Peggy Gachet's Real Estate Outlook

We are so proud of our St. Johns County Schools. 

The impact they have on property values in our area is immense.  Our Career Academies are second to none and continue to receive award upon award.  Congrats to our teachers and the administration.
http://staugustine.com/news/local-news/2013-10-29/two-st-johns-county-academies-earn-model-status#.Um-yxZ3D8ic

If your property values are suffering, get involved with the schools.  Better schools attract stronger families thus gradually increasing the value of our homes.

Peggy Gachet's Real Estate Outlook

 Looking for a Mortgage Today?  Let's analyze the biggest hurdles in the world of lending.

 
The days of easy mortgage money are long gone!  In many regards the changes are positive, but in reality the pendulum seems to have swung too far the other direction. 

Lenders are looking at a much larger profile of the buyer than in the past.  Credit scores are directly tied to the rates they offer.  The FICO credit score bar for approval of home loans has moved from a minimum of 680 in 2006 to 740 in today's market.

Even credit scoring is changing. VantageScore, a new scoring method created by the three leading credit bureaus, has emerged and is gaining popularity. VantageScore is adopting the same ranges as FICO, but scores differently, at least for now. FICO is making changes to fall in line with the new VantageScore.

Buyers today have to provide more income and asset documentation than ever before.  If anything looks out of the ordinary, rest assured the underwriter will not only take a closer look but may turn the loan down.  The fact that one could actually pay cash but has elected to get a mortgage doesn't always factor into the equation.  We'll just call that over kill of legislation.

Requirements - don't get too comfortable with the guidelines published.  They change regularly.  The loan process may start with a required credit score of 740 & 36% debt to income ratio, 20% down and stable employment just to change before the process is completed.

Another frequent hurdle is a low appraisal.  Since appraisals are done on a "look back" approach they take past sales into consideration.  Seldom will pending transactions be used as a factor at all.  We've seen some improvement in pricing, but it takes time for appraisals to catch up with current market trends.

Condo financing faces even more hurdles than single family homes.  The lender is now reviewing the association documents, financials, rental policies, occupancy ratios and more.  Most lenders require 20-30% down for a condo purchase, and I've seen it go as high as 40% for investment purchases.

Have we eliminated the chances of home ownership for low income buyers with all the new regulation?  Not exactly: The USDA is still approving loans in rural areas for 103.5% of the sales price.  In fact a family of four with a household income of approximately $45,000 annually is eligible to purchase a property valued at $77,400.  The program is designed to assist the low and very low income buyers.  There is even a payment subsidy program available is some cases.  While the island isn't considered rural, there are still communities within our county that qualify.  If you know anyone who may qualify, they can get more information on the USDA website.

There are still great rates out there for purchase or refinance.  Just be prepared for the mountains of documentation that may be required.  If you are selling, I suggest you start packing the boxes, but don't move out until loan approval is received.

Published in the Marsh Creek Jounal May 2013.

Peggy Gachet's Real Estate Outlook

What Happens when a Landlord Sells?


The hazards of renting a property in this market are abundant! The most important thing to know is that every state is different and knowing the law in your state is very important.  Local Realtors should be prepared to discuss this with prospective tenants/landlords and the information below applies to Florida.

*  Know who the REAL owner of the property is.  Understand the rates and terms before offering a deposit.  There are so many scams today a prospective tenant should either work with a Realtor or do research on their own.  Get the facts!

*  The lease should cover expectations for showings.  Have a clear understanding of expectations for showings and be prepared to abide by them.  

*  A lease normally survives the sale.  If an owner desires to sale the property, the lease and terms are provided to the Realtor and/or buyer.  Any purchase agreement is subject to those terms.  All changes to the terms should be negotiated prior to closing.  This will enable the tenant to negotiate any change in their lease with the current owner.  It is the perfect time to discuss moving expenses, deposits on a new property, release of any existing deposits and any other terms important to the tenant/landlord.

*  Short sales and foreclosures are abundant and if the tenant isn't working with a Realtor, they will want to know in advance if the owner is current with their lender.  If not, realize that a foreclosure offers no Real protection.  The tenant could find a notice to vacate posted with little notice, in which case the deposit is likely a total loss unless recovered in small claims court.  Some lenders will allow the tenant notice or a "buy out" of the lease but remember, Nothing is predictable in those situations!

Peggy Gachet's Real Estate Outlook

Buying a High End Home?  Take Note!
I found this article to be interesting for anyone planning to purchase a high end home.  The rates are still good for conforming loans but inch up when purchasing a home above 450,000. 
http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=4&id=298099

Peggy Gachet's Real Estate Outlook

Selling?  Don't Make These Mistakes!

What do you see upon entering the home?  Gym equipment or office furniture in the dining room?  Exercise equipment in the den?  Not a good idea!  Not only can most buyers not visualize how they would use the space it provides them with yet another objection to overcome.  It also makes the rooms look smaller.  Is the garage used for storage?  This is the perfect time to rent a storage room, rearrange furniture and download the garage. 
Making these minor modifications will allow the photos on line to capture and keep the attention of shoppers

Another mistake as a seller is staying home for showings (especially when pets are involved).  When a seller is present for showings, the buyer is reluctant to open closets and cabinets for fear of infringing on the privacy of the seller.  They may otherwise, rush the showing to minimize the inconvenience and can be offended by any line of questioning or the presence of pets. 

Removal of clutter is probably the easiest improvement to make but one of the hardest for a seller to do.  The "chef" wants all the pots, pans and small appliances readily accessible.  Our elders fear packing away all the memories and moving on.  Young parents refuse to inconvenience an over indulged child by packing away some of the toys.  Parents of teenagers refuse to hold their child accountable for the mess found in their rooms and closets.  Getting the kids involved in the process is not only a great teaching opportunity it can add value to the bottom line. 

The lists goes on to include dirt (unseen by many sellers), pet hair and odors (pet owners have become accustomed to), a dirty entry door, over done/grown landscaping, stuffed closets, smokers and more.   

Since St. Augustine is a coastal community a lot of our buyers are not local.  The seller is seldom given a chance for a second showing to correct the first impression.  Even the buyers who aren't ready to make an immediate purchase remove the property from their lists of possibilities and refuse to reconsider even after improvements are made.

Peggy Gachet's Real Estate Outlook

Ever Thought About Selling Your Home Furnished? 

If that's a question you are currently asking yourself, ask just one more!  Is there a demand for furnished homes in your market?

 

A local Real Estate Professional should be able to guide you through the decision making process. Depending on the quality and décor it may add value through the eyes of a buyer.  In many cases however, it can distract from the sale.  It may help to visit a few model homes in your area to view the latest trends.  I recommend you take a camera and take lots of photos.  Then when you go home, take photos of the same room in your home and compare the two.  If your home looks like a model the answer may be "go for it".  Otherwise, your Realtor should be able to offer suggestions for discarding used furnishings.  Auction houses, consignment shops and of course donating to a charity is always an option.

 

Of course, location has a lot to do with the decision making process.  Resort communities frequently sell with the furnishings in place.  The buyer can then take their time replacing any items they aren't fond of and simply making the place their own.  Remember to remove any items you may not want to convey with the sale before the prospective buyer sees the property.  It's easier to negotiate a offer since "items" will not come into question.  If that's not possible, be clear with your Realtor of any "exceptions" that will be made at the time of listing.  Ideally, an inventory list can be presented to the buyer prior to their first visit.

 

Finally, I recommend you have a clear understanding of how your decision will affect appraisals, taxes, fees, financing, etc. so the best decisions can be made for your situation.  

Welcome to my first post!

St. Augustine Lighthouse

My name is Peggy Gachet and I am excited to share with you some valuable insights on real estate and life in St. Augustine!!!

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