Watts Realty Blog

April 2012 Housing Statistics for the Greater Kalamazoo Area

Thu, 17 May 2012 19:12:00 GMT

The housing numbers continue to improve for the Greater Kalamazoo Area. Compared to last April, the current data shows encouraging news for the Greater Kalamazoo housing market.

Based on the data and graph below, you can see that the overall number of properties sold and the total dollar volume sold was higher in 2012 than in 2011 for the same time period. Other good news is that the average residential sale price increased from $125,686 to $127,478, while the median residential sale price increased from $99,950 to $102,000.

Another positive indicator is that the number of pending properties is up in April 2012 to 416 compared to the April 2011 level of 335. These are the properties that are in the process of closing. This number has been increasing for the past ten months and is at a level that has not been reached since April 2006.

The number of multi-family units that have sold is almost double in April 2012 compared to April 2011.

Another positive indicator is that the number of residential listings entered is up slightly from last year at the same time. The number of active residential listings at the end of the month is down compared to last year so that means there are fewer properties on the market. Buyers have fewer choices and sellers are seeing faster sales IF their homes are priced appropriately. Remember, a property has to appraise if there is a mortgage involved.

With interest rates below 4%, now is a great time for buyers to get off the fence and get serious about making a purchase. If you are thinking of selling, now is the time to contact a Realtor to put your home on the market.

Kathy Fosmoe
The Watts Realty Team
Kalamazoo, MI
www.WattsRealtyTeam.com

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Rural Development Loan FAQ

Fri, 11 May 2012 20:12:00 GMT

In last week’s post, we talked about Conventional Loans. Today, we will answers questions about Rural Development.

Type of Loan: Rural Development

Length of loan in years: 30 year fixed rate

Debt to income ratio: 29% housing ratio and 41% debt ratio.

Credit score minimum: Minimum is 580. A score of 580-640 will have to meet certain credit requirements to qualify.

Can my credit score effect the interest rate: This will depend on the lender.

Income minimum or maximum: The maximum income is 115% of the median income for the area.

Down payment requirements: There is no down payment requirement. Closing costs, guarantee fee, legal fees, title services, establishing escrow account and other prepaid closing costs may be included in the total loan if it does not exceed the appraised value plus the guarantee fee.

Is PMI required & if so how much: No PMI is required, however your loan will have a Rural Development annual fee.

Typical closing cost amount & who can pay: Rural Development charges a 2% fee on the loan amount. The borrower can roll the fee into the loan and have a loan-to-value of 102%. There is no limit on seller contributions to closing costs unless set by the lender.

Does the interest rate change: The interest rate is a fixed rate.

Does the loan have a prepayment penalty: This can depend on the bank and is a good questions to ask at application.

Is this loan assumable: Most are not, but it will depend on the bank.

Does this loan have a balloon payment: Your rate should be a fixed rate payment with no balloon.

Does this loan require an escrow and if yes what items: If the loan is being done with less than 20% down, typically your taxes and insurance will be escrowed.

Click here for more information about Rural Development Loans.

Information provided by:
Jeff Stoops
Keystone Community Bank
269-488-4800
www.KeystoneBank.com

for
The Watts Realty Team
Kalamazoo, MI 49048
www.WattsRealtyTeam.com

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Tags: watts realty,Buying a Home Kalamazoo,Real Estate Kalamazoo,kalamazoo housing,Homes in Kalamazoo,kalamazoo real estate brokerage,kalamazoo real estate agents,Selling your home Kalamazoo

Conventional Loan FAQ

Fri, 04 May 2012 18:53:00 GMT

In last week’s post, we talked about theMost Common Types of Mortgage Loans. Over the next few weeks we will be giving answers to some of the most frequently asked questions about loans.

Type of Loan: Conventional

Length of loan in years: Loan terms can vary from 10, 15, 20, and 30 years.

Debt to income ratio: This ratio can vary, but typically you want your ratio to be 45% or less.

Credit score minimum: The typical minimum score is 620. A score of 740 or above will place the borrower in the best position.

Can my credit score effect the interest rate: Yes. Credit Score can have an impact on interest rate. The most significant portion that a credit score will affect is the closing costs.

Income minimum or maximum: There is no maximum or minimum on a conventional loan as long as your debt to income ratios are in line.

Down payment requirements: The minimum down payment is 5%. Anything less than 20% will require PMI insurance.

Are Gifts acceptable and if so how much: Gift funds are acceptable for a primary residence and second homes. The gift must be from a related person or acceptable agency. There is no maximum provided the borrower has at least 5% down from other sources.

Is PMI required & if so how much: PMI is required if the down payment is less than 20%: This monthly payment amount will vary depending on the borrower. Such factors are; loan amount, loan to value, and credit score.

When can the PMI be removed: PMI typically automatically is removed when the loan to value hits 78%. If you make extra payments check with your loan servicer for the necessary steps to have it removed.

Typical closing cost amount & who can pay: Seller paid closing costs can always be negotiated. For a conventional loan the maximum seller concessions vary from 3-9% of the loan amount.

Does the interest rate change: The interest rate on a conventional mortgage is fixed unless the borrower has chosen an adjustable rate mortgage.

Does the loan have a prepayment penalty: This good question to ask as it can be different between different lending institutions.

Is this loan assumable: Another good question to ask your lender as this may vary. Most conventional loans are not.

Does this loan have a balloon payment: If you have a fixed rate conventional loan you will not have a balloon payment.

Does this loan require an escrow and if yes what items: Escrows for taxes are typically required for loans with a down payment less than 20%. Your taxes and insurance are collected each month and placed in the escrow accounts. When these items come due, your loan servicer will make the payment. If you put more than 20% down, you can always choose to escrow.

Information provided by:
Jeff Stoops
Keystone Community Bank
269-488-4800
www.KeystoneBank.com

for
The Watts Realty Team
Kalamazoo, MI 49048
www.WattsRealtyTeam.com

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The Most Common Types of Mortgage Loans

Fri, 27 Apr 2012 17:58:00 GMT

You decided now is the time to purchase a home. This is the first step and the most important in the home buying process. We congratulate you on making this very powerful and life changing decision. Then you ask yourself “what is my next step?” The answer to that question is talk to a mortgage lender to determine how much you can afford. This is also a very important step in the process and should be done before you have your REALTOR® set up appointments to view properties. The reasoning behind this step is to make sure you can afford to purchase a home. Once that is determined, you want to make sure your real estate professional is showing you homes you can afford to purchase as well as the properties allowing the types of financing you have been approved for by the lender.

There are many types of mortgage loans and not all of these loans are applicable to everyone. Here is a list of the most common types of mortgage loans:

1. Conventional Loans
2. FHA Loans
3. Rural Development Loans
4. VA Loans
5. Construction Loans
6. Jumbo Loans
7. Portfolio Loans
8. Vacant Land Loans

In future posts we will go into more detail on each loan type to help you determine what mortgage product may be best for you and your situation.

Joy Watts
Watts Realty Team
5071 Gull Road
Kalamazoo, MI 49048
www.WattsRealtyTeam.com

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What is the first step to buying a home?

Fri, 20 Apr 2012 20:34:00 GMT

Meet with a lender to determine how much you can afford. So many times, home buyers look at houses and find one they love without knowing if they can afford it. It’s heartbreaking to fall in love with a house only to find out you cannot afford it. It makes looking at houses in your price range so much harder once you’ve already fallen in love.

Below is a list of items that will be needed throughout the loan process. While not all are needed during the initial loan application meeting, they will be needed at some point, so if you have them available, bring them with you to the lender.

Copy of Driver’s License or Government Issued Photo ID
Copy of your most recent paystub
Copy of your most recent year W-2’s for all jobs
Copy of your most recent month Bank Statement (include all pages)
Copy of your most recent month Retirement and/or Stock Statements
Copy of your last year Personal Tax Returns (include schedules)
Copy of your last year Business Tax Returns (include schedules)
Copy of year-to-date Profit and Loss for your Business
Copy of the Sales Contract for the subject property (include all addendums)
Copy of the Sales Contract or Listing Agreement for the sale of your current residence
Provide the name and phone number of your Landlord(s) for the past 24 months
Copy of all Leases for any rental properties you purchased this tax year
Copy of your Separation Agreement and Final Divorce Decree
Copy of your Bankruptcy Petition, Discharge Papers and Credit Explanation Letter
Copy of your Award Letter if currently receiving Social Security, Disability or Retirement Income
Copy of your College Transcripts or your Diploma/Decree
Copy of your DD214 and your Original Certificate of Eligibility
If you are refinancing, please provide a copy of your Homeowners Policy, your Agent’s name and phone number
You will need to write a check to your lender for a credit check

Not all of these items are applicable and due to your individual circumstances, additional items might be needed, but this list should help you get started on your home buying journey.

Nancy Tolmacs
Watts Realty Team
Kalamazoo, MI 49048
www.WattsRealtyTeam.com
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March 2012 Housing Statistics for the Greater Kalamazoo Area

Fri, 13 Apr 2012 18:04:00 GMT

The housing numbers continue to improve for the Greater Kalamazoo Area. Month over month improvements are being made comparing 2011 to 2012.

Based upon the figures and graph below you can see that the overall number of properties sold and the total dollar volume sold was higher in 2012 compared to 2011 numbers. Another positive statistic for March 2012 is the average residential sales price has increased when compared to 2011 figures and the median residential sales price has also increased compared to 2011. From the graph below you can see that pending sales in 2012 (435 units) are higher than 2011 (338 units) which is a positive indicator as well as the actual number of closing increased in 2012 compared to 2011 (287 units in 2012 vs. 242 units in 2011). The final positives for 2012 vs. 2011 are the number of listing entered and the number of active residential listings. The number of residential listings entered year to date is up slightly compared to 2011 which may mean things are holding steady. The number of active residential listings is down in 2012 which means fewer homes are actually on the market giving buyers fewer choices and faster sales.

If you are thinking about selling your home now is the time to put your home on the market due to less competition and the incredibly low interest rates.

Joy Watts
Watts Realty Team
5071 Gull Road
Kalamazoo, MI 49048
www.WattsRealtyTeam.com

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Tags: watts realty,Buying a Home Kalamazoo,Real Estate Kalamazoo,kalamazoo housing,Homes in Kalamazoo,kalamazoo real estate brokerage,kalamazoo real estate agents,Selling your home Kalamazoo

Six Items to Investigate Before Purchasing a Condominium

Thu, 05 Apr 2012 18:54:00 GMT

When you are considering purchasing a condominium, here are just a few items to investigate before you and your Realtor® set up a showing.

Is the association FHA approved? You should already be familiar with the type of financing that you are going to use for your purchase after meeting with a loan officer. The type of financing available for purchasing a condo is very important. While in the past, if an association was not FHA approved, there could be “spot approvals” for a particular condo, but this is no longer available. Make sure that before you view properties it is verified that the association is currently approved for this type of financing. Some associations may have been approved in the past, but the approval may have expired.
Are rentals allowed in the association? This can be important for both the current owners, who may like to have the option of renting out their condo, as well as you, the prospective buyer, wondering if the neighbors’ condo is owner occupied or a tenant. Typically a one year lease rather than short term or month to month is required if the association allows units to be rented.
Are pets allowed? While you may not have a pet, it is important to find this information out for future reference. Some associations allow pets, but do have weight restrictions such as dogs under 15 pounds or 35 pounds. Some only allow indoor cats and no dogs.
Check the condo rules and regulations which are also known as the covenants. Do you want to grill outside? Are you allowed to grill on a balcony or only on a ground level patio? Where is gardening allowed if at all? Where can a bike be ridden and stored? Are there any age restrictions? For example, is it a senior community for those 55+ years old?
History of special assessments is also important. From the time an association is built, there is always going to be the need to maintain and repair common elements. These can include, but are not limited to: repaving parking lots, replacing sidewalks, removing and replanting trees and shrubs, re-roofing, residing, and replacing garage doors among other things. If the association has funds in their reserve fund, then these items will be paid for out of the reserve. If there are not enough funds due to delayed maintenance or some other reason, then there may be the need to have a special assessment of the current owners to cover these costs.
Make sure you verify that the association is financially strong. Look at a current budget and see if there is a future budget available. Check to see the current level of cash reserves. What improvements have been made recently? What improvements are planned for the future? Once again it is better to know what type of association you are looking at financially before you decide on purchasing your dream condo only to find out that it is going to cost more than you expected.

Condos are a specialized type of housing and are not for everyone. If you are interested in purchasing a condo, it is best to find a real estate agent that is well versed and very knowledgeable about condominiums and associations.

Kathy Fosmoe
Watts Realty Team
5071 Gull Road
Kalamazoo, MI 49048
www.wattsrealtyteam.com

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Home Buyers Insurance Checklist Part 4

Fri, 30 Mar 2012 20:06:00 GMT

Home Buyers Insurance Checklist - Reproduced from The Insurance Information Institute

While House Hunting Cont’d

Determine How Much It Will Cost to Maintain the House
Routine maintenance is your responsibility as a homeowner. Losses caused by failing to properly care for your home are not covered by standard homeowners insurance policies. The yearly cost of taking care of your house is another factor to be included in the overall price of owning the home.

Call Your Insurance Representative
Don’t wait until the last minute to think about insurance. Ask your insurance professional if the house will qualify for insurance, and get an estimate of the premium. The sooner you act, the smoother the process will be. Don’t be shy about asking for estimates on more than one house. Insurance is an important consideration when purchasing a home. If you are uncomfortable with the cost of insuring a particular house, keep looking for one that better fits your financial situation. If you do not already have an insurance agent or company representative, get recommendations from family, friends or co-workers, or consult your state insurance department.

Purchasing Insurance for your New Home
When purchasing a home insurance policy, work with your insurance agent or company representative to get enough insurance to rebuild the house in the event of a total loss. No new home buyers want to think that their house could go up in flames, but disasters do happen. It’s important to have enough insurance to completely rebuild your home and replace all of your personal possessions. You also need to make sure you have enough liability insurance to protect your financial assets. Ask about additional coverage such as:
• Replacement cost for personal possessions
• Extended or guaranteed replacement cost for the structure
• Building code upgrades
• Sewer and drain back-up coverage
• Inflation-guard
• Umbrella coverage for a pool or other high-risk items
• Special riders for jewelry, collectibles and expensive items
To save money on your homeowners insurance, shop around and take the highest deductible you can afford. Since most people only file a claim every eight to 10 years, having a higher deductible saves money over time and preserves your insurance for when it’s really needed. You can also ask about available discounts for:
• Multi-policy (home, car or other policies with the same company)
• Smoke detectors
• Fire extinguishers
• Sprinkler systems
• Burglar and fire alarms that alert an outside service
• Deadbolt locks and fire-safe window grates
• Being 55 years old and/or retired
• Long-time policyholder
• Upgrades to plumbing, heating and electrical systems
• Earthquake retrofitting to make the home safer
• Wind-resistant shutters

Additional Resources
ChoicePoint
CLUE reports
Fair Isaac
To order a credit report, MyFICO.com
For help in determining your credit score, call 800-777-2066
Institute for Business & Home Safety
ISO
-To order a copy of your A-PLUS report, call 800-709-8842
-For up-to-date information on fire protection services throughout the country, see the Public Protection Classification program
National Flood Insurance Program

Watts Realty Team
Kalamazoo, MI
www.WattsRealtyTeam.com

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Home Buyers Insurance Checklist Part 3

Fri, 23 Mar 2012 19:56:00 GMT

Home Buyers Insurance Checklist - Reproduced from The Insurance Information Institute

While House Hunting Continued

Swimming Pool or Other Special Feature
If the house has a swimming pool, hot tub or other special feature, you will likely need more liability insurance. You may also want to consider purchasing an excess or umbrella liability policy to provide added protection in the event someone gets injured on your property and decides to sue you.

BEFORE YOU PLACE A BID ON THE HOME
Check the Loss History Report
Ask the current owner of the house for a copy of the insurance loss history report, such as a Comprehensive Loss Underwriting Exchange (C.L.U.E.) report from ChoicePoint or an A-PLUS report from ISO, a leading source of information about property/casualty insurance. This is a record of insurance claims on the house that can provide answers to two questions that any savvy homebuyer should ask:

Have there been any past problems in the home?
If damage has occurred, was it properly repaired?

Note that prior claims are not a barrier to getting insurance. In fact, sometimes a recent claim can have positive ramifications. If, for example, a roof was damaged by a wind storm and replaced by a new one, this would make the house more desirable to an insurance company. If there have been no claims within five years, there will be no loss history report on the home.

Get the House Inspected
A thorough inspection of the home is very important. The inspector should:

check the general condition of the home;
look for water damage, termites and other types of infestation;
pay special attention to the electrical system, septic tank and water heater;
show you where potential problems might develop;
double-check that past problems have been repaired;
suggest upgrades or replacements that may be needed.

If the inspector raises questions, your insurance company will as well. And, be sure to find out if there is an underground oil storage tank, as many insurers will not provide policies for homes that have one.

Watts Realty Team
Kalamazoo, MI
www.WattsRealtyTeam.com

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February 2012 Housing Statistics for the Greater Kalamazoo Area

Thu, 15 Mar 2012 16:02:00 GMT

The housing numbers are improving for the Greater Kalamazoo Area. Month over month improvements are being made comparing 2011 to 2012.

Based upon the figures and graph below you can see that the overall number of properties sold and the total dollar volume sold was higher in 2012 compared to 2011 numbers. Another positive statistic for February 2012 is the average residential sales price has not decreased when compared to 2011 figures all though the median residential sales price was lower than 2011. From the graph below you can see that pending sales in 2012 (320 units) are higher than 2011 (243 units) which is a positive indicator as well as the actual number of closing increased in 2012 compared to 2011. The final positives for 2012 vs. 2011 are the number of listing entered and the number of active residential listings. The number of residential listings entered year to date is up slightly compared to 2011 which may mean things are holding steady. The number of active residential listings is down in 2012 which means fewer homes are actually on the market giving buyers fewer choices and faster sales.

If you are thinking about selling your home now is the time to put your home on the market due to less competition.

Joy Watts
Watts Realty Team
5071 Gull Road
Kalamazoo, MI 49048
www.WattsRealtyTeam.com

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Tags: watts realty,Buying a Home Kalamazoo,Real Estate Kalamazoo,kalamazoo housing,Homes in Kalamazoo,kalamazoo real estate brokerage,kalamazoo real estate agents,Selling your home Kalamazoo