Our weekly wrap up begins with the weekly Freddie Mac survey of mortgage lenders. The weekly average rate for a thirty (30) year fixed rate mortgage dropped slightly to 5.00% holding in the 5% range. The fifteen year fixed rate showed slight decrease at 4.36%. To obtain the rates, an average of 0.7 point down was required to get the rate. The West region survey has been showing a slightly higher amount down to get the rates but is coming into line with the average. The U.S. Average for a five/one year adjustable rate mortgages is 3.97% with 0.7 fees and a margin of 2.74.The one year ARM (treasury rate linked) is 4.07%. Treasury bond rates and yields decreased slightly having the impact of keeping rates low.
If you are paying attention to local real estate, you may have noticed that there are several auction events underway this next month. Participating in an auction is tricky business and typically discouraged against. The allure of finding a bargain can be hard to resist. If you can’t resist, check out the below tips to getting started....
Understanding the home, neighborhood dynamics and who the competition may be are critical success factors.
- Be knowledgeable about the area. Check out our real estate stats about your area of interest. If the area is seeing strong activity, don’t expect a bargain. Competition will be fierce with hungry bargain seekers. If the area is lukewarm or even weak, pressure on bidding shouldn’t be so intense. Of course, an individual house may bring an unexpected slurry of bidding due to unique features, strong resale expectation or other factors.
- Don’t become emotionally attached and have a ceiling to what you are willing to bid. If you are well versed in what the house’s value should be and can stick to that, you won’t overpay and regret the bid later. Seller’s will tend to accept a slightly higher, financed offer than one that is a little lower and all cash. Keeping this in mind when determining a ceiling is important.
- Have finances in order; cash ready or a letter from your lender confirming approval.
- Work with a buyer’s agent/Realtor. Understanding the market and negotiating the closing can be tricky in the current marketplace. The risk of a $10,000 error isn’t worth it.
Homes at auction are typically sold “as is”. Taking care to determine the exact amount of investment needed to bring the home into top condition is another critical success factor. Based on our experience, most buyers will find that they can find a comparable home not under short sale distress. This is due to the recent alignment of seller’s expectations and acknowledgement of foreclosures as a part of the appraisal process.
