Dale Alverson

Boise Idaho

Well it has happened hasn't it. - If you are a first time home buyer you have missed the bottom. I have tried to explain in several blogs and emails about taking advantage of the market conditions while the market was cold and the interest rate was hot. Now with a 1/2% interest rate hike last week to 5.5% we can fully appreciate the previous 4.8% financing....and we won't even talk about the rarefied air of the 3.875% financing that was available on select properties.

So now you want to know will the rate come back down. The answer is maybe - but probably not. No one knows the answer,( just as no one could predict when the rate would go up). What I can tell you is we have definitely reached bottom in the under $200k price range. In the last 90 days home prices have stabilized in the sub $200k range and the ratio of sales price to asking price has increased from 95% to around 98%-99%. The 1st time buyer Tax Rebate program has been effective in getting the lower price range moving.

With the Government increasing the Bond prices to attract investors the mortgage market is not looking as competitive and obviously investors are only loyal to the return on their investment.

The cost of complacency is more poignant when you consider the cost of mortgages relative to purchase power. Lets say you were looking at buying a $200k home with FHA 3.5% minimum down which would give you $193k loan @ 5% for a $1036. monthly payment. Now lets say while you re waiting for interest rate or home price to drop the rate goes up to 5.5%. Now your $193k loan payment goes up to $1095 per month. This .5% change in interest rate = $11,000 in purchase power! In other words you could have bought a $211,000 home with 3.5% FHA down for a $203,615 Loan amount at 5% interest for a $1093. payment!

You may say well I'm not a 1st time buyer so I am not affected as much. OK let's look at your situation. Let's say you have a $210,000 home and you have held off lowering the price $10k because you want every dollar you can get (don't we all!) Now lets say your move up home is going to be $300k and your going to put 20% down for a $240k loan. At 5% interest rate your monthly would be $1288. Now lets say you hold off for 90 more days trying to extract that infamous $10k on your existing house and in the meantime interest rates go up to 5.75% - Your monthly payment goes up to $1400. - If you would have lowered your sales price to $200k and taken the 5% money you would be $54 a month ahead even after borrowing $10K more because you took 10k less for your house!

Here is the bottom line: The cost between what you are trying to achieve today and what you will be able to achieve tomorrow will never be less than it is right now today. The longer you wait the greater the distance is going to be between what you can buy with your money today and what you can buy later. We all know that these low rates will not sustain We know that recovery will take place and with the new administration quadrupling the national debt we can be assured that we are going to have inflation. New construction is at a 2 decade low in cost of building. Building lots have been slashed in half to sub 2002 levels or lower. The cost to develop a lot tomorrow will exceed the cost of a building lot today if the bare ground was free! Builder, developers and banks are willing to sell at bottom prices to either promote growth or clear inventory.

Do what you have to do to take advantage of these conditions today! You are no longer in a gaining position by waiting. If you need to sell 1st, drop the price and make it move and take the hit. If you don't have to sell then seriously start your purchasing process now. You are going backwards while you wait.

Every 1/2% jump in interest rate on a $200k loan costs $11,289. in loss of purchase power. Are you stepping over a dollar to pick up a dime?

Let those that have ears hear - I am here waiting for your call - Let's move while we can - you have the advantage - Use it or Lose it!



Dale Alverson
e-Pro Certified
Certified Buyer Broker (CBB) - (Only One in Idaho)
Certified Relocation Professional (CRP) (one of 4 in Idaho)
Accredited Buyer Representative (ABR) (#70 of 54,000 USA)

35+ years - Representing Clients - not Sales -

43 Degrees North Real Estate www.43re.com <http://www.43re.com/>

www.teamboise.com <http://www.teamboise.com/>
dale@teamboise.com
Direct Cell 208-863-3093
Toll Free 800-359-0855
Fax 208-338-1010

Free Money - Is there really such a thing? Well the answer is YES! - if you are a 1st time home owner or have not owned in 3 years.

I hear you - your thinking well it's not free if you have to do something to get it right? Technically your right of course but let's look at this in real life terms.

OK...so you do have to have a FICO score above 640 ...and you do have to be able to afford the monthly payments ...and of course not everyone can, however for those that can, a separate program sponsored by Idaho Housing allows you to borrow $7,000. of your next year $8,000 1st Time Buyer Tax Refund and use the funds for down payment and closing costs today!

Now let's look at an example: Lets say you qualify and you are find a nice home for $150,000. FHA lets you have a loan for 96.5% of the sales price so you will need 3.5% down payment or $5,250 Down and closing costs of about $2,500. Under normal conditions, this would require you to have about $7,750 cash at closing. With the $7,000 loan against your $8,000 Tax credit you are about $750 short of enough to close....but wait these are not normal times are they?

If we get the seller to pay your closing costs of $2,500. (not unusual in this market) you will only have to come to closing with the $5,250 leaving you about $2,600 left after you receive your Tax Refund in 2010 and pay off your Down payment loan.

Bottom Line:You get the house for no money out of pocket and collect $2,600 for passing GO...and have ownership of a home that now allows you to claim a further Tax Deduction for interest paid on your home purchase for the next 30 years.

So tell me is there such a thing as FREEMONEY or not?

Now lets talk about Really Free Money!

If you are a Veteran you can get 100% financing - again have the seller pay your closing costs and get $8000 Tax refund in 2010. - Free probably doesn't get any more Free than this!

**This amazing program currently ends in December of this year.....so now you know ...help me get the word out to your friends - family - acquaintances - anyone you might know that can take advantage of this program. You will help them - you will help the economy - If you have been looking for a way to do your part to move America forward, this is as good a chance as were going to get!

God Bless ,and Thank you in advance for your help - We all appreciate your efforts!

Dale Alverson

Certified Buyer's Agent

43 Degrees North Real Estate

Your personal Real Estate Advocate for life

Direct Cell 208-863-3093

One word - NOW!

- last Friday, Jack Koskinen, interim chief executive of Freddie Mac, said that home loan rates are near the bottom and that any further decreases will be small-

We all want the last drop - the lowest price - the best time - but few will take advantage of that precise moment - because they won't realize it has happened until it is gone-

So the signal has been sent to not expect that long awaited 4.0% everyone seems to be looking for.

Just as there is no such thing as a bad profit - there is no such thing as a bad 4% Mortgage Rate. These are the lowest Rates in 3 decades .

Prices are at bottom in lower price ranges and the ability to negotiate in higher price ranges is astronomical.

If you want a barometer to determine when to invest in the Real Estate Market - Use this one: When ever properties get low enough that you can put 20% or less down and the PITI will break even with current rent prices.

Rent prices have remained stable in the last 2 decades through upswing and downswing with less than 10% deflection. Compared to the Stock Market and other investment options Real Estate is still and will always remain your best option!

Dale Alverson CBB,CRP ABR,e-PRO

43 Degrees North Real Estate

35 years Representing Clients - not sales!

800-359-0855 dale@teamboise.com

Santa Coming in Spring?..... Well it sure looks that way - Yesterdays unprecedented close to the Bond Market signals an unheard of break through to a very tough layer of resistance closing 138 basis points higher.

Yesterday's result of the Federal reserve's commitment of $1.25 Trillion Dollars to buying long term treasury Bonds and buying back mortgage backed securities is a direct move to lower Mortgage Rates, as well as other consumer debt rates. This unprecedented very aggressive move, is the direct result of a major effort by the Fed to bring us out of this recession.

We don't know as of yet how low this will cause rates to go, however as of today, we are well into the 4% range, and I have confirmed a rumor that there is a local bank that will give a 3.85% 30 year fixed rate loan on bank owned property with 10% down! or 4.87% ZERO Down and NO PMI! (call me for a list of qualifying properties)

I have been saying since the start of this Real Estate bubble burst, that the answer to the problem was not Govt. bail outs to Wall Street. The answer to the whole debacle is much simpler than anyone suspects. The market would correct almost instantly if the Govt. will put the money back into the Home lending market by providing 3% 30 year fixed financing to every qualified buyer. Maybe they will finally get it right!

Windows of Opportunity Pass!

Caution*** People miss opportunities like the ones being presented today because they wait until the media tells them that if they don't hurry they will miss the opportunity. The problem is that by the time the media reports it - most of the benefit has passed.

This Window of Opportunity is already under pressure even as it has been created. Because spending this kind of money by the Fed - requires the Fed to print money, it also induces and greatly risks inflation. Yesterday there were early indicators that this is exactly what was happening. The cost of the Euro was 2 cents higher than on Wednesday when the Fed announcement came out. (a significant leap by normal standards)

Bottom Line: If you are waiting for a signal from on high to make a move in the Real Estate Market, DON"T WAIT ANY LONGER - It is TIME! This Fed incentive to the Housing Market will be effective at getting people out and the market will definitely heat up - and as you should know - the more people looking and buying - the less discount you are going to receive. Increased sales = increased inflation = less purchase power. What ARE you waiting for - Pick up the phone - Get to the Market Place - Santa has delivered -

Dale Alverson 43 Degrees North RE

35 years representing Clients! - Not Sales-

Direct Cell 208-863-3093

Today's Blog came about from a referral from my wife/partner (Debbie Sargent Coe). Debbie avails her self to Open Houses on most week-ends ... and always... seems to come back with new people - suspects & prospects for Representation for either seller's or buyer's or both!

What makes Debbie so Special at Open House's is her ability to relate..... and her 33 years of experience understanding the dilemma's that face people looking for a new or different places to live. Most "Realtors" see this business as a "Sales Business" when in reality it is not..nor should it be. Professional Real Estate should be a "People Problem Solving Business".

The following account should clear up the mis-understanding between being a "Customer" or a "Client" and give you a glimpse into the life of our lives as Agents Representing Clients rather than Realtor's selling houses.

Back to the story.....When Debbie met the couple they were interested in selling their older remodeled home that they had put a lot of money and time into making it just right.... and now they as aging Boomers were feeling like maybe they might enjoy a less physically stressful lifestyle.They came out to see some of the Patio Homes at Hazelewood Village and literally fell in love with one of the homes that had recently been reduced in price and had just been sold to another couple. The Husband liked the home as well however felt that it was too far from his employment on the far side of the town. They stated that if they could replicate the Sold Home for the same price they would be interested in going forward - Debbie made an appointment to see their home and the next week they were referred to me as a Buyer's agent and we looked at the intended home together, and again they reiterated they would be interested if we could duplicate the home for the same reduced price the other had sold for on a lot with a view of the mountains ( a difficult task)

The Monday after I met them, I called as I promised, and the Wife said they had decided that it just wasn't going to work because the house was: 1. Too far out 2. It was going to cost them $20k-$30k to upgrade and they didn't want to really spend more than their current home was worth. and 3. With the economy being so un-stable, they thought they should do nothing and just stay in their nice little home that was all paid for. ( I found out later that they had been on & off again, looking for nearly 2 years). The Wife( a lovely lady) said we were going to hate her because they were so indecisive and I replied not at all - there was a lot at stake and they should be very concerned about taking action of any kind without really understanding the options. I told her not to worry and that we would keep in touch if they changed their mind.

Now I had a choice to make. Leave them alone making their decision based on emotion and pray for the best for them - or invest my time to represent their interest and identify their problem, and show them their options. As customers not clients at this point, we were not authorized to"Represent their Interests without a Representation agreement). - Remember: Customer = Selling.. and Agency = Representation.

The part that bothered me wasn't that I was going to lose a sale. It was the fact that they had a do-able desire and they didn't Understand THEIR PROBLEM... and because they didn't understand that they had a problem... they couldn't possibly understand a solution. The problem that they didn't understand, was the dynamics of this market today - right here and right now! If they indeed stay in their very comfortable abode and don't change their mind after the advantages of this market have disappeared, then they did the right thing. However if a few months or a year from now, the wife finally decides she really wants a "New Home for their last home, and they try to go forward. they chance to lose the entire ability to facilitate the move.

Here is why:

#1. They are trying to make a very difficult almost lateral move -from a $170k-$180k older smaller home to a New $200k larger home at near the same price ( a very tough task to say the least)

#2.Today's interest rates are artificially low and at the lowest rate in my 35 year career! This abnormally low rate will not last much longer and especially with coming inflation which will affect not only the ability to buy - but the ability to sell as well-

#3. The type of home they are interested in has been reduced below the cost to build it.. and the only reason they can build it today at the under market value is because we may be able to find a developer in this market, who may consider selling a lot to us for less than he owes on it..and the bank may allow the lot sale in order to provide some debt relief. The builder will in turn offer his sub-contractors less in order to provide them a job.....and suppliers have already rolled back their prices to below 1993 pricing in order to move product. In other words, the home will NEVER be able to built for less than it can today!

#4. The type of lot they desire is the most valuable & desireable lot in any development (a rear East viewing lot with a view of the mountains). After 4 hours of preliminary research I found only 4 possible lots in the entire Valley) In a normal market they wouldn't have a chance of replacing it at $10k-$20k more-

#5.Their home is under the magic $200k range which is the only price range that is still moving at near normal market time levels, and the ability to sell their home is at a high point of opportunity because of the Stimulus package for 1st time home buyers (this year only)as well as their price range.

#6. When comparing the appreciation advantage of a "New Modern Home" to keeping their remodeled older Home - the difference is decidedly overwhelming advantaged to the New Modern Home which should easily out distance their current home due to **functional obsolescence of thier current home. (**a term Appraisers use to adjust the value of an older home down from comparable sized newer homes)

#7. The New home will not need maintenance items for 8+ years - while the older home will continue to require more and more dollars to keep it in proper state of maintenance.

#8. Last but not least and probably the crowning factor - many if not most economists foresee a major wave of inflation in the near future as China refuses to loan any more Trillions of Dollars to the US, and the Treasury is forced to print money to pay for bloating Government Programs and Continued Government growth because they have no more money. INFLATION will likely cause Interest Rates to accelerate and the ability to purchase an undervalued New Modern Home will be ....well - history -

The choice I have to make as a professional is to decide if it is worth the time & effort to try and educate my customers to become clients so I can save them.... or if I am better off to just let them go and spend my time working with clients that are waiting to hear my counsel. As I said in the beginning - This is NOT a sales business.... it is a People Business. If your into it for the quick $$... then you should just be a "salesman" and try to sell customers before they change their mind. If your into it for the long term career, you take the time - do the research - and try to represent and educate your customers to become clients and Represent their" Best interest"...not your own. Not all customers will become clients,however, without the effort, one can only pretend to be a Professional!

We will make a final attempt to show these customers their options and hopefully turn them into clients who trust our experience and ability to show them options that work to their advantage. The difficult part of the Boise Real Estate business at this time, is seeing people make decisions based on negative information and not realizing the advantages that are available that they may lose by not being informed.

Sales People prey on customer emotions. Realtors providing Agency should provide balance to clients emotions based on prevailing logic and past experience to try and forsee the future..and use that information for their clients best interests. In some instances it will be in clients best interst to not go forward. In other instances, it will be in their best interests to go forward. It should NEVER be about the Sale - It should be about what is in the best interest of the client period!

Dale Alverson
e-Pro Certified
Certified Buyer Broker (CBB) - (Only One in Idaho)
Certified Relocation Professional (CRP) (one of 4 in Idaho)
Accredited Buyer Representative (ABR) (#70 of 54,000 USA) 35+ years - Representing Clients - not Sales - 43 Degrees North Real Estate
www.teamboise.com
dale@teamboise.com
Direct Cell 208-863-3093
Toll Free 800-359-0855