TEAM EMPOWERMENT MORTGAGE CHATTER: June 1; Should You Rent or Buy in This Market?; How To Make An Offer That Will Get Accepted; Foreclosure Starts Fall, But Pipeline Full

“If you care enough for a reasult, you will most certainly attain it…” – William James: Was a psychologist and author




Families are trying to determine whether or not now is the time to buy a home. Some are advising these families to sit out the current real estate market and instead rent for the next year or two. We do not agree with this advice. Homeownership means a lot to a family. We also realize that the financial aspects of purchasing a home today can be a concern. The challenge is any advice given by someone in the real estate community is immediately dismissed as self-serving.

For this reason, we want to give you the advice of three entities not involved in real estate sales:


“When we examine the relationships between mortgage payments and income and mortgage payments and rent, we see that these relationships have also reverted back to or below equilibrium points. In some cases, particularly when mortgage payments are compared to the cost of renting, home prices actually appear cheap.”

JP Morgan

“JPMorgan analysts said ‘the continuation of falling rental vacancies and rising rental demand will make home buying increasingly attractive’, especially as rental prices increase.”

Business School professors Eli Beracha and Ken H. Johnson

“Fundamental drivers now appear to be in place that favor homeownership over renting in the near term future…

The second finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting…

Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

Bottom Line

Is it better to rent or buy? According to those quoted above, it seems it may be becoming a no-brainer.


You have finally found the house of your dreams. It is priced right and is receiving a lot of attention from other buyers. You don’t want to miss this opportunity so you are ready to put in an offer with the real estate agent immediately. What can you do to guarantee your offer is the one accepted? Financially, offers can be broken down into three categories:

1.) An All-Cash Offer

Obviously, a cash purchaser is always favored by any seller. In today’s real estate market, an all-cash offer is even more enticing. Last month, one in four real estate transactions were impacted by a low appraisal. An all-cash buyer eliminates the need for the bank appraisal.

2.) A Non-Contingency Offer

If you don’t have the cash reserves for an all-cash purchase, the next best thing would be to make a non-contingency offer. To do this you should be already pre-approved for a mortgage and have your current house already in contract. This gives the seller the confidence that you are already a qualified buyer who will be able to complete the purchase.

3.) A Contingency Offer

Some buyers start the process of looking for a new home before their current home is sold. This could be a big mistake. If you find the home you were hoping for (perfect for your family AND priced right), it will be very difficult to get your offer accepted because you are not actually qualified to buy.

Asking a seller to wait for your home to sell is somewhat unreasonable in today’s environment. One of the reasons you would want the home is because the seller priced the home at a value to sell it NOW. They want to know it is sold when they accept an offer. They normally will not even entertain a contingency offer.

Bottom Line

Unless you have the ability to purchase with cash, the best thing to do is to be pre-approved for a mortgage and have your current house already in contract before looking for the home of your dreams. That guarantees you will get the home you love at a price that makes sense.


Foreclosure starts dipped below the 200,000 mark during April for the first time in years, but the foreclosure pipeline remained bloated by more than 4 million homes whose owners are in foreclosure or delinquent by 90 days or more.

That’s according to the latest numbers from loan data aggregator Lender Processing Services, which show foreclosure starts fell nearly 31 percent from March to April, totaling 187,423 — a 14.7 percent decline from a year ago.

LPS estimated that 2.18 million mortgages were in foreclosure, down nearly 2 percent from a record 2.22 million in March but up 9.5 percent from a year ago.

Another 1.96 million mortgages were delinquent by 90 days or more in April, down about 1.5 percent from the previous month and 29 percent from a year ago.

All told, LPS tallied 4.14 million loans in foreclosure or delinquent by 90 days or more at the end of April.

Those numbers are in line with the Mortgage Bankers Association’s most recent National Delinquency Survey, which suggested about 4 million residential mortgages were in foreclosure (2.24 million) or delinquent by more than 90 days (1.78 million) at the end of the first quarter.

LPS data showed a 7.5 percent month-over-month bump in the number of homeowners behind on their mortgages by just one payment, to 1.63 million, to roughly the same level seen a year ago.

While LPS estimates 60-day delinquencies grew by 1.2 percent from March, to 615,608, that’s down 14 percent from a year ago.

The total number of noncurrent loans stood at 6.39 million loans, up less than 1 percent from March and down nearly 11 percent from a year ago.

LPS estimates that the number of noncurrent loans has fallen 21.2 percent from a peak of 8.12 million in January 2010, when the number of homes in foreclosure or delinquent by 90 days or more totaled 5.17 million.


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