Fannie Mae and Freddie Mac stocks hit rock-bottom, falling into the penny stock category on Monday as Treasury stepped-in to save the troubled giants. While mortgage rates might be falling (30-year fixed rates on conforming loans are nationally around 6.2% down from 6.55% a week ago), the nation shouldn’t look for an immediate revival in the housing market.

Historically, Fannie Mae and Freddie Mac bought-up the majority of conforming consumer mortgages. Following purchase, they repackaged them into securities (Mortgage-Backed Securities or Obligations) or sold them off to mortgage pools/large investor groups. With the rise in defaulted mortgages, rising unemployment rates and tighter lending criteria that resulted, homebuyers like San Juan Realty, Inc.’s clients are wondering:

What does this mean for me?

What we find is that our clients care the most about the value of their home. Value means different things to different people, but most often it’s a simple equation of:

How much did we pay for our house vs. what our house is worth today if we wanted to sell it.

Here are a few tips we can offer consumers, whether you’re looking to buy, sell or stay put for the time being:

1. If you want to know what your home is truly worth, spend the money on an appraisal. Hiring an appraiser with not only get you the expertise of a professional familiar with your home market, but it will give you a real tool to use in your decisionmaking process regarding the status of your home.
2. If you’re looking to buy, be open-minded. Especially if you’re looking to purchase a home to keep for a few years and then upgrade, hire a Realtor to let you know what your options are. Often the best “deals” are in areas you didn’t think to consider for your home and you just might find your Realtor brings you some ideas that are complete gems!
3. If you’re looking to sell, be realistic about your home value and be prepared to offer concessions if the market demands. Your home is likely not worth what it was at this time last year (and if it’s worth more, congrats!). Be realistic about your asking price and if the trend in your area is to contribute towards closing costs, offer an extra point to the buyer’s agent or include a carpeting or landscaping allowance, trust your Realtor to guide you. Your Realtor doesn’t make money unless they sell your home, so it’s likely they’re going to give you sound advice that makes good business sense.
4. Know your mortgage options before you shop. Downpayment assistance has come to an end an even new homes can no longer include this service. Know what you can afford to spend, know what you’re approved to buy, and enter into your home search with the same arsenal of knowledge you’d use if you were told you needed major surgery. Chances are you’re not going to just let your doctor cut you open! Do your research and know where you stand. It can only increase your leverage as you negotiate the home of your dreams.