Blake Rickels

HARDER THAN IT LOOKS

With markets so rapidly changing, it's easy to imagine how property appraisers might sit in a darkened room, waving their hands over a crystal ball, and producing the mysterious and all-powerful document of a home's value. Let's dispel the notion of magical figures and look more carefully at the process.

When comparing against similar properties, it's not just the final price that counts. Appraisers also factor in any "incentives" offered, such as sellers who pay closing costs or remodeling allowances.

Perhaps the most important factor that lenders review in an appraisal is the closing dates of the "comparables" (other homes by which yours is measured). Unfortunately, with today’s stricter lending requirements, most "comps" must have sold within the last 60 or even 45 days to carry weight. Markets change so quickly that any sale price over two months old may be completely irrelevant.

Now a few words about how foreclosures in a neighborhood affect determination of value. Technically, appraisers shouldn't consider them, because they don't fit the Appraisal Institute's definition of "a property reasonably exposed in a competitive market." However, if several area homes have been abandoned, we know the negative effect that can have on a home's “perceived” value.

If you're planning to sell, express your concerns about the appraisal process to your representative, who will offer explanations and suggestions for improving your report’s results.

GET THE CREDIT YOU DESERVE

Mortgage applications are being reviewed far more thoroughly now than in the past, and your credit score should be 680 or higher to qualify for the best interest rates. So how do you determine your score, and know you're getting the credit you deserve?

Everyone is allowed one free credit report per year from the three reporting agencies (Experian, Equifax and TransUnion). Review the reports for accuracy and act quickly to correct any errors or omissions.

Approximately 35% of your credit score is based on the timeliness of your payments. Make sure that no late payments older than seven years are still on your report.

If you have paid off loans or credit cards, a zero balance should appear on those accounts. Sometimes, agencies don't properly update those balances after settlement.

15% of your credit score is based on the length of your credit history, so make sure that the opening dates of all your accounts are accurate. Also make sure that the limits on your credit cards are correct, and keep the balances under 50% of those limits. Total debt accounts for 30% of your credit score.

Finally, think twice about closing credit card accounts with zero balances, because this negatively reduces your ratio of "available credit" to your debt. First, get the facts. Then, make corrections. Finally, apply for home financing with confidence!

This article was written by Blake Rickels: a Realtor in Knoxville, TN

Foreclosures Rise in Higher Price Ranges

New data from Zillow.com shows that about 30 percent of foreclosures in June involved residences in the top 33 percent of local housing values, a gain from 16 percent at the start of the foreclosure crisis in 2006. Meanwhile, the bottom one-third of housing markets, by home value, has dipped from 55 percent of foreclosures three years ago to 35 percent. Analysts fret that rising foreclosures among pricier properties could create additional pressure in a housing market that has shown signs of stabilizing of late, thanks to a rebound in lower-priced home sales.

The Mortgage Bankers Association adds that prime loans accounted for 58 percent of foreclosure starts in the second quarter versus 44 percent a year earlier, while subprime mortgages accounted for roughly 33 percent of foreclosure starts compared to 50 percent year over year.

Please visit my website, contact me via email at Blake@BlakeRickels.com, or call me direct at 865-207-4283 for a list of foreclosures available in Knoxville, TN and the surrounding areas!

Long-Term Rates Closer to Record Low!

Thirty-year fixed mortgages moved closer to the all-time low of 4.82 percent reached in May, falling to 4.87 percent last week from 4.94 percent a week earlier, according to Freddie Mac. Homeowners who refinance have an opportunity to reduce their payment on a 30-year, fixed loan for $200,000 by nearly $134 a month from a year ago, when long-term rates averaged 5.94 percent. Also, 15-year loans fell to 4.33 percent, and five-year adjustable-rate mortgages dropped to 4.35 percent; but one-year ARMs rose to 4.53 percent.

Please visit my Knoxville Real Estate website or call me at 865-207-4283 for more info on local mortgage companies or local real estate information.

Tennessee's a Desirable Place to Live!

A recently released Harris Interactive poll asked Americans where they would choose to live if they did not live in the state where they are now. 2,498 U.S. adults were surveyed online between August 10 and 18, 2009, and Tennessee made the top 10!

1. California

2. Florida

3. Hawaii

4. Texas

5. Colorado

6. Arizona

7. North Carolina

8. Washington state

9. TENNESSEE

10. Oregon

Of course, we already knew that it's great to be in Tennessee!

If your looking to move to East Tennessee, you can visit my website or contact me at Blake@BlakeRickels.com

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