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Danielle Ervin's Blog

By Danielle Ervin | Agent in 91709

5 Reasons you should consider to sell now... BUT I have 6

I recently read this blog post about the 5 reasons you should consider selling now... Here is the gist of it... This content below is from the KCM blog (with permission to share) :)..

If you plan on moving anytime in 2011, you should strongly consider selling your house now rather than waiting. Here are five reasons why:

1.) This is when your house will get the most exposure 

The spring, and particularly the month of May, is when most buyers enter the real estate market. This surge of buyers dramatically increases the exposure for your house . The best chance of getting quality offers (perhaps even multiple offers) is RIGHT NOW!

2.) Foreclosures and short sales will increase in about 90 days

The good news is that the number of people paying their mortgage on time is increasing. This will lead to less distressed property sales later this year and throughout 2012. The not-so-good news is that there is still a large inventory of existing foreclosures and short sales that will still be coming to market.

As an example, LPS reported in their latest Mortgage Monitor that:

  • There are still twice as many loans going 90+ days delinquent as are starting foreclosure
  • There are almost three times the number of foreclosure starts as there are foreclosure sales
  • Distressed property inventory levels are almost 45 times the rate of monthly foreclosure sales 

This means that there is a backlog of properties which will start coming to the market in about 90 days as banks clear up their paperwork challenges. These properties sell at dramatic discounts. They will be your competition. Both Fannie Mae and Freddie Mac have recently discussed the magnitude of this challenge.

3.) Interest rates have risen over the last six months

Interest rates have stabilized recently. However, in the last six months, interest rates have climbed over 1/2%. Every time the rates increase 1/4%, approximately 250,000 buyers are eliminated from qualifying for a mortgage. In an environment of volatile rates, waiting could mean that there will be fewer buyers eligible to purchase your house. It also could mean that you will pay a higher rate on the next home you buy.

4.) Qualifying for a mortgage is about to get even more difficult

Besides increasing rates, there are other factors that will hinder a buyer’s ability to qualify for a mortgage as we move forward. Lending standards have been getting tighter over the last year. And as the government debates the new proposed guidelines (QRM), banks are gearing up for even more stringent standards.

Morgan Stanley recently stated:

“Recent developments in issues such as GSE reform, Dodd-Frank securitization rules, and foreclosure settlement issues suggest a tighter and more expensive environment for mortgage credit.” 

This may impact any potential purchaser for your property and may also impact your next purchase.

5.) It’s time to get on with your life 

Probably the most important reason to sell is so you can get on with your life. You placed your home on the market for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family. Think about the reasons you decided to move in the first place. Are these reasons still important to you? If you have to take less than you were originally hoping to get for your house, your family has a question to ask each other: Is the dollar difference in sales price worth putting off our plans? Only you and your family know the answer to that question.

BUT... I have a 6th reason...

6.) Conforming loan limits about to DECREASE. This issu may have a gigantic impact on the housing market later. Here is what it could mean to the buyers looking at your home or the consequence if you are looking to move up.

First.. what is it? The ‘conforming loan limit’ sets the maximum loan amount, which either Fannie Mae or Freddie Mac are allowed to purchase individual loans. If a loan is larger than this limit, it is considered a ‘jumbo’ loan and is automatically disqualified from being sponsored by Fannie and Freddie. It would have to be handled by the private market.

Prior to 2008, the loan limit was $417,000. When prices started to rapidly escalate in certain regions of the country, the limit was increased. In some counties, that limit jumped to over $700,000. (Which here in Orange County it is currently $729,750).These new limits are scheduled to expire this October. If this happens, Fannie Mae and Freddie Mac may no longer be involved in these loans.

The impact could be great. Just a ½ point increase in mortgage rate on a $500,000 mortgage means an additional $154.84 in your monthly mortgage payment; a difference greater than $55,000 over the life of a 30 year mortgage. 

So if its time to discuss your options for buying or selling...please give me a call or email today! Real Estate is my passion and clients are like family :)

Helping you build your dreams

Danielle Ervin
danielle.ervin@yahoo.com
www.luxurylivingoc.wordpress.com

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