Isn’t it time to take a look at those VA benefits?

As we celebrate Veterans Day in November, I would be remiss to not mention one of the most misunderstood and overlooked veteran’s benefit, the VA home loan.

  • Of the more than 20 million U.S. military veterans, only 10.5 percent utilize their home loan benefits.
  • When those who aren’t using this benefit were asked why, more than 33 percent responded that they didn’t know about the VA loan guarantee (2010 National Survey of Veterans). Another large group claims that FHA loans are easier to obtain.
  • The largest groups of respondents to the National Survey of Veterans who were unaware of the program’s existence were older veterans and unmarried surviving spouses.

While not at all flag-waving worthy, these statistics can, and should change. It starts with the real estate/mortgage industry taking responsibility for educating veterans and their spouses about the VA home loan program and its benefits.

The loan, in a nutshell

The U.S. Department of Veterans Affairs offers a home loan guaranty, promising the veteran’s lender that the veteran will repay the loan.

Now this guaranty doesn’t cover the entire loan amount. Should the veteran default on the loan, the VA guaranty covers from 40 to 50 percent, depending on the size of the loan.

VA home loans can be used to:

  • Buy a single-family home or a condominium unit in a VA-approved project.
  • Build a home.
  • Simultaneously purchase and improve a home.
  • Improve a home’s energy efficiency.
  • Buy a manufactured home and/or lot.

VA loan advantages

Today there are only two easy ways to finance a home with no down payment: through the United States Department of Agriculture Rural Development Program and through the Veterans Administration.

Thinking of a FHA-backed or conventional loan? If you put down less than 20 percent, you’ll be subjected to the required monthly payment for MIP (mortgage insurance premium) for the former and PMI (private mortgage insurance) for the latter.

This insurance, which benefits the lender should the borrower default on the loan, can add quite a chunk to your monthly mortgage payment.

The amount you’ll be required to pay depends on how much you borrow and the loan-to-value ratio. You’ll find an FHA MIP rate chart at LendingTree.com.

The VA loan, on the other hand, has no monthly mortgage insurance premiums, there are limitations on how much you’ll spend on closing costs, and the loan has no prepayment penalty.

If you choose a newly constructed home, the builder is required to purchase a 1-year home warranty for you.

How to get one of these bad boys

As with anything that comes from the government, eligibility can become complicated (wait until you see the appraisal requirements!).  You are eligible for a VA-backed loan if:

  • You have what the VA considers “suitable credit.”
  • You have sufficient income to pay your bills and your mortgage payment.
  • You plan on occupying the home.
  • You have a valid Certificate of Eligibility (COE).

The latter is easy to obtain. In fact, a VA-savvy lender should be able to get your COE through the online ACE system. Learn how to choose the right lender for your VA loan at Military.com.

If for some reason your records can’t be accessed, you’ll need to apply to the VA for your certificate. We can help you with that.

Remember, you’ll be applying for this mortgage through traditional lender and each has its own guidelines so you’ll need to meet the lender’s requirements as well.

Yes, your credit score and overall financial picture will be examined, but the lending process for veterans isn’t quite as stringent as it is for civilians.

Should I sell my home during a recession?

It’s inescapable. Discussions about a possible upcoming U.S. economic recession have become daily media fodder.

Speculation and reality, as we all know, are two entirely different things.

What many Americans don’t understand is that the U.S. economy runs through four periods, or phases.

  • Expansion
  • Peak
  • Recession
  • Trough

Movement of the economy through the four periods is known as “the business cycle.” Although no two cycles are identical, they look a bit like this:

Source: Congressional Research Service

The Congressional Research Service claims that “the average expansion has lasted about 58 months (about 4.8 years), and the average recession has lasted about 11 months.”

On July 1, 2019, our economy reached a milestone: 11 straight years of growth, marking this as the longest expansion in the country’s history.

What goes up must come down, right? Which explains the media’s frenzy over a supposed coming recession.

Just today we read an article promising a recession in 2021 from a news outlet who swore in 2018 that it would happen in 2019. Moving the goal post seems to be a favorite pastime of many journalists.

Of course, a recession is coming. It’s part of our business cycle. Pinpointing when it will happen, however, is a bit of a challenge. But it doesn’t take a genius to conclude that a recession is coming. There is always one “coming.” Eventually.

While we urge you to use common sense when reading or listening to the news, especially lately, we understand the power of the media to create fear and doubt in the minds of Americans.

So, on to today’s questions: Is it wise to buy or sell a home during a recession?

Do you need to buy or sell?

The “best” time to buy or sell a home is when you need to. Sounds simple, doesn’t it?

But it’s true. The market could be red-hot for sellers but if you don’t need or want to sell, what difference does it make? It’s not the best time for you.

Confusion reigns among the public during recessionary periods and, as we see lately, even when there’s merely speculation about an impending recession.

Everything seems so uncertain and it’s easy to feel paralyzed. Should I turn this way or that?

There really is no clear course, no crystal ball to let us know when a recession will begin or end. Everybody sort of plays it by ear, or by gut.

The truth, at least statistically, is that aside from the last recession, when home prices hit rock bottom and interest rates were the lowest they’d been in a very long time, home prices typically increase during a recession.

Surprised?

Recessions typically present an ideal time to sell a home. If you are selling your current home and hope to purchase another one, however, that can present a problem.

It isn’t just your home that is higher priced, so if you wait for a recession to sell, be prepared to pay more for the new home than you would were we not in a recession.

The first thing to consider is how much, if any, equity you have in your current home. When all is said and done, after the lender has been paid, the real estate broker has been paid, how much do you stand to make from the proceeds?

Is that enough money to put you into your next home?

Consider, as well, any repairs or upgrades you would like to perform on the new place. Perhaps, if you can’t do them immediately, you are willing to wait until finances aren’t quite as tight.

If the foreclosure rate is high, understand that there may be more and cheaper competition for your home, the buyer pool will naturally shrink as folks lose jobs or tighten their belts. The time it will take to sell your home may be significantly longer than it is today.

If you are at all considering selling your home, we urge you to do so soon. Trying to time the market is a recipe for financial disaster.

Should I sell my home during a downturn in the economy? It’s a common question among homeowners who plan to sell, but it requires some careful thought.

Besides, you will most likely get the highest price possible right now, while there are few homes for sale and lots of buyers wanting one.

Finally, whether or not to sell your home during a recession is question that you should probably run by your accountant, if and when the time comes.

Is it time for you to buy a bigger home?

Houses a bit like your kids’ shoes – before you know it, they don’t fit anymore.

And, while we never hear folks say they regret having children, we often hear that they wish they’d bought a larger home.

While a growing family is one good reason to think about moving up, there are other aspects to upsizing that offer bonuses you may not have considered.

Larger Homes Offer More

That sounds a bit like a “well, duh” comment, but bear with us.

We aren’t just referring to the extra square footage here. Think about roomier closets, glorious amounts of storage space, the ability to comfortably house out-of-town guests and more elbow room in which to find a bit of privacy when you need it.

If you made a priority list to refer to when you shopped for your current home, you no doubt ended up making compromises. When you upsize, however, you’ll find that both of you (and maybe even the kids) will finally get some of the options you dreamed about but had to give up.

Finally, a larger home offers the option of growing into it. You may not be currently thinking of having another child or offering a room to an aging parent, but isn’t it nice to not have to consider moving again should either of these come to pass?

The financial benefits of a larger home

Depending on the equity you have in your current home, you may be able to keep your house payment quite close to what you’re paying now. After all, that equity will go a long way to cutting down on the initial cost of the new home.

Then, consider this: money has rarely been cheaper to borrow than it is right now. If you make the move now, before interest rates increase, you’ll save significantly when it comes to your monthly mortgage payment.

Then, consider the resale value of the new home. In 2016, for instance, the average American home included 2,400 square feet of living space, according to the Census Bureau.

And a National Association of Homebuilders survey finds that most older members of our largest generation, the Millennials, prefer living in a home with at least 2,475 square feet of living space with either three or four bedrooms and a minimum of two bathrooms.

So, look to the future, because it looks quite rosy for owners of larger homes. Demand should be high enough to mean more money in your pocket when you decide to sell.

Upsizing: Get clear on your goals

You already know you want a larger home, but it’s important to understand your other goals. As discussed earlier, the amount of room you need right now will change if you plan on growing your family or take in an older family member.

And, if you have children, consider how close you’ll need to live to schools.

Other goals to consider include:

  • Your commute time to work
  • Desired nearby amenities
  • The type of floor plan you’ll need to accommodate your family’s lifestyle

Need to save money? Shop strategically

The more move-in ready a home is, the more competition you’ll encounter when shopping for homes, and competition drives up home prices. If you’re on a tight budget, overlook those turnkey properties and search for a home that many need some simple upgrades.

Once you’ve settled on a neighborhood or two, buying one of the worst homes on the block can be a good financial strategy. It’s the old “rising tide” adage – the surrounding homes will lift the prices of all the homes in the neighborhood.

If a home is sitting on the market because of cosmetic issues, and priced accordingly, consider looking at it to see if it meets your needs.

Sure, there’s a lot to consider about upsizing. But, take the process one step at a time and you’ll not only get rid of some of the stress, but find that moving up is one of the best decisions you’ve ever made.

3 Things your cat can teach you about house hunting

Whether you’re a crazy cat lady with a house full of felines or you prefer the company of just one kitty, if you watch closely you can learn a lot about successful house hunting.

Of course, you never want to rub up against a homeowner’s couch or destroy the roll of toilet paper in their bathroom, but there are three cat characteristics in particular that you might put to good use when searching for a home.

1. Be a hunter

Cats are serious hunters. Even when the prey is a stuffed mouse, they practice their stealth and hunting prowess.

Watching a cat hunt is a lesson for home buyers. If a cat were house hunting instead of mouse hunting, she would stalk the latest MLS listings tenaciously, pouncing immediately on those that look tasty.

Don’t give up the hunt because it seems too challenging. Crouch, crawl, stare hard and then twist, curl and pounce when that perfect home is within striking distance.

Ok, so you don’t need to go through the physical gyrations that cats do when you’re on the hunt for the perfect house, but you do need to use that same laser-focus, remain flexible and be oh-so-tenacious.

Keep in mind that the absolute perfect home for any one person probably doesn’t exist, unless it’s custom-built. Decide what your priorities are and aim for fulfilling at least three of them.

Then, be flexible enough to compromise on the others if they conflict with your partner’s priorities.

2. Don’t be distracted by shiny objects

Staged homes are attractive, there’s no doubt about it. Especially if the staging was performed by a professional, it’s so easy to see yourself living there.

Homes with features you’ve been dreaming of (a fireplace in the master bedroom, that to-die for Wolf® range or the perfectly-perfect-for-entertaining backyard can blind you to other, perhaps undesirable aspects of the home.

Don’t be like your cat – easily distracted by shiny objects.

But do be like kitty in that you should be curious. Look beyond the sexy paint colors and amazing décor to the bare bones of the home. Don’t be distracted – be curious.

3. Remain aloof

Many cats are mysterious, somewhat aloof and can keep you guessing about why they even allow you in their presence.

Once you find a home that you’re excited about, don’t EVER show it — at least not around the homeowner or the homeowner’s agent (or the homeowner’s Nest Cam).

Maintain that cat-like aura of coolness, disinterest or, at the very least, neutrality.

The worst thing you can do is gush over the home, expressing your love for it and your overwhelming desire to own it – at any cost.

Nope, this is the time to be very cat-like and back off, as aloof as possible. When how you feel about the home is inscrutable to the homeowner, you’re in a stronger negotiating position.

Oh, one other thing your cat can teach you – when we win the battle for the home of your dreams you are allowed to purr in contentment

 

Working in the gig economy? How to get a mortgage

For the self-employed, April 15 holds no particular significance, income is often erratic (killing it one month to eating ramen for dinner the next), nobody sends them W-2s at year’s end and their shoebox filing system contains zero paycheck stubs.

If you make a living by driving people around in your personal car, delivering restaurant food, grocery shopping for others, renting out rooms or an entire home to vacationers, delivering packages or freelancing online, you are self-employed.

You are an independent contractor in what is commonly known as the “gig economy.”

While the freedom these vocations offer is amazing, they do come with some drawbacks. One of those you’ll meet up with is when you try to get a mortgage to buy a home.

The mortgage challenge for the self-employed

One of the large real estate portals reported that self-employed workers:

  • Earn more than employees
  • Have more cash on hand
  • As a group, receive 40 percent fewer mortgage quotes than other homebuyers
  • Apply for homes that cost 12 percent more, on average, than other borrowers
  • Are “twice as likely as other borrowers to report a score of less than 680.”

While none of these factors either automatically qualify or disqualify gig economy workers hoping to get a mortgage, the low credit scores and lack of income documentation do present a challenge.

Deal with the credit score first

Regardless of how well you can document your income, a poor credit score will be your biggest obstacle in obtaining a mortgage.

The simplest way to raise your score is by paying your bills on time and by not applying for new credit. Then, consider the following:

  • Pay down your debt (on credit cards, personal loans, etc.)
  • Don’t close unused credit cards (they count in your favor)
  • Dispute inaccuracies on your credit reports
  • Keep credit card balances to 30 percent (or less) of your credit limit

Visit the Federal Trade Commission’s website to learn how to order your free credit report.

Gather up the necessary documentation

While your accountant may tolerate that shoebox full of records, your lender will not. Documentation requirements vary, but you’ll typically need to provide the lender with the following:

  • The past two years’ tax returns (with all schedules)
  • A profit and loss statement (yes, even gig economy workers will need to supply one). Wells Fargo and Chase offer fill-in PDF profit and loss statements online and Dummies.com offers one that you can download and print.
  • Bank statements (your lender will tell you how many are required. Submit all pages, including those that are blank).

These are the basic documents required; your lender may ask for additional information. Also, Fannie Mae guidelines are a bit different and you may be able to qualify with only the most recent tax return.

Additional considerations

Tax deductions are the holy grail for the self-employed because they reduce income and, thus, the amount of taxes owed.

This presents a conundrum when it is time to apply for a mortgage because the opposite is true: you want to show as high an income as possible.

If all else fails:

  • Put off buying a home for the next two years and, during that time, cut back on the number of business expenses you write off.
  • Save up a large down payment. This will lower the amount of the loan you’ll need to qualify for.
  • Consider purchasing a less expensive home that will be easier to qualify for.

Sen. Mark R. Warner (D-Va.), co-sponsor of the Self-Employed Mortgage Access Act, claims that “as many as 42 million Americans — roughly 30 percent of the workforce — are self-employed or in the gig economy,” according to the staff at Bankrate.com.

Thankfully, the mortgage industry is waking up to this fact and easing requirements for some loans.

By the way, we aren’t mortgage or tax experts and urge you to consult with yours if you have any questions.

Negotiation: There’s more than the price of the home to consider

Home buying negotiation

Naturally, the price of a home is top-of-mind when we talk about negotiating in a real estate deal. And, for some homebuyers, these negotiations are critical.

But, did you know that there are other ways to bargain with a home seller other than on price? The purchase agreement is full of haggling opportunities. Let’s take a look at five of them we deal with most often.

1. Repairs

Negotiating home repairs is something we are quite familiar with. After the home inspection, when the homebuyer receives the inspector’s report, negotiations often begin anew.

Understand, however, that no home is perfect; even newly-constructed homes can have problems. Don’t sweat the small stuff – save the negotiations for anything major that needs repair or replacement.

This is especially true if the problems are in one or more of the home’s major systems, such as HVAC, electrical, plumbing or with the roof or foundation.

We can negotiate for a price reduction, closing costs credit or for the repair work to be performed by the seller before closing. The first two options (price reduction or credit towards closing costs) are preferable, as they won’t typically delay the closing.

Plus, there is no way to guarantee the repair work, if performed by the seller’s contractor, will meet your standards.

2. Closing costs

With a mortgage comes a requirement to pay a down payment and closing costs. The latter includes all the costs of obtaining the loan, such as lender fees, notary fees and more.

While sellers are under no obligation to do so, many buyers negotiate with the seller to pay all or part of their closing costs.

It’s an easier pill for the seller to swallow if:

  • Your offer for the home is at full asking price
  • You intend to keep your request for repairs to a minimum. If the seller has to pay for a laundry list of requested repairs, he or she may not be amenable (or have the funds) to assist with your closing costs.
  • You put some skin in the game as well, by paying for a portion of your closing costs

3. Personal property

Anything that isn’t permanently affixed to the home or land (real property) is considered the personal property of the homeowner. Personal property that we commonly negotiate over for our homebuying clients include:

  • Appliances, such as refrigerator, washer, dryer
  • Window coverings
  • Chandeliers
  • Portable out-buildings

Buyers, however, have negotiated for furniture, pool tables, artwork and even the family pet.

4. Closing date

The closing date – the day on which the home becomes yours – is negotiable. This is important to know for several reasons:

  • If you are trying to time the closing of your current home to be simultaneous with the new home’s closing.
  • You need more time to find another home
  • You are relocating and need to be in your new city by a certain date

If your schedule doesn’t conflict with the seller’s this is often a successful negotiation.

5. Home warranty

Real estate agents have a love-hate relationship with home warranties. Some consider them useless while others love them for the peace-of-mind they offer homebuyers.

If a home warranty is something that you desire, it’s possible to ask the seller to provide you with one – at least for the first year of home ownership.

Basic coverage varies by region and company, but commonly includes coverage for:

  • HVAC systems
  • Kitchen appliances
  • Plumbing
  • Electrical
  • Roof leaks

While the above is only a partial list of commonly negotiated items in a home purchase, it outlines the ones we see most often.

Feel free to reach out to us if you have questions on this or any aspect of the home purchase process.

The life expectancy of home appliances

Whether you’re shopping for a home or already own one, knowing the current age of the appliances is important. Like us, they have an average life span. Unlike us, they can be replaced. But it’s pricey to do so.

The experts at Consumer Reports recommend that you replace appliances if the cost to repair them is more than half the price of a new one. While that’s a good rule of thumb, it’s something you can put off with care and proper maintenance of your home’s appliances.

As a bonus, your appliances won’t become energy hogs.

 

USDA Loans – They Just May be the Best Option for Low-Income Buyers

USDA Loans

Keeping your nose to the grindstone, using credit wisely and responsibly and paying your bills on time every month have their rewards, no matter how much or how little money you make.

One reward is how much easier it is to realize your piece of the American Dream – the opportunity to purchase your own home. A bonus for the low-income earner is a government-backed loan with no down payment.

The United States Department of Agriculture (USDA) Rural Development Single Family Housing programs may just be the best option for low-income folks with good credit and a steady job to buy a house.

Two types of loans for homebuyers

The two most popular USDA home loan programs are the Homeownership Direct Loan Program and the Guaranteed Loan.

Both of these programs aim to help low-to-moderate-income people purchase homes in rural areas. Both have no down payment requirement.

The key differences between the direct loan and the guaranteed loan are as follows:

  • Direct loans are intended for low and very-low income purchasers that have been unable to obtain a conventional or FHA loan. Guaranteed loans are intended for those with moderate incomes.
  • Income levels for guaranteed loan borrowers are capped at 115 percent of the area’s median income, while those for direct loan borrowers are capped at 80 percent.
  • The guaranteed loan is made by a conventional lender but guaranteed by the government. The U.S. government acts as the lender for the direct loan
  • Direct loan applicants with inadequate incomes may use a co-signer. This is not possible with the guaranteed loan.

Guaranteed Loan Benefits

Remember, the guaranteed loan is for the moderate-income borrower. It is much like the FHA loan in that the government gives the lender a guarantee of repayment in the event the borrower defaults on the loan.

The biggest difference between the USDA loans and FHA is that USDA requires no down payment. Here are some basic benefits of the guaranteed loan:

  • No down payment required and 100 percent financing available.
  • Certain repairs and closing costs may be rolled into the loan up to the appraised value of the home.
  • The upfront guarantee fee may be rolled into the loan amount above the appraised value.
  • The loan can be used to purchase existing or newly constructed homes and planned unit developments. Some condos are eligible.
  • Interest rates are fixed and the loan has no prepayment penalties.
  • Non-traditional credit histories may be considered.
  • Down payment assistance programs, seller concessions, gifts and grants from city and county housing development programs may be considered.

Direct Loan Benefits

This is the loan for you if you are low income but have decent credit and a steady job. You will borrow for the home directly from the U.S. government. Here are just a handful of the benefits of the USDA Direct Loan program:

  • No down payment required.
  • Payment assistance is available that may reduce the monthly payment.
  • Some closing costs may be included in the loan.
  • No private mortgage insurance required.

Eligibility

To use either loan, the borrower must be purchasing a home in a rural area. The USDA defines “rural” as any town with a population of “25,000 or less that is not adjacent to a large city or that is not part of a continuous urban area.”

The home must be “modest” in size. The average USDA home is 1,200 square feet. Homes with swimming pools are ineligible. The loan cannot be used to purchase income producing property, furniture or other personal property, an existing manufactured home or for a home with non-essential buildings and land.

To determine if a particular property is eligible, visit the USDA Rural Development Property Eligibility website.

For a borrower to be eligible for the USDA Guaranteed or Direct Loan program you must:

  • Be a U.S. citizen or be admitted as a permanent resident.
  • Be unable to secure a comparable loan without a government guarantee.      
  • Not currently own a home within commute distance of the home you are buying.
  • Have a dependable income.
  • Have a credit history that proves you meet your financial obligations on time.
  • Occupy the home as your primary residence.
  • Direct loan applicants must prove that they do not currently own safe and sanitary housing.  
  • Direct loan applicants must be very low income (income that is between 50 and 80 percent of the area’s AMI). Guaranteed loan applicants must be moderate income, making 80 to 115 percent of AMI.               

An easy way to determine your income eligibility is by visiting the USDA Single Family Housing Income Eligibility website.

3 Things to know about buying a new-construction home

Home construction

Will this be the year you buy a brand-new home? Don’t be discouraged by news reports claiming that “U.S. home building fell,” or “housing starts dropped.”

The scary-sounding numbers are due to a drop in multi-family home building, not single-family.

In fact, the single-family home construction market across the country is set to be just fine, with a surge in new building permits late this summer.

Moving into a newly-built home is a lot like the first time you sit behind the wheel of a new car, but on steroids. No stinky smells from whatever it was the previous occupant was cooking, no greasy range hood and walls, no dinged-up baseboards – everything is new and pristine.

While these aspects may make you starry-eyed, there’s reality to contend with as well. Today we share with you some things to watch for when taking on the purchase of a brand-new home.

The builder’s real estate agent

When you drive up to the new home community you’ll notice quickly how you’re directed first to the builder’s office before you get to the model homes. That guy or gal sitting in the office isn’t a receptionist, but the builder’s real estate agent.

She or he will show you a map of the buildable lots available, talk to you about the community’s amenities and, naturally, the homes, before sending you on your way to view the models.

If you fall in love with one, which is every builder’s goal, you’ll want to get the purchase process underway quickly.

Hey, I don’t blame you, this is exciting stuff! And, what better and easier way to do it than to allow the builder’s agent to get the ball rolling?

Ok, that’s the third time I’ve said it: “the builder’s real estate agent.” Sure, legally this agent can represent both you and the builder, but is it a wise move?

Think about this: if it were legal, would you use your about-to-be former spouse’s attorney in your divorce proceedings? Why do you suppose that isn’t common practice?

Here’s why: it is almost impossible for the builder’s agent to protect both the builder’s interests and yours in the same transaction.

Since the seller pays for the buyers’ real estate agent at closing, it only makes sense that you have your own agent who will look out for nobody else but you.

Avoid this problem by letting the builder’s agent know, upfront, that you have an agent.

The builder’s lender

Hey, this is a one-stop shop, right? Of course!

Home builders understand that they need to hook the buyer when he or she is most excited so they offer all the services one might need to get the process started. This includes an “in-house” or “preferred” lender.

Now, unlike using the builder’s agent, there’s nothing wrong with using his or her lender, as long as you’ve shopped around and know that you’re getting a good deal.

Never feel that you have to use this lender, however, because you don’t.

The builder

Check out the builder’s reputation if you aren’t familiar with him or her. Start with the Better Business Bureau and then scour the city’s public records for lawsuits against the builder.

Buying a newly constructed home in Billings is a lot more involved than buying an existing home, but the end result is well-worth the steps it takes to get there.

Dreaming of life on a golf course?

Golf Course

There was a time when real estate agents could confidently tell their clients that one of the biggest advantages of owning a home on a golf course is that the verdant view would be permanent.

Today, many owners face a view of brown, dead fairways, vandalized buildings and uncertainty about what may pop up when the land is sold.

Chalk it up to the busyness of Americans. The lengthy game of golf has declined in popularity, leaving course owners to deal with the consequences.

Or, blame the oversupply of golf courses and the waning of Tiger-mania (among other reasons), as  John Eidukot at GolfOperatorMagazine.com does.

Whatever the reasons, “More than 200 courses closed in 2017, while about 15 opened,” according to Newser.com editors, quoting National Golf Foundation figures.

We are frequently asked if golf course homes are worth more than those not similarly located, if golf course homes are a good investment and about the pros and cons of golf course living.

Here’s what we know, the good and the bad.

The future of golf

It’s not all doom and gloom for the $84 billion-dollar golf industry. Nearly 40 percent of Americans (107 million, to be more precise) either played read about or watched golf in 2018, according to the National Golf Foundation’s 2019 Golf Industry Report.

The report also found that participation has stabilized. Gone are the crazy statistics of drop-out golfers. In fact, last year, participation rates climbed. The report credits this growth, in part, to “popular off-course forms of the game such as Topgolf, Drive Shack and indoor simulators.”

Since our children are our future, there is encouraging news in the number of young golfers taking up the sport.

“There were 2.5 million junior golfers last year [2018]” the report claims and “an estimated 2.6 million beginners (those who played on a golf course for the first time) in 2018, which is near record levels and marks the fifth straight year with over 2 million newcomers.”

It appears that it’s far too soon to call time-of-death for the game of golf and, by extension, the American golf course.

5 tips to consider if you’ve been thinking about buying a home in a golf course community

  1. While living across the street from the fairways offers a homeowner additional privacy (no neighbor in front), it also provides a bird’s-eye-view to golfers – especially those wandering through your yard to retrieve balls.

Choose your location within the golf community carefully. Homes along the right side, nearest to the tee box, are statistically at higher risk for wandering golfers searching for errant balls and the damage those balls can cause.

One golfer/golf course homeowner we spoke with suggested playing the course to help you determine if the home you have your eye on is ideally located.

  1. While we stress the importance to all homebuyers interested in purchasing a home in a managed community to read the HOA documents thoroughly, it’s even more critical when considering a home on a golf course.

Is netting prohibited? Are there rules against entering the course from your property?

  1. While golf participation is stabilizing, and fewer courses are closing, keep in mind that it’s still a buyers’ market in this real estate niche. You are in the drivers’ seat, by and large, in negotiations.

4. No, you don’t need to be a golfer to enjoy golf course living. In fact, it’s estimated that only about a quarter of residents who live on or near courses play the game. They purchased the home to enjoy the scenic view, the enjoyment of not having a neighbor’s home facing theirs and the peaceful evenings.

5. Even if you do play, you may want to restrict your search for a golf course home for sale to communities that offer other amenities as well, such as walking paths or a swimming pool.

Thinking of selling your golf course home?

Realtor.com analyzed listings of homes for sale in 273 U.S. counties. They found that those listings that included the word “golf” took, on average, 75 days to sell.

These homes eventually sold for 14 percent more than the median sale price for the area and nearly 30 percent more than the nationwide median home price.

Of course, all real estate is local and markets change so the “mileage” here in our area may vary. Feel free to reach out to us for a complimentary, no-obligation determination of your home’s likely market value.