Author: Shannon

Home builders are back at work! In fact, according to the Census Bureau, permits for single-family homes increased 7.6% in February over January.

This is not surprising when we take into account the demand for homes of any age and the statistics that show 60% of homebuyers “…prefer a new construction home over an existing home.”

If this includes you, we’d like to share several aspects of new-home shopping and purchasing that you may not know.

1. The new-home mortgage

Just as when you purchase a pre-owned home, you’ll need to visit a lender for mortgage pre-approval consideration. This way you’ll not only know for certain that you can get a home loan, but also the amount you’ll be receiving, which helps you avoid looking at homes that are out of your price range.

Most new-home builders have established relationships with their own  “preferred lenders.” Depending on the builder you speak with, you may feel pressured to use that particular lender.

“The builder may make it seem like you have to use their preferred lender, but you always have the option to finance your home with someone else,” according to the experts at Better Mortgage.

“It’s often in the builder’s best interest for you to partner with their preferred lender, but it may not be in yours,” they conclude.

You may, on the other hand, get a better deal with the builder’s preferred mortgage company. That’s why it pays to shop around before settling on one.

2. Get your own real estate agent

The first person you’ll meet when you visit a new-home community will most likely be the builder’s real estate agent. Even though he or she may be a very nice person and knowledgeable about the homes and the community, resist any pressure to allow the agent to represent you in your purchase.

The builder’s agent represents the seller, the builder in this case. It’s important for you to have your own representation as well.

Since a buyer’s agent costs you nothing (the builder pays the buyer’s agent commission) you have nothing to lose and lots of protection to gain by working with your own agent who is looking out for your best interests.

3. How will you deal with deciding between standard options and upgrades?

The interior of the home will come with what are known as “standard” options. You will also be offered a choice of upgrades for most of these options.

If you fell in love with the model homes, you’ll pay a pretty penny to recreate them because they’re all furnished with upgrades.

Examples of standard vs. upgrade include:

• Standard vs. high-end cabinets
• Neutral paint colors vs. specialty paint colors
• Carpet vs. wood floors

Keep in mind that upgrades are going to increase the sticker price on your home. Sometime significantly so.

This is where your buyer’s agent will be extra helpful. As you tour the design center and come across an upgrade you like, ask your agent if the upgrade is worth the investment and whether you’re likely to see a return when you sell the house.

You might also consider reaching out to vendors directly because you may get these upgrades after closing for much less than what the builder would charge. It’ll be even cheaper if you’re handy and can install the updates yourself.

This said, upgrading a kitchen (or bathroom) is not an especially easy project and — let’s be honest — do you really want to move into a brand-new home and already feel like your kitchen needs renovating? In some cases, it may be worth the splurge to get the materials and appliances you really want from the outset.

To help you make up your mind, visit this blog post at Realtor.com.

We can help you navigate the new construction waters and bring you to a successful close on your brand-new home. Feel free to reach out to us.

Before putting your home on the market, it’s important to focus on who your likely buyer will be. Now, you don’t necessarily need a crystal ball to figure this out; statistics abound on what different types of buyers are looking for, both in a home and a neighborhood.

Then, there are the basic needs that seem to cut across all demographics. Once you have a clear picture of your likely buyer, we can better focus our marketing efforts.

The first-time buyer

Believe it or not, despite still-inflated prices and higher interest rates than we’ve grown accustomed to, the Associated Press reports that homeowners with starter homes are still experiencing multiple offers from buyers.

The buyers included many first-time buyers who accounted for 28% of home sales in March.

Naturally, if you own a starter home, you’ll want to cater to these buyers.

A dedicated laundry room tops the list of what these folks want most in a home. If your home boasts one, staging it to appeal to these buyers will have them clamoring for your home.

Consider adding shelving and other storage solutions. If space permits, a laundry-folding table will be a hit with buyers.

Don’t be surprised if baby boomers fall in love with your home

Baby boomers are large and in charge in the current market. For years their number of homebuyers was swamped by Millennials but not anymore. Nearly half of homebuyers are among the older generation.

Luckily, for home sellers who plan on staging to appeal to their target market, boomers want a lot of the same things as Millennials. This includes:

• Laundry room
• Hardwood floors
• Open floor plan
• Outdoor space

There are a few minor differences, however. Boomers crave one-level living and aren’t at all interested in a basement, Paul Emrath with the National Association of Home Builders tells Michele Lerner at NewHomeSource.com.

He goes on to claim that this cohort is looking for a patio, a “small private yard” and an outdoor kitchen.

Tip: Energy efficiency, especially when it comes to heating and cooling costs, is a homebuyer hot button, so if you’ve made any improvements in that area, they will make perfect marketing points.

The time to get the home on the market is a.s.a.p.

Now that you understand who will be attracted to your home, get it on the market as soon as you can.

What’s the rush?

Home prices may be about to plunge, according to PNC Bank’s Senior Economist, Abbey Omodunbi. She tells Yahoo Finance Live that they “… are forecasting that we are going to get a 10% decline in house prices this year.”

“There will be more of a balance in the housing market. There will be less demand and more supply. And that will contribute to the decline in house prices,” she concluded.

If you hope to get the maximum amount of profit that you can from the sale of your home, you may be disappointed if you wait too much longer.

Questions? Feel free to reach out. We’re always happy to help.

A client called recently with a question that we frequently field: “We plan on putting our home up for sale next month and we’re wondering, aside from cleaning the home really well, are there any repairs that sellers commonly overlook? We want to make sure that the house is ready to sell for our price.”

Certain repairs simply must be made before putting your home on the market. A leaky roof, broken windows and an inoperable furnace aren’t going to fly with buyers. Other fixes, however, aren’t as important but they may help sell the house.

“You want to spend as little as you possibly can on the improvements that make the most sense, and ignore the ones that you’re really dreaming about because you’ll never get your money back,” Barbara Corcoran tells The Today Show.

First impressions matter

One of the best fixes you can make for the money is anything that is wrong with the home’s exterior, visible from the street. In other words, give the place some curb appeal by fixing all of the following:

• Sagging and/or torn window and front-door screens
• Peeling paint on railings or trim
• Leaves, weeds in the gutters
• Dead or dying landscaping
• Dirty windows

Consider giving the front door a fresh coat of paint, adding a new welcome mat, new house numbers and freshening up the mailbox.

If the lawn is beyond help, installing sod will give the home’s exterior instant curb appeal. Keep in mind that “You can lay sod anytime during the growing season, although spring and early autumn are best—cool temperatures combined with occasional rain help sod quickly root,” suggests Viveka Neveln, garden editor at Better Homes and Garden.

What’s underfoot?

Unless they’re high-end and impeccably clean, it may be worth it to remove the carpets and install luxury vinyl plank flooring.

Huh?

Not only has vinyl plank flooring landed at the top of the majority of young homebuyers’ wish lists, but “Homes with luxury vinyl flooring in the listing description can sell for 1.7 percent more and nearly 4 days faster than expected,” claims Terri Williams at RealSimple.com.

To put it in ROI terms, the experts at HomeAdvisor.com has “… the average homeowner paying $2,433 for vinyl …” flooring. The ROI on this project is more than $3500. 

Walls and Baseboards

New paint on the walls is an inexpensive way to completely change a room from dull and outdated to fresh and contemporary. Since you’re trying to sell your home and not prepare it for its 15 minutes of fame on HGTV, stick to neutral colors.

Now, this doesn’t mean you need to stick with the boring beige or even white. Neutral colors that are attractive on walls include different shades of gray or a gray-blue, a muted robin’s egg blue-green and some of the beige shades that lean to the color of café au lait.

Yes, they’re close to the ground and it’s easy to think that nobody notices them, but baseboards grab attention – especially if they are clean or freshly painted. Sometimes all it takes is a swipe with a Magic Eraser to remove the scuffs. If you paint the walls, don’t neglect the baseboards.

Lighten and brighten

Dim houses feel closed-in while light and bright spaces make the home look larger. There are lots of ways to fix a dark home. Open all the window coverings before a showing and wash the windows to let in as much natural light as possible.

If you’ll be marketing the home when the weather turns gloomy, consider buying new light fixtures and lamps. It may seem like an expensive undertaking but consider this: New lighting increases the home’s perceived value for buyers.

Fix plumbing problems

Leaky faucets and running toilets tell buyers two things: the home hasn’t been maintained and there may be a big repair bill down the line.

Minor plumbing repairs aren’t difficult to do yourself if you have the proper tools. Otherwise hire a plumber or handyman to fix the leaks and drips before the house goes on the market.

These are just a few minor fixes you may want to perform, before listing your home for sale. Take a walk around both the outside and the inside of your home and try to see it through a stranger’s eyes. You’ll be surprised what will catch your attention and, perhaps, make it onto your repair list.

Yes, the housing market is confusing right now. Questions abound. Read on for some information that may help clear up some of the confusion.

The mortgage rate roller coaster

Will rates go up or down? That seems to be the question at the top of the list for homebuyers and sellers alike.

“Rates for home loans are still caught in a tug-of-war between high inflation and the Federal Reserve’s actions to restrain inflation, which often indirectly pushes long-term mortgage rates higher,” explains Robin Rothstein at Forbes.com.

The suggestion for homebuyers is to be prepared to jump into the market when there is enough of a dip in rates for them to be able to afford a home.

Ready for some forecasts from the experts?

• Freddie Mac foresees a 6.2% rate for a 30-year mortgage by the fourth quarter of 2023.
• A bit more optimistic is Compass U.S. president, Neda Navab. “A sustained drop [in U.S. Treasury yields] could push mortgage rates into the 5% range late in the second quarter or in the second half of 2023, but that’s definitely not guaranteed.”
• “If inflation continues to slow down—and this is what we expect for 2023—mortgage rates may stabilize below 6% in 2023,” forecasts Nadia Evangelou, National Association of Realtors (NAR) senior economist.

When it comes to the current economy, with its multitude of moving parts, it’s wise to take any forecasts with a grain of salt. But do keep an eye on the economy if you hope to jump into the housing market quickly.

How’s the inventory of available homes looking?

The inventory of available homes dropped again and new listing activity is at all-time lows, according to Logan Mohtashami at HousingWire.com. Despite this, the homes that are on the market are selling quickly in many markets across the country.

These homes, by the way, are the turnkey style, in good condition with loads of curb appeal and in high demand. The fixers, the overpriced homes and those that aren’t appealing are sitting on the market.

In a nutshell? “Buyers can expect a shortage of well-priced, turnkey homes—and plenty of competition for the few that go up for sale,” according to Clare Trapasso at Realtor.com.

And home prices?

This seems to be the question that is top-of-mind for many buyers and sellers. The good news is that home prices dropped 12% “… to $363,000 in February from $413,800 last June,” says Dan Weil at TheStreet.com. Should we expect additional drops?

Mortgage rates can make or break a market. When they drop, markets turn “hot.” When they rise, activity slows way down; the inventory of available homes dries up and prices rise.

Here’s what the experts are forecasting when it comes to home prices:

• “… how much further home prices dip in 2023 will likely depend on where mortgage rates go.” (Forbes)
• “On a national basis, we expect home prices to decline about 4% both in 2023 and in 2024,” Moody’s analysts said. (The Street)
• “By February 2024, the analysts at CoreLogic expect home prices to increase year over year by 3.7%.” (Business Insider)
• The National Association of REALTORS predicts that home prices will be once again on the rise, beginning in the fourth quarter of 2023.

As you can see, the experts are as conflicted as the rest of us.

For buyers, the time to jump back into the market is when interest rates fit your comfort zone and before prices rise again.

The best thing you can do right now is get pre-approved for a mortgage, look into down payment assistance programs if you need help and keep an eye right here. We’ll keep you posted on what’s happening in the market.

The number of Americans filing for bankruptcy increased 20% this past January compared to January 2022.

There are a number of reasons for the increase, according to economists. Topping the list is the “end of pandemic funding,” but “… rising interest rates and high inflation continue to stress household budgets,” says Kristopher J. Brooks with Money Watch at CBSNews.com.

Tens of thousands of Americans went through the process, came out the other side and are chomping at the bit to buy a home. Let’s take a look at some answers to the more common questions about buying a home after bankruptcy.

Bankruptcy and your credit score

Yes, the fact that you discharged your debts in bankruptcy will end up on your credit reports and lower your credit score. In fact, your score may fall more than 200 points, according to Barry Paperno at Marketwatch.com.

“But for people in dire straits, bankruptcy is a last resort that can help them liquidate assets, discard or pay off debts, and get some financial relief.” In other words, it’s a good option if you’ve nowhere else to turn.

You are now considered a subprime borrower and will pay more for any credit that you receive, initially. To build a new credit rating, however, you will need to responsibly use credit, such as credit cards.

So, how long will this take?

The length of time it will take to purchase a new home after bankruptcy varies. A Chapter 7 bankruptcy will remain on your record for 10 years. A chapter 13, on the other hand, “… generally remains for seven years from the filing date,” claim the experts at Capitalone.com. Find out the difference between a Chapter 7 and Chapter 13 bankruptcy at RocketMortgage.com.

Then, there’s another waiting period, depending on the type of loan you choose.

If you used a Chapter 7 bankruptcy you’ll need to wait four years from the date the bankruptcy was discharged if you want a conventional loan.

If you will be pursuing a loan backed by the FHA or VA you’ll have a two-year wait. Chapter 13 bankruptcies are a bit different, but you’ll find the answer to your questions at the aforementioned Rocket Mortgage link.

How long you’ll wait to buy that home also depends on how much you want to pay for the mortgage. The higher your credit score, the lower the interest rate you’ll be offered. Borrowers with a FICO score of 620 to 639 pay, on average, 1.5 to 2 percent more interest on a mortgage loan than borrowers at the top of the FICO score range (760 to 850).

Once upon a time, a person that went bankrupt might have been forced to wear a basket over his head while in public, be thrown into debtor’s prison or even end up as a slave and sold at auction to the highest bidder. Although today’s penalty isn’t quite so harsh physically, it may be emotionally draining to be unable to obtain credit for an extended period of time.

Thankfully, with strategic planning, some hard work and the right lender, you will be able to purchase a home sooner rather than later.

We are not legal, mortgage or financial professionals, and the information provided in this blog post is for general education purposes only and is not intended to constitute specialist or personal advice.

The home-buying process is full of decisions. From which lender and insurance agent to go with to which neighborhood to concentrate the search, it’s one long string of choices.

Occasionally, I’ll have clients that fall in love with two homes which leads to probably one of the hardest decisions they’ve ever made

One way to avoid this predicament is to get clear on exactly what everyone in the family is looking for in a home. Each person should make a wish list and then prioritize it by putting their three absolute must-haves at the top.

Then, compare lists. Anything that everyone agrees on should go on a master list – the one you’ll use when actually shopping for a home. The remaining items are those on which you’ll compromise, so be ready to do so.

Try to remove emotions from the process. Yes, I know this is easier said than done. But remember, the home is also an investment. If one home will hold its value better than the other, that’s a huge plus.

Make a list of pros and cons for both houses to help you in the decision-making process. Everyone gets input into the process so one person’s pro may be another’s con. Obviously, the pros and cons list works best for singles or couples.

Consider the neighborhood

Too many homebuyers fall in love with a home without considering the neighborhood. It’s important to investigate the area in which your future home is located. When it comes to a decision between two homes, comparing neighborhoods may just cinch the deal.

• Check the school districts. Homes located in good school districts tend to hold their value better and sell for more than homes in poor school districts.
• How close is each neighborhood to the conveniences you typically use? Which has a quicker commute to work?
• How well do the neighbors care for their property?
• Are homes in one neighborhood increasing in value faster than the other?

Check crime statistics in both neighborhoods. You can do this by calling the local law enforcement agency and there are several crime databases online, such as:

• SpotCrime.com
• FamilyWatchdog.us
• Department of Justice National Sex Offender Public Website

Compare the homes

This is where you’ll really need to remove your love hat and put on your business hat. Forget the gorgeous wall colors and the immaculate landscaping and look at the bare bones of each house.

If you are just planning a family, how will the house work with little ones tearing through it? If you’re downsizing, which house offers you enough space to not feel like you’re living in a shoebox but enough storage room to not have the garage packed floor to ceiling?

Compare features that can’t be changed (or can, but at a huge expense), such as the flow, the number of bathrooms and the size of whichever room you use the most.

If none of this helps you make the decision, look at both homes again and again and again if need be. Like certain movies, you may have missed something on the first viewing that you’ll catch on a subsequent one.

And do enlist your real estate agent’s assistance. Ensure he or she knows exactly what you’re looking for.

Of course, in a fast-moving real estate market, buyers don’t have the luxury to deliberate like this. Decisions are made on the fly and offers submitted at lightning speed. But in slower markets, if you find yourself torn between two houses, slow down and consider all the factors.