So, you want to look at a house?

I’ve had the good fortune to work with a LOT of buyers in my real estate career thus far and one thing that always surprises me is how little buyers understand about the real estate “process”.

Education is my forte, and I’d like to take some time to share a few commonly asked questions so if YOU want to “look at a house”, you’ll have the tools you need.

First of all, the most important thing to do when buying a home is to find a real estate agent you feel comfortable with. Take a little bit of time here, talk with a couple agents, get a feel for their personalities and how you may work together. Purchasing a home is a MAJOR financial decision. You owe it to yourself to work with someone you feel comfortable with.

When it comes to choosing an agent, most people don’t even realize they can work with whomever they want. You don’t need to call the agent who has the house listed. You don’t even have to call that real estate company to see that particular house. Any REALTOR can show you any home listed in the MLS (the multiple listing service). So take some time to find ONE agent you like and work with them.

Why not work with several agents at once? Realtors all pull their information from the same system, the MLS. If they’re all accessing the same system for the same information, why wouldn’t you pick ONE whom you had a comfort level with?

On the flip side, if an agent understands you are committed to them. . . .and not “shopping around” with a number of Realtors, they’re going to be committed to YOU as well. They’ll be much more likely to invest their time and energy into helping you find a home, because they understand they’ll ultimately be compensated for their time.

Yes, that’s right, Realtors work strictly on commission. We don’t get paid unless we sell a house. Time equals money. And while most of us don’t mind spending as much time as our buyer and sellers need to find (or sell) a house, ultimately that time has to translate into a “transaction” or it’s time “uncompensated”. Think about that the next time someone asks you to do something “for free”. Would you spend a significant chunk of your time knowing you weren’t being compensated? If you’re like most of society, you’re a lot more likely to commit to someone knowing you’ll receive a payoff of some sort in the end.

Tune in next time, when we’ll talk about how to actually “set a showing” with your Realtor.

The Internet Buyer vs The Traditional Buyer

In today’s fast paced society more and more buyers are starting to look for homes on the Internet. A study done by The California Association of Realtors reveals some interesting facts we’re starting to see across the states, not just in California.

According to this study 92% of Internet buyers found their agent on a web site. This indicates and interesting shift from only a few short years ago, where most buyers were finding an agent through the newspaper, open houses, or word of mouth.

In 2000, 28% of the people surveyed said they used the Internet as an important part of their home-buying and selection process. In 2006 this percentage rose to 70%. This dramatic increase reinforces the “technological trend” we’re seeing, where buyers are becoming more computer savvy, and spending more time on-line.

86% of the home buyers started using the Internet as part of their search process BEFORE they started looking for a specific home, the other 14% used the Internet after they started looking but BEFORE they even contacted a real estate agent. What’s interesting here is that each buyer surveyed admitted they use the Internet on a regular basis to look for homes. Quite a shift from only a few years ago where everyone was looking for homes in “black & white”.

Internet buyers spend an average of 4.8 weeks doing research before even contacting an agent, while traditional buyers spend only 1.7 weeks researching.

Number of agents an Internet buyer interviewed on the median: ONE. Traditional buyers: THREE.

These are some interesting statistics if you think about the fact that purchasing a home is one of the LARGEST financial decisions you’re going to make in your LIFE. If you’re going to spend the time and resources to research homes on the Internet. . . . . . .why not take some time to research agents as well?

As a buyer, it’s not always in your best interest to simply contact the “listing agent” for a property you may be interested in. Taking the time to interview different agents, finding someone you’re comfortable with who will represent YOU and stand by your side in this important life decision is a wise investment.

First-Time Homebuyers Are Putting Less Down

A National Association of REALTORS survey of 7,548 home buyers from mid-2005 to mid-2006 reveals that close to half obtained mortgages for 100 percent of the sales price. During this period, NAR says the median down payment for first-time buyers was 2 percent while the median for trade-up buyers was 16 percent. The emergence of piggyback loans that involve an 80-percent or 90-percent first mortgage and a 10-percent to 20-percent second mortgage enabled these buyers to contribute less than the traditional 20-percent down payment; and, in the midst of a housing slump, many now owe more than their homes are presently worth. Regionally, the median mortgage amount was 100 percent in the South, 99 percent in the West, 98 percent in the Midwest, and 96 percent in the East.

Baltimore Sun (02/09/07) Harney, Ken

Housing Market Rebounds Slightly

Milwaukee Journal Sentinel (02/09/07) Derus, Michele

Metro Multiple Listing Service data shows that the Milwaukee metro area recorded 971 home resales last month, which was 3.9 percent more than during the same month a year ago. That coincides with 3,355 new listings, a 4.8-percent increase over January 2006. Metro Multiple Listing Service's research covers Milwaukee, Ozaukee, Waukesha and Washington counties. The nation's five-year residential real-estate boom ended last year as supply mushroomed and demand dried up. Various studies show that home construction declined 17.3 percent nationwide and about 25 percent in the Milwaukee region. Existing-home sales, meanwhile, slumped 8.4 percent and 7.3 percent, respectively. Even Wisconsin's frigid temperatures have not been a major turnoff for prospective buyers in the early going of 2007. Terry Donahue, CEO of Prudential Absolute REALTORS in Oconomowoc, remarks, "People are writing offers. And if they're writing offers at 30 below, they've got to be committed."

Down on Downsizing

Empty-nesters are among the main driving factors in downtown Milwaukee's recent surge in condominium building and sales. Jerry Weisman, professor of architecture at the School of Architecture and Urban Planning at the University of Wisconsin-Milwaukee, reasons, "My sense is that it's more the cultural resources, the buzz of being downtown that attracts people rather than looking ahead to the challenges of aging and reduced competence. They're not quite living for today, but they are living for the decade." City officials report more than 1,600 new condos in the downtown and Third Ward areas in the last year or so. Brokers in those areas note that the number of condos with three or more bedrooms and at least 2,000 square feet has increased from practically none five years ago to become a major growth category today. Those buying such big condos are not particularly interested in downsizing. They are just using the money they got from the sale of their bigger homes during the recent housing boom to finance the condo of their dreams. In turn, developers are touting such amenities as upgraded appliances, granite counter tops and other fancy design features.

Reprinted from The Milwaukee Journal Sentinel (02/10/07) Cleaver, Joanne

Are you a First Time Home Buyer?

Often times first time home buyers don't know where to start or what they need to do in order to be "ready" to purchase a house. Below are a few tips published by the Daily Real Estate News which first time home buyers may find helpful.

Daily Real Estate News February 6, 2007

6 Ways First-Time Buyers Can Prepare

A cooling housing market gives buyers, especially first-time buyers, more opportunities to snatch up a good deal. But just because there are good deals, doesn't always mean buyers are ready to make the leap.

These six tips will help prospective buyers find out if they are ready for homeownership.

1. Take a first-time home buyer class. It will make repairing a credit score and shopping for a loan less stressful.

2. Be conservative. Borrowing too much can mean stretching and even sacrificing — to the point that it's hard to even keep a six-pack of beer in the fridge.

3. Organize documents. First-time buyers should keep a pay stub, W-2, and bank and retirement account statements on hand to expedite the loan application process.

4. Get pre-approved. Before starting the homebuying process, consumers should get pre-approved by at least one lender. Being pre-approved won't lock buyers in to a loan but it may save them the heartache of falling in love with a home they really can't afford.

5. Play house. Every month, prospective buyers should bank the amount that they'd have to pay if they owned a home. It's good practice so they'll be ready for the real thing.

6. Consider all the costs. It's not just a mortgage payment they have to worry about. Repairs, assessments, and other costs of homeownership can add up quickly.

Source: Star-Tribune, Kara McGuire (02/02/07)

National Association of Realtors gives 2007 outlook.

Wondering what economists are saying the real estate market has in store for us in 2007? The following article was released by the National Association of REALTORS (NAR). While it gives the forecast for the NATIONAL outlook, it's rather interesting - given how the media keeps reporting how "poor" the housing market is.

After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turnaround by summer, according to the latest forecast by the National Association of REALTORS®.

David Lereah, NAR's chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007. "We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation," he said. "We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it'll be pretty much of a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward."

Existing-home sales for 2006 are expected to come in at 6.50 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.

Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade. Builders are pulling back on new construction to support prices of remaining inventory.

The 30-year fixed-rate mortgage will probably rise to 6.7 percent by the fourth quarter of 2007. Last week, Freddie Mac reported the 30-year fixed rate at 6.18 percent -- far below earlier consensus forecasts. "The current interest rate environment and housing inventory levels present a window of opportunity for potential buyers," Lereah said.

The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300. The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3.0 percent in 2007 to $248,900.

"With all the wild projections by academics, Wall Street analysts and others in the media, it appears that much of the housing sector is experiencing a soft landing," Lereah said. "Despite the doomsayers, household wealth will not evaporate and the economy will not go into a recession. If you're in it for the long haul, housing is a sound investment."

The unemployment rate is likely to average 4.8 percent this year, following a rate of 4.6 percent in 2006. Inflation, as measured by the Consumer Price Index, is expected to be 2.2 percent 2007, down from 3.2 percent last year, while growth in the U.S. gross domestic product is seen at 2.5 percent in 2007, compared with 3.3 percent last year. Inflation-adjusted disposable personal income should grow 3.4 percent this year, following a rise of 2.7 percent in 2006.

The National Association of REALTORS®, "The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

"Foreclosures Up 48 Percent in Wisconsin in 2006"

A source that tracks foreclosures across the states nation (RealtyTrac) confirms that foreclosures soared 48 percent in Wisconsin last year versus 2005. In total, the state recorded 7,572 foreclosure actions during 2006--which amounted to one per 304 households. On the positive side, Wisconsin's rate was still well below the U.S. average of one for every 92 households. RealtyTrac CEO James Saccacio remarked, "The increase was driven partly by the general slowing of overall housing sales, and partly by the impact of monthly mortgage payments increasing dramatically for homeowners who held some of the riskier types of adjustable rate and sub-prime mortgages." According to RealtyTrac, Colorado led the nation with one foreclosure action for every 33 households in 2006.

Many people simply don't know where to turn for help when they're facing the possibility of foreclosure. For some, getting out of this situation is as easy as refinancing. For others, it may mean selling, negotiation with the bank for a "short sale", or even turning the property over to the bank to save their credit rating. If you or some you know is faced with this situation, talk to your mortgage company, your Realtor or a foreclosure prevention counselor (888-995-HOPE, 800-569-4287 or 800-877-8339) to find help.

Welcome!

Welcome to my Real Estate Blog. Please check back regularly for updates on the real estate market, helpful hints in selling and buying real estate and other tid bits of information you may find valuable.

I look forward to being your source for real estate information.