The deal was struck, and it was all for the good. As reported here, buyers were going to be able to get a loan to cover the $8,000 tax credit. In effect, the loan would be a low cost way to use the tax credit for their down payment.
But… two days later and it is not as true as it seemed. Jeff Belonger has uncovered the weak link and found that the rule change has been ruled out of validity…
There might be ways to utilize this for other loan programs, but for FHA it doesn’t look like a go… today.
Obviously we are seeing things change on a day to day basis.
It looks like there are changes being made to allow First Time Buyers to apply for a loan to be repaid by the FTHBTC. I’m looking for some more info on this, but here is a start.
As a special Mother’s Day post, I thought I would put up something I wrote last July. Video Sunday (and 101 Cars…) will be posted up just after midnight as a Monday post. So, without further ado…
Mommy…
Something struck me today. And then it just seemed so natural. the more I turn it over, the move applicable it is… Mommies are the ultimate hyper-local experts.
I am a very lucky Dad. Because of my job, I get to spend a lot of time with my kids. With the older one (a whopping 4 years old), we get to go ice skating and to the park and to area attractions. He has gone to the office and he has “helped” me work in a variety of ways.
I know his moods, and can identify most of the tip-offs that a good or bad one is on the way. But not like Mommy…
And then there is the 4 1/2 month old… I’m lost. Mommy knows what is going on by his particular cry. She knows which smiles are poop, and which ones are gas. There is nothing that happens with him that she doesn’t have the inside track on…
Talk about hyper-local…
We aren’t talking about a region, state, city, ZIP code or even a subdivision… we are talking about an expert that knows EVERYTHING about just two people. The Doctor’s chart can’t cover what Mommy knows. Daddy knowledge isn’t as wide or as deep. Even Granny insights place behind the Mommy Expertise.
So, why does it matter?
When one of these little boys is sick, the doctor NEEDS to talk to Mommy. Sure, Dad can shed some insight… but the expert is Mommy.
Let’s think about real estate…
You knew it was coming if you’ve read me before. I always seem to find ways these relate to real estate. This time is no different, although I think I have already left a pretty good map…
But, the biggest point is that even the doctor needs to know the information that the mommy has… Mommy is the ultimate area expert on those kids, and nothing happens that gets past her. If you are buying or selling a home, you need to have the person that knows more about your home and area than anyone else. You need the expert… the person that is connected to the community. The reference.
And yes, Daddies can be the Mommy…
I know I just built up a bunch or goodwill with the mommies… and now I’m going to erode some of it. Being the Mommy isn’t just a biological thing… it is a state of mind. It is a quest for knowledge and insight. It is both a path and destination.
I know… most sellers at some point take a look at the ‘Zestimate’ that Zillow produces for their property. And there is almost always one of two reactions…
“Those people are on crack, my house is worth way more than that” (if the Zestimate is lower than expected)
“Wow, I didn’t know it was worth THAT much… Cool” (if the Zestimate comes in higher than expected)
The bottom line is that if it is low, it must be wrong, and if it is high, then it must be right. It is pretty rare for someone to see a low valuation and think it could be right, or see a high valuation and think it could be wrong…
But let me tell you a truism… the Zestimate is wrong. Blanket statement. It could be high. It could be low. It isn’t dead on.
Here are the current levels of accuracy for the Atlanta Statistical Area…
Within 5% of the true value, 25% of the time.
Within 10% of the true value, 45% of the time.
Within 20% of the true value, 66% of the time.
Median error, 11.6%.
This is lifted straight from Zillow’s accuracy. For the Atlanta MSA, you are within 5% once out of 4 times… So, are you telling people that the just gave them a $400,000 valuation, and they have a 25% chance of the house being worth $380k – $420k? And a 10% chance of it being worth either $$360k – $380k or $420k – $440k? Or that there is a 10.5% chance of it being worth either $320k – $360k or $440k – $480k? Or a 34% chance that it is worth less than $320k or more than $480k?
Maybe you will let them know that about half of the time your $400,000 valuation is worth $446,400 or $353,600… since the median error is 11.6%
The thing is that the Zestimate could rise or fall by a significant percentage and still be within the range of error..
So, the thing is that 75% of the time, Zestimates are off by more than 5%.
Now, I am not going to argue with Zillow’s national or regional data. It is likely to be much closer than the data for a specific property. The folks there argue (and I can’t refute them in any way) that Zestimates are as likely to be high as low and therefore cancel each other out and that for larger samples, they are quite accurate.
in fact, everyone that gives you an estimate of market value is doing exactly that… giving you an estimate of market value. Market value can’t be determined until there is a buyer… That was the previous post…
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