6 Tips to Avoid the Buying Frenzy

February 20, 2023 by cgrus

*The spring selling season gets started in February*, *but the seller’s seem to lag behind.*

As we start to see longer days and the world has accepted the results of the latest NFL season, the housing market starts to pick up. We see buyers getting caught up in the intensity, which rarely has a good ending. So we’ve included these tips to all buyers to avoid being overly rushed in the home-buying process.

While higher interest rates slowed things down in November, the market is showing signs of a strong market and its important to remember that home buying is a long term decision.

1. Begin with the end in mind

A good line from 7 Habits of Highly Effective People rings true here. Sometimes buyers get nervous too soon about finding a home by a certain date. They want to move by August, so they start getting anxious as the market picks up. We always help buyers count backward from their move date: Closing –> Contract Period –> Offer Period. Typically contract periods are 30-45 days. Getting overly anxious early in the process can force bad decisions, higher offers, and undue stress. Some buyers have no reason whatsoever to be in a rush. They’re in a month-to-month lease, or living with family / friends. While it would be nice to find something fast, jumping into the market and competing in the frenzy is costly.

2. Flexible Closings

One of the most common things buyers tell me is when their lease is up. As a landlord for 20 years and a Realtor for almost that long, I’ve seen many situations where a tenant approaches the landlord at the beginning of the process and asks for a flexible lease termination or month-to-month option. Most landlords like the advanced notice and are cooperative. Some may ask for more rent, but that’s not nearly as common.

Along the same lines, people moving from out of town usually feel the pinch of having to buy fast. Consider short-term furnished rentals and mobile storage options to give yourself some breathing room. Home buying selection is crucial. Rushing can be bad.

3. Broaden Price Criteria

Another regular occurrence is when buyers change their criteria in the middle of the search. This can be bad in many respects. Usually its based on price. Going into the process extra conservatively is fine, but don’t limit the price conservatively on your home search! More commonly than not, buyers try to thread the needle by wanting the perfect home for the perfect price. Be realistic! While a good Realtor should never encourage a buyer to spend more than they should, we find buyers REAL price range after a few trips out. If the buyer passes on listings for the first few months because of restrictive standards, then changes midstream, they might miss out on the best opportunities.

4. Broaden Search Details

Buyers typically start out pickier. The process of aligning realistically with the market we call, “getting into the saddle.” The problem with being extra picky, like being too conservative, is complex. Getting too picky when looking online or being to restrictive in search criteria can cause problems.

One of our goals is to always have the home looking fantastic, both with staging / and furnishing, along with great professional photographs. Not all Realtors do. Excluding a home because of bad photos is missing the point. Not being flexible in location and features really is costly in our current state of low housing inventory. When buyers tell us their goals, in many cases, we already know they’ll need to be more flexible. Keep an open mind!

5. Realize the Fluidity of the Market

The market is fluid, not linear. The market is ever-changing. We can’t predict how it will be, but one common trend is that the springtime (starting in middle of winter) is busy. As we hit summer, people often times slow down the search, and maybe postpone it until fall. There’s picnics, vacations, weddings and float trips; a lot of distractions from house hunting. This might be a time to seize the opportunity. Another aspect of market fluidity is Days on Market (CDOM). People are crazed to find the amazing home that was just listed, while homes that may have been overlooked are still available. Homes that are “back on market” are also great opportunities. Though the contract may fall through due to home problems or inflexible sellers, a lot of time there’s nothing wrong except the buyer may have rushed into things and changed their mind.

“be fearful when others are greedy, and greedy when others are fearful.”
Warren Buffet

6. Don’t Fall in Love before the First Date!

Homes are homes. We’ve seen buyers fall in love with a house or condo, only to find something better down the road. Keep your emotions in check when looking and be open to the possibility that there are other options that may be just around the corner.

Hiring a good, experienced Realtor with an equally good team of support professionals goes a long way towards a smooth and favorable buying experience. Ask questions and decide for yourself, but allow them to share experience and ideas that have accumulated over the years. It always pays off!

St Louis real estate is our specialty! If you want to net the best value when you buy, anywhere in the St Louis, MO area, call us for a no obligation assessment! We work throughout the metro area, especially in Sunset Hills, Crestwood, St Louis City, St Louis County, Ballwin, Chesterfield, Kirkwood, Webster Groves, St Charles,or one of the other areas we serve, simply click the “How-To Find my buyers agent” link at the top or bottom of this page to begin the selling process now. Buying and selling, check out our home seller blog or home selling page!

The New Normal

January 18, 2023 by cgrus

Talk to one of our preferred lenders to learn what lower mortgage rates options are available.

You Pay for What You Get

Higher mortgage rates shouldn’t be a suprise. Besides having SUPER LOW RATES for over 10 years, there were factors that led to our shocking interest adjustment this past fall. Last year when we were hit by the news of the great resignation due to the free money we got from the government, many people had a bad feeling about what would come as a result. That, plus all the shortages and subsequent price hikes made it absolutely necessary for the Federal Reserve to slam on the brakes.

Rates are higher…. Get used to it!

but wait…. Rates AREN’T High?

As a matter of fact, rates are still below average.

average 30 year fixed mortgage rate is 7.75%.
Rates have averaged above 10% for 574 weeks
Rates have averaged above 7% for 1,316 weeks
Rates have averaged below 7% for 1,175 weeks

So it’s been a while since we’ve had high rates, but only because of the great recession and the pandemic.

OK… fine…. Where do we go from here?

Buyer’s have always had options for lower rates. The 30 year fixed rate is especially good for people who plan keeping the same mortgage for 30 years, but who does that? Average homeownership (same home) is around 8% on average, and people keep the same mortgage for around 4-5 years. That being the case, the majority of people would benefit from the adjustable rate mortgage. As of this post, rates for a 30 year fixed mortgage are around 6.375%, and rates for a 5/6 adjustable rate mortgage are closer to 5.375%. Even after the initial term, all reputable banks have limits on how much a rate can change in a year, and if rates have dropped, the adjustable rate drops too.

Don’t Forget!

Keep in mind, when it comes to numbers, sometimes interest rates can be decieving. While the monthly payment is based upon the interest rate, the actual cost of the loan is reflected by the APR (annual percentage rate) which adds the origination fees divided by the number of payments for the life of the loan. The APR and the rate are always pretty close together, so most buyers don’t sweat it, but if the origination fees are divided by the ACTUAL length of the loan (4-5 years on average), the APR is significantly higher when the origination fees are greater.

It pays to pay attention and compare ALL the numbers

when considering loans!

March 20 – Match Day for Medical Residents!

March 20, 2015 by cgrus

Today may be the biggest single day that hundreds of people find out at the same time that they will be living in St. Louis for the next 3-6 years. Almost like the military giving orders or the NFL draft, new MD’s pick their favorite residency programs and locations, and likewise, the residency programs at SLU, WASH U, St. Lukes, MERCY and St. Mary’s pick their favorites. The matching service does the rest.

This organized chaos is something we’ve helped medical residents and fellows with for several years.

Truly, a home buying process for a medical resident is nothing like the traditional home buying process. Without a buyer’s agent that has a unique understanding of the needs fo an incoming resident, there could be problems.

Last week I showed a home in West County. I was told by the agent that the owner was a physician that had to sell because he had purchased too far away from the hospital. Another physician we assisted in the selling process had a buyer’s agent that put him in a community he never liked at a price he would never be able to resell in. Lots of problems can arise if the process isn’t handled correctly. Knowing the unique criteria and timelines that residents have, along with their special financing requirements is crucial.

We started a section on our website especially for medical residents to help them avoid the pitfalls of home buying that can take place due to their difficult and fast paced process of relocation. Visit it or pass it on to a medical resident!

Loan (pre) Approval vs. Loan Commitment

January 25, 2012 by cgrus

The process of getting a home mortgage can be confusing.

Its confusing mostly because its overwhelming. Lender spin accounts for a little confusion too. Lastly, the consumers desire for things to be simple makes it more overwhelming still.

One thing that trips up a lot of buyers is the pre-approval.

There’s the pre-approval mantra we hear so often. Homes listed used to say “bring your pre-approved buyers”, bank tag-lines talk about getting pre-approved, stream-lined pre-approval process, pre-qualification and more. Buyers meet up and tell their Realtor that “the loan is APPROVED, we just need to pick the house.” That tells me the mortgage lender is blowing some serious smoke where they shouldn’t be. That seems to be a common belief among buyers though.

Changing gears a bit, the St Louis Association of Realtors standard Residential Contract has a built in loan contingency in the contract. This contingency is called the loan commitment period, a time after which one can not back out of the contract due to the inability to obtain a loan without being in “breach of contract”. Restated simply, a home buyer has a certain period to get their loan approved. Usually about 3-4 weeks are needed to get this (clear) ‘loan commitment’ from a lender.

Back to the whole pre-approval thing. So if a buyer gets pre-approved before starting the whole real estate buying venture, what else needs to be done? Is the home shopper really “approved”?

The answer is NO.

The pre-approval process is usually a basic analysis of the major qualifying information. A few questions about employment terms, annual income, name, date of birth, social security number and so on. A credit report is run, but otherwise, little if any verification takes place before the buyer is pre-approved. Some lenders go further. They may ask for the last two years W-2 forms. The bottom line is that pre-approval amounts to a preliminary screening of the credit worthiness of a buyer.

The buyer finds the perfect St Louis home with their Realtor of choice, they negotiate a deal and are “under contract. Then what?

There’s a bunch of things we’re not addressing on the real estate side, but regarding the mortgage, here’s what happens:

1. The lender gets a copy of the contract and reviews the terms.

2. The lender will need to meet with the buyer, or work via mail to prepare a mortgage loan application.

3. The loan application, along with 2 years of tax returns, a check for the appraisal and other documentation specific to you will be returned to the lender.

4. Good lenders wait until buyer’s have passed through the inspection period to move forward with appraisals, but once they get the green light, an appraisal is ordered.

5. CONDO’s or HOMEOWNER ASSOCIATION HOMES ONLY -Good lenders get necessary questionaire completed early in the process. There may be a fee for this also. Finding out if a condominium can be financed before ordering an appraisal can be good.

6. Lenders get the application, credit reports, all corresponding documentation and the appraisal and submit it to their UNDERWRITER. Good lenders have “in house” underwriters, since having to submit items to an outside source complicate things immensely.

7. The Underwriter responds to the application at some point with CONDITIONS. These are the conditions that need to be “cleared” for them to approve the loan. The fewer conditions the better. Most good lenders would anticipate what conditions would come up and “put out the fires before they start”. Conditions that come up usually are letters of explanation from the buyer, their employers, the appraiser and additional documentation. Sometimes the underwriter can reject an appraisal completely and ask for a new one.

8. Responses to all the conditions must be submitted to the underwriter, then, ideally the loan passes from underwriting to the closing department. At this point, the buyer or buyer’s agent may receive what is known in the St Louis area as “loan commitment”. Other areas of the country are often times not familiar with this term. Here in St Louis, its part of the Residential Sales Contract.

So between the pre-approval process and LOAN COMMITMENT, there are 8 basic “hoops” that need to be jumped through, plus everything else, from writing the contract through inspections that need to be addressed before the bank can give the real approval. Final approval usually happens when the bank wires the funds and authorizes the title company to “fund” the deal, so BUYER’S, keep this process in the back of your mind when you make an offer and make sure you choose your lender quickly after your contract is written.

The moral of this story: a week after a contract is accepted is not the time to still be shopping rates and interviewing lenders! Talk to your Realtor every step of the way and make sure YOUR THINKING correlates to what you’ve agreed to in the contract and everything should turn out fine.

St Louis real estate is our specialty! If you’re looking for real estate anywhere in the St Louis, MO area, including St Louis City, St Louis County, St Charles, Ballwin, Chesterfield, Kirkwood, Webster Groves, or one of the other areas we serve, simply click the “Search St Louis Real Estate” link at the top or bottom of this page to begin your home search now.

What Do You Do?

January 31, 2010 by cgrus

Buyer's agents clear up confusion

Chris,
My wife & I are looking to buy our first home, and are looking to live in St. Louis City.

Do you give any kind of quick presentation on what services
……….you offer as a buyers agent?

Thanks,
D

Your question is not an easy one to answer, because our services can vary depending upon your needs as a buyer.

As a buyer’s agent, I work with you to find and analyze prospective homes, become educated with areas and choose one that fits. Sometimes buyers have a very good idea of what area they want to live in, sometimes not. We usually consider alternatives that they may not be aware of offering similar types of homes.

Once you have chosen a home you are most interested in, we prepare the offer / contract forms and help to explain the process. We can add in contingencies and explain how your offer can be made attractive to the seller while still getting the deal you want. We provide analysis on home sale prices (not listing prices) and discuss offering price and negotiation strategy.

When an offer is submitted (usually to another agent) we negotiate on your behalf. Our goal is to get the absolute best price for you by explaining how your offer is a reasonable price–where the seller’s asking price is unreasonable.

An accepted offer becomes a legal contract and as a buyer, you are obligated to “perform” in certain areas. We assist you in the process of having it inspected and inform you of everything you need to do and make sure that everything gets done to your satisfaction, in the time frame agreed upon in the contract. A good buyer’s agent is like a quarterback: we coordinate between all key players, the seller’s agent, lender, inspectors, title company, and others needed to have a successful home purchase.

Lastly, we assist with all kinds of odds and ends, meeting repair people, helping you to get the best rates with the title company & lender, lining you up with any needed contractors such as electricians, painters, tile layers, roofers, and more. As we own many properties so we have vast connections. Our goal is to support you in any area needed and share our expertise in homes & homeownership.

Thanks for contacting Premier Realty Exclusive!

Chris

St Louis Home Buyer Guide

January 22, 2010 by cgrus

: Home Ownership Happens!

Welcome to St Louis Home Buyer Guide; the complete, up to date reference for home purchasing in the St Louis Missouri metropolitan area!

As full time realtors, working in the field of real estate every day, a few things become apparent:

A great deal of confusion exists on how to buy a home.
Similar levels of confusion exist on where to get answers.
Many sources of information seem to add to the confusion.

Every buying scenario is different, but home buyers have goals. There are specific “needs and wants.” Whether its area, style, size, amenities, use or investment potential; it’s important that home buyers identify what is important to them before they make the move. This isn’t always easy.

Other people’s priorities and opinions always seem to surface. Whether its family, friends, complete strangers or guides, someone looking to buy a home has a thirst for knowledge and often will seek advice from others that may or may not be the best resource. A good buyer’s agent can be very useful in helping a buyer digest all the information and offer current, local and relevant information for an ultimately balanced approach to buying a home.

Thanks for visiting StLBuyerGuide.com and come back often for updates and St Louis home buying news!

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Making Sense of the Home Buying Process

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