Attention home buyers and sellers: What a Federal Reserve interest rate increase could mean to you!

Beautiful North Fork Produce - Coming Soon!

Last week the Federal Reserve released a statement indicating that they could increase interest rates as soon as June of this year.  Since then, there has been a lot of squawking about whether or not this is realistic, and whether or not any increase will be significant. Should you believe that this will happen, this is how the hike could affect almost all of us.

1. The good news: A rate hike means that the Fed thinks the economy is healthy, based on the indicators. While wage growth has been around 2%, not the preferred 3.5%, wages traditionally fall behind the other indicators and is not a required precursor to a rate hike.  On the other hand, unemployment is down to its lowest level since 2008!

2. Buyers beware: Mortgage rates will rise. "People thinking of buying a house should act quickly to lock in today's low rates" says Dean Croushore, former Philadelphia Fed economist (http://money.cnn.com/2015/03/19/news/economy/federal-reserve-statement-interest-rates/). We are already seeing an increase in the amount of buyers coming out to the North Fork to take advantage of low rates, as well as many local buyers who can now afford to purchase a year-round residence. Competition is up since there is not a lot of inventory available yet, and we have seen an increase in bidding wars or multiple offers on properly priced homes.

3. Sellers beware: Mortgage rates will rise! (As will auto loans). If you read the above, the downside for sellers is that some buyers will no longer be able to afford to purchase at current prices, and we may see a price drop.  Right now is a GREAT time to list your home for sale, before any significant changes occur in the financial markets.

4. Stock volatility: Any increase in interest rates could make stocks less attractive to investors, and possibly trigger a 'correction' (drop) of 10% or more. This will make 'savers' more profitable, since interest rates will also increase in bank savings accounts, and also make bond investment more attractive.

5. The real deal: No one really knows when (or if?) this hike will happen, but chances are very good it won't be before June, possibly as late as September. This gives buyers a chance to lock into a great mortgage rate, and sellers a window to list and sell their home before a rate increase stalls or reduces any recent gains in selling prices.

I constantly monitor the local market - click here for my most recent Market Report, and check the 'Links' on the right of the page for previous reports.

Working hard to bring East End buyers and sellers together - Certified Buyer Representative - call me today at 631.766.2598

related links:

http://www.reuters.com/article/2015/03/24/us-fed-bullar-rates-idUSKBN0MK0YS20150324
http://money.cnn.com/2015/03/19/news/economy/federal-reserve-statement-interest-rates/

http://money.cnn.com/2015/03/18/investing/federal-reserve-rate-announcement/

http://blogs.wsj.com/moneybeat/2015/03/24/fed-to-markets-get-ready-for-higher-rates-but-not-too-high/

#homebuyers, #sellers, #realestate, #northfork, #mortgage, #mortgagerates, #homesellers

Buyer Tips: 6 Reasons for buyers to hire an agent (or what the listing agent won't tell you)

Remember spring?

In New York State, it is usually assumed that a real estate agent represents the seller, unless the buyer hires an agent to represent them - a buyer agent. What does this mean to you, the buyer, and why should you do it? You're a savvy internet user, and get open house alerts from Zillow or your local MLS, right? You have mobile apps that instantly send you the selling information of any sign you pass? Won't you get a better 'deal' with the listing agent?  (The short answer is no - they work for the seller, and it is their job to get the highest price for the house!).

What can hiring an agent do for you that you can't do for yourself? (By the way, in most cases, this is absolutely free to you, the buyer!).

1. Represent your interests with undivided loyalty. When I show you a house working for the seller, I am obligated (by law) to try to get you to buy THAT house at THAT price. My role as a buyer's agent is to provide advice, expertise, information and counseling, not to SELL you any particular house.

2. Do a market analysis of recent comparable sales to help you reach an appropriate offering price. A realtor normally does a comparative market analysis for prospective sellers to show them what is available, under contract and recently sold for similar homes in their area.  This is a large factor in determining the listing price.  A buyer agent can and should do a similar analysis for you to help you get the best home for the best price.

3. Pull public records to find out about any underlying issues with certificates of occupancy, municipalities, building departments, etc., to make sure that you are making a sound purchase. Better to find out as much as you can before contracts are signed, or before you pay for an engineering inspection.

4. Point out both the strengths AND weaknesses of a prospective purchase. A realtor notices things that you may not, especially if you are in love with the home. That slight discoloration on a ceiling might signal leaking from a bathroom above, but a crack in the sheet rock in a newer home that concerns you may just be the normal settling newer homes can go through.

5. Put your money to work for you. While legally, all brokers work for the seller unless there is a buyer-broker contract in place because the seller 'pays' the commission, in reality, who is it who brings the money to the transaction? The buyer! One way or another, the commission comes from the proceeds of the transaction, which is brought by the buyer. So would you rather pay someone to represent you, or pay someone to represent the seller?

Click here for my latest East End Market Report ( 2/15/15 - 2/28/15)