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Category Archives: Real Estate Blog

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Top Reason to List Your House For Sale Now!

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If you are debating listing your house for sale this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes For Sale

The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage:

“While feedback from REALTORS® continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.”

The latest Existing Home Sales Report shows that there is currently a 5.1-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and well below November 2014 numbers.

The chart below details the year-over-year inventory shortages experienced in 2015:

Housing Supply Year-Over-Year | Simplifying The Market

Anything less than a six-month supply is considered a “Seller’s Market”.

Bottom Line

Meet with a local real estate professional who can show you the supply conditions in your neighborhood and assist you in gaining access to the buyers who are ready, willing and able to buy now!

Source: Simplifying the market


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Thinking of Selling Your Home? Get Ready to Negotiate!

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Now that the market has showed signs of recovery, some sellers may be tempted to try and sell their home on their own (FSBO) without using the services of a real estate professional.

Real estate agents are trained and experienced in negotiation. In most cases, the seller is not. The seller must realize their ability to negotiate will determine whether they can get the best deal for themselves and their family.

Here is a list of some of the people with whom the seller must be prepared to negotiate if they decide to FSBO:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house.
  • The termite company if there are challenges
  • The buyer’s lender if the structure of the mortgage requires the sellers’ participation
  • The appraiser if there is a question of value
  • The title company if there are challenges with certificates of occupancy (CO) or other permits
  • The town or municipality if you need to get the COs permits mentioned above
  • The buyer’s buyer in case there are challenges on the house your buyer is selling
  • Your bank in the case of a short sale

Bottom Line

The percentage of sellers who have hired a real estate agent to sell their home has increased steadily over the last 20 years. Let’s get together and discuss all we can do to make the process easier for you.

Now that the market has showed signs of recovery, some sellers may be tempted to try and sell their home on their own (FSBO) without using the services of a real estate professional.

Real estate agents are trained and experienced in negotiation. In most cases, the seller is not. The seller must realize their ability to negotiate will determine whether they can get the best deal for themselves and their family.

Here is a list of some of the people with whom the seller must be prepared to negotiate if they decide to FSBO:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house.
  • The termite company if there are challenges
  • The buyer’s lender if the structure of the mortgage requires the sellers’ participation
  • The appraiser if there is a question of value
  • The title company if there are challenges with certificates of occupancy (CO) or other permits
  • The town or municipality if you need to get the COs permits mentioned above
  • The buyer’s buyer in case there are challenges on the house your buyer is selling
  • Your bank in the case of a short sale

Bottom Line

The percentage of sellers who have hired a real estate agent to sell their home has increased steadily over the last 20 years. Let’s get together and discuss all we can do to make the process easier for you.

 

Source: Simplifying the Market


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5 Holiday Recycling Tips

After the holidays, your home can look a bit hung over, with piles of wrapping paper and fallen tinsel trailing under everyone’s feet. It all feels like a hazy eggnog memory. You may be wondering how you’ll possibly clear out all the trash. Well, maybe it doesn’t have to be trash. Here are five tips for keeping the planet in mind as you clean up this holiday season.

1. Wrapping Paper
Wrapping paper with glitter and foil is fun, but unfortunately can’t be recycled efficiently. Don’t just toss it in with your everyday recycling. Check with your sanitation department for seasonal recycling guidelines.

2. Christmas Trees
Many communities provide a service that will compost or chip your holiday tree into mulch for free or a low fee. Be sure to remove all tinsel, lights and wires before taking advantage of this opportunity.

3. Cardboard boxes
If you don’t need them to store your new goodies, cardboard boxes can usually be recycled curbside.

4. Ribbon
Ribbon generally can’t be recycled, so save it! Curling ribbon can be “re-curled” for another special occasion by zipping it along a scissor blade.

5. Electronics
You’ve unwrapped this year’s latest gizmo, now what should you do with last year’s model? Many computer companies, like Apple and Dell, will recycle your machines, and box stores such as Best Buy accept phones and all sorts of gadgets for recycling.

 

Source: The RE/MAX Housing Blog


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Building Family Wealth Over The Next 5 Years

As the economy continues to improve, more and more Americans are seeing their personal financial situations also improving. Instead of just getting by, many are now beginning to save and find other ways to build their net worth. One way to dramatically increase their family wealth is through the acquisition of real estate.

For example, let’s assume a young couple purchases and closes on a $250,000 home in January. What will that home be worth five years down the road?

Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists every quarter. They ask them to project how residential prices will appreciate over the next five years. According to their latest survey, here is how much value that $250,000 house will gain in the coming years.

Family Wealth Earned Through Home Equity | Simplifying The Market

Over a five year period, that homeowner can build their home equity to over $40,000. And, in many cases, home equity is large portion of a family’s overall net worth.

Bottom Line

If you are looking to better your family’s long-term financial situation, buying your dream home might be a great option.

 

Source: Simplifying the market


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10 Tips Before Leaving for the Holidays

Leaving your home during the holidays? Follow these tips to keep it safe and save a few bucks on bills while you’re gone.

1. Put mail on hold
An overstuffed mailbox or a pile of newspapers at the bottom of your driveway can be an invitation to thieves. Not only is it a sign that no one’s home, identity thieves can find all sorts of goodies while sorting through unattended mail. Go to usps.com to have the US Postal Service hold your mail, and also check on your options for holding newspaper delivery.

2. Put lights on a timer
It makes it appear that someone is home. If you can, switch your exterior lights to the “motion-activated” setting.

3. Check batteries
Make sure the batteries are fresh in your smoke alarms and that they function.

4. Remove valuables
Hiding your jewelry is always an option, but when you’re gone for several days, thieves have more time to hunt through the house. If you can, place jewelry and important documents in a safety deposit box or home safe.

5. Grab your spare key
Bring inside any keys that are hidden outside. You can give one to a neighbor along with your contact information where you’ll be, just in case there’s an emergency.

6. Unplug
Your electronics will still suck energy while you’re gone. Unplug the biggies, like your TV and computer.

7. Don’t advertise your trip online
At least until you return, when it’s safe to make your Facebook friends jealous with photos from your holiday beach vacation. Don’t post the dates when you’re leaving your house vacant.

8. Switch your water heater to “vacation” mode
It won’t turn off completely, but it will still save energy.

9. Deodorize the sink
To avoid returning to a kitchen disposal that belches up the stench of your pre-vacation dinner, run it with a half-cup of vinegar, or lemon peels and ice cubes, before you leave. To keep things smelling fresh, it’s also a good idea to throw out any food that will go bad while you’re gone and make sure to take out any trash.

10.  Bleach the bowl
Dump half a cup of chlorine bleach into your toilet bowl to prevent mineral stains from developing.

 

Source: The RE/MAX Housing Blog


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You Will Need to Sell Your Home Twice

A recent post on “The Home Story”, a site published by Fannie Mae, explained the difference between the price a seller may get for their home and the value an appraiser might assign the property.

The Sales Price

Of course, most sellers want to maximize the value they get for the house. However, the price they set might not be reflective of the other comparable homes in the neighborhood. As the article stated:

“People tend to view their homes emotionally, and that can become quickly apparent when they decide to sell.”

That doesn’t mean that the home won’t necessarily sell for that price.

A seller can set an asking price and actually have a buyer agree to that price. However, that value may not be necessarily in agreement with what most buyers are willing to pay. For example, one person can view a property, determine it is exactly what they are looking for and well worth the asking price, whereas another person could look at the same property and feel the asking price is too high.

Steven Corbin, Director of Valuation in Fannie Mae’s CPM Real Estate division gives an example:

“Someone may have driven by the property countless times, and they really want to live in that house. So in reality they may overbid for that property. This would be a situation where the actions of a specific buyer do not represent the actions of a typical buyer.”

The Appraised Value (or Market Value)

Fannie Mae explains what they look for when appraising the house:

“When a contract is established on a property, an appraised value is determined by a professional real estate appraiser. The appraiser works on the lender’s behalf to determine that value by taking many factors into consideration, including the neighborhood, the value of properties of similar size and construction, and even such things as the type of fixtures on the premises and layout of the floor plan.”

Corbin adds:

“From a lending perspective, a bank would want to know the probable price a typical buyer would offer for the property. That’s what an appraiser would set as the market value.”

The Challenge when Sales Price and Appraisal Value are Different

If the appraiser comes in with a value that is below the agreed upon sales price, the lending institution might not authorize the mortgage for the full amount a buyer would need to complete the transaction.

Quicken Loans actually releases a Home Price Perception Index (HPPI) that quantifies the difference between what sellers and appraisers believe regarding value. The HPPI represents the difference between appraisers’ and homeowners’ opinions of home values.

Currently, there is approximately a 2% difference between what homeowners believe their home to be worth and what appraisers value that same home. On a $300,000 sale that would be a $6,000 difference. That could be a challenge that might prevent the home sale proceeding to the closing table.

Quicken Loans Chief Economist Bob Walters recently commented on this issue:

“The more homeowners are in line with appraisers, the easier it will be to refinance their mortgage and easier for those looking to buy a home. If the two are aligned, it eliminates one of the top stumbling blocks in the mortgage process.”

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). In a housing market where supply is very low and demand is very high, home values increase rapidly. One major challenge in such a market is the bank appraisal. If prices are jumping, it is difficult for appraisers to find adequate comparable sales (similar houses in the neighborhood that closed recently) to defend the price when performing the appraisal for the bank.

With escalating prices, the second sale might be even more difficult than the first. Let’s get together and discuss the market in your neighborhood and the best listing price for your home.

 

Source: Simplifying the Market


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Home Prices: Past, Present & Future

CoreLogic released their most current Home Price Index last week. In the report, they revealed home appreciation in three categories: percentage appreciation over the last year, over the last month and projected over the next twelve months.

Here are state maps for each category:

The Past – home appreciation over the last 12 months

Home Prices Past | Simplifying The Market

The Present – home appreciation over the last month

Home Prices Present | Simplifying The Market

The Future – home appreciation projected over the next 12 months

Home Prices Future | Simplifying The Market

Bottom Line:

Homes across the country are appreciating at different rates. If you plan on relocating to another state and are waiting for your home to appreciate more, you need to know that the home you will buy in another state may be appreciating even faster.

Let’s get together to determine your next steps.

 

Source: Simplifying the Market


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What You Really Need To Qualify For A Mortgage

A recent survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 5% or less.

Below are the results of a Digital Risk survey done on Millennials who recently purchased a home.

Down Payments | Simplifying The Market

2. FICO Scores

The Ipsos survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower.

Below are the numbers from the latest Ellie Mae report.

FICO Scores | Simplifying The Market

Bottom Line

If you are a prospective purchaser who is ‘ready’ and ‘willing’ to buy but not sure if you are also ‘able,’ let’s get together and discuss your options.

 

Source: Simplifying the Market


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Prices & Mortgage Rates Going Up in 2016

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The monthly mortgage payment on a home is determined by two elements: the price of the house and the interest rate you pay on your mortgage. Recently released reports are revealing that the experts expect both elements to increase in 2016.

HOME PRICES

CoreLogic has projected a nationwide 5.2% home value appreciation for the next twelve months. Here is their breakdown by state:

Forecasted Prices | Simplifying The Market

MORTGAGE INTEREST RATES

All four of the entities that provide projections on mortgage interest rates agree: they’re going up in 2016. Here are the predictions over the next four quarters:

Interest Rates | Simplifying The Market

Bottom Line

With both home values and interest rates projected to increase over the next twelve months, buying (or moving-up), sooner rather than later, makes sense.

Source: Simplifying the market


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The Impact of Higher Interest Rates

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Last week, an article in the Washington Post discussed a new ‘threat’ homebuyers will soon be facing: higher mortgage rates. The article revealed:

“The Mortgage Bankers Association expects that rates on 30-year loans could reach 4.8 percent by the end of next year, topping 5 percent in 2017. Rates haven’t been that high since the recession.”

How can this impact the housing market?

The article reported that recent analysis from Realtor.com found that –

“…as many as 7% of people who applied for a mortgage during the first half of the year would have had trouble qualifying if rates rose by half a percentage point.”

This doesn’t necessarily mean that those buyers negatively impacted by a rate increase would not purchase a home. However, it would mean that they would either need to come up with substantially more cash for a down payment or settle for a lesser priced home.

Below is a table showing how a jump in mortgage interest rates would impact the purchasing power of a prospective buyer on a $300,000 home.

Buyers Purchasing Power | Simplifying The Market

Bottom Line

If you are considering a home purchase (either as a first time buyer or move-up buyer), purchasing sooner rather than later may make more sense from a pure financial outlook.

Source: Simplifying the market


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