Consumers are still cautious when it comes to how they spend their money. According to a recent Harris Poll, nearly two-thirds of U.S. adults (63%) say they have purchased more generic brands in the post six months in an effort save money, while an additional 12 percent say they have considered doing so.
The survey also finds that each generation saves money in different ways. For example, Gen Xers (ages 34-45) are more likely to brown-bag lunch (56%) and cut back on going to hair salons (43%). Matures (65 & older) are more likely to cancel a magazine subscription (45%). Members of Generation Y (age 18-33) are more likely to cancel their landline phone service and use only a cell phone (20%) and to carpool or use mass transit (26%).
New research suggests buyers applying for mortgage loans immediately after house hunting often make poor choices—sometimes selecting the first loan option presented, regardless of the terms with which it is associated.KEEP THIS IN MIND
• The research, conducted by two George Washington University instructors, found “cognitive resource depletion” to be a determining factor in why some borrowers make poor choices in selecting a home loan. Cognitive resource depletion implies willpower is a limited resource that can be exhausted. The study suggests the depletion of willpower may be one reason borrowers choose loan products such as pick-a-pay mortgages, interest-only loans, loans with balloon payments, and mortgages with negative amortization.
• To test the theory of cognitive resource depletion, two test groups were created. One was presented with an online-shopping simulation, the other was not. The group completing the simulation then was tasked with selecting a set of mortgage alternatives. The second test group only was asked to select a mortgage product. Almost half of those participating in the house-shopping exercise selected a higher-risk mortgage, while less than one in five of those who did not participate in the experience selected a higher-risk mortgage.
• Although most sales contracts require buyers secure financing within a designated time period, the authors of the study recommend even financially savvy borrowers institute a waiting period of at least two days after selecting a home to purchase before applying for a home loan. To address this, the authors and most real estate professionals advise home buyers apply for a home loan and receive preapproval prior to searching for a house.
reprinted from CAR’s “Market Matters” newsletter, original article: LA times
Foreign investor interest in U.S. real estate grew sharply in the fourth quarter of 2009, according to the latest survey by the Association of Foreign Investors in Real Estate. More than half of the respondents (51%) believe U.S. real estate provides the best opportunity for capital appreciation, up from 37% in 2008 and 26% in 07. The United Kingdom ranks second for expected capital appreciation with votes from 30% of respondents, followed by China with 10%.
Washington, D.C., & New York City rank highest among U.S. cities thought to offer the best investment opportunities, followed by San Francisco, Boston and Los Angeles. Two thirds of respondents say they plan to increase their investment in U.S. properties in 2010, and a majority of them say they prefer multifamily properties over other types.
Before placing your house on the market, make as many repairs and improvements as you can. It will be worth it. “New” and “just replaced” are the magic words to attract home buyers.
Steam clean or replace carpet, fix loose door knobs and railings, make sure windows and doors open and close easily. Apply a fresh coat of paint where needed.
But you may find yourself deliberating over larger problems. Should you replace the crumbing driveway? Buy new kitchen appliances? Refinish the floors? Big repairs cost more time and money. You could simply disclose the problem and let the buyer deal with it.
On the other hand, the better condition your home is in, the wider the group it will appeal to. When making a decision of this kind, consider that repairing the problem could also result in a higher sale price. The best thing to do is start making these big repairs a year or two before you plan to move. Then you get to enjoy the results too!
