"The Bear"

"BUY LOW, SELL HIGH!"

My father and I always joke about how easy investing is, just buy low and sell high.

Well the recent market crash and upheaval in the financial industry have left everyone unsure of what to do next. Do we bail out the Wall Street elite who made tens of millions of dollars a year selling fraudulent derivatives, and in turn send the US economy into recession for the next 5 years? Do we buy up risky mortages and put a freeze on foreclosures, allowing the average American to catch his or her breath and keep their primary homes?

What should you do next, if you are planning to buy?

1. Contact a local Mortgage Broker who lives and works in the community you are looking to buy in. Choose an agent based on referrals from trusted, experienced Real Estate agents. Ask them who they would use for their next purchase. If your agent directs you to a basket of brokers cards by the front door or hands you three cards with no explanation of what makes one better or worse than another, get another agent.
2. Plan on putting together 20% of the purchase price in cash. If you can pull it from saving great, or consider gifts from relatives, or even asking the Seller to kick some money back to you for closing costs. The new threshold of 20% will be around for some time to come and although you are still seeing offers to finance at less, the terms and interest charges will be much less attractive.
3. Work with a Buyers Agent that specializes in the specific market you are interested in. Do not be shy about asking for references of your Realtor. They will make between $4,000 and $6,000 handling the average transaction in NH. For that much money they should bring some strong experience and negotiating skills to the table for you.

• Ask how many properties like the ones you are looking at did they list or sell last year.
• What type of research and analysis do they do before making an offer. Expect at a minimum, a CMA, review of the deed and convenience, and a review of the property file at town hall within 48 hours of the offer being made.
• Finally, they should require you to sign a Buyer's Agency agreement prior to looking at any property. If they don't they are not looking out for your best interests and are working solely for the benefit of the Seller!

There are some great properties for sale out there at some great prices. But while some of the rules have changed, the basics never will... Buy Low, Sell High

On Sunday the Federal Government took over Fannie Mae and Freddie Mac mortgage companies, quasi-government entities that purchase or guarantee most of the home mortgages in the U.S. & got into trouble with subprime lending. This basically, is similar to Chapter 11 bankruptcy reorganization.

Some people are saying this is a good thing. A good thing for the Stock Market, The Banking Industry, and the overall U.S. Economy, maybe. Not such a good thing for the Buyers and Sellers in the real estate market. Don't expect any positive news from this move for at least a year.

The first impact of the take over will likely be a short term drop in interest rates on new mortgages of about a quarter percentage. Not enough to change the current market conditions. Any drop in Federally funded mortgages rates with further weaken competitive mortgages from the private banking sector. Can a strong independent banking industry compete with a government able to borrow at 2.5% interest?

Second and most important to watch is the rules the new government agency will set for accepting new loans. Expect them to be stricter and limit the number of marginal buyers hoping to buy into the cheaper market. These marginal buyers were the ones we needed to reduce record high inventories and stabilize the markets. If qualifying is tightened then a hundred potential buyers for a home will be reduced to fifty.

Third, foreclosures might slow down as the Federal Government will be more willing than the Private for-profit businesses were to write down higher loans to more manageable payments plans. But Warren Buffet, warns that bailing out Fannie & Freddie and the associated bad loans sends a dangerous signal that the Federal Government intends to insure bad business practices instead of prosecuting fraudulent practices.

Fourth the National Economy will take another hit with the addition of over $200 Billion in deficit spending to operate these two companies in the short term.

Finally, the three factors that effect real estate the most are 1. the ability to finance 2. The inventory of homes and 3. the positive or negative stance of the economy. I am afraid this week-ends news will result in it being harder for Buyers to finance deals because of tougher credit score requirements, loan-size-to-home-value ratios and down payment requirements. Which will not reduce inventory or improve the overall economic forecast.

HAPPY BIRTHDAY PETER!

 After a great 1st week of school it was time to celebrate Peter's Birthday. 

 

 

The crew started out at White Mountain Mini Golf in Intervale.  It was impossible to keep score so they were all winners! 

Special congratulations to everyone who got holes-in-ones!  I know of at least three.  Ian, Timmy & Andrew! 

 

 

 

 

 

Then Water Balloon Wars in the back yard. 

It sure takes a lot longer to fill them up than it takes to throw them.  But, everybody had a BLAST!

 

 

 

 

Since they were wet already, it wasn't hard to get them into the river for a swim.

Last night hurricane Hanna dropped a couple of inches of rain on us, but this morning it was blue skies and by afternoon the river was almost swimable.

John was king of the rocks and all the boys followed him up the river.

 

 

 Hot Dogs, Pizza, Birthday Cake, and Fudgecicles.

 

Eleven tired boys dragged themselves inside for a quick gift exchange and as the last toy was un-wrapped, the first mother came to signal the end of a GREAT BIRTHDAY PARTY!

 

"See you all, next year."

 

TAKE A HIKE!

When the Summer comes to an end, it is time to take a final hike. Beautiful clear warm days, no bugs or humidity, and the promise of stunning vistas.

This Labor Day week-end we were able to do two great little hikes with the kids!

The first was Champney Falls off the Kancamaugus highway. It is an easy 2 hour round trip to two beautiful granite water falls.

The next day we were ready to take on the IMP! Yes the Imp, sounds like a little trail of no consequence. Yet the Imp is a challenging little 4.5 hour climb in Pinkham Notch just South of Dolly Copp.

It is one of those trailheads you drive by and wonder, "Why are all those cars parked on the side of the road in the middle of nowhere?"

It starts off from Route 16 and climbs at a steady pace along a small brook.

Then shoots up a series of steep switchbacks and rocky scrambles to gain elevation.

It is a hike you will appreciate, for the pay-off at the top and the fun climb getting there!

WHAT DID YOU DO ON YOUR SUMMER VACATION?

Summer is drawing to an end and school starts in a few days.

Let's hope everyone has great memories of this Summer.

Like this beautiful day on Lake Aziscoos.

www.Black-Bear-Realty.com