Great 5 & 7 year ARM rates one should consider!

Many buyers are not aware of the extremely low Adjustable Rate Mortgages available, specifically the 5 and 7 year. As of this writing one can lock in for a 7 year ARM for 3.75% rate. The 5 year is even better at 3.5%. These are conventional rates although FHA which offers lower downpayment and more flexible underwriting criteria is also offering a 3.625% 5 year ARM. The rates are quoted by Netcentral Mortgage (netcentralmorgage.com/414-258-7833) which is located in the same building as our central office in Wauwatosa.

In the conservative environment of Southeast Wisconsin most buyers refuse to even consider the ARMs. Yet, if one had been in an ARM for the last 25 years, they would have enjoyed tremendous savings over a fixed mortgage (and would not have to incur refinancing charges). As the rates adjusted lower the ARM would have adjusted lower and ARM rates are lower than 30 year rates.

Most buyers have been reluctant to purchase or refinance with an adjustable rate having this fear that rates will go up, yet if one looks at Japan the fixed mortgage rates are close to 2%. In the economic environment we are in, it is very conceivable that fixed rates can continue to move lower to the 3-4% range. Adjustments to the ARM rates at the end of 5 or 7 year anniversary would then translate into a new rate in the 2-3% range.

Seller w/Flat Fee Co. wondering why she's not selling.

A question was recently posed on Trulia a national real estate website. A seller was wondering whether there is a conspiracy among agents to not show or write offers on homes that are FSBO yet on MLS with a flat fee/limited service company. I am certain that there is no such conspiracy but for various reasons FSBOs using a flat fee company do have a very low chance of selling (some companies have dismal records of only 20-30% success rate).

There are a dozen or so small companies in Greater Milwaukee which will put a FSBO in MLS for a flat fee of usually $500 UPFRONT. Most of these outfits are doing just MLS data entry, and they could care less whether the home sells. These outfits are well known in the industry as: “list them and forget them”. Their listings are flagged in MLS as "Limited Service".

Obviously, being in the MLS is far from enough to get the property sold. There needs to be a strategy on how to best market the property and how to best present the home to the buyers. At Homeowners Concept we take a good bit of time explaining our strategy to home sellers on how we use our magazine and the internet (including the MLS) to get their home sold. Just being on the internet (and the MLS) is not enough in today’s very competitive real estate market.

In my opinion, she has chosen to go at it alone and is finding the going very lonely. She should hire an advocate to help her get her home sold (We even know the best real estate company in metro Milwaukee that will also save her thousands in commissions!). I am shocked that somebody who needs to sell a home does not understand how important having great help is in this market, especially when most of the time, we are less expensive than the flat fee route. Why do some Homesellers not “get it?”

Over the last few years, thousands of sellers have fallen victim to paying the hundreds of dollars upfront just to get in MLS, wasting months or years on the market and having to turn to another broker (ourselves included) to eventually sell.

Danny Gokey's home gets an Accepted Offer!

Within a few short weeks on the market, this very nice home in the far NW area of Milwaukee received an offer. After some lengthy negotiations, the American Idol star accepted the Offer. Needless to say, this makes not only the seller very happy but the Homeowners Concept family as well. You see, this is the second time in the last couple of years that we have had the opportunity to sell a home associated with an American Idol finalist. The last time it was Taylor Hicks girlfriend's home in Glendale.

So Danny does not have just a great voice, he's also a very smart guy because by using Homeowners Concept and paying only 1.5% commission he netted over $13,000 in savings over a 6% commission! Meanwhile he received the most in marketing the home and unparalleled expertise from staging the home to negotiations to a smooth closing (the agent for this home has been in business for 16 years and sells 4 times as many homes than the average 6% agent). As many of the tens of thousands of past sellers (26+ years in business!) have remarked: "it's a no brainer" using our service.

What happens when the tax credit expires?

For the last couple of months, we’ve been turning a corner of sorts in real estate. The number of sales has increased, inventory is slowly decreasing (still high though) and foreclosures have stabilized. As the opportunity for the tax credit comes to a close on April 30th, many sellers, buyers and Realtors are wondering what would happen to the market thereafter.

Although no one has a crystal ball, one can make an educated guess as to what to expect. Below are some of the reasons I believe the market after a dip in May will continue to march ahead of 2009 in the number of sales.

1. We know that even with the tax credit in place only about 1/4 of the buyers were enticed to buy to secure the credit (study was done by NAR in late 2009). That leaves at least 3/4 of the current buyers in a state to continue shopping for a property.

2. Many of the buyers that are in the market to get the credit have waited till the last few days to write offers. Some of these buyers will not find a home by the deadline and may continue to look after the deadline. Of the offers written in next few days some will fall apart, as many are written by mediocre agents (see other posts about this very subject). Those buyers I am sure will go forward to secure another home.

3. The economy appears to be improving and more unemployed should be heading back to work. As consumer confidence goes up we would expect additional buyers to enter the market replenishing the buyers lost due to the lack of the tax credit.

4. Interest rates are at historic lows and should continue low unless the overall economy heated up considerably.

5. Down payment assistance programs and grants continue to exist. Should the market not recover sufficiently, expanding programs for the first time homebuyer could become reality.

Even though we expect sales to stay ahead of 2009, prices will still be under pressure due to the high inventory of homes for sale and appraisal issues which are a result of new rules.

Another American Idol connection!

For 25 years now we have sold plenty of local celebrities' homes (many celebrities are smart people and choosing Homeowners Concept is the most intelligent way to sell). Recently, we seem to have connected with American Idol celebrities. A couple of years ago our company sold Caroline Leiter's (of Channel 12) home in Glendale who was seriously involved with Taylor Hicks. In fact he showed up in one of the interior photos.

One of our most recent listings involves Danny Gokey's house. This 2006 split ranch at 11212 Sanctuary Drive, Milwaukee is an absolutely fabulous home boasting quality, grace and perfection. 2,172 sq. ft. 3BR/3BA, 3.5 car Garage , Gourmet KIT, soaring ceilings, professionally decorated. For all the other amenities and interior photos you go to Http://HomeownersMKE.com, just enter "sanctuary" in the street name.

Seller gets $26k more than originally offered.

The seller of this property at 4344 S. 51st in Greenfield was contemplating of selling it to Homevestors for $125,000, when on a lark he decided to call us. For those of you who are not familiar with Homevestors, it is a franchise that typically buys properties in need of work and for a price below market value in order to remodel and resell for a profit.

One of our agents Julane Myers went to the property and upon further review she suggested that seller could get as much as $160k for it. Seller was reluctant and afraid he might not get much more than the $125k he had already been offered. At the end, he did agree to market the property at $149,900 since he was in a hurry to sell. Within a week 3 offers were on the table with the winning offer at $151K. Seller was ecstatic to say the least and very appreciative at Julane for insisting at the higher price.

The seller was wise to take the advice of an extremely experienced agent (as ALL of Homeowners Concept's agents are). We hire only competent, honest agents that abide by the Realtor Code of Ethics.

April Special-No lender closing costs!

Our affiliate lender NetCentral Mortgage (414-258-7833 - netcentralmortgage.com) has a special for first time homebuyers that are looking at doing an FHA loan and closing in April, NO CLOSING COSTS! This is for purchase only. The only money the buyer will need is downpayment and prepaids (taxes and insurance). The rate on this program is also very good, 30yr fixed at 5.375% with APR of 5.743% (as of 4/1/10)!

30 photos per home now!

We just upgraded our website to handle up to 30 photos for each of our listed properties. Everyone else is at 25 or less. We strongly feel that if a home warrants extra photos the ability to display a large number of them can only help the buying process.

By increasing the number of photos, we continue the long established pattern of providing MORE for LESS commission.  The marketing advantages Homeowners Concept offers also include our own full color magazine with the widest distribution in Southeast Wisconsin and our website which contains the most listings in this area. Couple the superior marketing with one of our highly skilled Realtors and the savings in commissions is your bonus!

For Sale By Owners (FSBO) sales have become non-existent.

Has anyone seen a For Sale By Owner (FSBO) sell in the last few months? We sure would like to know because we have been tracking a number of them over the last 12 months with none of them selling as a FSBO. The last national survey showed less than 10% of FSBOs were successful in 2008. It appears that the figure is much lower today and particularly so in Metro-Milwaukee.

Even in the best of times, during the real estate bubble years of 2002-2005 the best the FSBOs could do were to sell at a rate of about 4 out 10. Since then that rate has gone to oblivion. The number one reason for such monumental failure is the fact that FSBOs provide no help whatsoever to the buyer. If a buyer is interested in buying a property the buyer would most likely have to get an attorney, usually pay a retainer fee of at least $500, take off work (as most attorneys are 8-5) then go through the whole process of negotiating by themselves. Should the Offer not get accepted the buyer is out the money and time. Any issues that arise after the acceptance additional costs are involved. On the other hand, when a buyer buys a property listed by an agent the costs and time constraints are not there.

With such an overwhelming supply of homes to choose from (3 times the inventory of homes that was a few years back) one can see why the buyers shy away from the hassle of buying FSBO. Unless a property is a compelling bargain (much less than Fair Market Value) buyers refuse to venture into a transaction with a For Sale By Owner. You can't blame them.

By the way, Homeowners Concept started and continues to be the missing link for sellers that want to save money yet elevate their chances of selling to same or better than listed with a 6% Realtor. In the last 25 years in business we have assisted thousands of ex For Sale By Owners accomplish the goal of selling their home without paying a hefty commission.