Home-Buyer Confusion

With the plethora of information one can find on the internet about real estate, today’s home buyers tend to be fairly knowledgeable about the home-buying process. However, there are still a few points of confusion, a new survey by Zillow of 1,000 potential home buyers finds. 

Here are the five main areas of confusion the survey revealed: 

1. Mortgage insurance: 41% of buyers think they will have to purchase private mortgage insurance, regardless of the amount of their downpayment. 
• Reality: Buyers only need to purchase PMI if their downpayment is less than 20 percent of the home’s purchase price.
2. Appraisals: 56% of the buyers said the purpose of the appraisal was to determine if a home was in good condition. 
• Reality: That’s the purpose of a home inspection; an appraisal estimates fair market value. 
3. Home owner’s insurance: 37% of home-buyers said that buying home owner’s insurance is optional. 
• Reality: Lenders require home-buyers to purchase homeowner’s insurance. 
4. Appreciation: About 42% of home buyers believe home values will appreciate by 7 percent a year. 
• Reality: Historically, home values in a normal market appreciate by 2 to 5 percent in a year. 
5. Ownership: 47% of home-buyers said a prospective buyer owns a home after the purchase contract is signed. 
• Reality: The purchase and sales agreement is the beginning of the closing phase, but it can be a long process until they finally take ownership. 

Source: Zillow Inc.

If you have any questions on the complicated and confusing home-buying process, sign up to receive a FREE interactive cloud-based presentation on the entire home buying process, created of course by Jonathan Ghaly. 

August Denver-metro home statistics

3,079 home sales closed in the metro area in August 2010


23,615 homes in inventory

6.4 Months of inventory, meaning we are in a buyer's market


- Prices have remained fairly stable. The median price for homes sold in August was $239,900, compared with $240,000 in July and $227,000 in August 2009.


- The median price of condos sold rose to $130,000 in August from $129,000 in July but is down from a median sales price of $144,500 a year ago.
 
Sales have slowed down alot since the tax credit expired, but that is just making seller's more desperate to sell, and giving buyers more leverage to buy, especially at 4% interest rates, which will save you about $25,000 over the life of the loan... much more than $8,000.
 
Click here for more trends!!

$8,000 Tax Credit Q & A