Ask A Realtor - Peoria, IL

Questions to Realtors:

You can ask a Realtor® a question by sending it to us at:
admin@greaterpeoriahomes.com

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May 2007 - I read this month that the National Association of Realtors expects
home sales to drop this year and that the average price of homes sold will drop?
Is this a good time to buy or sell?

Yes, you are correct. The number of homes sold this year is expected to fall due in part to
sub-prime mortgage failures. This is discussed below in a question from March 2007.
Lenders are limiting home loans in response to many borrowers who defaulted on their
loans. I believe previous years home sales were inflated due to the fact that lenders were
loaning money to people with poor credit so they could make a quick buck. More homes
were sold but some to people who then defaulted on the loans.

The NAR also projects that the average price of a home sold will fall this year. Again this is
not a long term problem. I see part of this due to the fact that many baby boomer's are
downsizing their homes for retirement. They realize that the big homes will be too big to
heat and cool. They also want homes with one level so they don't have to deal with stairs
in their old age. If you are selling a smaller home the next few years will be great. Baby
boomer's will be competing with first time home buyers for your smaller house.

May 16, 2007 - As an update, the Illinois Association of Realtors has announced that the
average price of a home sold in Illinois during the first three months of 2007 is actually
slightly higher than one year ago.

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April 2007 - I have heard that the housing market has bottomed out and home
sales are now rising? Should I buy before prices rise because of more demand?

The National Association of Realtors has recently said its Pending Home Sales Index has
risen in February. This index has stayed level since July 2006 and could indicate that
housing demand will not get any worse, only better.

You need to understand that this index is based on home sales throughout the country.
We see the national news report about home sales in other parts of the country and
naturally assume that it applies in the Peoria area. This is not always the case. Growth in
Peoria is slower and steadier than some other parts of the country. We don't see housing
prices rise drastically like in areas of the north east. We also don't see prices fall
drastically because of businesses relocating or going under.

Is it a good time to buy? In my opinion it depends on your current situation. Are you
currently in the market to buy a house? Don't jump into a home purchase if your finances
are not in order, if you are still trying to decide where you want to buy and the options you
need. If you currently looking for a home and are ready then anytime is a good time to
buy. A Realtor can help you find the perfect house that meets your needs much faster
than going alone.

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March 2007 - What is a sub-prime mortgage and why are they in the news?

A sub-prime mortgage is a loan made to someone who has a poor credit rating and/or
does not have a study, verifiable income. Interest rates and loan fees are higher because
they are based on the borrower's credit rating. More loan applications are rejected and a
higher number of the borrowers default on the loans. This increases the costs and the
interest rates offered.

The good news here is that many people who could not get a loan to buy their own home
now had the chance. The bad news is that many lenders that specialized in sub-prime
mortgages have went out of business or were bought by others lenders as more and more
borrowers defaulted on loans.

If you have a poor credit the best thing you can do is hold off on the house and work to
improve your credit rating. Make payments on time, create and follow a budget, and get
help from credit counselors if needed. It is great to buy your own home but you also need
to be able to afford it and keep a roof over your head.

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January 2007 - I'm interested in buying a house this year. How much can I expect
to spend to hire a Realtor to help me?

You should not have to pay a Realtor to help you find a house, negotiate on your behalf
and work with you till closing. Your buyer's agent gets a fee from the listing agent for
bringing them a qualified buyer and helping them sell the house.

If you see a house that you are interested in just remember that the best person to help
you is not Real Estate agent who is selling the house. Their name will be on the For Sale
sign in the front yard. They represent the people selling the house. Many times another
Real Estate agent will host the open house so they can represent you and the listing agent
can represent the sellers without any conflict of interest.

The only time you may be asked for a fee from a real estate agent helping you buy a
house is if the house is a FSBO or For Sale By Owner. In this case your buyer agent will
usually approach the owners first about the fee but if they are unwilling to pay anything
then the agent may ask you. This is something to discuss up front when first meeting the
Realtor you want to work with.