Linda Walters, Owner and Broker of Record

Latest Market Statistics for Radnor, Tredyffrin and Easttown Townships*

For the 30 days ending March 9, 2009 in the 3 nearest townships, there were 21 single family and twin homes that settled at an average price of $694,293. The average discount off the original asking price dropped to below 90% for only the second month in the last few years, to 87.9%. This is troubling, but still a strong statistic compared to what other areas of the country are experiencing. There were 4 lower-priced homes and one higher-priced home ($1.3 mil) which sold for less than 80% of asking. The five homes had been on the market for an average of 223 days. This month only one home, at a high price of 1.7 million, sold for 100% of asking price. About a third of the homes sold for 90% or more above asking price. Seller concessions increased in number and amounts. Overall, the month showed our market making a downward turn.

Days on the market varied significantly from 2 to 364, with 5 homes selling after having been on the market 30 days or less. The average of 122 days on the market is a significant increase, almost twice as long as we have been seeing, indicating that many of the homes that closed last month had been sitting for a long time.

The chart below gives a broader view of all residential home sales (including townhouses and condos) in the 3 surrounding counties for January compared to one year ago. Total sales are still significantly off in all three counties, after an improvement last month. Discounts off asking prices increased a bit as well, particularly in Delaware County. Days on the market statistics are still not quite to last year's numbers yet for any of the 3 counties, particularly (again) in Delaware County.

We are thinking of "downsizing" but the very concept has us flummoxed. We have so much stuff!!! Where do we start? S. and A. Campbell, West Chester, PA

So ironic that just when we don't need all the space, we have filled it all up with accumulated things. Believe it or not, there has sprung up an entire industry of "declutterers" to help people just like you. These people come into your home and help you decide what to keep, what to throw out, what to sell and even sell things or have them consigned or donated for you. Then they help you organize what is left for easy transference. I can't say enough about this service-most people are paralyzed by the idea of having to pare down and really benefit from having help. One local company that does this well is Survival Essentials-they have a positive attitude that makes the process painless.

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I have been told that I may no longer qualify for a loan because I depend heavily on overtime pay. Is that true? Q. Trainor, St Davids, PA

The rule is that overtime pay has to be averaged over a 24 month period and they use that average number as the "income". So while it is not a disqualifying factor, it may lower your purchase price a bit. Similarly, part time jobs cannot be considered towards income until they have been held for 2 years.

I always recommend that my buyers contact a couple of good lenders to be sure they have looked into all of the possible programs that may exist, since I have seen exceptions made to a lot of these "rules".

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We are trying to buy a home in your area, having just moved here from out West. We had an agent but her office unfortunately had a lot of the listings and we got uncomfortable with that. We actually lost out on a house where we were competing against another buyer also represented by an agent in that office. Our agent said that is common here in Pennsylvania. True? P. Loftus, Gladwyne, PA

Pennsylvania does permit agents to act on behalf of both parties to a residential real estate transaction, so long as there is a state-mandated disclosure. It also permits agents in the same office to be on opposite sides of the transaction. There are many good agents who work in this manner.
Another option, however, is to use a buyers agent who does not act as a "dual" or "designated" agent so that you avoid those potential issues that can arise. Home buyers who do this usually interview a few agents and ask about their policies and then have those agents show them all of the homes on the market and negotiate on their behalf.
I know that many of the western states have laws that encourage buyer agency. I found this out because I get a lot of clients from the west coast looking for an exclusive buyer agent. Agencies that just represent buyers are quite rare in these parts. I think, though, that the concept will gain in popularity over the next few years.

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This is a question we should know the answer to but don't. How long is a rate good for when you get a mortgage approval? We put an offer on a house but the seller wants to delay the closing while they find something to buy. Our agent says that we may have to pay something to hold a good rate for more than 45 days. What should we do? Mr. & Mrs. Agnew, Paoli, PA

That is a point that many people forget about when they are making an offer for a home. In the past, lenders were willing to lock rates for 45 or even sometime 60 days without any extra fees. That was usually enough time for the transaction to finalize and close.
The typical agreement of sale used in this area provides that the buyer has to apply for a mortgage of the specific type they designate in the exact time they set forth. For example, the buyers agree to apply for a 30 year fixed mortgage at an interest rate between 4.5 and 6.5 percent within 10 days of the execution of the agreement. Then the mortgage commitment letter is due so many days after that. Sellers want to know that their house is really sold, so they do not like to wait a long time to find out if the buyers are able to get the mortgage they said they would apply for. In your case, since the sellers are asking you to wait, they could pay the cost for the lender to commit for longer than the typical 30-45 days on the rate. The cost is usually a quarter of a point (¼ of 1 percent of the loan amount). But this charge has gone up recently. In New York City, for example, buyers pay up to 2 points to lock rates for more than 30 days. So it is a good idea to be sure you know what the cost will be before finalizing the offer.
The timing of a home purchase has many moving parts. The buyer may have a home to sell and the buyer of that home may have to give notice on a lease or need to be here for a job that starts some time in the future. School schedules, lender requirements, construction delays and many other things can impact the delicate balance. I always think of dominoes when I picture how all the timing needs inter-relate. It's actually amazing how many houses change hands so smoothly!

Some questions and answers on the local real estate scene:

Q. Someone has told us we should apply for a "homestead tax exemption" for our new home. Sounds like something out of the dark ages-what is it? P and S. Solomon, Daylesford, PA

A. Sounds like something out of The Grapes of Wrath, right? Originally, "homestead" laws were passed following the Great Depression to protect the family home from certain creditors. The term has come to have a broader usage, and was applied to the tax relief measures recently passed to take advantage of gaming revenues in Pennsylvania. Many people are not aware of this break.

So the short answer is that it is not that old and it depends on where you live. If your home in Daylesford is in Chester County (T/E or Great Valley School District) and is your "permanent" residence, then you should be able to obtain the exemption.

Under Pennsylvania's Taxpayer Relief Act (Act 1), which became law in July 2006, school district property tax relief is available to resident homeowners each year that the Commonwealth accumulates sufficient revenue from slot machine gaming. In order to qualify, you must file a homestead/ farmstead exclusion application with the county assessment office and your application must be approved. The deadline for filing this year is March 1, 2009. Whether you have to re-apply every 3 years or only once is conflicting depending on the source, but supposedly the county will automatically send renewal forms. Questions can be directed to the Chester County Assessment Office at (610) 344-4570.

To illustrate, last year, all T/E homeowners who qualified for a homestead tax reduction received $181.41 off their taxes. It was equally distributed, based on receipt of $2,099,814 in state gaming revenue by the T/E School District.

Most Delaware County Residents also qualify and can check on their status by selecting the "Public Access/Online Services" button of the County's website at http://www.co.delaware.pa.us/ and typing in the property address.

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Q. Do you have anything good to say about this market? Y. Ester, Ardmore, PA

A. Sure. I am thankful to live in the Philadelphia suburbs, which have seen only a modest downturn compared to parts of the South and West. And interest rates are great right now. People who have heard that loans are not available should at least look into that statement, as I have been able to get loans for my clients through a variety of sources.

According to the National Association of REALTOR®s, first time homebuying is up, to 41% of the total purchases, probably because of the low rates and because these buyers do not have a home to sell. In Pennsylvania the number is even higher, 46%.

Let's compare the market to last year. In our 3 county-area, the average discount off asking price was around 94%. For the same period this year, that number was about 92.5%. Not that bad. Of course, that is based on the original listing price and does not take into consideration whether those listing prices have reduced.

But Americans continue to believe in home values. Recent surveys recently found that 61% of home owners thought their home value would rise in the next 6 month, 91% thought their home was the best long-term investment they could have made and 51% thought now was still a good time to buy.

Even the cynical experts agree that house values should beat inflation over the next 10-20 years (James Hagerty, Wall Street Journal "The Future of Home Prices").

Unless you want to rent, live in an RV or put all your money in the stock market, home ownership in a good location still makes sense to me.

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Q. I am confused by the term "Good Faith Estimate". What is that and can I rely on it? T. Bradley, Paoli, PA

A. What is that expression about being from the government and here to help you? This particular form has been around a long time and causes me more headaches than any other form in the home buying process. It is supposed to be what a lender gives to a potential borrower to spell out all the costs of the loan, and many borrowers rely on it in selecting the lowest cost money, but until recently, there was no requirement that the lender then actually charge those amounts. Hence the name "Estimate".

When the trouble in loan land hit recently, many borrowers who thought they knew the terms of their loans were hit with revisions and changes. Under a newly-revised format for these Estimates, lenders will not be able to vary by more than 10% from the estimated costs and will also have to split them out in more detail to prevent overcharging. HUD estimates a typical borrower should save $700 with the new format. In our area, loan costs are about $1,000 to $2000 but in NYC, for example, they can run up to 2.5% of the loan.

Lenders do not have to use the new form until 2010, but you can download it from www.HUD.gov and request that your prospective lender use it.

Another form that is supposed to help home-buying consumers is the state Consumer Notice, also recently revised. This is to be given to anyone by an agent at the time they discuss possible representation to explain agency options. Many people think it is a contract or do not understand all the types of agency that can exist. They are not aware, for example, that an agent may legally represent both the buyer and the seller at the same time. No matter how many revisions that form gets, it is still destined to be confusing, in my opinion.

You should always ask to have documentation explained so that you feel you really understand it. Buying a home is a monumental investment with a lot of complicated parts. You deserve to have control over it.

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Q. Our agent warned us against spending too much time on the internet looking at homes. She wants us to go out and see them. Isn't that a waste of our time? D. and L. Salus, West Chester, PA

A. I think she should recognize that a majority of potential hone buyers now look online for homes, even though many end up buying through an agent. My website has all the multiple listings as do those of most of the area real estate companies, so the old paradigm of the listing company having control of the inventory is gone. People will shop online. I think it is a great way to get a general idea of the types of home and the range of prices in any given area. What people do not realize until they go out is that the photos do not begin to tell the whole story. I have seen countless listings where the shots look great until you get to the house and see they were all taken with a wide angle lens or the house is right next to a factory or the ceilings are so low you can't stand up.

I had one client whose mother lived in another part of the country who would "google- earth" along Philly streets. Then she would ask me to find out about houses that she liked that weren't even for sale! Her son made a good income and the houses she was finding were subsidized for low-income buyers. That was a foreign concept to her. She just liked the fact that the house had a garage.

On the flip side, I always tell people you should not eliminate a house that is the style you like in a good location at a reasonable price without going to see it. I have seen some really bad photography where the house was actually lovely.

You might schedule a phone call every few days with your agent to go over the ones where you liked the photos to see if she has any information one way or the other that would be relevant to you. Many agents will already have seen the house at an agent tour or will know the builder's reputation for quality. Having your own agent is very smart and costs you nothing, so you should take advantage of that resource when making such a large investment.

For the 30 days ending April 28, 2008 in the 3 nearest townships, there were 68 single family and twin homes that settled. The average discount off the original asking price rose slightly to 93.6%, staying close to the discounts seen over this spring selling season. Four homes sold for 100% or more of their asking prices. Sixteen sold for 98% or more of asking price. There was no clear reason for the few homes selling with the largest discount this month-they varied by price and age. The tendency to offer seller concessions continued, with four paying in the $10,000 range and one paying $15,000. These could include amounts for repairs of payment of some of the buyers' closing costs.

Days on the market varied significantly from 1 to 548, with 15 homes selling in less than 11 days. The average of 68 days is down from last month.

*This report is based on the Trend Multiple Listing statistics reported by the selling agents under an agreement that requires compliance. The statistics can therefore be deemed as accurate as available. (Days on the market can be skewed if the listing is taken off the MLS and re-listed with a new date.)

The chart below gives a broader view of all residential home sales (including townhouses and condos) in the 3 surrounding counties for March of this year compared to one year ago. Totals are off but the discounts are not significantly deeper. Days on the market statistics demonstrate that we are not at the point that we were last year when a third to a half of homes sold within 30 days.

Latest Market Statistics for Radnor, Tredyffrin and Easttown Townships*

For the 30 days ending March 26, 2008 in the 3 nearest townships, there were 47 single family and twin homes that settled. The average discount off the original asking price remained about 92%, the same as the last two months. Six homes sold for 100% or more of their asking prices. Older homes and a few (but not all) of the newly-constructed houses had the largest discount this month. Of note was the increase in the number and amount of seller concessions offered, many in the $10,000 range. These could include amounts for repairs of payment of some of the buyers' closing costs.

Days on the market varied significantly from 1 to 548, with 13 homes selling in less than 30 days. The average of 89.7 days is up slightly from normal for this area.

The chart below gives a broader view of all residential home sales in the 3 surrounding counties for February of this year compared to one year ago. Totals are off but the discounts are not significantly deeper.

*This report is based on the Trend Multiple Listing statistics reported by the selling agents under an agreement that requires compliance. The statistics can therefore be deemed as accurate as available. (Days on the market can be skewed if the listing is taken off the MLS and re-listed with a new date.)