Storm

While banks are trying to rectify their foreclosure procedures, there is a large supply of discounted properties which has been delayed coming to market. This inventory will be released sometime in the next few months. Foreclosures sell on average at a 41% discount. When released they will be competing with your house for the buyers in the marketplace. If you are looking to sell in 2011, you want to sell before this inventory becomes your competition.

CNN Money quoted the leadership Of RealtyTrac on this issue:

“We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000,” said James Saccacio, CEO of RealtyTrac.

“Unfortunately,” he added, “This is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”

“We expect a spike in the first quarter,” said Rick Sharga, a RealtyTrac spokesman.

The End Result

These are five strong reasons to sell now instead of waiting until later in the year. Sit down with a local real estate professional today and decide the best options for you and your family.

Current Interest Rates:

30 Year fixed: rate 5.14% – APR 5.24% – Change + 0.40%

15 Year Fixed: rate 4.40% – APR 4.56% – Change + 0.29%

15 year- Home Equity Year – fixed: rate 7.21% – Change + 0.06%

For more information on FHA and VA rates, visit:

Real Estate definitions & Terms explained:


A person named in a will to administer an estate. The court will appoint an administrator if no executor is named. “Executrix” is the feminine form.

Exclusive Listing

A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time

Examination of Title

The report on the title of a property from the public records or an abstract of the title


The ownership interest of an individual in real property – The sum total of all the real property and personal property owned by an individual at time of death

Escrow Disbursements

The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

Escrow Analysis

Once each year your lender will perform an “escrow analysis” to make sure they are collecting the correct amount of money for the anticipated expenditures.

Escrow Account

Once you close your purchase transaction, you may have an escrow account or impound account with your lender. This means the amount you pay each month includes an amount above what would be required if you were only paying your principal and interest. The extra money is held in your impound account (escrow account) for the payment of items like property taxes and homeowner’s insurance when they come due. The lender pays them with your money instead of you paying them yourself.


An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.

The housing market has been tough. Selling a house has never been as difficult as it has been recently. Honestly evaluate the job your current agent has done. If they have been honest with their input and diligent with their feedback, you may consider extending the contract.


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