Rehoboth Beach Real Estate Blog - December, 2012

Coastal Delaware Good Faith Estimate: It’s Part of the Deal

When you plan on getting a mortgage in Rehoboth Beach anytime this winter, you’re fairly certain to run into something known as the GFE. It’s the acronym for ‘Good Faith Estimate’-- and despite the reassuring name, the federal government decided they had better make it mandatory (to me, the opposite of having much faith at all). 

The GFE has a new format dictated by the federal Real Estate Settlement Procedures Act which requires lenders to provide an estimate of the charges and fees due at closing. Lenders have three days to make it available.

The GFE looks like a bill. It features a list of fees and charges denoted by three-digit codes. It is grouped into sections to make it more readable, and although at first glance the resulting grid looks overly…

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Six Mortgage Tips for the Self-Employed

It's no secret that mortgage lenders are requiring more information from potential borrowers than they did prior to the 2008 financial meltdown. But for self-employed borrowers, qualifying for that mortgage loan is particularly difficult. In the past, self-employed business owners were easily approved for stated-income mortgages – or, loans that didn't require tax documents or bank records to verify income.

But because of more stringent lending policies, self-employed individuals in particular can expect far more scrutiny than in the past. In particular, lenders are looking for proof of stability, or a pattern of income. Fair or not, the self-employed are not considered as "safe" a bet as someone on an established salary.

Simply stated, lenders want…

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3 Ways To Purchase Foreclosed Properties

The process of buying a foreclosed home is slightly different from the process of buying a non-foreclosure home.  If you want to invest in Coastal Delaware foreclosures, therefore, it is important to understand the different ways by which to purchase a foreclosed home. There are three main ways to buy a foreclosed home.

Buying before the auction

Some delinquent homeowners may want to sell their homes before facing an actual foreclosure.In this instance, the homeowner, in agreement with the lender, agrees to sell the home for less than the amount owed on the mortgage. This is called a short sale. Coastal Delaware short sales are "pre-foreclosures", of sorts. By broadening your home search to include short sales, you can identify homes that may be…

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Homebuilder Confidence Rises For 9th Straight Month

The National Association of Home Builders (NAHB) released its Housing Market Index (HMI), showing another monthly gain -- its ninth in a row.

The HMI -- a gauge of homebuilder confidence -- rose 1 point to 47 in December 2012, lifting the index to its highest levels since April 2006.

Readings under 50 indicate unfavorable housing conditions for builders. Readings over 50 signal "good" conditions. Coincidentally, the last time that the HMI read above 50 was April 2006, too.
The Housing Market Index is based on a survey which the NAHB sends to its members. The survey asks the nation's builders to rate the current housing market conditions.

In December, home builders reported gains in two of the three areas surveyed:

• Current Single-Family Sales: 51 (+2…

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Listing Agent, Buyers' Agent, Sellers' Agent: Who is My Agent?

Buyers’ agent, sellers’ agent. In every Coastal Delaware real estate transaction, the differences are easy to understand, right? Not quite.  

For openers, that sellers' agent may also be called the ‘listing agent’ – both mean the same thing. The ‘trapdoor’ is a further complication that comes into play once a contract is in place -- after which the buyer’s agent may also properly be called the ‘selling’ agent!

The potential confusion between seller’s agent and selling agent doesn’t usually have much practical significance: after all, by then, everyone should know the cast of characters and who represents whom. But it can come into play if buyer or seller are not actually present here in Rehoboth Beach to keep the names and duties sorted out -- but…

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Short Sales Outnumber Foreclosure Sales For Third Straight Quarter

Foreclosure-tracker RealtyTrac reports falling foreclosure sales nationwide as banks get better at selling homes via short sale.
In its Q3 2012 report, RealtyTrac says that 193,059 homes in some stage of foreclosure were sold, accounting for 19% of all residential home sales. In addition, pre-foreclosure sales -- also known as "short sales" -- climbed 22% on a year-over-year basis.

For the first time since 2007, the number of short sales outnumbered the number of homes sold in foreclosure over three consecutive quarters.

The average price of a short sale home fell by 5 percent as compared to a year ago which may reflect an eagerness on the part of mortgage lenders to dispose of distressed properties before they fall into foreclosure. Foreclosures can…

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Wall Street, Your Street, & Coastal Delaware Real Estate Listings

When you check into the latest real estate listings in Coastal Delaware, you come away with an accurate snapshot of our current market. But when you are thinking of the future, and where values might be headed, it’s also useful to think nationally.

Useful, yes: but careful! There is a tendency to mentally equate the equities market averages – Dow Jones, S&P, Nasdaq – with the real estate market. They are certainly related: one of the causes of the 2008 Dow plunge was the collapse of the subprime mortgage market, which led to the glut of foreclosed homes in realty listings. Yet, the two markets are far from identical. 

According to Yale University professor Robert Shiller, the number one driver of the value of realty listings is momentum. If the prices…

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A Look into Rehoboth Beach Condos and Future Value

Condominiums in Rehoboth Beach continue to offer unique attractions for all kinds of homebuyers -- not least because of their often ultra-competitive price points. Nationally, condos continue to be real bargains -- statistics show them to continue to underperform the rest of the housing market, which translates into a tempting value proposition to home hunters with economy on their minds.

That local condos for sale may still offer top-notch value is, historically speaking, not a surprise. Often, condos are the first part of the market to register price drops (and slower than other segments to recover). The NAR confirms the national trend, with existing single-family home prices rising 10.2% from a year earlier, while existing condos’ and co-ops’ rose a…

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Simple Explanation Of The Federal Reserve Statement (December 12 , 2012)

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday.
For the tenth consecutive meeting, the FOMC vote was nearly unanimous. Richmond Federal Reserve President Jeffrey Lacker was the lone dissenter in the 9-1 vote.
The Fed Funds Rate has been near zero percent since December 2008.
In its press release, the Federal Reserve noted that, since its last meeting in late-October, the U.S. economy has expanded "at a moderate pace" despite "weather-related disruptions". It also acknowledged that "strains in global financial markets" remain a threat to U.S. economic growth.
This comment is in direct reference to the Eurozone, its sovereign debt concerns, and its nation's…

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The Federal Reserve Begins A 2-Day Meeting Today

The Federal Open Market Committee (FOMC) begins a 2-day meeting today, its last of 8 scheduled meetings this year.

The Federal Open Market Committee is a 12-person subcommittee within the Federal Reserve. It's the group which votes upon U.S. monetary policy.

The monetary policy action for which the FOMC is most well-known is its setting of the Fed Funds Funds. The Fed Funds Rate is the interest rate at which banks borrow money from each other overnight. Since late-2008, the Fed Funds Rate has been near zero percent.

Prime Rate, a business and consumer interest rate used in lines of credit and credit card rates, is based on the Fed Funds Rate. Prime Rate has been similarly unchanged since 2008.
One rate which the Federal Reserve does not set is the 30-year…

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