Jeffrey Wilkish

Don't reduce the price. Lower the Rate instead.

With a full shift in power from seller's market to buyer's market , both sellers and buyers need to reevaluate the approach to the transaction. The examples below illustrate how a simple seller credit can increase the number of prospects able to qualify for a listing and how it can produce significant savings for the buyer as well as helping to stabilze home values in a neighborhood.

Take a listing with a $450,000 Sales Price with a 20% down payment would have a loan amount of $360,000 at 6.5% that would be a payment $2275.44 per month and would require a monthly income of $5057 per month to qualify. Lets take that same listing and assume a price reduction of $13,500. That would make the new loan $349,200 assuming the same 20% down payment. The new payment would be $2207.00 and drops the income to qaulify to $4904.85 ($68.26 LESS). With a rate reduction (NOT a Temporary BUYDOWN) you would keep the sale price $450,000 and use a $13,500 seller credit to buy the rate down to 5.5%. This would drop the payment to $2044.00 per month this is $163.00 less a month in payment. And it drops the income to qualify to $4542.31. Which means there are a lot more folks could you show this property too. In addition the points are tax deductable. This really is a WIN-WIN FOR ALL PARTIES INVOVLED.

If you would like any more information about this or other sales stratigies please feel free to use me as a resource.

Mortage Rates continue to decline as the jobless claims continue. Tomorrow we will see the release of the November Retail numbers depending on how they come in we will who the consumer is holding up. If the numbers dont look in line with expectations it could push rates even lower. As I write this we are at %5.25% with no points on a 30 year fixed!!!.

I attached a chart that I thought you ma find interesting it shows the impact of rates on affordibilty.

Today Mortgage Rates moved down to 5.625% with zero points on a 30yr fixed Mortgage and 5.5% on the 30 year fixed FHA. With these rates and the discounts in the market more folks should qaulify...

With Rates moving downn over a half point from a week ago more people may quailify for that home that may have not just a week back.

This may be the best time to purchase real estate. With inventories at a high level and extremely low interest rates (slightly under 5.625% for a 30 year fixed rate mortgage as of the writing of this blog) this truly is a wonderful time to move-up or purchase a vacation home. For first -time home buyers there is a window of opportunity that has never before existed to take advantage of a $7500 tax credit! I like to call this the "perfect storm" of opportunity.