Jul 1, 2022 | QA
Published on our June 2022 Newsletter
Question: Will you put these recent rate increases into historical perspective for us?
Chris’ Answer: Looking back, starting in the 1980’s by decade, on a Freddie Mac 30 year fixed mortgage for a primary residence, the rates from the St. Louis Fed Survey looked like this:
1980’s – about 9.00%
1990’s – about 6.75%
2000’s – about 5.25%
2010’s – about 3.50%
2020’s – about 2.75% and we’re currently hovering just under 6%
We’ve all gotten accustomed to the low rates over the last 10 years. We’re now entering a period where the rates are normalizing and that rate environment is more in line with historical rates. These current rates are more in line with what the “cost of money” should be based on the last four plus decades.
#interestrates #2022 #realestate #realtor #colwellbanker #buying #homebuying #stcroix #usvi #caribbean
Jul 1, 2022 | QA
Published on our June 2022 Newsletter
Question: What effect is the increase in rates having on buyers and sellers?
Chris’ Answer:
Here are three things that have the potential to effect on buyers:
- The cost of homeownership has increased.
- It is affecting the ability of some buyers to qualify for a mortgage.
- In markets such as this, some lenders tend to become a little more conservative. While I don’t expect them to change guidelines, I do expect that they may become more conservative in their pricing.
Sellers could be affected in these ways:
- Second home sales, whether houses or condos, may begin to slow. This is a big part of the St. Croix market.
- Investment and speculative buying may also begin to slow. These buyers are likely to search out other investment options which may be more attractive as rates increase.
- As the real estate markets and players try to “right size” themselves after a few boom years, we may find that Days on Market will be affected.
#interestrates #2022 #realestate #realtor #coldwellbanker #homebuying #stcroix #usvi #caribbean
May 27, 2022 | QA
Published on our May 2022 Newsletter
Question: What should homebuyers know about agency, loyalty, and shared expectations?
Chris’ Answer: Most real estate agents earn their living by representing buyers and sellers in property transactions. The yard sign makes it obvious who is representing the sellers’ interest.
Problems can arise when buyers unwittingly or intentionally act in a way which lead two or more agents to believe they each represent that same buyer. Sometimes buyers think that the more agents they have working for them, the better service they will receive. The opposite is true.
It’s in everyone’s best interest that a buyer selects an agent before viewing a property. Buyers can typically expect a higher level of service when they’ve aligned themselves with one agent.
St. Croix is like a small town. Most of the Realtors know each other. Even though we may be with different firms, as professionals, we work on deals co-operatively to ensure that the interests of both buyers and sellers are addressed.
As a buyer, your relationship with your agent is based on mutual consent. You can cancel the arrangement if you feel your agent isn’t living up to your expectations. Each agent has their own style and preferred way of working with clients. For example, we work as a team, and feel that as professionals who bring different perspectives to that Buyer/Realtor relationship, we take better care of our clients and their needs.
We love working with people! What we recommend is that you take time to discuss expectations at the beginning of your relationship with us. It’s the surest way to form a strong partnership – one which allows us to serve you to our highest ability, and helps you achieve the best results in your property purchase.
#realestate #realtor #stcroix #usvi #caribbean #realestateagents #homes #condos #homebuying #homeowner
May 27, 2022 | QA
Published on our May 2022 Newsletter
Question: What is the importance of an appraisal?
Christie’s Answer: Appraisals are required to value a property for a mortgage and are a very good idea for a cash purchase. While the property is priced based on the current sales market, Appraisers look at past sale data. This is one reason the sale price of the property may be different from the apprised value.
For the buyer, if the appraised value comes in at or above their offer price, the mortgage process can move easily forward. On the other hand, if the appraisal comes in below the purchase price, assuming a standard mortgage contingency clause, rider, or addendum is in place, the buyer has three options:
- Make up the difference between the appraisal and the offer.
- Negotiate a lower purchase price with the seller.
- Cancel the offer to purchase based on the contract language in the mortgage contingency clause.
Here on St. Croix, real estate listings aren’t the only shortage in today’s market. There’s also a limited number of appraisers. So, scheduling an appraisal should be done as soon as possible.
#realestate #relator #stcroix #usvi #caribbean #appraisal #homes #condos #homebuying #homeowner
Apr 29, 2022 | QA
Published on our April 2022 Newsletter
Question: How are closings handled?
Chris’s Answer: In the US Virgin Islands, the long standing practice is for Buyers and Sellers to each be represented by attorneys to close the sale. We always recommend hiring an attorney who specializes in real estate to represent you.
The Buyer’s attorney will review all the documents to make sure “clear and marketable title” to the property being purchased is delivered to the Buyer. The attorney’s work includes, but isn’t limited to, reviewing the title commitment, survey, tax clearance letters, closing statements, Buyers statements of expenses and making sure that all the documents are in order for closing.
Sometimes Buyers and/or Sellers are present for closing. If you are off island for the closing, this is not a problem. Your attorney can have you sign a Limited Power of Attorney for some documents, so that the attorney can sign them for you. If there is a mortgage, those loan documents do need to be physically signed by the Buyer (i.e. the Borrower) and those documents can be sent to the Buyer through the mail. The closing usually takes place in one of the attorney’s offices.
Once the documents are signed and funds paid to the Seller and any lien holders — CONGRATULATIONS — you now own a new home, condo or land on St. Croix! The Buyer’s attorney will make sure that any relevant documents are Recorded at the Lt. Governor’s Recorder of Deeds Office.
Apr 29, 2022 | QA
Published on our April 2022 Newsletter
Question: What is an inspection contingency, and how is it handled?
Christie’s Answer: Once an offer to purchase a property has been accepted and signed by all parties, the Inspection Contingency Period begins. Generally, this is a 2 week period, though 3 week periods are not unusual. It ensures that the Buyer receives vital information about the property from a Licensed Professional Home Inspector. It gives the Buyer the option to accept and sign off on the Inspection Contingency Period, OR potentially negotiate repairs, a reduction in the purchase price in lieu of repairs, or even walk away from the purchase with a full refund of their earnest money deposit.
Some people ask if they can waive the property inspection contingency. Our professional advice is to not do this. We feel it’s important that Buyers have as much information as possible about the property they are buying. It’s to the Buyers’ advantage to be present during the inspection so that they can ask questions of the Inspector on site, and learn more about their new home or condo.
After the inspection contingency period is complete and accepted by the Buyer, in Real Estate terms, their earnest money deposit has “gone hard” and is non-refundable. Then the purchase moves to the next phases of the process, which we will cover next month.
#stcroix #stcroixusvi #caribbean #realestate #realtor #coldwellbanker #buying #homeownership #homeinspection
