In this day and age of being able to shop for anything anywhere, it is really important to know what you’re looking for when you start your home search.
If you’ve been thinking about buying a home of your own for some time now, you’ve probably come up with a list of things that you’d LOVE to have in your new home. Many new homebuyers fantasize about the amenities that they see on television or Pinterest, and start looking at the countless homes listed for sale through rose-colored glasses.
Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the “man cave” of your dreams be a future renovation project instead of a make-or-break right now?
The first step in your home buying process should be getting pre-approved for your mortgage. This allows you to know your budget before you fall in love with a home that is way outside of it.
The next step is to list all the features of a home that you would like, and to qualify them as follows:
· “Must-Haves” – if this property does not have these items, then it shouldn’t even be considered (ex: distance from work or family, number of bedrooms/bathrooms).
· “Should-Haves” – if the property hits all of the ‘must-haves’ and some of the ‘should-haves,’ it stays in contention but does not need to have all of these features.
· “Absolute-Wish List” – if we find a property in our budget that has all of the ‘must-haves,’ most of the ‘should-haves,’ and ANY of these, it’s the winner!
Having this list fleshed out before starting your search will save you time and frustration. It also lets your agent know what features are most important to you before they start showing you houses in your desired area.
There are many reasons why a homeowner decides to sell their house and move. The latest Generational Trends Report from the National Association of Realtors asked recent home sellers to share their reason for moving.
The younger the respondents, the more likely their top response centered around needing a larger home (ages 29 to 53). Relocating for a job was the top reason for those ages 54 to 63 and the second most popular response for those under 53. The chart below shows the breakdown for these two reasons.
For homeowners over the age of 64, wanting to be closer to friends and family served as the top motivator to move. Downsizing to a smaller home or moving due to retirement came in as a close second and third.
Have you outgrown your current house? Are you a homeowner who can relate to wanting to be closer to family and friends? Is your house becoming a burden to clean now that the kids have moved out?
Let’s get together to set you on the path to selling your current house and finding the home that fits your needs, today!
· When listing your house for sale, your top goal will be to get the home sold for the best price possible!
· There are many small projects that you can do to ensure this happens!
· Your real estate agent will have a list of specific suggestions for getting your house ready for market and is a great resource for finding local contractors who can help!
Congratulations! You’ve found a home to buy and have applied for a mortgage! You are undoubtedly excited about the opportunity to decorate your new home! But before you make any big purchases, move any money around, or make any big-time life changes, consult your loan officer. They will be able to tell you how your decision will impact your home loan.
Below is a list of 7 Things You Shouldn’t Do After Applying for a Mortgage! Some may seem obvious, but some may not!
1. Don’t change jobs or the way you are paid at your job! Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.
2. Don’t deposit cash into your bank accounts. Lenders need to source your money and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
3. Don’t make any large purchases like a new car or new furniture for your new home. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher debt to income ratios… higher ratios make for riskier loans… and sometimes qualified borrowers no longer qualify.
4. Don’t co-sign other loans for anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payment against you.
5. Don’t change bank accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer money between accounts, talk to your loan officer.
6. Don’t apply for new credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.
7. Don’t close any credit accounts. Many clients have erroneously believed that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score.
Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.
Spring has sprung, and it’s a great time to buy a home! Here are four reasons to consider buying today instead of waiting.
1. Prices Will Continue to Rise
CoreLogic’s latest U.S. Home Price Insights reports that home prices have appreciated by 4.4% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.6% over the next year.
Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year fixed rate mortgage came in at 4.41% last week. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting rates will increase by this time next year.
An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
3. Either Way, You Are Paying a Mortgage
Some renters have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.
Are you ready to put your housing cost to work for you?
4. It’s Time to Move On with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But what if they weren’t? Would you wait?
Examine the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, greater safety for your family, or you just want to have control over renovations, now could be the time to buy.
If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.
According to the National Association of Realtors, total inventory has been growing for six months straight, as has the number of buyers looking to find their dream home. In a market where inventory is increasing, you want to stand out in the crowd!
This quote from Grandscope puts it well:
“You can differentiate from competition by WOWing or exciting customers, not just trying to compete on price.”
What better way than to be creative with your Open House!
Here are a few ideas for how to do this in this era of technology.
1) Facebook Live Virtual Open House
This can also work as a ‘preview’ before an official Open House. Let your agent walk potential buyers through your home using a webcam or cell phone, highlighting the unique features of your house and taking questions. This can be of great benefit, especially for those out-of-state buyers looking to relocate to your area.
2) Youtube Live Virtual Open House
YouTube is forecasted to have 187.8 million video users in 2019 in the United States alone! One of those users might be the buyer you’re looking for! Like Facebook Live, allowing your agent to have a virtual open house will make it available, especially for all those first-time homebuyers house hunting on their phones! This allows access to your home from the comfort of their own. Broadcasting at peak time (during lunch between 12 and 2 P.M.) also prevents buyers from having to leave work.
What if you do not want to show your house online?
3) Have a Garage Sale at The Same Time
This serves two purposes. First, you can start getting rid of some of the clutterinside your home. This will help it to show better and make packing a little easier. Second, people will come to a garage sale. Whether it’s the neighbors or bargain-hunters, each garage sale attendee is a potential “salesperson for your home”. They could be looking for themselves or talking to someone else in the market. The more people who are aware that your house is for sale, the better.
4) Go With Off-Peak Times
Why not host an Open House during the week when people are on their way home? This works especially well if the home is convenient for commuters. Add a little wine & cheese as a transition to going home for dinner! Or, why not have an Open House at 9:00 in the morning? After parents drop their kids at school, they can stop by your Open House for coffee & cake. Promote the Open House in community chats. Maybe one of the neighbors has a family member that wants to move to the area.
With new inventory coming to market, you need your house to stand out from the crowd! Contact a local real estate professional to see what alternatives will work best in your area.
Home prices have appreciated considerably over the last five years. This has some concerned that we may be in for another dramatic correction. However, recent statistics suggest home values will not crash as they did a decade ago. Instead, this time they will come in for a soft landing.
The previous housing market was fueled by an artificial demand created by mortgage standards that were far too lenient. When this demand was shut off, a flood of inventory came to market. This included heavily discounted distressed properties (foreclosures and short sales).
Today’s market is totally different. Mortgage standards are tighter than they were prior to the last boom and bust. There is no fear that a rush of foreclosures will come to market. The Mortgage Bankers’ Association just announced that foreclosures are lower today than at any time since 1996.
Case Shiller looks at the percentage of appreciation as compared to the same month the year prior. Here is a graph of their findings over the last ten months:
As we can see, home price appreciation is softening as more inventory comes to market. This shows that real estate prices are not crashing, but merely returning toward historic appreciation numbers of 3.6% annually.
Home prices are leveling off. Long term, that is a good thing for the housing market.
Why Homeownership Matters Now More Than Ever
Study after study shows that no matter what generation Americans belong to, the vast majority believe that homeownership is an important part of their American Dream. The benefits of homeownership can be broken into two main categories: financial and non-financial (often referred to as emotional or social reasons.)
For Americans approaching retirement age, one of the greatest benefits to homeownership is the added net worth they have been able to achieve simply by paying their mortgage!
The Joint Center for Housing Studies at Harvard University focused on homeowners and renters over the age of 65. Their study revealed that the difference in net worth between homeowners and renters at this age group was actually 47.5 times greater, with nearly half their net worth coming from home equity!
Homeowners over the age of 65 are much more financially prepared for retirement and often own their homes outright if they were fortunate enough to purchase their homes before the age of 36.
Their 30 years of mortgage payments have paid off as they gained equity through their monthly payments and as home values appreciated.
It is no surprise that lifelong renters have had a hard time accruing net worth as the latest Census report shows that the Median Asking Rent has been climbing consistently over the last 30 years.
Your monthly mortgage payment is a form of ‘forced savings’ building your net worth with every payment!
How To List Your Home for the Best Price
If your plan for 2019 includes selling your home, you will want to pay attention to where experts believe home values are headed. According to the latest Home Price Index from CoreLogic, home prices increased by 4.7% over the course of 2018.
The map below shows the results of the latest index by state.
Real estate is local. Each state appreciates at different levels. The majority of the country saw at least a 2.0% gain in home values, while some residents in North Dakota and Louisiana may have felt prices slow slightly.
This effect will be short lived. In the same report, CoreLogic forecasts that every state in the Union will experience at least 2.0% appreciation, with the majority of the country gaining at least 4.0%! The prediction for the country comes in at 4.6%. For a median-priced home, that translates to over $14,000 in additional equity next year! (The map below shows the forecast by state.)
So, how does this help you list your home for the best price?
Armed with the knowledge of how much experts believe your house will appreciate this year, you will be able to set an appropriate price for your listing from the start. If homes like yours are appreciating at 4.0%, you won’t want to list your home for more than that amount!
One of the biggest mistakes homeowners make is pricing their homes too high and reducing the price later when they do not get any offers. This can lead buyers to believe that there may be something wrong with the home, when in fact the price was just too high for the market.
Pricing your home right from the start is one of the most challenging parts of selling your home. Once you decide to list your house, let’s get together to discuss where home values are headed in your area!