My neighbor asked me if me and my family were going to starve. He had heard that real estate was struggling right now.
It is true that it is a SLOW market in our area. It is also true that if home sellers have realistic expectations of what they are up against with the market and react accordingly, that they can still sell their home. Home sellers need everything working on all cylinders right now to make that happen. Homes need to show well inside and out, be available to show at the drop of a hat, be priced correctly, and be marketed through a professional. When these things are done and sellers are taught realistic expectations to reflect their current position, then homes still sell and people can still move on with their lives.
With that being said, let’s look at some of the current stats to see where we are at for home sales in Utah County. The numbers for May were just recently made available, of which I think the following are quite intriguing:
Active Listings of Homes for sale May 2008: 5306. Still near the highest it has ever been. There is more inventory of homes for sale. More supply = more competition among sellers and a longer sale period.
418 properties of all types sold in May 2008. This is down quite a bit when compared to May 2007; however, it is an increase from April 2008, making it a positive trend for the current year.
For single family homes, the median sales price decreased from $235,000 in April 2008 to $230,000 in May 2008. The median sales price of homes in Utah County has hovered predominantly between $230,000 and $240,000 for the last year and a half. No real gains or losses over that stretch of time when looking at the market as a whole. Of course, there are gains and losses in specific areas. With gas prices right now, more people are demanding to live closer to the center of Utah County in cities like Orem, Provo, American Fork, Pleasant Grove and Lehi. On average, these areas seem to be faring better than places further out such as Eagle Mountain, Woodland Hills, Santaquin, etc.
The number of condos selling stayed about equivalent to last month at 82 units. This surprises me the most since they are the most affordable for first time home buyers.
All in all, it’s true that things are slow in our corner of the real estate market. At the same time, positive trends give a glimmer of hope. Consumer sentiment is hesitant and uncertain. Fuel and food prices make it an interesting time throughout the nation right now. Let me know if you have questions regarding your specific situation.
Buying a home for the first time can be a daunting task…even terrifying. There are so many things to know and understand. What should you even expect? Let me offer a few tips on how to prepare to buy a home:
Start Planning and Preparing Long Before You Buy When I speak with clients who are thinking of buying real estate, I recommend that they come in and meet with both me and a loan officer right away, even if they don’t plan on buying for a long time. I’ve met with people who have no intention of buying a home for over a year, but I still insist on talking to them. In the real estate business, knowledge is power. The better you understand the Utah real estate process, the better off you will be when you do decide to buy. When meeting with me to talk through the buying process, there is no obligation nor cost. But this way I can explain to people the home-buying process and get them thinking about what things they should be planning on; things such as legal paperwork, earnest money, appraisal, home warranty, title reports, inspections, homeowner’s insurance, escrow, settlement, etc.
My clients tell me all the time how empowering it is when I outline for them everything that is involved when buying a home. Because buying a home can be much more complicated than one would think, oftentimes people don’t adequately know what to expect, nor do they even know what questions to ask. But by talking through things early, I help them anticipate what things they should really be planning for and give them a realistic idea of what to expect. Think of it like a road map - shows you what you need to do to get to where you want to be. That way, when you are ready and do find a home you like, you can act on it right away.
Check and Build Your Credit Score Credit Scores today are paramount. A good credit score is vital to getting a good loan. Besides meeting with me, I recommend meeting with a loan officer. Again, the more time you allow before actually buying, the better chance you’ll have of fixing any credit problems that may exist. Sometimes I.D. thieves can completely ruin your credit long before you even know about it. So get your credit checked in advance! I can put you in touch with an exceptional loan officer for a free consultation. He can consult with you on your financial situation, talk to you about what you can qualify for in terms of a loan, run a free credit report and score, and talk to you about ways to improve your credit. Furthermore, he’ll outline the process for getting a loan and what to expect.
Of course, it’s best to understand what price range you should even be looking in when considering a home. Without talking to a loan officer about your specific situation, you may fall in love with a home that you simply won’t be able to qualify for. Save yourself time and heartache by getting pre-approved first so you can be realistic about what homes are in your price range and comfort level.
Save Money for Loan Closing Costs and a Down Payment One of the very best things you can do to prepare to buy a home is to save money for a down payment and loan closing costs. Back in the old days, many people would save 20% or more before applying for a loan on a home. Today, most people come in and want to buy right away - without any savings whatsoever. Whereas that was quite possible for many people to do last year before the credit crunch and sub-prime meltdown, now it is very tough. 100% financing is very hard to come by today. This is yet another reason why it is important to talk to a loan officer really far in advance. What amount should we be saving? What is best for us to have in terms of closing costs and down payment? Once you know answers to these types of questions, you can build a plan to make it happen.
Just Getting Started Of course, this is just the beginning but it gives you the map to confidently make well-informed decisions. The right attitude, the right preparation, the right loan officer, and the right REALTOR® - all will give you the edge in making the right choice when it comes to buying a home.
Kiplinger’s personal finance last week ranked Provo as one of the Top 10 Best Cities to Live, Work, and Play in for 2008. Based on strong economies, job abundance, reasonable cost of living, and availability of fun things to do, the Top 10 cities are as follows:
1. Houston, Texas
2. Raleigh, North Carolina
3. Omaha, Nebraska
4. Boise, Idaho
5. Colorado Springs, Colorado
6. Austin, Texas
7. Fayetteville, Arkansas
8. Sacramento, California
9. Des Moines, Iowa
10. Provo, Utah
This is not surprising. Provo, among other cities in Utah County, has a lot to offer. There are good business, good recreation, Universities, clean streets, etc. Our area is desirable - another reason why our real estate market has fared better than most other places.
What is the MLS? The “MLS” stands for multiple listing service. There are several multiple listing services throughout the nation. In our real estate market in Utah, the Wasatch Front Regional Multiple Listing Service is most prominent and serves pretty much the entire state.
The MLS is probably hands down the most powerful tool that real estate brokers and agents utilize. As agents, we pay regular dues keep the MLS up and running. Brokers and agents use the MLS to market and advertise home listings they have for sale. It is a fairly uniform tool that helps agents describe property listings and offer compensation to other agents who bring ready, willing, and able buyers to purchase their listings.
Can I see MLS listings? On My Website You Can! MLS listings can be seen by the general public with some but not all access to listing information. In fact, go to this link on my website to search virtually all properties listed with any real estate agent or REALTOR® throughout Utah. You can look at specific cities such as Orem, Provo, Springville, American Fork, Pleasant Grove, Lehi, etc, or get even more specific by narrowing your search to certain zip codes when you want to break down larger areas - such as 84097 in Orem. You can see online photos and virtual tours, utilize a mortgage calculator, and email questions. Whether your a first-time home buyer or a seasoned real estate investor, feel free to access this public version of the MLS anytime and as often as you’d like to familiarize yourself with our Utah County real estate market.
How do I find out more about a property? This is where I come in. If you find a property you are interested in, contact me via email or phone with any questions you might have. I can answer questions about any property and arrange for walk-through showings of all properties.
Utah County’s 2008 Parade of Homes starts tomorrow!
This event is for anyone to go see new premier homes that have been built by a variety of different builders and in a vast array of price ranges - from entry-level to multi-million dollar homes. These builders showcase their craftsmanship by decorating and displaying their new homes on the Parade.
Tickets to the Parade are 10 dollars per person (5 and under are free). Tickets are available at any of the 28 Parade Homes, AmBank, or online at www.UtahParade.com.
Once you have a ticket you can go to any of the 28 Parade Homes located from Eagle Mountain to Woodland Hills every day from tomorrow through June 14th between noon and 9:00 p.m (Closed Sundays and Mondays).
Parade of Homes participants are also encouraged to vote for their favorite home. Those who submit a vote will be entered into a drawing to win a free leather sofa from McCoy’s Flooring, Furniture, and Cabinets.
The Parade of Homes is not only a great opportunity to see new home styles and floor plans, but also to get ideas on decorating, arranging, and sprucing up your own home.
I always get antsy to see the latest real estate statistics for Utah County because I want to see trends within our local market here in our little nook of the Rocky Mountains. Well, as always, it takes about roughly 2-3 weeks following the end of a month for the stats to be compiled and reported and Utah County’s Association of REALTORS® (UCAR) just published April’s numbers.
Home Sales 395 residential properties sold during April 2008. This is down quite a bit from the 585 properties that sold last year in April of 2007; however, the number of homes that have sold has increased every single month since December 2007’s low of 269. This is a positive trend.
The number of home sales so far in 2008 throughout Utah County is 1289, which is still far fewer than levels set by this time in previous years (2044 in 2007, 2117 in 2006, and 1738 in 2005); but again, at least the number of home sales has increased each month throughout the current year.
Days on the Market The average time a home is on the market continues to increase. To reiterate what I said last month, there are still a lot of homes on the market so it is taking longer for homes to sell since there is more supply and less demand. For April 2008, the average days a property was on the market before being contracted for sale was 83. Remember that most people prepare their homes for sale before putting them on the market, or may have put their home on the market before. A more realistic number for days on the market is probably more like 115. Lastly, this number is only for when a property goes “under contract” to be sold. Most take roughly 30-45 days beyond that to actually Close. In total, I think a good estimate of the average time for people to expect from Start to Close when on the market for sale is about 5 months right now.
Median Home Prices/Appreciation The reported median home price of properties that sold during April 2008 is $219,500. This median home price has been hovering around $220,000 for a while now.
Utah County Condo Sales The trend for the number of condos selling is going up, but is significantly lower than last year. This last month, 83 units sold (compared to 61 sales in March 2008 and 132 sales in April 2007). The median price of condos that sold was $159,900.
Listings Versus Sales There are over 5100 properties being listed for sale throughout Utah County with a REALTOR® and right now, and a little under 8% are actually selling each month. At the current rate, it will take roughly one year to sell all the current inventory. The high-end homes are particularly slow to sell. We are headed into the summer months when real estate sells faster, but the essentials are of utmost importance: priced right, marketed effectively, showing beautifully, etc.
Even though the number of homes selling has slowed down considerably, home prices are still holding their value in our area. It will take time to sell a home, but with the right help and understanding or our market, it can still be done effectively.
Home buyers have perhaps the biggest advantage now of more homes to choose from, coupled with traditionally low mortgage interest rates.
Tonight is the night! For months American Idol has whittled down the list of contenders and now only 2 are left standing: David Archuleta Vs. David Cook. And soon there will be only 1.
Join FOX’s Ryan Seacrest, together with judges Paula Abdul, Randy Jackson, and the infamous Simon Cowell for tonight’s American Idol performances. Tune in to FOX between 7 and 8 p.m. and vote for your favorite, then watch tomorrow between 7 and 9 p.m. to find out the winner.
David Archuleta is a 17-year-old Utahn and student of Murray High School. I think it is great that we have talent like his here in the state of Utah. His talent has propelled both him and Utah more on the map and shows more reasons why Utah is a desirable place to live.
To watch one of David Archuleta’s most recent performances, click here.
When a person says he is “upside down” in his home, this means that he owes more on the home what it can be sold for.
It seems to me that people are getting themselves in upside down more and more these days. A common scenario is to use your home as leverage to pay for other things such as cars or boats. Lenders, banks, and credit unions actually encourage Home Equity Lines of Credit (HELOCs) to make these types of purchases or for use on remodeling projects.
Not enough money to buy in the bank to buy that fancy new truck you really wanted? Get a home equity line of credit (HELOC) and charge it against your house!
Now, I’m certainly not saying that this is always a bad idea. In fact, sometimes it can be a great thing to do. If you can get better interest rates by utilizing a HELOC, then certainly look into it. But I think too many people are doing it without thinking it through enough and taking the necessary precautions.
If you become upside down in your property, then it makes things very difficult when the time comes to sell your home. Imagine having to pay someone to buy your home because you have it leveraged for more than what it is worth. Or, as some home sellers do, they establish the selling price for their home according to how much they owe on it (when they have had boats, cars, ATVs etc rolled into their home). Those are the homes that just don’t sell! It could be that you just are unable to sell your home and the pressure to make inflated payments leads to late fees or worse . . . bankruptcy, foreclosure, ruined credit, etc.
Again, the point is not to leverage your home for more than it is worth. I’ve seen it too much recently and it can be a very scary thing.
Having a real estate license granted by the State of Utah does not automatically make that person a REALTOR®. In fact, the difference between a REALTOR® and someone with only a real estate license can be a big deal. Let me explain:
A REALTOR® is someone who holds a real estate license and agrees to live by a much higher standard of conduct called the REALTOR® Code of Ethics whenever real estate is involved. Furthermore, REALTORS® are subject to disciplinary action if they violate articles of this Code and anyone can submit complaints when a REALTOR’S® actions violate any of the Articles in the Code of Ethics.
In describing what the Code of Ethics means to the general public, the National Association of REALTORS® has stated that “Every member of the National Association of REALTORS® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public.” subject to disciplinary action and sanctions if they violate the duties imposed by the Code of Ethics.
To help you better understand what REALTORS® commitment to living to the Code of Ethics entails, I am including below the National Association of REALTORS® summation of the Code of Ethics:
REALTORS’® Pledge of Performance and Service:
I. Duties to Clients and Customers Article 1 - REALTORS® protect and promote their clients’ interests while treating all parties honestly. Article 2 - REALTORS® refrain from exaggeration, mis-representation, or concealment of pertinent facts related to property or transactions. Article 3 - REALTORS® cooperate with other real estate professionals to advance their clients’ best interests.
Article 4 - When buying or selling on their own account or for their families or firms, REALTORS® make their true position or interest known. Article 5 - REALTORS® do not provide professional services where they have any present or contemplated interest in property without disclosing that interest to all affected parties. Article 6 - REALTORS® disclose any fee or financial benefit they may receive from recommending related real estate products or services.
Article 7 - REALTORS® receive compensation from only one party, except where they make full disclosure and receive informed consent from their client.
Article 8 - REALTORS® keep entrusted funds of clients and customers in a separate escrow account. Article 9 - REALTORS® make sure that contract details are spelled out in writing and that parties receive copies.
II. Duties to the Public
Article 10 - REALTORS® give equal professional service to all clients and customers irrespective of race, color, religion, sex, handicap, familial status, or national origin. Article 11 - REALTORS® are knowledgeable and competent in the fields of practice in which they engage or they get assistance from a knowledgeable professional, or disclose any lack of expertise to their client. Article 12 - REALTORS® paint a true picture in their advertising and in other public representations. Article 13 - REALTORS® do not engage in the unauthorized practice of law. Article 14 - REALTORS® willingly participate in ethics investigations and enforcement actions.
III. Duties to REALTORS®
Article 15 - REALTORS® make only truthful, objective comments about other real estate professionals. Article 16 - Respect the exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with their clients. Article 17 - REALTORS® arbitrate financial disagreements with other REALTORS® and with their clients.
The Code is more detailed but the above version is a good synopsis.
I find it interesting that the Code of Ethics was established in 1913 and has been used as a measuring stick that states have used to write their real estate laws. The Code of Ethics goes above and beyond federal and state laws to ensure that the public is served well. Not only do I have my real estate license here in Utah, I am also a REALTOR® dedicated to living by this Code of Ethics.
Utah is growing, and with that growth comes the challenge of how to accommodate for more people. It has become necessary to add an area code overlay to provide additional telephone numbers for our state. The new area code will be 385 and will cover the same geographic area as the existing 801 area code. In less than one year, everyone will be required to dial 10 digits to make phone calls.
10-Digit Dialing Starts June 1, 2008 but will not be mandatory until March 1, 2009. This will allow people to get in the habit of dialing 10 digits over the next 9 months, but a 7 digit phone call will still work in case people forget. It will work, that is, until March 1, 2009 . . . at which point it will be necessary to dial using 10 digits.
One very important way that people will want to adjust during the conversion period is to have any printed materials re-printed with the area code included, such as business cards.
…at least that is what the Wall Street Journal reported in an editorial less than one week ago. There is light at the end of the tunnel. Remember, as I’ve said again and again, real estate is local. What happens in one area doesn’t necessarily happen in another. Utah has fared much better than most areas and still has a lot of great things going for it.
But speaking with a broad national brush, the US Housing Market as a whole, has taken some pretty big hits over the last few years. The Wall Street Journal made some noteworthy points as to why this housing crisis may be headed in the right direction again:
“it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.”
“if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one’s income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%.”
“We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to subtrend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.”
From a large-scale perspective, I think this is good news. Less speculative buying and more people purchasing homes for themselves - for the purpose of actually living in them.
This “bottoming” in the national market has happened before - and with time I am sure it will happen again. Real estate has the tendency of going through this cycle again and again over the years.
For those who would like to read the entire Wall Street Journal article, go ahead and click here.
Forbes Magazine recently released analysis of a study comparing the nation’s 40 largest metropolitan areas and ranked Salt Lake as the Number 3 City for Home Sellers, due in large part because of high job growth, declining inventory, and a drop in new home construction. As part of the study, Forbes measured real estate market indicators such as unsold vacancy rates, new construction starts, job growth, and the expected affects of new loan limits.
Forbes Rankings:
1. San Jose, California
2. San Francisco, California
3. Salt Lake City, Utah
4. Austin, Texas
5. Kansas City, Missouri
6. San Antonio, Texas
7. Denver, Colorado
8. Providence, Rhode Island
9. Charlotte, North Carolina
10. Seattle, Washington
I don’t fully agree with this list. California is one of the most difficult places to sell real estate right now because it overheated so much in the past.
Salt Lake, as the article points out, has some very favorable market conditions. However, properties are taking longer to sell than in the past and seller’s asking prices are coming down. This portrays the normal real estate cycle and correction to get things back to normal. Although the aforementioned market statistics make real estate here in Utah better than most places throughout the country, there continues to be more supply than demand - resulting in longer sell times, more competition between sellers, and potential price drops.
I’ve said a lot recently and to quote myself from an earlier article: “fundamentals are the key for home sellers right now - priced right, professionally marketed, and showing beautifully. Buyers have more options available and less “pressure” to make quick decisions, as was the trend through 2006 and the first quarter of 2007. There is still a nationwide lack of consumer confidence in the economy, in real estate, in lending institutions, etc. However, properties in our local Utah County market are still selling - and we are much further ahead than just about everywhere else in the country.”
The U.S. Post Office is increasing postage rates again, starting May 12, 2008. The price of stamps will increase by 1 cent despite the last increase having happened less than one year ago. First class postage stamps will now cost 42 cents.
There is still time (though not much) to purchase the “Forever Stamp”. This stamp will still cost 41 cents until May 12th and is good for first class postage forever, despite any future increases in postage. You can order Forever Stamps at the post office or online at www.usps.com
As part of the $168 billion stimulus package, tax rebate checks are being direct deposited starting today. Paper checks will be sent out as early as May 9th. The typical qualifying taxpayer will receive $600 plus $300 for each dependent child. President Bush is confident that enough people will spend this money and give the economy a much-needed “shot in the arm”. I’m certainly intrigued to see what the state of the economy will be during the next few months and what affect this stimulus package will have.
Home buyers and sellers, along with their real estate agents, are getting more creative in structuring deals that can help both parties accomplish their goals - to buy or sell a home. One way that more people are accomplishing this is by utilizing lease options.
Oversimplified: a lease option occurs when a buyer leases a property for a specified period of time, and at the end of that period of time has the option of purchasing the property. Put another way, it allows the potential buyer to move in now through renting and buy later if the buyer so chooses. Sometimes these agreements are structured so that a portion of the buyer’s monthly rent is actually credited towards the purchase price. Lease options have existed for a long time, but many are hesitant to utilize them because there are more risks involved.
Lease options can be very complex because there are so many factors to keep in mind. However, for the seller who really wants to sell and the buyer who really wants to buy, this can be a great solution as long as all the bases are covered.
With all the commotion about recession and people losing jobs, I thought I would talk a little bit about Utah’s unemployment rate. To cite statistics from Utah’s Department of Workforce Services: In March of 2008, Utah’s unemployment rate was 3.3% compared with the national average of 5.1%. Although this is still better in Utah, there are fears that a potentially deepening recession will cause more joblessness. This will happen anytime the economy faces a downturn.
I’ve heard people say before: it’s a recession when your neighbor loses his job and a depression when you lose yours.
Perhaps what’s most important on an individual level is to save money “for a rainy day”. I recommend having a short-term liquid fund and a long-term savings fund. The short-term fund should have enough money saved for 6 months of living expenses and be easily tapped in to. A portion of this can be in storing food and hygiene necessities rather than cash. Keep the money portion of this fund in a bank with low risk tolerance, but still earning modest returns. This money can then be used in case of extenuating circumstances.
The long-term savings fund is something that everyone should be adding to on a regular basis to cover future costs such as children’s college tuition and retirement. When at all possible, this money should not be used unless under dire emergencies when the 6 month slush fund mentioned above is not enough. Depending on age and risk tolerance, this money can be invested in higher-interest bearing accounts to have the potential for a higher return upon maturity.
In these ways, you can mitigate the damage and be prepared if you lose your job and are counted in the unemployment percentage. Implementing these ideas will help you get back on your feet without paralyzing fear.
Here we are again and the March statistics for real estate in Utah County are out. Statistics can be quite boring at times. I like looking at trends and trying to see patterns - I actually find them fascinating, but I’m a very analytical person.
Cities with positive median sales growth
March was a rough month for real estate in our area. Although many cities in Utah County had, on average, positive appreciation when comparing the March 2008 Median Sales Price with that of March 2007. Those cities include: Eagle Mountain, Highland, Lehi, Payson, Pleasant Grove, Provo, Spanish Fork
Cities with negative median sales growth However, there were a number of cities that had Median Sales Price declines, including: American Fork, Cedar Hills, Mapleton, Orem, Saratoga Springs, and Springville.
Utah County Overall Median Sales Price = Moderate Growth Over the Last Year
Overall, the Median Sales Price for all residential properties sold in March 2008 $224,850, which is still higher than the Median Sales Price for properties sold in March 2007 - $217,900. This is a year over year growth of 3.19% throughout Utah County. Each location, however, has different numbers.
Days on the Market
Perhaps the most telling statistic is that the time a property spends on the market before being sold is increasing. There is still a lot of homes on the market - lots of inventory - so it is taking longer for them to sell since there is lesser demand. For March 2008, the average days a property was on the market before contracting for it to be sold was 78 - and that is for properties that sold. Obviously those properties that are not priced correctly will take longer, perhaps not sell at all. So let’s take the 78 days - this is not exactly an accurate picture of what is happening. Most people prepare their homes for sale before putting them on the market, or may have put their home on the market before. When you add in these considerations, a more realistic number for days on the market is probably more like 110. Lastly, this number is only for when a property goes “under contract” to be sold. Most take roughly 30-45 days beyond that to actually Close. In total, I think a good estimate of the average time for people to expect from Start to Close when on the market for sale is about 4-5 months right now.
The Number of Home Sales
The amount of homes selling is fewer - one big reason why days on the market is longer. 327 residential properties sold in March of 2008, down from 578 residential properties that sold in March of 2007 - a 43.4% decline in the amount of homes being sold. More supply and less demand.
Condo Sales Another surprising stat shows that condo sales dropped drastically - only 61 sold in March of 2008, whereas 124 sold in March of 2007. Up until now, condo sales have been one of the strongest segments in the market because they were still the most affordable option for first time home buyers.
In Summation
Our market here in Utah County has definitely slowed and is experiencing a “market correction”. Fewer homes are selling and those that do are taking longer to sell. Fundamentals are key for both buyers and sellers. If you have further questions or comments, let me know.
There’s a lot of talk about foreclosures right now. Everyone knows that foreclosure means someone is losing their home. Not everyone knows what the steps are in a foreclosure, so let me outline what the basic process is here in Utah:
First, the Notice of Default. When a homeowner fails to make a mortgage payment, he is in default. The lender can have a Notice of Default filed against the homeowner at any period of time after not receiving mortgage payments. Usually lenders will wait 90 days or so before having a Notice of Default filed, hoping that the homeowner will bring payments current and pay any necessary late fees.
Second, the Equitable Period of Redemption. The homeowner has 90 days after the Notice of Default to bring mortgage payments current (including any applicable late fees). If payments are brought current, the Notice of Default is canceled and the homeowner stops the foreclosure process. If not, however, the process continues with. . .
Third, the Notice of Sale. At this point, a date is set for the home to be sold at a Trustee’s Sale. The sale must be advertised at least once per week for a 3 week period of time in a local newspaper.
Fourth, the Trustee’s Sale. Shortly after the 3 week advertising period, the home is sold at a Trustee’s Sale. This usually takes place on the steps of the county courthouse in the style of an auction. Essentially, the bidding will typically start at whatever amount is owed the lender and will be bid up by any interested buyers. The highest bidder must pay cash to purchase the home. If nobody bids on the home and it remains unsold, the process continues with . . .
Fifth, the Home Becomes an REO Property. The bank now has ownership of the property (also called Real Estate Owned or REO) and will try to market and sell the property on its own terms.
Are there good deals available in the Foreclosure Process?
It depends - sometimes “yes” and sometimes “no”. There are opportunities to find and purchase homes for good deals during any of the stages of foreclosure. However, each individual’s resources will usually dictate which stage is best. For example, there are not very many who can participate in a Trustee’s Sale because very few people have the cash on hand to do so.
Also, and perhaps most important, sometimes people think they are getting a deal when in fact they are not. “Foreclosure” is one of the big buzz words in real estate right now and many people are trying to embrace potential foreclosure opportunities. However, with enough demand, foreclosure property prices can be just as expensive or even more so than properties purchased at market value. Every situation is different. Some present good deals but many others just waste time, money, and effort.
That’s exactly what Dan Kadlec of Time Magazine told people in an article published earlier this year. Dan makes some very interesting points regarding homeownership, stocks, bonds, the feared recession, the credit crunch, and rising oil prices. It’s a very enlightening and entertaining article, which I recommend reading by following the link I provided above.
With regards to real estate, the most important thing Dan points out is that there are two very different, converging markets right now that make buying a home now a good choice. These two markets are the housing market and the mortgage market. Right now, interest rates on mortgages are very low when looking at historical averages.
Couple this with the current real estate market. Now, our market in Utah has fared much better than most throughout the nation, so his broad statements about the housing market don’t apply as much to us. However, we do have more inventory - more homes on the market than our area has had in the past. More supply means greater leverage for buyers and potential for good deals. With both these markets converging, favorable home buying is available - lower interest rates and more to choose from. This type of convergence doesn’t happen very often, so no one really knows how long it will last. Of course, some argue that maybe more favorable terms are likely if they just wait a little longer. This is true. But also true is that waiting longer could also lead to less favorable terms. To quote Dan:
“Let’s say you are emotionally ready to be a homeowner. You have good credit, plan to stay put for five years and have been waiting for the perfect entry point. It’s time to get serious–before an inevitable rise in interest rates wipes out your advantage. “The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher,” says Jim Svinth, chief economist at mortgage firm Lending Tree. So anything you gain by a further drop in prices might be offset by rising financing costs. “
In my opinion - my crystal ball forecast - I think that home prices in Utah will continue to slow down and may even level out for a little while. But in most price segments, I don’t think average home prices will fall by much. If they do, it will not be significant. I certainly think we are in a time of “correction” - homes taking longer on the market to sell and some prices coming down. But on average, especially homes below about $400,000, we won’t see as big of a correction as many are hoping for. Best case scenario we will continue to have single digit home price appreciation, but not in the high end price segments above roughly $400,000 or more. Only time will tell!
Utah is an extremely arid state. As many of us know, when the first settlers of the state came here the landscape looked more like a barren wasteland in the middle of the desert. That’s exactly what it was! But with irrigation and water systems set in place, Utah has become a great place to live.
Water is the staple of all life. We are completely dependent upon it. We can all do more when it comes to using water wisely and teaching others to do the same. Conserving this most precious of all resources will benefit ourselves, everyone around us, and even help us save money.
Here are some water conservation techniques you can use to cut back on water usage:
Water your lawn in spring and summer months early in the morning and never during the heat of the day. If you haven’t already, installing an automatic sprinkler system can make this very simple. Watering twice each week for 20 minute intervals in the morning is often sufficient for most lawns. In fact, lawns absorb more water from smaller, more frequent intervals than they do from longer, infrequent intervals. For example, it is much more effective to water the lawn for two separate 20 minute intervals than it is to do it all on one 40 minute interval. Again, the comfort and ease of automatic sprinkler systems today is that they can do all this for you once you program them.
Make adjustments on watering the lawn when it rains - especially heavy rain. A rain gauge is great for showing the amount of water received from a rainstorm.
Repair leaks and dripping faucets. Even a slow, small drip can waste a lot of water over time.
Never pour water down the drain. Instead, use it to water house or garden plants.
Replace old washers with new Energy Star efficient models to conserve both power and water.
Wait and wash bigger loads of laundry rather than smaller, more frequent loads. The same goes for washing dishes in a dishwasher.
Replace older toilets with toilets that flush using less water volume. If this is not practical, then get a water displacement object from your local hardware store and place it in your toilet to cut down on the amount of water is flushed from the tank.
Place a water timer in your shower to help you take shorter showers.
Don’t let the faucet run while waiting for hot or cold water. Instead, fill up drinking water containers to put in the fridge until the water starts to warm up. Or collect the water to use for watering plants
Never wash dishes with running water. If you don’t have a dishwasher, fill up the sink partway to wash your dishes.
Turn off the water while brushing teeth or shaving.
Whenever replacing appliances, always buy Energy Star models. They will conserve more energy and water.
