Monthly Archives: February 2014

Days on Market … Why do I Care?

Days on Market … Why do I Care?

Properties with great locations, perfect condition and priced at market value do not last on the market and thus their days on market are very short. You can use days on market (DOM)  statistics as a way of determining what the market (read that – buyers) think of any one of these three variables.  Typically, properties with a large DOM will command lower prices than a property with small DOM’s because buyers perceive the property as over priced or less desirable. DOM is often used when developing a pricing strategy. DOM can also be used as a “thermometer” to gauge the temperature of a housing market.That’s why you care about DOM.

Okay, so how is DOM figured?  In simple terms, DOM  is the number of days on the market that a property is “active” from the list date of the current listing. A home can be withdrawn from the market, a listing may expire or it may be taken “temporarily” off the market for completely valid reasons. The MLS stops counting days for any of the these reasons in addition to a property changing status to “under-agreement.” If a property then comes back on the market – BOM in MLS terms (a contract is voided for home inspection, financing, or some other reason) counting days resumes.

If a listing is taken off the market then comes back on the market more than 90 days later with a new MLS number  the DOM is reset to zero but the MLS continues counting days from the first (original) list date – called Property History. Agents used to cancel stale listings and put them on the next day with a different MLS number and buyers would think it was a “new” listing. But those days are over with the transparency of the internet … you can find out the true DOM easily.

In a buyer’s market, the DOM are generally higher because inventory takes longer to sell. In a seller’s market, the DOM are fewer.  In the current market conditions terrific homes in active price points are getting offers within 15 days.  Mediocre homes in those same price points are taking 30-180 days. And fixer-uppers/as-is/dated/bad location/overpriced homes in those same price points are taking much longer. There are currently 20 homes on the market in Metrowest that have DOM over a year, and one even has 1696 DOM (I hope that agent doesn’t need a paycheck).

Bottom line if you’re a seller, bringing a house to market it is vital that you bring it to market in the best condition possible, with good marketing and priced right. Anything less than that may put less money in your pocket.

Bottom line if you’re a buyer, pay attention to DOM and use it as a negotiating tool. Knowing it may put money in your pocket.

DO’s & DONT’s When Applying For a Mortgage

DO’s & DONT’s When Applying For a Mortgage

Okay, you’ve found a great home to purchase, but you’ve got to replace your car and your furniture is hand-me-downs from your grandparents. Before you start doing your duty to the God of Consumerism, here is some wise advice to follow:

DO’s

  • Notify your mortgage broker of income changes … any changes from when you applied need to be above board
  • Keep documentation of any large deposits … lenders will need to verify where you received the money from
  • Pay all your bills on time … keeping current on all existing accounts is extremely important
    (a single late payment 30 days could affect your credit score between 50 and 100 points and may change your mortgage rate)

DONT’s

  • Apply for new credit of any kind … credit scores will be requested and this will be recorded, your score could be adversely affected
  • Go over your limit on credit cards …try to keep your balance below 50% of your available credit limit on any/all of  your cards
  • Consolidate your debt over 1 0r 2 credit cards … appearance is reality, it will look like you’re maxed out on the remaining cards, again could adversely affect your credit score
  • Change or quit jobs … if anything – especially your employment changes from your initial application your approval may change or be revoked.

Your mortgage company will verify your employment and credit score approximately 2 days before the closing, so keep everything steady and calm and you’ll be fine and get that great home you wanted.

Top 7 Best Practices for Buyers

Top 7 Best Practices for Buyers

Here’s a list of my current best practices for BUYERS for the Spring Market 2014

1. Arrange for your mortgage financing up front before you even start to look for a home. Your mortgage broker will help you focus on your ideal price range, your maximum loan and whether there are any credit issues you should correct before buying. They will also prepare a “pre-approval” letter … which you will provide the seller when you are ready to make an offer.

2. Familiarize yourself with the purchase contract details and ask questions. Ask your agent to explain the process of negotiating and counter offers.

3. Use buyer representation. It is important to have an agent who owes his total loyalty to you. Discuss your representation options with your agent. If you are purchasing one of your agent’s company listings  make sure you understand what your agent can and cannot do for you.

4. Review the seller’s disclosure before you make an offer. Your offer should reflect your knowledge of the condition of the property. The seller’s disclosure will tell you of  any known repairs or conditions that would affect what you would be willing to pay. You should know this before you decide on an offering price. If you are unsure go back with the agent and look at the home after you have reviewed the disclosures. Also note, not all brokers use seller’s disclosures … doesn’t make sense to me but there are no state/national laws requiring disclosure. If they don’t use disclosures it doesn’t mean they are hiding anything but you would be wise to assume there are problems not readily visible on a quick walk-through and adjust your offer accordingly.

5. Ask the seller to provide a home warranty when you write the offer. This will cover you for some items that malfunction during the first year of ownership. Cash used for down payment, closing costs, and other home necessities can deplete your cash reserves. A home warranty will reduce the risk of a future drain if a warranted item needs repair that first year.

6. Get the property inspected by a licensed professional home inspector. They will let you know the true condition of what you are buying. Follow the inspector’s advice if he/she recommends that you have another expert inspect a troublesome item. During the inspection you should also ask your inspector to explain how to work or maintain appliances or systems in the home, they are a wonderful resource to help you learn “how to drive the house”.

7. Ask your buyer’s agent to prepare a market analysis of the property before you make the offer. A seller’s agent cannot do this for you. You should know what similar properties are selling for so that you don’t overbuy. Also, if the seller remains firm on his price, you will be able to tell if the value is really there.”

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