Category: Real Estate

5 Smart Reminders for Your Home Sellers | Realtor Magazine

Besides staging, sellers also should take a few more steps to ease the stress of their sale. Realtor.com® offers up some of the following often-overlooked tips:

1. Highlight improvements and any issues.

“If you’ve owned your home for a while, make a list of all the problems you’ve solved for a while, make a list of all the problems you’ve solved while you’ve lived there,” suggests Avery Boyce, a real estate pro with Compass Real Estate in Washington, D.C. For example, be ready to disclose any potential past issues like chimney fires, water damage, or a flood in the basement. Disclose “invisible improvements,” such as a French drain system, too, says Boyce.

2. Google your address.

Nearly all buyers now search online for homes, and sellers need to be aware of how their listing looks on the Internet too. For example, Google Maps’ street view may not show your recent home improvements, so you’ll want to flag those updates in your listing. Also, “is the site’s estimated value very different from your asking price? It might be because tax records have the wrong information about the number of bedrooms or bathrooms your house has, and this is easily fixed,” says Boyce.

3. Test out the doorbell.

A lack of cosmetic repairs, even seemingly minor, can cost you a sale. “First impressions make all the difference,” says Marianne Leonard Cashman, a real estate professional with William Raveis Real Estate in Andover, Mass. “A well-kept home, starting with the view from the curb, gives the perception that the seller has great pride in the home and has taken good care of it—which translates into less energy and costs for the buyer as they prepare to move in.”

4. Clean everything.

Buyers are going to snoop everywhere, from inside drawers and cabinets to even the dishwasher. They are going to judge how clean everything is, too. “Spending the money on a service to deep-clean your home will come back to you at least 10 times in your sales price,” says Boyce.

5. Designate which items aren’t included in the sale.

If the custom window treatments aren’t included, sellers need to be sure to let their agent know. “The law says that anything bolted to the wall or ceiling goes to the buyer unless specifically excluded in the contract,” says Boyce. “If you want to take your flat-screen TV, chandelier, or custom pot rack, be sure to label it as soon as the house goes on the market, so that buyers don’t bank on owning that item and wind up disappointed.” Read more: Fixture Feuds

Bidding Wars to Heat Up This Spring | Realtor Magazine

Likely to be a hallmark of this year’s spring homeselling season: Bidding wars. As home listings are scarcer and buyer demand remains high, home shoppers are finding a lot more competition this spring, particularly in hot markets like the San Francisco Bay area, Denver, and Boston.

“Home buyers are going to find this spring that, in a lot of markets, the inventory of homes priced and sized at price levels they were hoping for will be very limited,” Thomas Lawler, a former Fannie Mae economist who’s now a housing consultant in Leesburg, Va., told Bloomberg. Even “unlikely places are getting significantly tighter.”

An improving job market, growing consumer confidence, and the threat of rising mortgage rates have Americans flocking to housing. But many markets remain tight for listings. Housing starts remain well below levels prior to the recession and are geared more toward the higher end of the market. Homeowners also are reluctant to sell their existing home because they’re unsure of where they’d move to with the dearth of listings.

Homes are selling at a rapid clip in places like Denver; Seattle; Oakland, Calif.; Grand Rapids, Mich.; Boise, Idaho; Madison, Wis.; and Omaha, Neb., according to the real estate brokerage Redfin. 

Grand Rapids has seen a 27 percent decrease in the number of homes for sale over the past year. One listing alone reportedly attracted 40 bids.

“People need to get their houses on the market, but they’re gun-shy,” Tanya Craig, an associate broker with the Katie K team at Keller Williams, told Bloomberg. “Unless they know where they want to go, everyone is hesitant.”

Home buyers certainly aren’t being hesitant, if they can find a home they want. They’re in a rush for financing too. The 30-year fixed-rate mortgage has risen by more than half a percentage point since November 2016. The Federal Reserve last week voted to increase its benchmark interest rate by a quarter point and strongly hinted it would do so two more times this year.

The 30-year fixed-rate mortgage is expected to increase to 4.7 percent by the end of 2017 and could reach 5.5 percent next year, according to Lawrence Yun, the chief economist for the National Association of REALTORS®. 

“In today’s market, many buyers think the trough in rates is over,” says Sam Khater, deputy chief economist at CoreLogic. “If you don’t get in now, it’s just going to be worse later. Rates will be higher, prices will be higher, and maybe inventory selection will be lower.”

Realtor view: Prioritize requirements during new-home search – Laredo Morning Times

Do you know the most important item you must consider when looking for a home? For many people, priority No. 1 may be price, neighborhood or number of bedrooms, or possibly some combination of the three. Someone else may list a backyard that can accommodate pets as their must-have feature before they will consider any other criteria.

The point is that you must decide what aspects of a home are most important to you when you are in the market for a new home. Once you prioritize your requirements, you can determine if that one-car garage is a deal-killer for an otherwise perfect home.

You have a lot to consider when buying a home. Not only must you find a property you like, but you must deal with financing, negotiations, inspections, an appraisal, title insurance and a survey. Here are a few to keep in mind:

Schools: According to a recent National Association of Realtors profile of home buyers and sellers, 30 percent of Texas home buyers listed the quality of a neighborhood’s school district as a factor in purchasing a home. That number increases to almost 40 percent for married couples and 55 percent of respondents who have children under the age of 18 living at home who listed the district’s quality as a factor in their decision.

Traffic: If you want to live in a quiet neighborhood where you can work from home in peace, walk the dog, or ride bikes with your kids, you may not want to live on a street with heavy traffic patterns. Sometimes a road can be fairly quiet during most of the day, only to fill with cars during commute times or if a school is letting out nearby. The best way to know for sure is to visit the property at different times of day and on weekdays and weekends.

Landscaping: Do you plan to put your green thumb to use? If so, you want to know if deer or other wildlife pose a challenge to gardens in the neighborhood. Maybe you prefer to limit your time maintaining a yard, so consider what will be required to keep the current landscape healthy or to replace it with lower-maintenance options.

Predicting the future – Any new roads or developments in the area can change your living experience. A view of undeveloped land now could be a new neighborhood, roadway, or multifamily housing in the future. It’s better to find out before you buy a home if the plans for the neighborhood fit in to your view of how you want to live.

Room to grow: If you’re buying with the thought of adding a second-story to the house sometime in the future, building a home office in the backyard, or installing an in-ground pool, find out if the property itself can accommodate what you have in mind. Remember to make sure that zoning or homeowners association rules don’t prohibit your plans, either. These are questions a Realtor can help answer for you.

Bear in mind that no property will be flawless. A qualified home inspector will look for any major defects, giving you time to make an informed decision about whether to continue with the purchase, renegotiate the deal, or terminate the contract.

Buying is Now 37.7% Cheaper Than Renting in the US | Keeping Current Matters

The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers actually show that the range is an average of 17.4% less expensive in Honolulu (HI), all the way up to 53.2% less expensive in Miami & West Palm Beach (FL), and 37.7% nationwide!

Other interesting findings in the report include:

• Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.
• Home prices would have to appreciate by a range of over 23% in Honolulu (HI), up to over 45% in Ventura County (CA), to reach the tipping point of renting being less expensive than buying.
• Nationally, rates would have to reach 9.1%, a 145% increase over today’s average of 3.7%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, meet with a local real estate professional who can help you find your dream home.

Borrowers Face Higher Mortgage Rates | Realtor Magazine

For the second consecutive week, mortgage rates were on the rise. “As expected, the [Federal Reserve’s Federal Open Market Committee] announced its first rate hike of 2017 and hinted at additional increases throughout the remainder of the year,” says Sean Becketti, Freddie Mac’s chief economist. “Although our survey was conducted prior to the Fed’s decision, the release of the February jobs report all but guaranteed a rate hike and boosted the 30-year mortgage rate 9 basis points to 4.30 percent this week. Increasing inflation, continued gains in the labor market and the Fed’s intentions for further rate increases—all three will keep pushing mortgage rates up this year.”

Freddie Mac reports the following national averages with mortgage rates for the week ending March 16:

• 30-year fixed-rate mortgages averaged 4.30 percent, with an average 0.5 point, rising from last week’s 4.21 percent average. A year ago, 30-year rates averaged 3.73 percent.
• 15-year fixed-rate mortgages averaged 3.50 percent, with an average 0.5 point, increasing from last week’s 3.42 percent average. Last year at this time, 15-year fixed-rate mortgages averaged 2.99 percent.
• 5-year hybrid adjustable-rate mortgages averaged 3.28 percent, with an average 0.4 point, increasing from last week’s 3.23 percent average. Last year at this time, 5-year ARMs averaged 2.93 percent.

What to Watch for in Home Renovations | Realtor Magazine

Home renovations can help boost the resale value of a property, but they also can expose homeowners to costly repairs or even make them physically sick, if they don’t take some precautions.

Help your renovating clients be on the lookout for some of these dangers that could surface in a home renovation:

Flooding and electrical issues.

Urge do-it-yourselfers to call 811 before they start digging. That is the service line that will inform them where underground utility lines are, such as for water, gas, or electrical lines. This is critical for to avoid, for example, a small water pipe during the renovation, which could lead to flooding. Also, if flooding in a home does ever occur and the water submerges appliances or electric tools, turn off the home’s power before wading through the water. 

Mold.

In a home renovation, always consider proper ventilation. “Most bathrooms have so little ventilation that they unintentionally become labs to grow mold and mildew,” says David Schneider, an interior designer in Chesterfield, Mo. Kitchen and bathroom remodels need fans that can exhaust all of that moisture-ridden air (many experts recommend one 100 cubic feet per minute fan per appliance).

Asbestos and lead.

If the home was built prior to 1978, some extra precautions will need to be taken if the home is at risk for lead or asbestos. “Inhaling or swallowing even small amounts of lead or asbestos is extremely dangerous,” says Dan Barr, property restoration expert with 1-800 Water Damage. “Any time you remove walls or ceilings or do major work on floors, you run the risk of encountering both.” Always wear a mask. Also, contact an indoor environmental expert to take samples before knocking down a wall, to be certain.

High-VOC materials exposure.

Wearing a face mask is smart to help avoid inhaling fumes when painting. Volatile organic compounds, or VOCs, are chemical-emitting gases found in several renovation materials, including many paints, carpeting, or upholstering. Many VOCs are also known as carcinogens and can cause headaches and asthma. Low-VOC paint and carpeting are available. Also, keep windows and doors open to help ventilate the home.

Mortgage Mistakes That Jeopardize Closing | Realtor Magazine

After home buyers get preapproved for a loan, they aren’t guaranteed a swift ride to closing. If they make a financial misstep, they could face a change to their mortgage terms and interest rate or even have their mortgage denied.

Here are some tips with their finances they’ll want to avoid on their road to closing:

Don’t move your money around.

Your buyers may have been storing their cash reserves. Warn them not to move that money out of savings and into stocks, or anywhere else for that matter. “You’d think that isn’t a big deal, but we’re counting how much money you have going into closing,” says Casey Fleming, a mortgage adviser and author of The Loan Guide: How to Get the Best Possible Mortgage. “With savings, we count that as 100 percent, but with stocks we only use 70 percent of the value because stock prices can change. So, if you have $100,000 in savings and you move that into stocks, suddenly you only have $70,000 from an underwriter’s perspective.” Lenders want to see buyers have enough for the down payment, closing costs, and at least three months of mortgage payments.

Applying for new lines of credit.

Watch how many times you apply for a new credit card or request a credit limit prior to closing. “Some credit inquiries are OK, but not all of them—and you don’t know which is which,” warns Glenn S. Phillips, CEO of Lake Homes Realty. “Worse than the actual hit on your credit score is any pattern of trying to borrow more money from more companies all at once. This suggests you are not wise with your money and just out running up debt you may not be able to repay.”

Heading out on a shopping spree.

Now is not likely the best time to buy too much new furniture, new appliances, or even a new car. “Because lenders often run credit reports within hours of the scheduled closing, running up new large debt is an awful idea,” Philips says. “It can change debt ratios, change your interest rate (which may also kill your mortgage approval), and even lead to a lender deciding you have too much debt and (you are) not worth the risk anymore.” You can still put small charges on your credit cards. You aren’t required to have a zero balance to get approved. But for any big-ticket items, it may be best to wait until after closing.

Real Estate This Spring: The Early Bird Wins | Realtor Magazine

Entering real estate’s traditionally busiest time of year, the housing market is being buoyed by a stronger economy and consumer confidence. Job creation is 30 percent stronger this year compared to a year ago, unemployment is near a 9-year low, and wages and incomes are growing at the largest levels in about eight years, notes Jonathan Smoke, realtor.com®’s chief economist.

Some buyers are in more of a hurry this season too. In the last two weeks, the 30-year fixed-rate mortgage rose by nearly a quarter of a point. The Federal Reserve also has given strong indication that it plans to raise short-term rates later this week (even though mortgage rates aren’t directly tied to short-term rates, they do tend to have an influence). Smoke predicts three to four major increases in mortgage rates this year. He expects rates to rise by from 10 to 25 basis points in one- to two-week spurts, followed by some holding patterns.

“The upside of higher rates is that it is getting easier to get a mortgage,” Smoke says. Mortgage credit access has increased 6.5 percent since September, the Mortgage Bankers Association reports.

“Arguably the biggest challenge to buyers this spring will be simply finding a home to buy and getting it successfully under contract,” Smoke says. “That’s because the supply of homes for sale is at an all-time low, and yet demand is strong and getting stronger.”

In January, the nation saw the lowest inventory of homes available for sale ever at realtor.com®. Inventory did manage a 2 percent increase in February, but it’s still down 11 percent compared to last year.

With lower inventories and higher demand, homes are selling faster. Twenty-seven percent of listings sold in less than 30 days in February, according to realtor.com®’s data.

“The early birds who decided to buy in the winter faced less competition and enjoyed lower rates than we are seeing now,” Smoke says. “It gets more expensive and more competitive going forward, but the early-ish buyer, at this point, is still likely to come out on top, when you consider that prices and rates are likely to be much higher later in the year.”

7 Kitchen Upgrades Under $5K That Boost Home Values — Trulia’s Blog

Boost your kitchen’s appeal and home value without breaking the bank.

It’s likely you spend much of your time at home in your kitchen, cooking, entertaining friends over a glass (or two) of wine, or talking through your day with family. But there may come a day when you look around and notice that this well-loved space is starting to look a bit worn. Suddenly, your favorite gathering spot has become a place you rush guests through, and you’re concerned that potential future buyers will be turned off by its outdated appearance — especially if you’re in a luxury market, like Westport, CT.
There’s no need to shy away from kitchen upgrades, though. Here are the seven upgrades suggested by design experts and real estate agents on how to rehab your kitchen (and increase your home’s value) for less than $5,000.

7 kitchen upgrades to boost your home value

1. Repaint your cabinets and change out hardware
   
   Estimated cost: $250 for hardware, $300 for paint
   
   Painting cabinets in a semigloss finish and adding new hardware are painless ways to give your kitchen a quick face-lift without breaking the bank. “One of our favorite tips for updating a kitchen is to swap out standard hardware,” says Marika Meyer of Marika Meyer Interiors LLC. “Hardware can change the feel of the space, making an out-of-date kitchen feel more modern, or noncustom cabinetry feel like an upgrade.” Try options like a recessed ring pull and traditional bin pull for stylish hardware that’s simultaneously timeless and trendy.
2. Replace or add a backsplash
   
   Estimated cost: $2,000
   
   Tired of doing dishes and looking at an old backsplash with yellowed grout? Renovate! Kathleen Hay, principal at Kathleen Hay Designs, suggests changing out what you have for new tile. “Consider changing a tile backsplash to a modern glass, mosaic tile, or a classic white subway tile, which never goes out of style,” says Hay. “It now comes in many sizes/shapes and can be laid in a herringbone or soldiered pattern for an updated and fresh look.” Neutral tones will make the kitchen feel bigger and brighter to you and potential buyers.
3. Paint the Hardwood Floors
   
   Estimated cost: Varies depending on the size of your space; painting or restaining floors typically costs between $400 and $650 plus labor; ceramic tile starts around $900 plus installation costs
   
   You might think about the kitchen floor mainly when you’re mopping up a spill, but painting it is a quick way to give this key surface new life. “Flooring is a very important part of a kitchen remodel, and there is a dizzying array of options available to the homeowner,” says Jane Toland, principal at Tolhouse Design. “A simple floor color change is all that is needed, in say, a rich brown shade or a trendy gray stain.” Opt for enamel paint like Benjamin Moore’s Floor and Patio Latex enamel. If you’re cautious of making such a long-lasting commitment, many retailers sell pint-sized paint samples so you can test out a color before you decide. If you want to heighten the look of the kitchen even more, consider adding ceramic tile.
4. Replace the lights
   
   Estimated cost: $75 to $250

    

   Good lighting is important for everyone and in every room. Jeffrey Osborne of Hark and Osborne Interior Design recommends sourcing “stylish yet affordable” pendant lights (he likes Schoolhouse Electric & Supply Co. Lighting) to hang above an island or countertop. Add undercabinet lighting to give the kitchen a higher-end look — or simply exchange the bulbs for LEDs in existing fixtures to cast the kitchen in a better light (and get some energy savings to boot).

5. Install butcher-block or concrete countertops
   
   Estimated cost: Starting at $300 for concrete countertops

    

   Since most of your time is probably spent in the kitchen at your countertop — eating, preparing food, planning the next party, etc – you want your surface to be durable, without over-spending. Search for remnant granite (pieces left over from other projects) or buy a butcher-block or even concrete countertop, which can be stained to match the space. “Go to a store that has reclaimed materials and grab a beautiful slab of wood or a commercial metal countertop to use as the accent on the island,” says Lisa DeStefano, founder and principal architect at DeStefano Architects. “Tile countertop can be fairly inexpensive, but the challenge is the grout and keeping it clean on what should be a sanitary surface.” Use more expensive materials, like granite or marble, on smaller spaces to give impact to the space, without a significantly higher price tag.

6. Add a new kitchen sink
   
   Estimated cost: Starting at $299 for stainless steel

    

   A sink is one of the most important elements in a kitchen: choosing one that doubles as a centerpiece turns what seems to be a purely functional element into a showpiece. Interior designer Laura Umansky, president and creative director at Laura U Interior Design, says that a new sink, such as an apron-front farmhouse sink “feels custom and thoughtful” and gives potential buyers the perception that the home has a greater value.

7. Put a hood on it
   
   Estimated cost: Starts at $599, plus labor

    

   Most potential buyers will see the kitchen in one quick scan, from the countertop and sink to the stove. Adding a functional stainless steel hood to the space is a great way to amplify the look of the kitchen and give it a fresh feel, even if you don’t put in a new stove. Hoods typically vent to the exterior, but don’t worry if adding new ductwork seems overdone. Instead, opt for a ductless range hood. The charcoal filters will have to be replaced every few months, but you will save a lot of money on ductwork. Interior designer Jeffrey Osborne recommends having an electrician come in to replace and install the hood for safety purposes. “An oversize hood creates the look of a ‘chef’s kitchen,’ which is usually only seen in luxury kitchens,” says Osborne, adding that it can immediately add thousands of dollars in value to the space.

Debt-to-income ratio 101

When lenders evaluate your mortgage loan application, one of the most important numbers they will look at is your Debt-to-Income (DTI) ratio.

It is a strong indicator of your ability to repay mortgage debt, and therefore how much risk you pose to the lender.

DTI allows a lender to look at a basic risk factor – do you tend to spend a lot compared to what you make? You can have a large income, but if your spending is also disproportionately large, it only takes a minor disruption to send you into a debt spiral.

There are two variations known as the front-end and back-end DTI.

A front-end DTI only considers all housing-related debt, including the mortgage payments, taxes, insurance, and homeowner’s association fees.

A back-end DTI also includes all of your non-housing-related regular debts and monthly expenses, such as car payments, credit card debts, child support, and student loan payments.

Lenders often consider both when reviewing your application, but the back-end DTI is usually given more attention since it is more comprehensive.

Historically, conventional loans have required a DTI of no more than 28 percent front-end and 36 percent back end, although this limit has been stretched at times. VA and FHA loans that have lower risk because of partial government backing can withstand higher DTI ratios, generally in the low-to-mid 40 percent range.

The DTI value was stretched often in the days leading up to the subprime mortgage crisis; since then, lenders, with the encouragement of regulators, have drawn back to the traditional marks.

The current rules from the Consumer Financial Protection Bureau (CFPB) put a DTI limit of 43 percent to be a qualified loan under the new rules, giving lenders incentive to stay under that mark.