Thursday, September 28, 2006

Despite the lowest borrowing rates in six months, U.S. mortgage applications fell last week for the first time in four weeks, reports the Mortgage Bankers Association.

The association says its seasonally adjusted index of mortgage activity for last week decreased 4.9 percent to 566.6 from the previous week’s 595.8.

Normally, lower rates mean application volume rises. But this time is different; consumers appear to be turned off by the slow housing market.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.18 percent, down 0.18 percentage point from the previous week, to its lowest level since February. Fixed 15-year mortgage rates averaged 5.81 percent, down from 6.04 percent. Rates on one-year adjustable-rate mortgages (ARMs) decreased to 5.90 percent from 5.95 percent.

The refinance share of applications increased to 44.3 percent from 43.7 percent the previous week, its highest level since September 2005.

Source: Reuters News, Julie Haviv (09/27/2006)

Sunday, September 17, 2006

Do you really know what kind of Mortgage you have?

First off, this is not a slam on the mortgage industry as there are a lot of good people out there. This is simply to let potential home buyers know a little about what is out there.

With so many options out there today, so many people can 'afford' homes, or can they? Banks have introduced creative concepts with ARMS's, Interest Only loans, Home Equity (HELOC), and now some are even introducing 40-year mortgages..What? All of these options sounded great to a lot of cash-strapped people wanting to buy a house in the heated market.

Adjustable Rate Mortgage (ARM) - They are loans secured on a property whose interest rate, and monthly payment, vary over time. They are sometimes sold to unsophisticated buyers who are unlikely to repay the loan if the interest rate rises, which they are doing here in the US now.

On the flip side, if you can repay this loan, it might not be a bad idea...That is if you can pay it off in the time allotted and not face a "pre-payment penalty." Early payments of part of the principal will reduce the total cost of the loan (total interest paid), and will shorten the amount of time needed to pay off the loan. Early payoff of the entire loan amount (refinancing) is often done when interest rates drop significantly.

With all of these options out there, more and more people were buying property, thus continuing the market "bubble" for so long. One of the most most risky and most complicated loans, according to Business Week, is the Option ARM Loan. It brought in a whole new group of buyers in to the housing market. Basically, the option ARM's low payments are temporary. And the less you pay on it, the more is added back into the balance.

Option ARM - An "option ARM" is a loan where the borrower has the option of making either a specified minimum payment, an interest-only payment, or a 15-year or 30-year fixed rate in a given month. The minimum payment is less than an interest-only payment and therefore results in negative amortization, while the full payment is the fully-amortized share of interest and principal. Option ARM's are popular because they are usually offered with a very low initial interest rate (a so-called "teaser rate") and a low minimum payment, which permits borrowers to qualify for a much larger loan than would otherwise be possible.

As with regular ARM's, there can be benefits to these loans, but be careful. For instance, someone like who has sporadic income (Real Estate), self-employed, or in a seasonal market, might chose to do an Option ARM. For example, someone who makes the majority of their income around the winter holiday season, but who earns minimal income during the following few months may wish to pay the full payment during their busy season, but drop back to the interest-only payment or the minimum during a period of reduced earnings. With a fixed-payment loan, if they were unable to meet the payment during their lean season they would risk late fees or foreclosure.

These are just two options out there, so be careful. Did you know that mortgage brokers get more commission, the riskier the loan is? I didn't either until I read an article about it. In the same article from Business Week (September 11, 2006), it stated that, "Big banks love option ARM's because they can book all of the earnings up front even though the borrower may never pay in full...Banks are underwriting riskier loans to less creditworthy customers."

Oh yeah, did you know foreclosures are up to? According to, "For a homeowner with a 5/1 ARM (an adjustable rate loan with an initial fixed rate for five years that then adjusts annually) that's now resetting, the adjustment could add at least two percentage points to the interest rate. That could send the payment on a $200,000 loan up from about $950 a month closer to $1,200.

These exotic mortgages, which have been issued by lenders at much higher numbers the past few years, default at a higher rate than do fixed-rate mortgages. And sub-prime loans, which are much more common than in the past, have a higher default rate as well."

Now that you have some knowledge be careful about who you chose to do work with when financing your home. Be sure to ask the right questions, read the fine print, and stick to your guns!

As I've stated earlier, there are a lot of good lenders out there, so if you would like some names of the ones I recommend, shoot me an email and I'll let you know!

Friday, September 15, 2006

Mortgage Rates Drop Slightly Last Week.

In an article from "Realtor Magazine Online", sources state that:

"The national average rate on a 30-year, fixed-rate mortgage was 6.43 percent last week, down slightly from 6.47 percent the week before but up from 5.74 percent a year ago, according to Freddie Mac.The average for the 15-year, fixed-rate mortgage was 6.11 percent, down from the previous week’s 6.16 percent but again higher than the 5.32 percent average for the same period last year.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.1 percent, down from 6.14 percent. A year ago, the five-year ARM averaged 5.26 percent.
The average rate on one-year ARMs was 5.6 percent last week, compared with 5.63 percent the previous week and 4.46 percent a year ago. "

Monday, September 11, 2006

Remembering 9/11, what were you doing on this tragic day?

It's hard to believe that five years has gone by sine the tragic events that happened on this day. Please do not forgot all those who lost their lives five years ago, and the all of the people who helped and risked their lives doing what they thought was best, and was at the time.

So, when you go about your day today, take a moment to pause and say a little prayer for all those families who are still suffering today.

God Bless America

We will never Forget.

Wednesday, September 06, 2006

How to Get More for the Money In a Cooling Housing Market
By Lauren Baier Kim - Real Estate News Journal

It's no secret that the housing boom is for the most part, over. As the number of residential properties on the market builds, buyers have more properties to choose from and are gaining power at the negotiating table. But buyers still need to be smart to get the most for their money.

Everywhere, homeowners and developers are scrambling as houses take longer to sell -- in July, the number of sales for previously owned homes dropped to their lowest level in two and one-half years and the inventory of houses up for sale was at a record high. At the same time, sales of new homes were down more than 20% compared with the same time last year. Last week, the National Association of Realtors reported that pending sales of existing homes decreased in July at a seasonally adjusted annual rate of 7.0%, their lowest level in more than three years. Existing-home sales "are likely to flatten in the months ahead," says David Lereah, chief economist for the trade group.

So is now the time to buy? "It depends on your personal needs," says Richard Rocker, a real-estate agent in Kamuela, Hawaii. "If you are buying as an investor, I would be cautious. If you don't need to buy and see that the market is correcting, sit on the sidelines and be patient." As an investor, it's best to buy at "rock bottom," he says.

Robert Lavoie, an attorney with the Real Estate Practice Group for law firm Devine Millimet in Andover, Mass., has a different view. "Buyers who keep waiting for the bottom of the market will end up losing out on a lot of opportunities," he says. "It is probably better to get a good, solid deal than a rock-bottom deal, which may never come along. There may be a recovery, who knows?"

If you're looking for a home that is just that -- a home -- and not an investment property, it may be the right time to make an offer on that house or condo you've been eyeing. Here are five strategies for getting the most out of your real-estate dollar:

1. Stay informed. With the housing market in transition and prices fluctuating, it is important to understand what's going on in the marketplace, says James Barry, president of Listingbook, an online service in Winston-Salem, N.C. that connects real-estate agents with their clients.

Buyers should gather up-to-date information on what homes are available, as well as how they compare to other residences for sale. Get this information through your real-estate agent or through Web sites like and

Having updated information helped Robert J. Mullin, a financial consultant with firm RBC Dain Rauscher, save at least $30,000, he says. In May, Mr. Mullin moved from his $750,000 residence in Basking Ridge, N.J. to one priced in the $400,000s in Clemmons, N.C., he says.

"The ability to do a market analysis helped us find a home that was appropriately priced," he explains. Thanks to his real-estate agent, who sent emails and photos about new Clemmons-area listings regularly during his search, Mr. Mullin says he "saved money by making the process more efficient," negating the need to rent temporary housing or pay for storage.

Knowing how a house stacks up against others on the market is handy from "a negotiation standpoint" and can help you bargain for a good price when making an offer, Mr. Barry says.

Make sure the information you have is current, says Chris Kelly, a broker associate with Coldwell Banker Residential Brokerage in Center Harbor, N.H. "Look at comparable properties that sold no more than two months ago," he advises. "Properties that sold within the last two months have sold for a lot less than those sold within the last 12 months."

2. Jump on a good deal. Consumers aren't snapping up homes as quickly as they did during the housing boom, but that doesn't mean buyers can take their time. That's because attractively priced homes still draw plenty of interest.

"It's the same scenario [as it was during the housing boom], except that we wait longer for properties to be at a price where a buyer will take it," Mr. Kelly says. Once a property is priced correctly, there should be plenty of buyers vying for it, he says. "If priced properly, a home will sell in days."

He mentions a house in his area that was on the market for nearly a year at $799,000. When the sellers chopped $200,000 from the asking price, they received nine offers, he says. "Those buyers were there," he explains. "They were waiting to see if the value was there."

If a price drops, "be there first," Mr. Barry says. A price reduction could signal a "highly motivated seller," he says, and "a tremendous opportunity for a good deal."

Beat other buyers to the punch by getting pre-approved or pre-qualified for a mortgage and line up a home inspector before you make an offer. That's because homeowners usually want to sell within a certain time period, Devine Millimet's Mr. Lavoie says. "Most sellers don't want to waste their time with anyone who is not pre-qualified," he explains.

If you absolutely adore a house, don't wait too long for a seller to reduce his price, says Dale Davis of Davis Team Real Estate at RE/MAX Napa Valley in Napa, Calif. "You can miss what you really love waiting for a price reduction," he says. "If you love it, and you think it is a good price, come in with an offer a little bit lower and start the negotiation process."

3. But...don't move too fast: You have to move quickly if you spot a house at a good price or if the house of your dreams comes along, but the housing slowdown also means that buyers have time on their side while looking for a property, as the number of properties for sale is mounting, giving consumers more choices.
"There is no longer a feeding frenzy for homes, so buyers can wait for what they want [to come on the market] instead of compromising just to get a house," Mr. Davis says.

Finessing today's market means not rushing the search process, but acting quickly when the right deal comes along. "Buyers can be patient to find the house they like, not necessarily to buy the house they like," Mr. Davis explains.

Take the time to think about what you want in a home and what neighborhood or geographical region you prefer, advises Tiffany Smookler, a sales agent with Vermont Country Properties/Sotheby's International Realty in Waitsfield, Vt.

Sometimes, "people don't get to know the area well enough and move on an opportunity without thinking about it," says Ms. Smookler, who works in a vacation-home locale with many out-of-town buyers. Your purchase may turn out to be a long-term investment, so thinking it through first is advisable, she says.

With so many houses available from which to choose, "be very specific about what you want," Mr. Kelly says. Only look at 10 or so properties at a time, he suggests. Otherwise, "you will have too many choices and will get confused," he says.

4. Get tough. It's now easier to convince homeowners to come down on price or make other concessions than it was in recent months, so don't be shy about offering "what you think a home is worth," Ms. Smookler says.
"You can't be afraid to offend," she explains.

Buyers are requesting -- and getting -- price reductions and concessions from sellers, Mr. Davis says. While you should always ask for concessions, the best time to get them is when a property has been on the market for 30 days or longer, he says. These days, sellers are more likely to give in to your requests than risk losing a potential buyer, he explains.

In some parts of the country, sellers are willing to accept less than what their neighbors got for their homes, he says. "Sellers are motivated," he says. "Some are making two mortgage payments."

The most frequently asked-for concessions are for repairs, Mr. Davis says, such as fixing termite and fungus damage or water leaks and replacing worn or stained carpeting. Sellers can make these fixes or compensate the buyer by paying some of the buyer's closing costs, so there's "less money the buyer has to come up with right now, today," he says.

Some home sellers are using extravagant tactics to lure buyers. "They are doing crazy things to create interest," Mr. Davis says. "There was somebody who bought a brand-new car, parked it in the driveway, and said, 'If you buy the house, you get the car.' "

5. Go off the beaten path. With properties taking longer to sell, some homeowners are using alternative selling methods like auction houses. Others aren't hiring a realtor and are trying to do a "for sale by owner" or FSBO. Buyers who seek out these alternative sales can save money.

One in five home sellers sells their properties through a FSBO, according to Colby Sambrotto, chief operating officer of, a Web site that provides home-selling services to homeowners for a flat fee instead of a real-estate commission. Buying a FSBO property presents a cost-cutting opportunity for home buyers because "if you are selling a property and aren't forced to take on a 6% to 7% commission, you will pass that [savings] along to the buyer," he says.

Some FSBO sellers list their homes through the Multiple Listing Service (MLS) and can be found on, Mr. Sambrotto says. (Sellers going through pay a higher-priced service package to get listed on the MLS.) He adds that only about 15% of his clients take that option.

To find FSBOs, buyers also should search nation-wide sites like or Craigslist, he says.
Mark Sekula, an accountant who relocated from Berlin, Conn., to San Antonio in March with his wife, Diane, and their young son, used various for sale by owner Web sites, and Craiglist to find a new home. After a two month search, he found the house that he purchased through The seller was asking for $160,000 and they settled on $158,000, he says. He estimates that the seller passed along approximately $10,000 in savings in the deal, since the seller didn't have to pay a real-estate commission. Although he wasn't specifically looking to purchase a FSBO home, Mr. Sekula says he is glad he did. "It was very easy," he says.

Buying a home through auction can also present a savings for home buyers because private and commercial sellers who sell through auction often "want to unload their properties" in a short period of time, says David E. Gilmore, National Auctioneer for Sperry Van Ness/Gilmore Auction & Realty of Kenner, La. "Because we are pushing the market a little quicker, you may get a good deal," he explains.

For example, this week, his company is auctioning 36 bank-owned foreclosure properties in south Louisiana. "The bank wants to get rid of them quickly and is willing to trade price for time," he says.
A drawback to buying through auction is that homes are sold "as is" and usually are a "kind of a do-it-yourself deal," Mr. Gilmore says. That means it's up to the buyer to ascertain a property's quality before bidding. Mr. Gilmore's firm generally advertises an offering six months prior to its auction with notices on the Web site, through email alerts, in newspapers and on the radio and TV, he says, and buyers can arrange to visit the property and have it inspected before auction.

Buyers must also have cash at the ready when bidding, and most auction companies generally require a 10% deposit, Mr. Gilmore says. Normally, buyers have 30 days to pay the rest of the balance, he says.
Buying and selling homes through auction is becoming more common, he says, noting that his company will auction off about 500 homes this year. "We are getting more and more calls in the last month or two from individuals because of the slowing market."

Tuesday, September 05, 2006

Williamson County Ranked as one of the wealthiest counties in the Country!

According to an article in the Tennessean :

"Williamson County is among the top 15 wealthiest in the country, according to a 2005 U.S. Census Bureau survey that measures economic data in the nation's largest counties.

Per-capita income in the suburban area south of Nashville was an estimated $39,150 over the last 12 months, placing it 15th among the nation's 787 largest counties. Williamson's median family income is $90,087, which puts it 11th, according to the survey."
What happened in Augut?

Well, as most of you have heard and seen, the market has slowed down a bit. However, it hasn't slowed down as much as everyone thinks. You also have to realize that we've been in a huge "bubble" for almost five years now, it was bound to happen at some point.

Anyway, here is what happened in Franklin during the month of August. Keep in mind that these figures are based on actual homes that were listed, not For Sale By Owner homes.

Number of homes sold: 190
Average Sales Price: $442,458.00
Low Sales Price: $156,665.00
High Sales Price: $1,970,000.00
Average Days on Market: 43
Average $/SQFT: $146.17

Compared to last month, the numbers are down, but not by much. Here is a snapshot of what happened in July:

Number of homes sold: 200 (10 more than August)
Average Sales Price: $443,604.00 ($1,146 less than August)
Low Sales Price: $41,500.00 ($115,165.00 less than August)
High Sales Price: $ 1,575,000.00 ($395,000 less than August)
Average Days on Market: 42 (1 less than August)
Average $/SQFT: $143.29 ($2.88 less than August)

So, as you can see, there really has not been that much change over July, except the number of homes sold, which is a very small percentage.
Thanks for visiting my blog! My purpose is to let everyone know what is happening in the Franklin area with regards to the Real Estate market.

I am an agent with Coldwell Banker Barnes and work with the Thomas Group, a local sales team. We have earned the "Most outstanding Sales Team" of the month for our office for the past eight months and we are still going strong. We pride ourselves on hard work, persistence, and dedication to our clients. The best part about working with a team is the team itself! Why work with one agent when you can work with four!

Please feel free to ask questions, concerns, or comments that you may have and I will help you out in anyway that I can. Also, stop by my website to check on the latest information on how I can help you, community resources, quarterly sales figures for the Nashville (and surrounding areas) area, and tips for buyers and sellers!

Thanks again and have fun!

Todd Lewis
Coldwell Banker Barnes
615.429.3815 cell