Category: Real Estate

A vacation is in order right about now, don’t you agree? And wouldn’t it be amazing to have your own little place, tucked away at the lake, by the sea or in the mountains to get away from the rest of the world and the craziness we’ve been enduring?

If you’re thinking of buying a vacation home, there are a few things you should know and maybe even run by your financial planner.

Can your budget handle two mortgages?

Unless you are fortunate enough to be considered wealthy, making two mortgage payments every month may be challenging.

Before letting the dream of a vacation home carry you away, keep this in mind. Ensure that you can make those two payments and still live comfortably.

PNC Investments senior vice president, Jay Mastilak, suggests that “The basic rule of thumb is that your housing costs – including those for your primary home – should be a third of your overall income.”

Housing costs, as we all know, include more than a mortgage payment. Take a look at the following costs to consider when thinking about buying a vacation home.

Upfront costs

Remember when you bought your current home? You paid a lot of lender fees, which are probably a blur at this point. Here’s a short list of the most common:

·         recording fees

·         loan origination fees

·         credit report fee

·         title insurance premium

·         private mortgage insurance

·         points

·         homeowner’s insurance

·         escrow deposits

·         miscellaneous fees

Naturally, if you pay cash for your vacation home, you’ll avoid all the aforementioned fees.

Ongoing Expenses

In addition to your mortgage payment, consider these additional ongoing fees:

• Insurance coverage for anything not included in your homeowners insurance. Flood coverage is just one example.
• HOA fees if the home is located in a managed community.
• The cost of maintaining the home
• Utilities
• Security if you won’t be renting out the home in the off-season.
• The cost of travel to the home.

Remember that older homes and those that are larger than normal, will most likely have higher maintenance fees than newer, smaller homes.

Will you rent it out?

One way to help pay for all of this is to rent the home out while you’re not using it.

A part of the rental income may be subject to federal and state income tax, so you’ll want to run this by your accountant before making a decision.

You’ll also want to take into account that the home will experience more wear and tear if it’s lived in for a good portion of the year. And, if you’ll be hiring a management company to help locate tenants and collect the rent, there will be a fee involved for that as well.

Your accountant can help you calculate how long you’ll need to rent out the home to cover the costs of owning it.

“If your monthly mortgage payment is less than or equal to one peak week rental, and you rent approximately 17 weeks per year, you should have break-even cash flow on your vacation home,” according to Christine Hrib Karpinski, author of “How to Rent Vacation Properties by Owner.”

Again, we aren’t accountants or financial professionals, so run this by yours when making the decision as to whether or not you can swing buying a vacation home.

 

So, are you tired of paying your landlord’s mortgage payment yet? If you answered yes, and you’d much prefer to be building your own wealth instead of your landlord’s, it’s time to start saving for a home of your own.

Yes, it seems daunting. It seems like it will take forever. But there are some very simple changes you can make that will have your savings account bulging in no time.

It requires discipline, but we know you can do it.

Sell what you no longer need or use

We have a friend who went through her home, every room, every cupboard and drawer and even the garage, to find items the family no longer used or wanted.

She put them up for sale on Facebook Marketplace and in one month she’d made more than $500. And, she hadn’t even sold everything. That $500 gave her down payment savings account a huge boost.

Next, she’s going to tackle their storage unit and hopes to make twice what she made selling things around the home.

Facebook Marketplace is but one online arena on which to sell things. Try posting to these sites as well:

• Offerup.com
• Craigslist.org
• NextDoor.com
• LetGo.com
• Ebay.com
• Mercari.com
• Bonanza.com

Having trouble finding Facebook Marketplace? Check out the reasons why and how to fix them at BusinessInsider.com.

The key to making online sales is in your description of what you’re selling and, most importantly, your photos. Get tips at CNET.com.

If selling online isn’t something you want to do, hold a garage sale. Get success tips online at DaveRamsey.com, HGTV.com and ConsumerReports.org.

 Take in a roommate

If you have a spare room, consider renting it out. It’s one of the best ways to accumulate a lot of money quickly.

Not only will you make money by charging rent, but you can also charge the tenant for a portion of the utility bills.

Need some tips on how to go about renting out a room in your home? Check out LandlordStudio.com, MoneyCrashers.com and Realtor.com.

Consider a side hustle

• Drive for Lyft or Uber
• Deliver food for Instacart, Uber Eats, Postmates, GrubHub, DoorDash
• Babysit
• Clean houses
• Mow lawns
• Walk dogs
• Offer handyman or woman services
• If you sew, create coronavirus masks and sell them online
• Grocery shop for the self-quarantined
• Offer errand running services

Advertise your services on Facebook Marketplace and Nextdoor.com.

Go hunting for down payment/closing cost assistance programs

Did you know that there are several mortgage programs that have no down payment requirement? If you or your spouse served in the military, check out the VA-backed mortgage.

If you don’t mind living in a rural area, the United States Department of Agriculture (USDA) offers several programs that require no money down. Explore the options for the Single Family Housing Direct Home Loan or the USDA Single Family Housing Guaranteed Loan.

If you don’t qualify for a zero-down program, consider other avenues that include down payment and/or closing cost assistance.

Federal programs include assistance for first responders and teachers. There are also down payment assistance programs for Native Alaskans, Americans and Hawaiians.

Then there are the low-down payment mortgage programs, such as FHA, Freddie Mac and Fannie Mae.

We’re happy to help in your hunt, so feel free to reach out to us.

Cut out the money wasters 

• Have your coffee at home
• Stop eating out or calling food delivery
• Shop for cheaper ISP and cell phone service
• Workout at home (cancel the gym membership)
• Give up cable (buy a streaming stick)
• Brown bag it at lunchtime
• Walk or ride your bike for errands, etc.

Even if you only use one or two of these tips, you’ll have a good chunk of money to put toward your dream of homeownership.

Again, don’t hesitate to contact us – we are happy to help!

We know you’ve seen them – those MLS listing photos that look like they were taken by the homeowner’s 6-year-old. Photos of messy rooms, blurry and/or dark photos and even exterior shots snatched from Google Earth.

We have clients who have refused to look at homes, based solely on the MLS photos when, in fact, we’ve seen them and they aren’t as bad as the photos make them appear.

First, it’s not the homeowner’s job to take photographs of the home – it’s the listing agent’s. Sadly, many agents will snap these photos with their smart phones or a cheap camera they bought on sale at Amazon.

We’ve read the statistics, however, and long ago we adjusted our marketing plan to include professional photography.  And, here’s why:

• Studies show that, by and large, homebuyers looking at online listings of homes for sale won’t look at a home in person if the listing lacks photos.
• If the listing does include photos, homebuyers decide within 20 seconds whether or not they like the property.
• Ocular studies (following eye movements of website viewers) have found that the photo of the home is almost always the first thing viewed in a listing.

If these statistics don’t prove that a home’s presentation is paramount in getting buyers through the door, nothing does.

Another big reason to insist on professional photography comes from another study we reviewed. This one found that listings with photos taken by a pro are viewed 61 percent more than those with photos taken by an amateur.

Better yet, these homes can sell for up to about $19,000 more than the homes photographed by a novice.

Ask yourself this: If all it takes is any old photo to sell something, why doesn’t Nike use its receptionist to snap their advertising photos? Because they, like us, know better.

Professional photos speak

Professionally-shot photos create inspiration, according to Jay Groccia, a real estate photographer in Massachusetts. His interior photos, like those of our photographer’s, show not only the room, but his eye-view of the lifestyle the home offers.

So, why don’t all real estate agents use professional photographers?

In all honesty, many real estate agents (no, not all, but a lot of them) don’t take the time to keep up with real estate industry studies and think that iPhone photos or other amateur tactics are “good enough.”

Also, marketing a home requires a robust marketing budget, something most agents lack. Yes, we could go into how they are short-changing their clients by not offering the service, but that one will wait for another day.

The bottom line is, we understand that to be effective in listing and selling homes, we can’t possibly wear all the hats in our real estate practice. And, we want only the best for our clients and we aren’t willing to compromise on quality when it comes to a home’s presentation.

A home of their own is the dream of many, and we want yours to be perceived as the realization of that dream from the minute someone eyes it online. Reach out to us to learn more about our marketing services.

We’re hearing from our clients and they’re confused; especially those who took their homes off the market or decided to put off buying a home during the shutdown.

Many are ready to jump back in but the housing market news has them confused. “The media says the market is changing but we don’t know if that is good or bad news for us,” is a common complaint.

We did a quick survey of housing market news this morning and found the following headlines:

• High demand, low interest rates make for perfect housing market
• Housing market looking to rebound from pandemic
• Higher May numbers indicate recovering housing market
• The Housing Market Will Lead the Post-COVID Economic Recovery

Overall, the market seems to have bounced back to where it was prior to the shutdown, with another competitive summer market on the way.

Still not enough homes on the market

It’s not that homeowners aren’t listing their homes for sale. In fact, in May of 2019, more than 12 million homeowners said they plan on selling their homes within the next 18 months, according to a Harris Poll.

A recent survey by a national real estate company found that 25% of homeowners who had planned on selling in 2020 have decided to put off selling their home for the foreseeable future.

More than half, however, either adjusted their listing price, took the home off the market until restrictions were lifted or haven’t changed their selling plans at all.

This is good news for inventory-hungry homebuyers who, pre-pandemic, were snatching up listings as soon as they hit the market. Many experts expect a rerun this summer.

Multiple offers – they’re baaaaack!

This is mainly due to the lack of homes for sale. Same old story, right?

Will there be multiple offer situations? There already are, in pockets, across the nation. According to yet another real estate company’s survey more than 40% of the company’s buyers faced bidding wars through early May.

Boston turned out to be the city with the most multiple offers, with San Francisco, CA and Fort Worth, TX slightly behind.

So, yes, multiple offers are becoming more common in the post-pandemic real estate market. If inventory remains low and the number of homebuyers in the market increases, as it does each summer, there is a very real possibility that you’ll meet with competition for homes in good condition.

Homebuyers need to be fully prepared to buy. This means seeing a lender and getting pre-approved for a mortgage. Lending standards have tightened, so even if you were pre-approved before the pandemic’s outbreak, you should check in with your lender to ensure that you can still qualify for a mortgage.

It also means not making any large purchases on credit or applying for new credit from the moment you obtain that pre-approval letter until you close escrow.

Here are a few other tips to put you in a more competitive position as a homebuyer:

• Choose your real estate agent carefully. The inexperienced or part-time agent may not have the negotiating chops to help you beat other bidders to win the home you want.
• Consider that you may need to increase your offer above asking price. Can you afford to do this? If not, vow to look only at homes at a price point that allows you to be competitive in a multiple offer situation.

We’ve helped numerous homebuyers successfully win heated bidding wars. Our techniques and strategies are proven to make your offer the most attractive to home sellers.

Spring is here, summer is right around the corner and the market is heating up. It is so important that you work with an expert team to help you navigate the process and negotiate on your behalf.

So your offer was accepted – Fantastic! If you’re like many home buyers, you’re probably asking yourself… What comes next? Here’s a breakdown of the home purchase timeline, so you know exactly what to expect:

If you’re a DIY type of person, the thought of selling your home without the help and expense of a real estate broker may be attractive to you.

Although selling a home isn’t exactly rocket science, there is a lot that goes on during the transaction that the layperson knows nothing about. If you insist on doing it yourself, take some time to consider some of the most challenging aspects of the process.

1. How much will you ask for the home?

Knowing the current market value of your home is the most important part of selling it.

Pricing a home too low is like taking a torch to a stack of your equity dollars and lighting them on fire.

Pricing a home too high is dangerous as well. Overpriced homes tend to sit on the market, languishing, until the price is lowered.

By that time, however, your listing is stale and real estate agents and homebuyers will assume there is something wrong with the home.

Despite being absolutely sure you want to sell the home without the aid of a real estate agent, that agent is your best bet when it comes to setting a listing price for the home.

Real estate agents compile a research report known as a comparative market analysis (CMA) for potential listing clients. It is free and there is no obligation to use the agent’s services.

Since there is always the chance that you may change your mind during the process and decide to hire an agent, interview three of them before putting the house on the market.

Use their suggested list price (they should all be roughly the same), or an average of the three as the price for your home and save the CMA from your favorite of the three agents.

This way, if you do change your mind (and the chances are good that you will, according to studies), you’ll have his or her contact information.

2. Marketing is what gets homes sold

Now that you know how much you’ll ask for the home, it’s time to determine your marketing plan: How will you get the word out to buyers that your home is for sale?

The most important step to take when compiling your marketing plan is to determine who will be your most likely buyer. Since they market homes for a living, this is something real estate agents can easily determine. For the layperson, however, it may be challenging.

Everything you do to market the home, from preparing it for the market to advertising, should be laser-focused to that group of homebuyers.

3. All that paperwork 

The National Association of REALTORS study finds that the most challenging aspect of the for-sale-by-owner process is dealing with the paperwork.

Not only will you need to locate the forms and contracts, but you’ll need to know how to fill them out correctly. Even one small mistake can be disastrous.

The wisest thing you can do, other than to hire a real estate agent, is to secure the services of a real estate attorney. Yes, it can be costly, but you absolutely need help when it comes to the legalities of the sale.

Deciding to go it alone in a real estate transaction comes with risks. If at any time you feel you’re in over your head, reach out to us – we’re happy to help.

You have questions and we have the answers. If you’re thinking of selling your home, read on.

1. Is there a best time of the year to sell a home?

Although homes sell year ‘round, the “best” time to sell depends on several factors. If your need is for speed, put the home on the market in winter. Surprised?

Homes for sale in winter have a 9 percent better chance of selling, they sell one week faster than during the other three seasons and they generally bring in more money. These statistics apply to all regions of the country, from the frigid northeast to balmy Waikiki.

When November rolls around, home sales tend to decrease about 8 percent. By January, we’ll have seen another 19 percent decrease. And, it only makes sense. With the media constantly harping on how winter is such a horrible time to sell, homeowners typically ride out the winter and wait until spring to list their homes.

This leaves the winter seller with less competition. And, since winter buyers are generally more motivated than those who shop during other seasons, having less competition in the market is a good thing.

The next best time to sell a home is fall, according to the National Association of Realtors. They cite the facts that fall buyers want to get into their new homes before the holidays and the weather is still conducive to house hunting.

Sure, you can put your home on the market in the busiest season, from May through August. That’s when 40 percent of all home sales occur. But, remember, you’ll have lots of competition, so if you need to sell quickly your home will need to be carefully prepared for marketing.

2. How will you determine what our price should be?

First, real estate agents don’t determine a home’s price. We can calculate its current market value and advise you of that figure or range of figures. It’s up to the homeowner to determine the home’s list price, however.

We carefully study recent sale figures and also take a look at pending sales and current listings, just to get a feel of where the market might be heading.

Comparing homes, analyzing the current market and crunching the numbers, we’ll arrive at what we feel is the current market value of the home. Our system is very much like what the bank’s appraiser will perform, although the information we provide you is not to be considered an “appraisal.” It’s merely our opinion of your home’s market value.

By the way, we offer a free evaluation of your home’s current market value. No strings attached. You are under no obligation to use our services when you list your home for sale.

3. How long will it take to sell my home?

We get this question frequently and it’s a tough one to answer. There are lots of variables to consider, including:

• The state of the housing market
• Your list price
• Your real estate agent’s marketing plan

These are just three of the variables. We’re happy to discuss all of them with you, at your convenience. Feel free to contact us.

As a real estate consumer, you need to know that the housing market is currently one of the bright spots in the U.S. economy.

Surprised? You’re not alone.

Sure, the processes have changed a bit and some lenders have changed their lending standards, but overall, the real estate market looks very much like the pre-pandemic market.

If you’re considering buying or selling a home in the near future, read on to learn about some of the changes.

The national market, in a nutshell

While March and April home sales plummeted, there are nuggets of wonder in the rest of the statistics.

Want to hear something surprising? Demand for homes is higher now that it was before the lockdown and prices continue to rise.

In fact, homebuyers vastly outnumber sellers in the current market. “More than 41% of homes faced a bidding war in the four weeks ending May 10,” according to Diana Olick at CNBC.com, citing a recent study.

For comparison, only 9% of homes for sale experienced bidding wars in January, pre-U.S. pandemic.

To add to the excitement, “mortgage applications from buyers jump 11%,” according to the folks at CNBC.com.

The authors add that they expect the frenzy to continue as the lockdown is eased. Perhaps then those wanting to sell will jump back into the market. We need homes to sell to these eager buyers.

Speaking of mortgages

With the volume of forbearance request rolling in, mortgage lenders decided enough was enough and began tightening lending standards.

Down payment requirements are higher and some have upped their minimum credit score requirement.

JP Morgan Chase & Co., for instance, announced that it is raising the minimum credit score they will accept to 700 and increased the minimum down payment from 3.5% to 20%.

Since Chase is the nation’s largest lender, others are following suit.

“Wells Fargo and US Bank both adjusted their minimum score requirement to 680 (including for FHA and VA loans, which typically feature credit-score requirements as low as 580),” according Natalie Campisi at Inquisitor.com.

If you are considered a credit risk, the best thing to do is work on your credit score. Check back here in the next week or two when we’ll be showing you some quick ways to raise your score.

Thinking of selling? You need to know about this

If you are thinking of selling, let’s get that home on the market sooner, rather than later, and here’s why:

“Home prices will hold up, at least through the summer, but declines are coming,” Mark Zandi, chief economist at Moody’s Analytics tells Bloomberg.com’s Noah Buhayar, Prashant Gopal, and John Gittelsohn.

If you’re in forbearance, you may also find challenges to getting the home sold if you wait. It turns out that the section of the Fair Credit Reporting Act that was amended by the CARE Act has a glitch.

While the CARE Act requires lenders to report mortgages in forbearance as current, many lenders are labeling these mortgages as being in forbearance when they submit them to the credit reporting agencies.

FHA, Fannie Mae, Freddie Mac and the Department of Veterans Affairs don’t allow those in forbearance to obtain a new loan or even refinance until at least one year after they’re caught up on payments.

If you decide to sell, you’ll be able to take advantage of the sellers’ market that is happening right now.

More questions about buying or selling real estate during the pandemic? Reach out to us – we love to talk about real estate!

If rapidly rising prices are making you feel squeezed out of the single-family home market, consider downsizing your dream. After all, first homes are rarely forever homes.

It’s tempting to put off the purchase of a home until either home prices fall or your income rises. Tempting, yes. Smart? Not really. The wise thing to do is to begin building equity now so that you can later use it for that dream home. One of the best ways to do this is to buy a townhome.

Townhome living has its advantages and disadvantages. The latter includes the likely HOA fees that will be tacked on to your monthly house payment and living in very close proximity to your neighbors.

Tolerate that, however, and you’re on your way to making the home of your dreams a reality.

Today, we take a look at four reasons to consider purchasing a townhome. But first:

What’s the difference between a townhome and a condo?

The confusion between the two stems from the general misunderstanding of what they describe. Townhome is an architectural term, like duplex or triplex.

It describes a building where units share a common wall, nobody lives above or below the unit and they all have separate entrances from the street. This is opposed to a main entrance and front doors off of corridors, as is the case in many condo communities.

Condominium, on the other hand, describes a type of ownership. Each homeowner owns their unit, but not the actual building, and they share ownership of the common areas.

Units can consist of one or more floors and units may have neighbors above and below.

To make matters even more confusing, a townhome can be a condo, depending on how ownership is held in the community.

1. Lawnmower not required

When you purchase a townhome, your monthly HOA fees cover the cost of landscape maintenance. Some townhomes offer private patios and, in that case, the homeowner is responsible for any upkeep of landscaping there.

The fact is, even maintenance of the hardscaping in a townhome community is covered by the association. This includes pool maintenance, tennis court resurfacing, etc.

While your single-family home-owning friends are spending their weekends mowing, edging, raking, weeding and feeding, you’ll be kicking your feet up in that hammock you installed on your patio.

2. You’ll spend less money

The average townhome costs less than the average single-family home. For instance, the average single-family home price in the U.S. hovers around $243,225 according to BusinessInsider.com. Compare that to the average townhome price of $195,000 (GlobalPropertyGuide.com).

Sure, you may run across the occasional luxury townhome that is selling for significantly more than this, but most are very reasonably priced.

The lower price tag makes for a lower mortgage payment. And, because townhomes often contain less square footage than single-family homes, they cost significantly less to heat and cool—saving you even more money.

3. How about those amenities?

If a pool, gym, outdoor kitchen or other amenities seemed beyond your homebuying budget, think again. When you buy a townhome, you may just get at least one of those amenities right there on the property.

If there are others you simply must have, shop strategically. Some of what you can find includes:

• Private garage
• Health club/fitness center
• Security guard or doorman
• Swimming pool and spa

Keep in mind that a single-family home with any of these amenities will cost significantly more than the townhome with these amenities. Remember as well that typically the more amenities, the higher the price of the home.

4. Like being social?

When you live in a townhome, your next-door neighbor (in fact, all of your neighbors) are situated a lot closer than they would be if you lived in a single-family home neighborhood. This provides lots of opportunities to get to know them, socialize with them and forge relationships.

Many people find this appealing. If you’re among them, let’s go shopping for a townhome!

 

We recently shared with you what has been happening in the real estate industry during the COVID-19 pandemic. Most parts of the process of buying or selling have gone virtual, from showings to closings.

Since then, we’ve heard from lots of folks, wanting to know how to prepare their homes to sell in this new real estate environment. It’s a good question, because showings online are a bit different than showings in person.

Getting the interior ready for its close-up

The prep work that was required pre-pandemic still holds true: clean and declutter the home. If you have any doubts about whether an item should remain in the home or get boxed up, go with the latter.

The idea is to create a somewhat clean slate, so that potential buyers can see themselves living in the home. Here are some of the items to consider removing:

• Collectibles
• Family photos
• Diplomas and certificates
• Mementos
• Stacks of magazines and newspapers
• Oversized furniture (it makes rooms look smaller)

Clear the bathroom and kitchen counters of anything that isn’t decorative. Need inspiration? Find decluttering advice online at GoodHousekeeping.com, ProfessionalStaging.com and ApartmentTherapy.com.

Now it’s time to get to the cleaning. We spoke with our favorite cleaning professional who suggests taking it a room at a time. Then, clean from top to bottom as you work your way around the room. From ceilings (and ceiling fixtures) to baseboards, clean every surface.

As you clean, check that the room’s lighting is sufficient. You want the rooms to appear as bright as possible. Consider brighter bulbs or adding additional lighting.

Finally, take some of your own videos of each room and then scrutinize them. How’s the furniture placement? Ensure that the rooms don’t look cluttered with furniture. Experiment with different arrangements to find the one that makes each room look its best.

Get furniture placement tips online from Let’s Revamp, Savvy for Life and Jsquared-Richmond-Home-Staging.

Don’t forget about curb appeal

An effective video tour will start at the curb and follow the route a homebuyer and his or her agent would take to enter and tour the home.

This means that how your home appears from the curb, the experience offered as the potential buyer navigates to the front door, is critical.

Clean up and spruce up the landscaping between the curb and the front door. Get rid of debris and kid and pet toys. Then turn your attention to what’s planted in the landscape. Yank dead or dying plants and then prune and fertilize what’s left.

Consider purchasing flowering plants or those with colorful foliage, such as caladium. The color will pop when it’s on video. Finally, spread fresh mulch in the planting beds.

How’s the porch looking? The front door is an often-overlooked aspect of a home’s curb appeal (or lack thereof) so consider giving it a fresh coat of paint. Don’t shy away from using a bold color, if it coordinates with the home’s color. Consider a vibrant red or even black.

In fact, a study conducted by online listing portal Zillow.com, found that “houses with black or charcoal gray front doors sold for as much as $6,271 more than expected,” according to Julia Glum at Money.com.

If there is room on the porch, consider adding pots of colorful flowers or stately potted evergreens.

When you’re finished, take an experimental video tour of the home. Start at the curb, go up to the front door, open it, enter the home and then tour it, with the camera operating.

When it’s complete, watch the video, with an eye toward anything that may look out of place, any areas that appear cluttered or any other changes you can make to wow a potential buyer.

We’d love to view your video with you and offer tips for making your home the belle of the video-tour world.