Just when we thought they couldn’t get much lower, mortgage rates dropped again to reach new record lows. As mortgages become even more affordable, hopes are placed for further recovery in the reciprocal cycles of the housing market and economy.

Thirty-year fixed mortgages are reported at 3.83%, while 15-year fixed rates are at 3.05%. These numbers are the result of nation-wide surveys collected from various lenders excluding fee-based reductions, known as “points,” which lower rates another percent per point purchased.

Not everyone is optimistic, however. Low mortgage rates are a sign of low rates everywhere, meaning interest rates on savings accounts, CDs, and other financial vehicles are equally rock-bottom low, earning next to nothing in positive interest. In fact, mortgage rates are often linked to the rates on 10-year Treasury notes (a type of government bond). In uncertain times, these bonds are seen as safe investments, and the more in demand they are (hence the more that are sold), the lower the rate of return. The efforts and manipulations made by the Federal Reserve are also troubling for many, as the weak dollar remains weak and inflation continues to rise. Coupled with a slow job market and stagnant wages among workers, the financial sector is a considerable concern.

With less money on hand, and less money to be made in the foreseeable future, the low rates might not have a considerable impact on the housing recovery. After all, rates have been steadily reaching ‘record’ lows for the past few years without sparking a glut of home sales. Lending restrictions remain tight and significant down payments are becoming the norm in order to achieve these optimal loans. Excellent credit scores are also increasingly essential to qualify for a mortgage loan. The tightening in requirements for these two factors (down payments and credit) could be reflected in the dropping average, as those who don’t possess these things are more frequently denied loans, allowing only the most optimal loans to enter into the averaging equation.

Overall, the mortgage rates are a mixed bag; while we can’t help but consider the negative circumstances, we also can’t help but be hopeful that buyers can and will take advantage of the long-term benefits that come with a good home at a great low rate. Other positive signs in the market include the best winter sales reports in five years and more new home construction in the works than we’ve seen in the past three years. So, if you are considering buying a home, shop your lenders to see if the record low rates can help make your dream a reality.

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About The Author: Geoffrey Thompson is an owner and founding partner of Express Schools, LLC. Since 1996 the companies under this banner have offered online real estate licensing and insurance licensing courses as well as online real estate exam prep and insurance exam prep.

A lot rides on a home’s appraisal, especially these days. The low market’s home values make appraisal a crucial step in getting any home sold, becoming a linchpin for confirming the sale price. That’s because most home sales contracts carry an appraisal contingency clause: if the appraisal doesn’t come in at or above the sale price, then the contract can be cancelled. Meanwhile, many buyers need the appraisal justification of the sales contract in order to validate their loan – the lender might also have an appraisal contingency built into the loan approval. Working with a market-savvy agent should be enough to make sure a home’s sale price will meet the appraisal value, but in today’s market unpleasant surprises can happen to anyone. When the appraisal isn’t enough, you have options. Don’t accept an appraisal you know is too low: challenge it.

Some buyers get excited at a low appraisal: they think they can void their contract and then get the home at the new discount price. Voiding an existing contract, however, is also a good way to offend a seller and risk losing the home entirely. Sellers shocked by an unexpectedly low appraisal are sure to feel cheated and in no mood to be bullied by a smug buyer. Renegotiating the contract could require some tough compromises from both sides. Sellers may be forced to reduce their price, but buyers may be forced to pay more out of pocket above the appraisal value to keep both the home and their loan. Other negotiations can get creative, especially if the seller refuses to accept a lower price. If negotiations fail, the buyer could be out of luck and out of the home’s contract for good.

Lenders, as the appraiser’s formal client, are barred from contact that might influence the appraisal, but buyers, sellers, and agents are encouraged to be present during appraisal and present their case, providing any information they can to help the appraiser determine the appropriate value for the home. After the appraisal, the buyer (as the client) is frequently the one that can request the paperwork for review, though sellers may also request it, either directly or through the buyer.

Neither buyers nor sellers have to accept a low appraisal. Either party can hire another appraiser (or more than one) to provide second and third opinions to counter the low appraisal. If the buyer is set on canceling the contract, some contract language could allow any low appraisal to legally invalidate it, even if other appraisals come back higher. The low appraisal itself can be challenged by providing detailed proof of the home’s value, demonstrating flaws in the appraisal process, or mistakes in the appraisal paperwork. Some appraisers may be unfamiliar with the area, have limited or imperfect comparisons to base market value, or be unaware of other features that improve a home’s value, from home improvements to local changes (a school redistricting or a new park commissioned nearby) that could increase a home’s value.

As long as the challenge is based on facts rather then opinions or emotions, there’s a decent chance of overturning it or acquiring a second appraisal to counter it in negotiations. No one has to accept a low appraisal. Talk to your agent and closing attorney for advice and assistance to deal with a low appraisal and take steps to deal with it.

Want to find out if you have what it takes to be a Real Estate Agent or Broker?

About The Author: David Goldstein is an owner and founding partner of Express Schools, LLC. Since 1996 the companies under this banner have offered online real estate licensing and insurance licensing courses as well as online real estate exam prep and insurance exam prep.

The Bureau of Labor Statistics reported last Friday that employers added only 115,000 nonfarm jobs in April, far below expectations. The numbers from December through February easily doubled that, averaging over 250,000 a month and raising expectations and hopes of economic recovery. April’s disappointing gain (projections had estimated around 165,000 jobs for April) has sparked talk of economic slowdown. This news comes on the heels of an earlier report showing claims for unemployment benefits dropped in April, lowering the nominal unemployment rate a tenth of a point to 8.1%.

Combined, these reports lead experts to bitter conclusions, among them, that the unemployment rate is falling not due to job creation but to unemployment fatigue: people dropping out of the workforce entirely. In some cases unemployment benefits have become exhausted, in others, workers have become exhausted looking for jobs and have given up. These two are often tied together, as many workers who might have stopped searching earlier were encouraged to keep at it a few months more due to the extension of unemployment benefits (a program requirement is that workers be actively seeking a job). In an election year, news of this nature has sent political interests on the attack, with republicans decrying the Obama administration’s policies on job creation, and democrats rushing to defend them. The media circus of campaigning makes it harder to process what is actually happening.

Is it really that bad? Though job creation slowed in April, a gain was still posted, and the strong numbers leading up to it could indicate a natural pause in hiring cycles. Also, previous job reports have all been revised upwards as more information surfaces, prompting some hope that April’s numbers could show improvement in the next few weeks. Other possible reasons behind the hiring dip include Baby Boomers, women, college cycles, the government, and the weather.

Part of the worker decline (“dropping out of the workforce”) can be tracked to the simple math of Baby Boomers, as the first wave of the generation enters retirement. As the largest living generation begins to retire, the weight of their numbers will inevitably alter the workforce. Some forecasters offer hope that the jobs retiring boomers leave behind could soon reemerge as new hires in future months. Additionally, women are increasingly choosing not to do paid work (work outside the home) at the highest rate since before the 80’s empowerment movements drove them into the workforce in large numbers. Socially, being a homemaker or stay-at-home mom has started to reemerge as an accepted lifestyle choice for women, and in some cases the economic pressures of childcare costs has made this option the most acceptable financial situation for families.  Meanwhile, college enrollment, especially among women, is increasing rapidly. Many workers are taking advantage of training, retraining, and other educational opportunities to reset themselves for the new economic landscape, a good sign for the economy in the years ahead as a more highly-educated, highly motivated workforce begins to emerge.

The government is absolutely a factor in the current employment figures, though not in the way some people think. The combined political forces of reduced spending and reduced taxing have caused significant budget shortfalls in the public sector, which has been shedding jobs consistently since 2009. Public job losses (15,000 in April), undermine the job growth in the private sector (130,000 in April), reducing the total job creation numbers as they offset. Additionally, tight budgets cause grants and other funding opportunities to dry up, preventing many would-be jobs, both in public and private sectors, to disappear at inception.

Can we also blame it on the weather? The weather is a factor in seasonal hiring rates. The mild winter is credited with the higher than usual hiring rates during the colder months. The early onset of the hiring season could well be reflected in these spring lows, as companies jumped to hire in what was traditionally a slow-hire season and now pause to integrate their new hires during what was traditionally the season hiring picked up. Economists say the true test will be the upcoming “graduation” months, as spring-to-summer ushers in a fresh wave of job-ready graduates and (hopefully) the traditional uptick in consumer spending and business expansion.

Overall, April wasn’t great, but it’s too soon to tell if the economy is really experiencing a slowdown, or if this low is simply a part of the cycle. “My guess is the weather made job growth look too strong in the first couple of months, and now it looks too weak as payback for the warm winter weather,” said Paul Ashworth, chief United States economist for Capital Economics. “It’ll probably settle somewhere in between.” The NY Times also reports that companies are producing more these days with fewer workers, leading many o wonder just what “normal” is anymore. A fall in productivity last quarter (perhaps due to overworked employees unable to keep up the pace?) may lead companies to increase their workforces to bring production back up.

Only time will tell. Until the future reveals itself, many economists and business experts are cautioning people to reserve judgment.

Want to find out if you have what it takes to be a Real Estate Agent or Broker?

About The Author: David Goldstein is an owner and founding partner of Express Schools, LLC. Since 1996 the companies under this banner have offered online real estate licensing and insurance licensing courses as well as online real estate exam prep and insurance exam prep.

Home staging is a technique anyone can use to help their home get noticed by buyers.  The idea is to arrange furniture and other items in the home to reflect unspecific ideal spaces. The goal is for each room to be pleasant and attractive, but generic enough that people can easily imagine themselves living there.

Imagine your home is a blank stage in a theater. How do you make a room into a bedroom? What items define the space? How do you arrange them so that they look good, accentuate the room’s best features, and make people feel comfortable?

Floor Plan
Work with your furniture to find the best arrangement – this is not the best arrangement for you and your life, but the one that makes the room look good to buyers, so try moving pieces around.  Remove pieces from crowded rooms and add pieces to empty rooms.  Too much furniture makes a room appear smaller.  Strangely, empty rooms also appear smaller; furniture helps to provide perspective.  Use furniture to highlight selling features; for example, placing a seating area by the fireplace or stools by the bar countertop.

Decorate Generically
Place decorative items to draw attention around the room and bring warmth; bare walls, tabletops, and shelves appear stark and uninviting. Use decorative items sparingly, as too much becomes clutter. Choose items that bring color and light to the space without being taste-specific.  Landscapes, colorblock abstracts, and still-lifes (like you see in hotels and waiting rooms) are typical examples of neutral art.  Mirrors, candles, vases, pillows, plants, and flowers are also safe decorations that can add some interest without pushing a specific style aesthetic.

Call for Backup
If your skills are not design-oriented and the thought of home staging causes you stress, it’s ok! You don’t have to do this alone.  Do a bit of networking.  The odds are pretty good that someone you know (or someone they know) might be willing to help you out.  You can also check out design shows on TV or the web, design magazines, even the furniture store showrooms for inspiration.  Some realtors can be a big help with home staging, or you could hire a professional home stager or local interior designer. Design students are also a great resource, and many will do the work for dramatically lower fees, or simply the opportunity to add it to their design portfolio.

Keep Clean
After the home is staged, cleanliness is key.  This doesn’t mean you can’t live in your own home, but always keep in mind that the more you show the home, the better your chances of selling it.  Whenever possible, try to erase the signs of occupation.  Fluff the pillows and wipe the mirrors (and whatever else you can manage) before each showing to make the best impression on buyers.

In a competitive market, staging is a valuable technique for sellers.  Home staging can cost next to nothing, while making your home stand out.  Combined with proper decluttering and good paint, staging will help generate traffic and interest, and ultimately help sell your home!

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About The Author: Tom Davidson is the acting Director of Sales & Operations for Express Schools, LLC. Since 1996 the companies under this banner have offered online real estate licensing and insurance licensing courses as well as online real estate exam prep and insurance exam prep.