When the Federal Reserve members got together really, really early on Tuesday morning - or late, late Monday night - of this week and did what they did, true financial news was made.

And what they did was drop the overnight funds rate (what banks charge each other as they make use of your money and mine) an incredible 3/4 of a point. A “point” is 1% interest rate. You may here about mortgage lenders charging a “1 point loan origination fee”. That means they’ll charge 1 percent of the loan amount to make the loan. More about that later…

So, back to the Feds. The reason they made this dramatic move was that international stock markets were in what can only be described as a melt down on Monday. In one of the few lucky breaks our economy has had in recent months, our stock market was closed for the MLK holiday so was not melting down. And the Feds wanted to make sure the heat was off when the opening bell sounded on Tuesday. A broad stroke was required to calm nerves. And stroke they did. And while the market dropped a bit down on that day, it was nothing like the 5%, 7%, 10% losses the other markets had experienced on Monday. And the market was up for the week by Friday. First time in 2008 that’s happened.

What does all this mean to you? It means that interest rates on mortgages are as low now as they’ve ever been. My favorite lender was quoting 4.875% on 15 year loans for a short while this week.

4.875%!!!!

So, if you are even thinking about buying a house, particularly in my neck of the universe here in Greensboro, NC, and if you have decent credit, the TIME IS NOW. Again - and I am running the risk of being the online version of a broken record (for those of you old enough to know about vinyl records) property values in Greensboro are not in the boat some other areas are. We aren’t seeing values drop. So buying is a good idea.

It’s a buyer’s market. This doesn’t happen often.

Plenty of inventory.

Crazy low interest rates.

And me!

What more could you ask?

I get this question often from both first-time buyers and those who have purchased property before. It’s a good question. And at some point a buyer will often wonder whether the appraiser, home inspector, Realtor, lender and all other parties involved in the transaction are happily colluding in order to close a deal, whether or not it’s in the best interest of the buyer.

There’s no doubt that there have been unscrupulous “professionals” who have engaged in a wink-wink/nudge-nudge mentality or turned a blind eye to issues that should actually raise red flags and perhaps stall or tank the deal. But those parties have always been in the minority and now that a bright light is being shown on real estate loans, they’re running back under their rocks. They’ll most likely turn up in another industry but, thankfully, they’re going to find it more difficult to jack things up in real estate.

But back to the main topic: The difference between an appraisal and a home inspection is that the appraisal determines the dollar value of a property. A home inspection checks out the soundness of the main systems of a property to see if things are working as they should.

The appraisal is required by the bank to verify the house is worth what they’re lending.

The home inspection is not required by anyone but is always a good idea.

You as a buyer will generally be expected to pay for both the appraisal and the home inspection, and usually “up front”. That’s a good thing.

Why?

Because it should give comfort to know that the appraiser and the home inspector won’t have a vested interest in whether the transaction goes through or not. They’ve performed the service and been paid. If the deal falls apart, it won’t impact them. So you as a buyer don’t have to worry that people who are supposed to being verifying that you’re buying a good house aren’t setting you up for failure.

I’ve also been asked how it is that the appraisal can come in exactly where the contract price is. That has made more than one of my buying clients scratch their heads. And I understand how it can look fishy. “How can the appraisal come in EXACTLY at $219,900 when that just happens to be the purchase price? What’s up with that??”

The reason is that the appraiser knows the contract price as soon as they get the order. They are hired by the bank - although the buyer pays for it - in order to verify the value. The bank wants to make sure that they are making a good loan. The appraiser’s job is to support the price.

But if they can’t, they won’t.

I’ve had lenders advise me that an appraisal has come in lower than the contract price on a pending sale. Fortunately, very often the seller will just adjust the price and the buyer comes out even better. At the very least, the standard “Offer to Purchase And Contract” that is used by Realtors here in North Carolina protects buyers from having to close on a property when the appraised price is not at or above the contract purchase price.

In short, if the appraisal comes in lower than the contract price, the buyer is not obligated to close.

The home inspection is a whole different story and will be for another day. Or three. (Inspections are where transactions can get REALLY interesting!!)

The press is consumed with a short list of topics: the presidential race, Brittany’s level of psychosis, and the state of real estate. And it’s a toss up as to which of the last two are the most screwed up.

No doubt that the real estate market in many areas is struggling. And in some places prices are dropping precipitously. But not everywhere. Not here in Greensboro, NC.

As I’ve written several times, our market has generally enjoyed steady but modest increases in prices over the years. It has been good, sustainable growth. Since we didn’t see double-digit jumps in values as did some markets (California, Florida, Nevada) we aren’t going through a “correction”. Our prices, for the most part, have continued to increase, even midst the dire reports in the news.

Of course, there are - and always have been - exceptions. For those properties that are in foreclosure, the price may be lower than others in the neighborhood. But not always. And some large volume builders have started offering incentives to lower their inventory. But not all builders.

In general, homes in the Greensboro area continue to sell at about 95%-97% of their asking price. This can difficult for buyers coming in from other parts of the country to accept. And really hard for those who have bought into the idea that all sellers are ready to get rid of their homes at fire sale prices. It just ain’t happening.

All that having been said, it is certainly a Buyer’s Market. What that means in this area is that there is more inventory on the market than there was 18 months ago and that homes are remaining on the market longer. And interest rates are great.

Does this mean that the seller whose property is listed at $245K will knock $15K off the price, pay $5K towards your closing costs, throw in a fridge and baby-sitting for year? Well, you can try. But be prepared to so irritate the seller that they refuse to negotiate with you. You may end up paying more for the house than you would if you had made a reasonable offer in the first place.

Best advice is to connect yourself with an experienced Realtor who can provide you with some guidance, comps, etc., and then listen to that person!

If your goal is to get someone to come off their price by 15% or 20%, then just look at overpriced houses. If you want to buy a house that you’ll be happy to come home to every day and that’s worth what you’re paying, look at the properties that meet your criteria, take advantage of the low interest rates, and be happy that you can take advantage of having so many good choices.

There. I feel much better.

Now, will somebody please help Brittany get herself together!?