Chris Sloan Tooele Real Estate

The following article was part of the series we publish in the Salt Lake Tribune each week.

Under the heading "Presidents Message" we try to provide Utah Realtors and their clients helpful information on a weekly basis about Real Estate in Utah.

We had some favorable comments about this article from Realtors and home buyers alike so we thought we would share it.

When it comes to purchasing a home, many buyers invest considerable effort in negotiating the best price possible and asking the seller for various extras as part of the deal. But when it comes to the fees they'll pay at settlement, buyers are less knowledgeable about getting the best deal.

Closing costs are the charges associated with getting a loan and transferring ownership. They may include fees for the loan application, mortgage origination, credit report, title search and insurance, appraisal, recording, etc. - costs that can ultimately add up to thousands of dollars.

While some of the costs, like the government's recording charge, cannot be negotiated, others can. The key is to be prepared and do your research before and throughout the process.

A recent article in USA Today, "Savvy home shoppers can save at settlement," reminded buyers that one of the best ways to save on closing costs is to prepare early during the house hunt. Buyers should start by becoming familiar with their credit score, which at a minimum should be 620 for an FHA loan and 720 for a conventional loan. Then buyers should learn about what to expect during the mortgage process by doing some Internet research and asking friends and family members about their experiences.

That know-how alone could provide savings since lenders appeared to make lower-price offers to borrowers who seemed more familiar with market terms, said a 2008 Urban Institute study quoted in the article. As you work to build your own knowledge, valuable online resources will include the U.S. Department of Housing and Urban Development's Web site, www.hud.gov, and the Federal Reserve's site, www.FederalReserve.gov. Both offer valuable information about what to expect in regard to settlement costs.

Once you're ready to visit the mortgage office, make sure to bring your paycheck stubs, recent bank statements, tax information, and numbers for savings accounts, stocks and cash-value insurance accounts, recommends one expert quoted in the USA Today article. Then request that the lender give you their best rate because you are comparing fees between multiple lenders.

As you compare the costs from various lenders, take a close look at the Good Faith Estimate, a document that lenders are required to provide three days after you apply for a loan. The 800 section of the form deals with the lender's fees and the costs of services the lender will contract. While many of the third-party services like the credit report are probably non-negotiable, ask your loan officer if he can reduce any of the administrative-type costs.

The 1100 section may also provide savings, since you can also shop for your own title company. Just make sure to let the lender know of your intent, and ask the title companies to include all relevant costs in their price quotes. In its publication, "A Consumer's Guide to Mortgage Costs," the Federal Reserve Board suggests another way to save on title insurance: Ask the seller's title company for a "re-issue" rate if the seller has only owned the home for a few years. There will be less work for the title company, which means potential savings for you.

Because the costs noted on the Good Faith Estimate can change between application and closing, ask the lender if you can get a guarantee on any of the costs quoted. One day before settlement, you can also request to see the HUD-1 statement which outlines all the final costs. Carefully scan this document and question any discrepancies between it and the Good Faith Estimate before you sign any closing papers.

Asking your lender about any questions you have along the way will also prove valuable, because the more you know about the settlement process, the more likely it is that you'll be able to save money at closing.

To learn more about the entire real estate purchase process, contact your local Realtor.

Published Monday, June 22, 2009 9:37 AM by Chris & Berna Sloan Filed under: Real Estate, Utah

Mortgage rates In Tooele County, Utah as well as around the country are inching up and in some cases they are more than inching, they are skyrocketing.

Homes for sale In Stansbury Park, Grantsville and Tooele UT became more costly to buy in just a few hours of Home Mortgage rate volatility last week.

To see what I'm talking about visit these blogs from our Salt Lake office.

Want a lower interest rate?

Mortgage rates increase, house payments up!

I hope you haven't been caught without a loan commitment or a home to apply it to.

Even though we have blogged about this almost every week, we are not going to say "we told you so" if you seem to have been left behind.

What we will say though is GET ON IT AND GET ON IT TODAY ! It may not be too late!!

Heres what to do!

Step 1. Call us today and let us know what you would like to have happen for you and your family, before the door of opportunity closes.

Step 2. Log on to our site (Tooele Real Estate) and begin to look for homes, read the blogs about buying a home in Stansbury Park, Grantsville, or Tooele City and pay attention to any article that you think could help you buy a home or Condo in Tooele.

Step 3. Either find a lender on our site, or call us @ 435-840-5029 and we will recommend someone we have worked with that we know will take care of you. START THE QUALIFICATION PROCESS!!!

Step 4. Get with us, get in the car, and lets find a home that you can afford, that you can love, and that will be a place for you to take care of your family.

You need to be ready, Mortgage rates will probably bounce around for awhile and you need to be in position to buy that home when all things are right.

This was originally posted on Chris and Bernas Tooele blog.

Utah Home Buyers & Homes Sellers Catch A Break !

Last week I had the opportunity of attending the National Association of Realtors' Midyear meetings in Washington, D.C., where each year Realtors and government officials talk about all things housing-related.

While many of the topics are usually targeted to Realtors and the successful operation of a real estate business, this year there were several announcements of particular interest to Utah home buyers and owners. Here are three such updates that could influence your home-buying and selling decisions:

Home buyer tax credit keeps getting better

During the first day of the conference, the secretary of the U.S. Department of Housing and Urban Development, Shaun Donovan, announced to attendees that HUD would provide short-term bridge loans that would allow first-time home buyers to use the federal government's $8,000 tax credit as part of their down payment and closing costs.

The step essentially allows home buyers to get their $8,000 tax credit at closing rather than waiting until after filing their 2009 taxes. For many potential buyers, the fact that the tax credit couldn't be received until 2010 made it difficult to make a purchase before the Nov. 30 deadline- especially if they planned on using the tax credit as part of their down payment. Under this new program the $8,000 can be used right at closing.

The short-term loan program would be available to buyers using FHA mortgages. It is expected the loans could be made by FHA-approved lenders, HUD-approved nonprofits, and state and local entities.

HUD officials say more details on the program will be published shortly. When that happens, more information will be available on Realtor.org.

Short sales poised to get easier

The Obama administration also announced last week that it was putting in place a program that would make it easier for "underwater" homeowners to sell their homes using a short sale.

A short sale occurs when an owner owes more on a home than it is worth and, rather than allow the property to go into foreclosure, a lender agrees to a sale for less than the mortgage amount. The short sale saves the lender money and leaves a less-severe mark on the borrower's credit report.

However, short sales in Utah are known to be time-consuming and fraught with pitfalls. That's why the Obama administration is taking steps to create a simplified and uniform process for the transactions.

Under the program, the government would provide incentives to banks and borrowers to encourage the "quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future," according to U.S. Treasury Secretary Timothy Geithner. The incentives include $1,000 for servicers who complete a successful short sale, $1,500 for borrowers to help with relocation expenses, and $1,000 toward paying junior lien holders to release liens that may be hindering the process.

To learn more about buying or selling a home using a short sale, contact a Realtor experienced in short sales.

Economy shows signs of hope

Along with the information about the home buyer- and seller-assistance programs, the conference also presented several optimistic economic reports.

During one session, former Federal Reserve Board Chairman Alan Greenspan said he could see "seeds" of a bottom in the housing market, while NAR Chief Economist Lawrence Yun said U.S. home prices could stabilize by the end of the year.

"My projection is home sales will be 10 to 20 percent higher the second half of this year than last year and we will come out of this recession in 2010," Yun said.

Yun said it would be critical to watch housing activity in the summer, because at that point buyers will have had a chance to respond to the government's $8,000 tax credit and other incentives. If sales activity does pick up, home prices should stabilize, triggering a broader economic recovery.

Nevertheless, Yun cautioned that if sales did not pick up in the summer, a recovery could take longer. He also said local price forecasts would vary depending on location.

For more information about home sales and prices in your area, contact your local Realtor or find one at UtahRealtors.com.

Utah Home Values level out, could be the bottom!

On A Monthly Basis, Home Values Look Better Than Press-Reported Annual Figures

Each month, researchers measure home values in 20 large U.S. cities, then compile their findings in a report called the Case-Shiller Index. It's a popular measurement of housing health across the country, but it's far from perfect.

As 3 examples:

1. It gives more weight to expensive homes than inexpensive ones
2. Its sample set includes just 37 states of 50 states
3. Real estate isn't a "national" market -- it's local

All that said, however, the data is still important. The Case-Shiller Index helps identify broader trends in housing and it's widely believed that the economy won't recover until the sector starts to stabilize.

Looking at Homes sold in three of the major population centers in Utah, Salt Lake County, Davis County, and Tooele County you can use the comparison with the above numbers to claim that Real Estate in Utah is moving rapidly towards recovery.

EXAMPLES:

Salt Lake County :
The difference in the price of homes sold in Salt Lake County between January 09 and 28 May 09 is less than 1%.

Davis County Utah:
Home prices in Davis County have actually increased $2.63 per sqft from January thru today.

Tooele County:
Homes and Condominiums sold in Tooele County since January reflect a value decrease of $0.78 per sqft.

Based on these trends, and comparing them with the numbers associated with the study's 20 cities, we may be at that recovery point now in Utah

Despite newspaper headlines blaring about 19 percent drops from March 2008, the month-to-month values appear to be stabilizing and the latter is the more important development. 15 of the 20 markets covered by Case-Shiller either improved, stayed flat, or declined by 0.2 percent or less.

Versus 2008, the rate of speed at which home values are falling is slowing.

Furthermore, because the Case-Shiller Index is on a 2-month delay, it doesn't account for all of this year's Spring Buyers, or first-timers taking the $8,000 first-time homebuyer tax credit.

Two months don't make a trend, but if Case-Shiller Index continues to report similar data for April and May, it could be the signal that housing finally bottomed.

For more information on Real Estate in various cities and towns in the state, check out our website @ Utah Real Estate. Or give us a call @ 435-840-5029 and talk to us about why Utah Home Values are better than most.

President's Message

Chris Sloan

Two weeks ago, interest rates for a 30-year fixed-rate mortgage in Utah were at their lowest point on record in Freddie Mac's weekly Primary Mortgage Market Survey, which dates back to 1971. The 30-year rate averaged 4.78 percent, tied with a record low set only four weeks earlier.

As we become accustomed to hearing these types of reports, we tend to forget that these low rates really are significant. Back in the 1980s, when we were also facing recessionary pressures, interest rates were in the double digits, with rates in 1981 averaging 16.63 percent. Compared to today's rates, a $200,000 loan would have cost $1,700 more each month.

Of course this is an extreme example, but even small rate decreases can significantly reduce your monthly payment or increase the amount of house you can buy for the money.

For example, at the start of the housing boom in 2004, the interest rate on a 30-year fixed-rate mortgage averaged 5.84 percent (which at the time was incredibly low). That meant if you were buying a home in Utah with a $200,000 loan, your monthly payment would be $1,179 (not taking into account insurance or property taxes).

With April's average rate of 4.81 percent, your monthly payment would be reduced to $1,051 - a savings of about $128 per month and more than $1,500 per year.

While today's consumer is certainly excited about these lower rates, there is still concern among prospective buyers about prices falling. Potential Utah homeowners may ask themselves why they should buy now if prices could be lower six months or a year from now.

According to economist Mark Zandi, co-founder of Moody's Economy.com, U.S. home prices will continue falling until December, with Economy.com saying home prices for Salt Lake will continue falling into 2010.

Even though there is some disagreement about where prices are headed (some reports say Salt Lake home prices are "overvalued" while others say they're "fairly valued"), let's assume the worst in our scenario.

Since the peak in 2007, the median home price of existing single-family homes in Salt Lake County has fallen 6 percent, according to multiple listing service data. Let's say prices fall another 6 percent in the coming year. We now have a mortgage amount of $188,000. If interest rates remain at their 50-year lows, a buyer will have saved money by waiting, with a mortgage payment of only $988.

However, if interest rates rise next year, which a number of economists say they will, a SLC home buyer could end up paying more. (this includes other largely populated areas like Davis County, & Utah County. Freddie Mac's Office of the Chief Economist is forecasting that interest rates on a 30-year fixed-rate mortgage will average 5.6 percent in 2010. With the new rates, the $188,000 loan would now cost $1,079 a month - almost $345 a year more than the $200,000 loan at the lower rate.

Gus Faucher, of Moody's Economy.com, made a similar point when he recently told the Salt Lake Tribune that current interest rates are so low that those who purchase homes in a year may have the same or higher payments than those who buy now - even if prices dip further.

Those who wait to buy will also miss out on seller and government incentives, like the $8,000 first-time home buyer tax credit, which is only available to buyers who close on homes before Dec. 1. The state's $6,000 grant program, available to first-time and repeat buyers of newly constructed, never-occupied homes, has already distributed half of its available funds, which means buyers who wait could miss out on this incentive as well.

Utah home buyers who are fearful of future price declines should also note that all real estate is local, meaning prices will vary from area to area. Some neighborhoods may see increases in home values, while other places could see a further erosion of prices, especially in areas hard hit by foreclosures. The best way to learn about the market in which you are interested is to talk to a local Realtor. He or she can help you find competitively priced properties as well as negotiate the best deal. To learn more about today's home-buying incentives or to find a Realtor, visit www.UtahHousingFacts.com.

Or give me a call @ 435-850-4029.

For a complete pictue of Utah Real Estate you can stop by my website, Real Estate In Utah for additional information.