Bob Mitchell - Realtor St. Louis

"Summer breeze, makes me feel fine....blowing through the jasmine in my mindddd" sang at the top of our lungs in a bad falsetto by three almost grown young men driving down the road in a 1964 Ford Fairlane with glass pack mufflers and 50's on the back. Oh, I almost forgot the, "Click Click" as the eight track changed to the next song.

No AC, but the windows were down and we had the cooler iced up. It was the summer after our high school graduation (1979) and before the start of college in the fall. Jeff Rideout, Kevin "You're barking up the wrong tree" Barks and myself were headed out of the city for one of the several camping trips that we took that summer.

The last summer that we would end up spending together before we took off on the wildly varying paths that all three of us eventually ended up taking. Of course, we didn't know that then. We were just some buds who wanted to get away from the prying eyes of the parents and any other authority figures that might want to intervene and stop us from smoking dope, drinking beer and otherwise enjoying life and one another's company.

The campsites varied, but we always picked one that was as far away as possible from the other campers and that had electricity. No, we didn't have a camper, but we did have a stereo! If my memory serves me it was an old Panasonic tuner with a Marrantz tape deck and two Electrovoice speakers (we left the Garrard turntable at home on the camping trips).

My life at that time revolved around that stereo system that I had purchased from the CMC Stereo store on Watson, out by the old KSHE studios. Finally purchased after 6 months in the lay-a-way, we lugged that stereo all over the place and didn't find it odd at all to lug it down to Meramec State Park where we would plug it in and rock out to bands ranging from Alice Cooper to Benny Goodman (can you imagine the looks on the old couple who were walking their dog around the campgrounds when they saw the source of those wicked horns?).

These were my "sounds of summer" at least for that period of my life. The windows down and the stereo cranked up. It's funny, to this day, there are certain songs where I still expect to hear that familiar "click click" at certain points in the song. Close your eyes and think back to listening to Styx and tell me that you don't remember, "Why must you be such an angry young man "click click" when your future looks so bright to me!"

It's funny, I can almost remember it all as if it were yesterday. That is until I remembered that the Fairlane got totaled on New Years Eve during our Junior year. I guess that it really doesn't matter because regardless of which car it was that we were driving, the emotions were the same. Three young men with their entire lives ahead of them, some fine Columbian and the ever present cooler full of beer on a hot summer day.

No, it really doesn't matter which car we drove to get there. I guess that in a sense, "The Song Remains The Same".

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com

They say that the typical consumer will tell 8 people if they've had a negative experience with you or your company and only tell 2 people if they have had a positive experience with you or your company. Well, through the power of the web I want to tell as many people as possible about the WONDERFUL experience that I had with Nicole Bradley and her company, West County Sports Fitness and Rehabilitation Center.

As some of you already know, a few months ago I tore my right rotator cuff. No good story about getting into a bar fight or crashing my bicycle, it just happened. I was getting ready to go down the stairs to my basement and my sock caught on a small nail that's head was protruding just a bit.

I didn't really even fall. But I did raise my arm very quickly to steady myself and when I did, "POP!" It tore.

Eventually I had surgery....a quick shout out to my surgeon Rick Wright of Washington University Orthopedics and his staff who also did a wonderful job....and started going to see Nicole at West County Sports Fitness and Rehabilitation Center.

To say that she took good care of me would be an understatement! She was very pleasant to deal with and has a natural talent when it comes to knowing when to push and when to lay back. The atmosphere as West County was very comfortable and relaxed, as well as well equipped. The staff was extremely nice and efficient and their location at 555 North New Ballas Road was centrally located near Interstates 270 and 40/64 with plenty of parking.

So, consider this to be the exception to the rule about not telling people when you're happy! Nicole Bradley and West County Sports Fitness and Rehabilitation Center definately get a "thumbs up, 4 star" review from me. If you're in need of physical therapy in the St. Louis area, you couldn't do better than to ask for Nicole!

R. B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com

As some of you know, my daughter recently graduated from "The Ohio State University" and moved back home to St. Louis to live with her mother. She's in the process of looking for her first "real" job and as is her style, she's already started burning the candle at both ends by starting work on her Masters in International Security.

The other day she told me that she's interested in finding a home for her and her boyfriend to buy and while I'm generally a big fan of people buying real estate, I'm a bit concerned that she's not ready for this move.

Maybe part of it is that she's my little girl and always will be, but to be honest, I think that it has more to do with what her apartment looked like the last time I went to visit her. True, she was still in college and getting that piece of paper does change some things, but I just can't see her mowing the grass on a regular basis.

Am I being unfair?

One of the homes that I purchased a couple of years ago was one that I had sold to a young couple right after they had gotten their first "real" jobs. When I went to look at it, the grass was waist deep and the cats litter box was over flowing. To say that this home had gotten away from them was an understatement!

I ended up buying the home at a severe discount and spent thousands of dollars and hundreds of man hours putting this home back into shape, all because they weren't ready to be homeowners. I guess that I'm afraid that the same thing might happen to my daughter if she were to buy now.

Well, this got me to thinking. How can you tell that you're ready to buy and own a home?

After thinking about it and reading a few articles on the subject, I've come to the conclusion that you can break the decision into two parts: Can You Qualify To Buy? and Are You Ready To Buy? Below are some considerations to think about that may help you answer both of these questions.

Can You Qualify To Buy A Home?

1) Do you have a job that provides enough income to qualify to buy a home? (Ability to Make The Payment)

Generally speaking, lenders are most concerned with your last two years of employment. They are looking to see if your job is secure and if your income is stable enough to pay the mortgage back and to take care of the home.

That's not to say that you have to have been on the same job for the entire two years, but if you've changed jobs, they want to know if the move made sense or were you just job hopping. Generally speaking, the longer you've been on your present job the better and if you have changed jobs, was the new job in the same field? If not, be prepared to explain your logic in changing jobs.

If you've recently graduated and this is your first job after your schooling, the schooling itself can be considered to be "time in your line of work or profession". Be prepared to provide documentation of your schooling.

As mentioned above, the lender is also going to be concerned with your income. Do you make enough to be able to afford to make your payments and to take care of your other financial obligations.

Generally speaking, Fannie Mae and Freddie Mac guild lines prefer that your housing expense be no more than 28% of your Gross Monthly Income and that your total monthly expenditures be no more than 36% of your gross monthly income. Notice that I said "Gross" monthly income, that is before taxes and any other deductions are taken out of your check.

These ratios are actually pretty flexible (FHA and VA can be even more flexible) and depending upon a host of different factors you may be able to get approved for a mortgage even if you fall outside of the guild lines. That said, especially if this is your first job or you simply don't make that much money, these ratios can be overly liberal and even if you can get approved, you still may not want to borrow the entire amount that you were approved for.

2) Have you demonstrated your willingness to make your payments on time (Your Credit History)

The single best thing that a lender can rely on when making a prediction as to how you're going to make your payments is how you've made your payments to other people in the past.

Do you have a credit history? For the most part lenders rely upon a Consumer Credit Report in order to make this determination. Part of this report is going to be a score that is given to you by each of the three major credit bureaus. Each of the bureaus has their own version of the scoring models, but they are all attempting to do the same thing. That is, they are attempting to predict the likelihood of your defaulting on the mortgage. The higher your scores, the lower the chances of your not making your payments on time.

These scoring models take into account all kinds of different factors including;

a) how long you've had your accounts? (The longer you've had your accounts the better.)

b) if you've made your payments on time? (Have you ever been 30 days late and if so how late were you?)

c) what kind of accounts that you've had? (Avoid pay day loans and excessive use of finance companies)

d) have you ever exceeded your credit limits or are you near your maximum available credit? (keep your balances less than 35% of your maximum credit limits)

e) have you applied for additional credit recently and how often you have done so? (keep your inquiries to a minimum - i.e. don't be casual with allowing people to pull your credit)

What if I haven't done so well on some of these things? Depending on where you've fallen down at will determine how long it will take you to over come any deficiencies. There's not much you can do if you haven't had a credit history for very long or if you've clicked late payments.

The cool thing to know is that in regards to credit, That Time Heals All Wounds". Also, a single late payment or two will probably not disqualify you from being able to borrow. If you have had late payments in the past, they will hurt you less and less as they age. Depending upon the severity of the late payments, it might take as little as 6 months of on-time performance or as long as 24 months of on time performance.

If you've declared bankruptcy, it will take you at least 24 months of on time performance in order to get an FHA mortgage or as much as 60 months to secure conventional financing.

3) Do you have money saved for down payment and reserves after you've made your down payment?

Even if you can qualify for 100% financing (difficult, but not totally impossible, especially if you're a vet) or participate in one of the various down payment assistance programs that are currently available (for now), you will still need to have saved some money in order to successfully complete a purchase of a home.

Closing costs and pre-paids are two categories of costs that you will need to keep in mind. While they can be negotiated (within limits) into a real estate purchase, you'll still incur expenses related to the purchase that you need to account for. Examples of these are things such as a home inspection and moving expenses. Other items that you will want to budget for are deposits on utilities, home maintenance items such as lawn mowers and trimmers, as well as any home repairs or improvements that you may wish to do prior to moving in.

Regarding how much you should plan for a down payment, this is a fairly complex topic that is worthy of it's own post, but suffice it to say that the more you put down the lower your payment is going to be. It will be lower because you are borrowing less (though putting more down might not drop the monthly payment as much as you would think) and because your mortgage insurance premium (MIP) or private mortgage insurance (PMI) will be less.

As mentioned, if your credit is excellent you may be able to qualify for 100% financing or you may be able to participate in one of the various down payment assistance programs that are available. The problem with 100% programs is that they are very difficult to get now and the mortgage insurance (if you can get it) is very expensive.

Putting 5% down will save you money on the PMI. Putting 10% down will save you even more. Putting 20% down will allow you to avoid PMI all together. Also, the more that you put down the less stringent an underwriter will be if you have a weakness in your credit file such as late payments or lack of time on the job.

So, if you have decent credit, income and job stability and at least some money to work with, you can probably qualify to buy a home. Now the question becomes, should you?

Should You Buy A Home or Are You Ready To Buy A Home?

Alright, so you've figured out that you CAN buy a home, but should you? This decision is a personal one, but there are some things that you need to think about in order to make an informed decision.

Some of the questions that you should ask yourself are;

1) Are you ready for the responsibility of owning a home?

All homes are in the process of falling down. It might be a very slow process, but if you look at a home that has been abandoned and then come back to look at that same home a year from now, you'll see what I'm talking about.

This means that you're going to have to do battle with time and the elements in order to keep your home in good condition. Some of this is pretty simple stuff, such as mowing your grass. Other maintenance items are more substantial, such as a roof that needs to be replaced or a heating and cooling system that breaks down on the hottest day of the year.

The fact that you own the home means that you won't be able to call a land lord in order to have them fix it. The good thing about this is that, you won't be able to call a land lord! So, while you'll be the one responsible for getting the item fixed, you'll also have the opportunity to fix it the way that it should be fixed and not as a good number of land lords do.

Since roofs, HVAC systems and other components of a home can be expensive to fix or replace, you'll need to be responsible enough to have money saved to be able to cover this expense or at least have enough credit to get the job done. This might mean that you have to delay gratification by foregoing a trip or other expenditure in order to have the money or credit available to you to fix your home if the need arises. Are you ready to make this type of sacrifice?

2) Are you confident that your job is secure and that you're ready to commit to living in this area for at least the next 5 - 7 years?

While nobody has a crystal ball that operates with any kind of efficiency, you should be able to assume that your job is secure and in today's economy, I would go a step further. If you're job were to go away, do you have a skill set that is marketable enough to be able to generate at least as much money as you are making now?

Next, are you subject to getting relocated or might you have the need to relocate with in the next 5 to 7 years? The reason that this is important is because buying and selling a home is expensive and while homes generally go up in value over time (a safe expectation is that your home will appreciate at a rate equal to the over-all inflation rate - this is a safe expectation over the long haul and not a guarantee.

So, if you buy your home and then find out that you need to sell it inside of this time period, chances are that you are going to lose money on the sale of your home. This isn't always the case and there are things that you can do to improve the value of your home in order to avoid this, but even then, it's still a safe assumption that you will need to own your home for at least this 5 - 7 year period in order to at least break even on the sale.

3) What are your future Lifestyle plans?

Are you thinking about having a family? How about buying a fancy new car? Honestly, when your friends call you and invite you to go backpacking in Europe, do you want a house to stand in the way of your going?

If you're planning a family in the near future, maybe buying that one bedroom condo isn't the best decision for you? Maybe you should buck up and go for the 3 bedroom home instead? If you do have a family, are both you and your partner going to continue to work?

Again, nobody knows what the future might hold, but now is the best time to think about what is likely to occur. A little forethought can save you a lot of heartache down the road.

If you're ready, owning a home can be one of the best financial moves that you can make.

As you can see, buying a home can be a fairly complex decision to make, but if you do decide that buying a home is right for you, it can be one of the best financial decisions that you can make.

Even in today's volatile market, buying a home can be a good financial move. The facts of the matter are that the US population is continuing to rise and that housing formations are also continuing to increase. This provides a solid footing for homes to continue to appreciate. While it's not guaranteed that the home that you buy will go up in value, over time the likelihood of it appreciating are substantial.

As I've written about before, you don't see a for-sale sign in front of Warren Buffet's home do you?

Equity in real estate is by far the largest single source of wealth in the United States. People own more equity in real estate than in all other forms of investment combined. Not only will a home provide a roof over your head and a place to call home, it will also allow you to take advantage of the economic concept of leverage.

That is, you can buy an asset that is likely to appreciate based upon it's gross value by only putting a small amount down. For example if you buy a $200,000 home and it appreciates at a modest average of 3% over the next 10 years, your home should then be worth somewhere around $268,783.28. Even subtracting out selling expenses equal to 6% of the appreciated value, you still have a gain of approximately $52,656.28. This figure doesn't count any amounts that you would have paid your mortgage down either.

If you compare that to putting what would have been your 5% down payment ($10,000) into a CD earning 5% your gain would have only been $6,288.95 over than same 10 year period.

Now, it is true that you will have to pay interest on your mortgage and also pay to keep the home up, but it's not like renting doesn't come with costs associated with it. For example, in addition to your rental payments you also have to factor in the fact that unless you sign a long term lease, your rent can be increased.

Also, if your landlord decides that, for whatever reason, that they don't want to rent to you any more, they can simply give you the minimum notice required and boot you out. Another consideration is if you want to improve your living quarters. If you rent, any money that you put into the home benefits the land lord, not you!

One last consideration to take into account is the "Home Mortgage Deduction" that the IRS allows you to deduct from your taxes. While the value of this deduction varies depending upon your tax bracket and the amount of interest that you pay on your mortgage, it can still be substantial.

For example, a person or couple who earn an income of $75,000 and who is in the 25% tax bracket who borrows $190,000 at 6.5% could expect an annual tax savings of around $3,087.50 or approximately $257.29 per month.

That means that for this person or couple that their rent is actually $257.29 a month more than they thought it was!

So, in closing, owning your own home can be a wonderful thing to do, if you're ready for it! If you have any questions about if it's the right thing for you, please feel free to give me a call and I'll be happy to talk with you.

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com

With all of the bad press that the real estate markets are getting, did you know that there is a silver lining to it all? That silver lining is in areas where you used to not be able to buy a home for less than $100,000 you can now buy a home for less than $70,000!

If you're willing to go a bit higher, there are several homes that you might be interested in.

True, it's a bit tougher to qualify for the mortgage, but as long as you have decent credit and a bit of money to work with, I can probably get you into a home.

If you're credit isn't that good, you can still give me a call and I will be happy to sit down with you and let you know what you have to do in order to be able to buy a house. Even if you've declared bankruptcy, I can still get you into a home 24 months after your bankruptcy has been discharged!

Basically, if there is a will, there is a way! Call me for additional information!

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com

With all of the bad press that the real estate markets are getting, did you know that there is a silver lining to it all? That silver lining is in areas where you used to not be able to buy a home for less than $100,000 you can now buy a home for less than $70,000!

If you're willing to go a bit higher, there are several homes that you might be interested in.

True, it's a bit tougher to qualify for the mortgage, but as long as you have decent credit and a bit of money to work with, I can probably get you into a home.

If you're credit isn't that good, you can still give me a call and I will be happy to sit down with you and let you know what you have to do in order to be able to buy a house. Even if you've declared bankruptcy, I can still get you into a home 24 months after your bankruptcy has been discharged!

Basically, if there is a will, there is a way! Call me for additional information!

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com