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Lenders are making it harder to buy! The rates are at historical lows! Just far more hurdles to jump!

     All lenders are becoming much more selective in who they will give a loan and what type of properties they are lending on.  Getting a local lender is the best way to start the process.  Out of town lenders are short on people and specifics.  They have really hard times closing on time and getting answers.  Its always the last minute.  This has been my experience of late.  There are several thing to do early on in the process before you actually start the process.

1.  Find a local lender that can do the loan and complete the process on time.  Get an idea of what your payments are going to be.  Give them a round number to quote you on.  They should be able to provide you with a truth in lending statement that will have your projected cost.  Not the exact cost as the property itself has to be known for that.  Find out the down payment that you are putting down.

2.  Know the type of loan you are getting.  Is it Conventional or FHA ?  Not all condos will qualify for certain loans.  Some condos will not qualigy for either.  The value of an FHA loan  is that it has a lower down payment and less stringent lending standards for the buyer.

3.  Rates are good once you have a contract signed.  You can get quoted on one but it will change daily until you lock in the loan.  Ask your lender about a float down feature.  If rates fall can you then get the lower rate ?  How long once you lock your rate in is it good for?

4.  Condo Insurance is in the condo fees.  The contents of the condo however are not included.  You will need to get an HO6 policy for that coverage.  See recent article on Condo Insurance, an HO6 policy.

5.  Appraisals are taking longer.  There are many more questions asked by all in the process.  The underwriters and the PMI companies are having a hard time responding to the needs of the purchaser.  Give yourself another week for the process.

    So start early and ask lots of  questions.  Ask about the details!  Ask friends what their experience has been lately.  As Realtors we know who is on time and makes it easy. Don’t hesitate to ask?

mortgage-lending-on-your-new-orleans-condo

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Timing in Real Estate is Key for Buying and Selling ! Now is the season !! Its Busy right now.

     Real Estate is seasonal but its very hard to judge when the season starts.  It started for most agents 2 weeks ago.  It was like someone shot a cannon off and the market filled up with buyers.  I thought it would be after Mardi Gras but nothing happened.  Then I thought it would start in March after Easter.  Then I thought is would happen after daylight savings time started.  It was close after that time that it really picked up.

    The interest rates are at 5%.  There are willing and nervous sellers.  There are some nice places in all price ranges.  The better condos and homes tend to come on the market this time of year.  People are moving, changing  jobs, moving up, moving in and moving out.  The sellers and buyers that fall into these categories are serious.  The Rent versus Buy is strongly leaning to buyers at this time.  The prices are leaning to buyers.  Just wonder what took so long for Buyers to start looking.  Psychological maybe?

timing-is-everything-in-real-estate

        Sellers need to make sure their units are priced correctly and compete well with the competition.   Are they ready to shown easily and quickly.  Are the places looking great with all the little issues having been taken care of.  People will buy the best looking properties.  Many, many people cannot see around a mess or lots of defects even if small.  You only get so many chances as a seller before your property gets stale in this market.  Its show time so act  like your condo is in a beauty pageant.  The winner sells.

       Buyers need to be ready.  Getting pre-approved and sitting down with a lender is a great way to start the process.  I would sit down and talk to an agent about the process that is used to being a buyers agent that knows the properties.   Getting started on the Internet is the way most buyers start looking at properties.  Its a great way to start but it has it limits. 

     Having an agent while you are beginning the process is a great step the right direction.  You are learning  learning the pros and cons of complexes, neighborhoods,  resale values, current and past pricing.  Think about resale values and local real estate trends when looking.

    Just call me when you are ready.  Eric

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New Orleans Buyers Agent, What exactly does that mean to you?

      A buyers agent is an agent working for you in the purchase of a home or condo.  This agent in Louisiana can list properties as well sell them but more than likely will not sell you one of his or her  listings.  My number one goal as a buyers agent is to match then buyers needs with the properties that are on the market or may come on the market in the future.  One thing I focus on is how well the unit will sell in the future when you are ready to sell.  What is the future value of the condo going to be?

     Does the condo  have value?  A Buyers agent should tell you what the condo is worth, this often times is different than the asking price.  Figuring out the asking price may be the seller or their agent.  I can look up in the property records or MLS and see what the seller paid for the unit and when.  In this market most things have been flat for 3 years.  If the person overpaid for the unit, I will tell you.

     What are the pros and cons of the unit?   How does this stack up against other units that have just sold or have been listed in the condo association.  Are the trends positive in the complex.  An agents experience will help you with this. 

    Are there any past assessments in the condo association and how likely will this happen again?  What do the condo documents say that may have some link to future value?  Are there going to be financing issues with the condo association? 

     What do your condo fees cover?  This fee may vary depending upon the condo association in what it covers.

     A buyers agents can lead you to some of the better title companies, loan officers and how good their deals are?  They will all save you money.  They are not all equal and its easy to avoid a horror story.  Just ask me.

      Inspections are generally easy on condos but if we find things that are broken your agent should be your advocate in getting those items fixed in your behalf.  The agent should have enough experience to know if the problem are major or minor.

     These are but a few of the questions that a seasoned buyers agent should be able to help you with.

Historic Condo on St. Charles Ave.

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Where and When do I start on my New Orleans Condo search? When, in 2009 of course!

      I often get asked how do I start my search for a New Orleans condo?  Contacting an experienced real estate agent who deals with condos is a common way to start.  I will then ask you several questions so I can determine what you are looking for.  I need to know if you know the price range that you want to be in?  Have you talked to a lender to get some ideas as to the numbers?  Where would you like to be?  Once I know this I can give you some of the better ideas and guide you through finding the best possible choice.

    As a real estate agent I get paid by the seller a commission for selling you the property.  Our function is to take your ideas and needs and then to come up with a plan to find you that unit.  I will then give you the pluses and minuses of each of the units that we see.  My take is always on the value and ease of reselling the unit that you buy. 

     The smart starting plan is to get qualified for a loan or at least know the numbers as to your note, taxes and condo fees.  This is the best way as then you know what your options are.  This is a great first step.

     The next step is to get a feel for the area or areas that your interest lies.  I have seen thecomplexes and hundreds of condos before so I can guide you once I know the type of unit that you would like.  I can e-mail you the selections so you can get some ideas.  We should then talk about the units and sit down and go over the process.  Its your time to ask questions and my time to listen to your needs.  The next step is to begin viewing your favorites and the ones that I think are good buys that meet your criteria.   

     I can then set you up to see all the new listings that are going to be coming on the market.  This is a good time to get an idea of the past sales so to give you an idea of pricing and what the history is in the area.  You of course are going to rule some out for various reasons.  Best to rank the units as you look at them and take some notes.  Each unit will have its positives and negatives.  This is the search that leads to writting an offer.  Recent articles that tie into this post: Interest Rates Drop, New Orleans- A Buyers Market, To Buy or Rent is a great question?

    

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Rates Have Fallen to an All Time Low this Century! Can that be correct?

     I was talking to Julie Baudier, my favorite lender today about the drop in interest rates and the effect it would have with people looking to purchase a new place.  Its never too early to get an idea of what your note will be and what kind of payment you will be comfortable with.  Doing this upfront is aways a good idea and great first step.  If you are looking in the Spring this is the time to start learning about the market and the lending process.  This is especially true of first time buyers but still true for experienced buyers. 

    Julie says  “Six weeks ago a client signed a purchase agreement for $260,000 he was borrowing $208,000.  We locked him in at a rate of 6.25% his Principal and interest payment was $1288.00.  I lowered his rate today to 5.375% and his interest payment went down to $1174.00.  His payment is now $114.00 lower than he originally panned.  Lower rates save you money and increase the amount you can afford to but.”

     Here are a couple of tid bits that we often forget to figure into the purchasing equation.  Your home or condo is an investment and it nice to know some of the numbers. 

     An easy way to remember is that each quarter of a point will mean a drop of about $16 per every hundred thousand that you are borrowing.   Another factor that many forget about $100 of your payment per 100k goes to pay day the balance of the loan in month one.  This is building equity that you will not get renting. 

     The effective rate will be much lower when you add in your interest deductions.  The higher the income the bigger savings.  For example if you borrow 200k and you are in the 25% income bracket at 5.5% you payment is $1126 without escrows.   Your interest is about $930 a month of when 25% or $372 is a tax break. 

      Your effective payment quickly becomes $1126 minus $372 tax break minus equity $196 or $584 per month.  Of course you figure taxes and condo fees into your equation.  Any appreciation is going to be tax free for most people.

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New Orleans Condos, The New Orleans buyers agent, how he can help you? Much more than just Pricing ?

     In Louisiana the agent working with you to find a condo is in effect a buyers agent for you.  Choosing an agent is very important.  An experienced and knowledgeable agent knows the pitfalls, upsides and various condo trends in the market.  Some areas are going to be hot and some areas not.  Some types are going to be slow while others much faster.  Some of course are going to be overpriced.  Some are going to be priced correctly. 

     Square footage  is often overdone in determining the value of the condo.  The buyers agent should be able to relate past sales with a first hand knowledge and how they compare with what you are buying. Lets sit down a coffee shop like the one below and talk about it.  Lets begin our homework.

Warehouse District Coffee Shop

    In this blog lets just concentrate on pricing.  Many times the seller has a figure in mind and does not listen to his agent or the numbers.  Some times the seller will take the advice of the agent and go right at the price.  The seller many  thinks his unit is better than the competition without ever seeing the competition.  Its not what the sellers is asking that is the important number, it is what the unit is actually worth. 

     Pricing can be somewhat subjective but the pricing is going to be in a range depending on what has been done to the unit to upgrade it since the seller bought the unit. How it compares to the units that have just sold and are currently on the market.  Things that effect pricing to look at include: Read the rest of this entry »

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New Orleans Condos, Your condo Inspections? One more Step!

     Once you have your offer accepted by the seller you have a certain number of days to inspect the working parts of the condo.  This period is usually 15 days but doing it as quick as possible is the best rule and you may need some followup inspections.  When you made the offer you looked at the condo and considered everything to be in working order.  This is your chance to inspect the condo to make sure all items are working to your satisfaction.  It is quite normal to find some items not working properly.

    Its advisable to hire a professional inspector so he can go through the list of items he has to check.  He will inspect everything from the electrical plus to the shower to the air conditioner unit.  You want to know what you are purchasing.  It is always advisable for you to attend the inspection so you can watch and really have time to look around.  This is a time to ask questions.  The inspector will write up a report and give it to you before we leave or e-mail it to us.  This gives you a back up from a professional to go to the sellers with the items that we have found to be deficient.

     Many times you will pick up on cosmetic issues that need addressing while the inspectors are checking the mechanical items.  Mothers are really great when it comes to this facet of the inspection.  We will combine the lists after both are finished.

The New Orleans Condo Inspector

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New Orleans Condo Fees, Always going up, maybe not?

     Condo fees seem to always be increasing and since Hurricane Katrina that has been the case as insurance companies rushed to raise rates — doubling the insurance on the buildings and in some cases even more.      Since Insurance is a major, major part of your condo fees, your condo fees had to go up.  Now we are beginning to see quotes being lowered which means the insurance rates are coming down.  This may not lower your monthly fee as other costs will continue to go up. 

     Many condo associations may opt to build up the reserves that may have been used for any number of reasons.  Its always good to have a reserve as every insurance policy has a deductible.  The trend has been to have a higher deductible.  Conforming loans want no more than a 5% deductible on the insurance policy.

     Its always good to check the latest business statements of your condo association to see what is being spent.  If you use a lender they are sure to look to make sure certain conditions are meet.  The lending rules have tightened up in the last couple of months and the rules seem to change monthly.   

     This is a Mardi Gras Bead Tree that tends to bloom the week of Carnival and can bloom all summer.  May need fresh beads every now and then.

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Eric Bouler Realtor
Gardner Realtors
Metairie - New Orleans, La. USA