John Hayes

John Hayes

RE/MAX Gold

530-306-3316

www.johnhayesrealestate.com

What happens when the Fed moves rates?

Consumers are often confused when it comes to the subject of the Federal Reserve and how it affects mortgage interest rates. Often the media is the culprit causing the confusion. In the last few years, the Fed has taken action that caused mortgage interest rates to move in a direction other than what consumers expected, because the media provided weak reporting on the subject.

The Federal Reserve movements affect short-term interest rates: the Fed Funds rate, and the Fed Discount Rate (overnight lending rate). These rates in turn have a direct impact on the Prime Rate. However, the Prime rate affects commercial loans, credit cards, HELOC's and other short term loans. Mortgage rates (long term loans) are dictated by the trading of mortgage-backed securities. These securities trade in the "bond market" and not the stock market.

The real dynamic at the heart of any interest rate movement at the time of a Federal Reserve rate cut is the relationship between stocks and bonds. Stocks and bonds compete for the same investment dollar on a daily basis. There is literally only so much money to go around. When the Federal Reserve cuts interest rates in an effort to stimulate the economy, this reduction in rates often causes a stock market rally. When the market rallies (stock prices move up) the money to invest in stocks usually comes from the selling of mortgage-backed securities. Unfortunately, when Investors put their money into the stock market rally, the bond market suffers. The bond market then has to increase their yields to Investors in order to compete for the same money... and this causes mortgage interest rates to go up, not down.

Conversely, there have been many times when the Federal Reserve has increased interest rates. Stocks then "sell off" in fear that the increase will affect corporate profit margins, and that money will then run to the bond market (known on Wall Street as a Flight to Quality). This "safe haven" is found in mortgage-backed securities... when money runs into these bonds, it causes mortgage rates to drop. This daily "ebb and flow" of money in and out of the bond market is very, very important when it comes to the movement of mortgage interest rates.

So... the bottom line is that movements by the Federal Reserve typically cause home loan rates to move in the opposite direction from which the Fed moved. Confusing, huh?

Lyman King
Senior Loan Consultant, CHUMS J127
(916) 961-0858 direct line

Metro Gold Financial

John Hayes

RE/MAX Gold

530-306-3316

www.johnhayesrealestate.com

Mather CMA Report Current market anylsys for the Month of Sept,2008 August 2008 High $365,000 Medium $295,258 Low $205.000 August 2007 High 1 Medium 1 Low 1 Active Pending Sold Other Total Total Sold In Aug 2008 12 12 Bedrooms Bathrooms Square Feet List Price Selling Price Days on Market Minimum 3 2 1,337 $189,900 $205,000 4/4 Average 4 2 2,483 $289,604 $289,258 42/58 Median 3 2.5 2,225 $287,900 $295,450 10/13 Maximum 5 2.75 4,062 $365,750 $365,000 180/218 Total Value $ $3,471,100 Average DOM Breakdown and Average % of List Price received on Solds by Market time 0-30 Days 31-60 Days 61-90 Days 91-120 Days 120+ Days #of Listings 8 2 0 0 2 Breakdown % 66.67 16.67 20.00 0 0 Avg SP % LP 101.55 102.04 100.00 0 0 John Hayes RE/MAX Gold 530-306-3316 johnhayesrealestate.com

Highlights:

1..1 Home sold this time last year in Mather. Signs of the market getting better.

2..The "Days on Market" 42..Under Standard time. "90 days"

3..Median Home price is up!

4. If the home is priced right and is in O.K /good Condition it WILL MOVE FAST!

John Hayes

RE/MAX Gold Folsom

530-306-3316

www.johnhayesrealestate.com

Espresso Martini recipe

1 oz cold espresso 1 1/2 oz Absolut® vodka 1 1/2 oz Kahlua® coffee liqueur 1 oz white creme de cacao Pour ingredients into shaker filled with ice, shake vigorously, and strain into chilled martini glass. It should be somewhat frothy.

Hi Bill

Thanks for the E-mail. Here is what the definition is:

An R.E.O is a commonly-used acronym for "real estate owned" by banks instead of an individual persons owning the property as in a typical resale transaction, a bank owns the property instead. The bank typically acquires title to its R.E.O properties through other means,such as a deed-in-lieu of foreclosure,tax sale,or corporate housing.

After the bank takes possession of the property, the mortgage loan disappears and the financial institution deals with any items owed by the prior borrower, such as homeowner association fees. The financial institution also tries to get the IRS to remove any tax liens against the property. The current owners are usually evicted and often repairs are made to damage on the property in order to make it more attractive to potential buyers

When preparing to make an offer, a potential buyer or agent needs to look at what comparable properties in the area are worth, along with the cost of any needed repairs. Financial institutions usually sell such properties as-is, which makes the buyer's inspection even more important. If they discover damage that they did not anticipate, which the institution will not repair.

If you need some assistance feel free to call or e-mail. Have a Great Day.

John Hayes

RE/MAX Gold

www.johnhayesrealestate.com

Top ways to boost curb appeal
Whether selling or staying, first impression makes world of difference

You've no doubt heard the term "curb appeal," which is the first impression that your home makes when a visitor arrives. Whether you have your home up for sale or just want things to look a little nicer when you or someone else pulls up out in front, the best place to start is by giving the front of your home a critical examination.

Driveway: A driveway, by necessity, tends to be a fairly dominant feature, and it is often one of the first things that a person sees when they arrive at your home. If you have a concrete driveway that is oil-stained, check with your local home center for cleaners that can spruce it up. While you're there, get a crack repair compound and take care of smaller cracks before they become larger. For asphalt driveways, a seal-coat can often make a big difference in appearance and help prolong the asphalt as well.

For concrete or asphalt that is badly damaged, it's time to be thinking about replacement. You can replace the driveway with the same material as before, or consider an updated look by using paving stones instead -- they hold up well in all types of weather, and can even be a very satisfying do-it-yourself project.

Walkways: When someone arrives, is there a clear and safe path to your front door? You may not mind walking across your front lawn, but guests and prospective buyers would definitely prefer a walkway. There are lots of options for creating a new front walkway or replacing an existing one, so check out your home center or some landscaping magazines for ideas.

Landscaping: Speaking of landscaping, do you actually have any? Is it well maintained? Few things look worse out front than an overgrown or neglected yard, and you can often remedy things with a little hard work and some minimal expense. Cut back or remove trees and bushes that have gotten out of control. Feed the lawn to get it to green up again, or consider removing all or part of it and replacing it with low-maintenance materials.

If you have planter beds, be sure they're weeded and have fresh bark in them. Plan your landscaping to create a visual appeal by not having all the same type of plant. Intersperse some plants that provide spots of color at different times of the year, and mix plants for different heights as well.

Shade Trees: Consider adding a couple of new shade trees in front. Trees are good for the environment in general; they help a home look more established and appealing; and they can help lower your summer cooling costs as well. Trees look best planted in odd numbers -- a grouping of three or five, for example -- and the folks at your local nursery can help you with proper spacing.

Exterior Paint: There is probably nothing that will help or hurt the outside of your home as much as how your paint job looks. A fresh coat of paint in up-to-date colors works wonders, while old, peeling paint in a color scheme that went out of style when Eisenhower was president can really ruin a first impression.

If the paint is in generally good condition and just has a few bad spots, spend a couple of hours with a paint scraper and a can of exterior primer to get things ready for touch up, then have your local paint store match you up a gallon of paint and touch up the primed areas so they blend in. You might also want to consider repainting the eaves or window trim in a fresh new color to liven things up a little.

A New Entrance: Your front door is one spot that every visitor has to pass though, and it can make a lasting impression. A fresh coat of paint or stain can sometimes do the trick, but if your door is badly beat up you should consider replacing it. Check with a local company that specializes in doors (not a home center) and see about having a new door matched to your existing frame. The door company will cut the door, mortise the hinges, and drill for the locks using your old door as a pattern, so you can slip the new door right into place without expensive frame alterations or extensive carpentry.

Whether you're getting a new door or working with your old one, make sure that there are no squeaks or groans when it opens, and that it fits well in the frame without binding. Check the operation of the door handle and deadbolt; check the condition of the weatherstripping; and don't forget the operation of any screen and storm doors.

Cleaning: Last but far from least, clean things up a little. Pick up any trash that's accumulated, including dead leaves, cigarette butts and other small debris. Wash the siding to remove dirt, dust and cobwebs, and wash the windows. Hose off the walkways periodically, and make sure that all exterior lighting is operational. Finally, clean off the front porch -- including porch furniture and knick-knacks -- so that that area is clean and inviting as well.

www.johnhayesrealestate.com