Category: Real Estate

It’s a Good Time to Sell, Americans Say | Realtor Magazine

Fifty-two percent of home owners say now is a good time to sell in their neighborhood. This is up from 34 percent who said so last year, according to a survey conducted by the real estate brokerage Redfin.

What’s more, 58 percent of home owners believe sellers have more power than buyers in the market right now. Redfin researchers note this is nearly the highest level of seller confidence they’ve recorded.

The top reasons sellers say they want to sell now:

• I want a larger or nicer home: 40%
• I am relocating to a new city: 24%
• I want to pull out my profit: 21%
• I want a smaller or less expensive home: 20%
• I have had a change in family status: 19%
• I want to move to a better school district: 15%

“Many move-up buyers have told me they are buying now to take advantage of low mortgage rates,” says William Porterfield, a real estate professional with Redfin in Little Rock, Ark. “Buyers are trying to get as much home as possible before rates rise.”

Still, some Americans expressed concerns about selling, mainly about finding a new home to buy when they sell their own.

The following were Americans’ top concerns about selling:

• I might not find another home I want: 30%
• Prices might fall before I sell: 26%
• I might not find another home I can afford: 25%
• General economic conditions might discourage buyers: 23%
• The appraisal might come in low: 19%

Pricing Matters

When it comes to setting the price for their home, 55 percent of home owners say they will price in the middle range based on comparable sales. However, 19 percent of home owners said they would price high, citing that negotiation is inevitable. Also, 12 percent of home owners said they would price high because if the market didn’t value their home, they would wait until it did.

“While we’re noticing a shift among sellers in terms of their confidence in getting their homes sold quickly and for good prices, it’s up to the agent as their advocate to keep their expectations grounded and recommend a pricing strategy that is most likely to get the best value for their home,” says Sascha Gummersbach, a Redfin real estate agent in Atlanta. “A seller’s market doesn’t grant home owners a license to skip things like valuable upgrades, home staging or setting a price based on comparable homes in their neighborhood.”

6 Home Improvement Flubs That Cause Inspection Headaches | Realtor Magazine

Do-it-yourself household projects have become increasingly popular, but home inspectors are finding a host of safety problems caused by overconfident home owners seeking shortcuts. “Home owners now see these DIY TV shows, which make these household remodeling projects look easy. They can go to a big box store and easily get the materials too,” says Randy Sipe, president of the American Society of Home Inspectors in Spring Hill, Kansas. “They think: ‘How hard can it be?’” Howard Pegelow, a home inspector in Arizona and Wisconsin, says home safety is a top priority in his inspections. He looks for loose carpeting, uneven steps, and water temperature extremes, among other common risk factors. Here are additional concerns noted by Pegelow, Sipe, and others in the field:

Wobbly decks

Look for: insecurely attached railings and wobbling or improperly sized posts.

“Decks shouldn’t move,” says Scott Patterson, an inspector with Trace Inspections in the Nashville area. Wood decks can collapse if they’re not properly attached to the house or if they rely on the house too much for support. “Fasteners can corrode, which could result in failure of the deck. Many times owners are unaware all these problems exist,” Sipe adds.

Incorrectly removed walls

Look for: sagging roofs and ceilings.

Open floor plans are appealing, but not when they overlook structural issues, which can happen when home owners fail to identify load-bearing walls. Pay attention to the age of a home, Patterson says. In newer construction, homes tend to have greater side support, which can accommodate open floor plans. Older homes relied more on the center for stability, which can mean trouble for amateur wall-busters.

DIY plumbing

Look for: wrong pipes used for connections.

A common error Patterson sees in plumbing jobs comes from home owners who purchase a sink and cabinet from a big-box store and handle the installation themselves. Using the wrong pipes often results in costly water damage. Patterson says he commonly sees flexible, accordion-shaped pipe under the sink for the drain, even though they do not comply with residential plumbing codes. Pipes should be smooth and unridged to prevent clogs or waste buildup.

Missing garage door sensors

Look for: sensors missing or not facing one another.

Garage doors can pose a big safety threat if improperly installed, Sipe says. The safety sensors must be connected and aligned correctly for the garage door to go down, and if it doesn’t, the owner may just uninstall them. Additionally, a poor connection could be the culprit of the sensor malfunction. Sipe says he often sees the safety cable being threaded incorrectly, which could cause it to break and send the garage door door crashing down.

Disarmed alarms

Look for: missing batteries or disconnected alarms.

Home inspectors aren’t always required to test smoke and carbon monoxide detectors, but many do. Municipalities often suggest installing them within 15 feet of the primary entrance to each sleeping room. Home owners often remove them if they start chirping or disconnect them to prevent false alarms as they cook. “Many times I’ll open it up and find the battery is gone,” Pegelow says. “That is a big safety concern.”

Faulty electrical

Watch for: exposed wiring and overloaded circuits.

Electrical problems often emerge when an addition has been made to a home, such as a basement or attic remodel. Home owners may add two wires to one circuit breaker where there should be only one. Or, Sipe says, he sees amateurs using a wire that’s too small in the breaker, which could pose a fire hazard.

FHA Condo Relief Coming: President Signs Bill | Realtor Magazine

President Obama has signed H.R. 3700 – the “Housing Opportunity Through Modernization Act” into law. The National Association of REALTORS® hailed the development as a “significant step” in eliminating barriers to safe, affordable mortgage credit for condos.

The bill was approved unanimously by the U.S. House in February and the Senate two weeks ago. NAR has long been an advocate of the bill, testifying before Congress and lobbying for its passage. Additionally, nearly 140,000 REALTORS® across the country voiced their support for the legislation during the NAR call for action.

“REALTORS® have reason to celebrate today as legislation easing restrictions on FHA financing for condominiums is finally signed into law,” says NAR President Tom Salomone. “This is a long-awaited victory for NAR and for home buyers for whom condos are an important and affordable option.”

The bill will make Federal Housing Administration’s recertification process “substantially less burdensome” and will lower FHA’s owner-occupancy requirement from 50 percent to 35 percent, NAR has reported. The bill also requires the FHA to replace an existing policy on transfer fees with a less-restrictive model that has already been in place at the Federal Housing Finance Agency.

This legislation will help offer to relief to well-qualified potential home buyers who have been facing tight housing inventories, rising home prices, and strict mortgage credit underwriting guidelines, Salomone has said.

“Condominiums often represent an affordable option that’s just right for first-time and low-to-moderate income home buyers,” Salomone said in a statement after the Senate approved the bill in July. “Overly burdensome restrictions on condo financing have for too long put that option out of reach for many creditworthy borrowers. This legislation meets those restrictions head on, putting the dream of home ownership back in reach for more Americans.”

Erasing buyer turnoffs will help sell your home – The Orange County Register

With back to school supplies lining the aisles of the local Target, Walgreens, and Staples stores, you might want to pick up some extra erasers if you’re getting ready to sell your house.

While the pencil erasers may take some marks off your kid’s bedroom walls, you may need a broader range of supplies to erase all the features that might not appeal to buyers.

Here are a few examples.

• You’ll probably want to erase your family coat of arms painted above the pantry door. It is unlikely that a family with the same lineage will buy the house, so best to give the kitchen a fresh coat of paint.

• Same goes for the black chalkboard paint in your kid’s room.

Unless you only want your house to appeal to families with small children, this will be a disappointment to those with older children or empty nesters. Another fresh coat of paint will make it all better.

• If you have holes in the dry wall in your bedroom from slamming the door open one too many times, you’ll want to patch up that hole and give that room a new coat of paint.

• If you have custom decorative accent tiles in your kitchen and bathrooms, you might want to pop those out and pop in plain tiles. Pink ribbons, perfume bottles, and parasols won’t appeal to many of today’s buyers.

And if you don’t want to go to the expense of replacing the counters with quartz or granite, at least pop out the dated tiles. It will erases the stigma of those special features.

• Have your cats and dogs enjoyed living in your house as much as you have? You may want to replace the carpet with something fresh and new.

Be sure to treat underneath the old carpet pad. Vinegar, water, and baking soda are a good way to clean up pet urine odor.

I’m sure there are several good YouTube videos on the process.

• Do you have leased solar panels? Erase the fear from buyers’ minds by providing documentation on the lease transfer process, your monthly solar lease payment and your average electric bill in the supplemental section of the listing report.

Your agent will know how to add the documents to your listing information.

• Have your neighbors gone a little too far with their draught tolerant landscape by allowing the brown weeds to tend to themselves?

Perhaps you can erase this eyesore by asking your neighbors if you can (or have your gardener) do a little touch up for them before the first open house.

Not quite the same as the Easy Button, but a little erasing will go a long way to making your house appeal to more buyers.

11 Real-World Tips on Buying a Home

When you’re about to make a purchase as big as a home, it’s easy to get caught up in relatively minor details like paint color or whether or not it has wood flooring. But don’t forget to check on the make-or-break features too, like the ones real home buyers shared with us below. And remember, a real estate agent can advise you on what to look out for to help prevent any surprises when you move into your new house.

 

1. “Good energy (this is the ‘it factor’ that’s hard to describe, but some houses just don’t have it!).” — Christy, Phoenix, AZ

2. “One major thing my husband and I make sure to check when viewing homes is water pressure. Seems like a small thing—turn on the faucet—but believe me, that is something that is hard to change after you buy a house. If you like great water pressure, check it out.”

—Sandy, Stafford, VA

 

3. “My number one tip to home buyers is to check the closet before signing on the dotted line! The closet is where you start and end every day—shouldn’t you make sure it’s comfortable and has the space to accommodate your wardrobe?”

—Dan, Los Angeles, CA

4. “My top priority when looking at potential houses is the floor plan and flow—does it make sense for the the way I want to live in my home? The arrangement of rooms, the traffic pattern in the house, and the sense of light and space greatly affect the livability. ”

—Kim, Houston, TX

5. “We were looking at an apartment in NYC (which I guess is a little different), but we tried to visit at a time when traffic would be the worst to see what the noise was like.”

 

—Jennifer, New York City, NY

6. “For myself and my clients, I make sure to check the big-ticket items, like the roof, windows and heating systems.”

—Jessica, real estate agent in Newport, RI

7. “It’s simple. Home buying should be about square feet and location. Everything else is just cosmetics.” —Adam, Chicago, IL

8. “I was told, ‘You want to like the way your house looks, but you should also like the house across the street because that’s the one you’re going to look at.’ (It’s true!)”

— Stephanie, New York City, NY

 

9. “We have the kids play at the neighborhood playground so we can get a feel for the neighborhood. In addition, we drive by the house at different times of the day and week to check things out, like street parking, noise level and traffic.”

— Haiyen, Los Angeles, CA

10. “I looked at the outdoor space—having trees on the property was important to me. And also how much sunlight I would get in the house during the day.”

— Janell, Oakville, Ontario

11. “It’s important to consider not just proximity to neighbors but who the neighbors are. While plumbing and electric can be upgraded, neighbors cannot be exchanged.” —Michelle, Los Angeles, CA

4 of 5 Americans Rate Housing a Good Investment | Realtor Magazine

The majority of Americans say that owning a home is a good investment, according to a new poll of more than 2,800 registered voters commissioned by the National Association of Home Builders.

“The survey shows that most Americans believe that owning a home remains an integral part of the American Dream and that policymakers need to take active steps to encourage and protect home ownership,” says NAHB Chairman Ed Brady. Those surveyed were split on which one of the current presidential candidates they felt would be best for housing, at 37 percent each, while 25 percent of those surveyed said they “don’t know.” 

The survey found that 72 percent of Americans say that they support the government providing tax incentives to encourage home ownership.

Eighty-one percent of 18-29 year olds surveyed say they want to be able to buy a home one day.

However, obstacles still remain in their path, as well as for others too. Among all those polled, 55 percent say that the biggest obstacle to buying a home is finding a home at a price that they can afford. Fifty percent said they were prevented from buying due to insufficient savings for a down payment, and 41 percent say they are struggling to get approved for a home loan.

Still, 36 percent of the more than 2,800 Americans surveyed say they hope to buy a home within the next three years, the survey showed.

The 20 Hottest Housing Markets for July 2016 | Realtor Magazine

July 2016 may end up as a month for the record books. According to new realtor.com® data, the U.S. is seeing the hottest July for home buying and selling in a decade.

“The best spring in a decade has transitioned into the hottest summer in a decade,” says Jonathan Smoke, realtor.com®’s chief economist. “Pent-up demand left over from tight supply for two years against the backdrop of mortgage rates remaining near three-year lows have encouraged buyers to keep active at a time when sales usually begin to decline.”

Smoke estimates that properties spent a median of 68 days on the market in July, and the median home price is $251,000, a record price for the month and 7 percent higher than a year ago.

In certain markets, housing markets are especially sizzling. Realtor.com®’s research team took a look at the number of days homes spent on the market, the measure of available supply, and the number of listing views on realtor.com® (to represent demand). They then identified the following 20 medium-to-large U.S. markets where homes are selling the fastest:

1. Vallejo, Calif. (second consecutive month at number one spot)
2. Dallas, Texas
3. Denver, Colo.
4. San Francisco, Calif.
5. Stockton, Calif.
6. Columbus, Ohio
7. San Diego, Calif.
8. Santa Cruz, Calif.
9. Sacramento, Calif.
10. Santa Rosa, Calif.
11. Yuba City, Calif.
12. Modesto, Calif.
13. Detroit, Mich.
14. Fort Wayne, Ind.
15. San Jose, Calif.
16. Colorado Springs, Colo.
17. Fresno, Calif.
18. Eureka, Calif.
19. Nashville, Tenn.
20. Ann Arbor, Mich.

Rising Prices, Rates Subdue Mortgage Activity | Realtor Magazine

Mortgage activity – for both home purchases and refinances – plunged 11.2 percent last week compared to the previous week, the Mortgage Bankers Association reported Wednesday. Despite the latest sizable drop, application volume remains up 42 percent compared to the same week a year ago.

Rising interest rates means fewer and fewer home owners stand to benefit from refinancing. Applications to refinance dropped 15 percent last week, but remain nearly 72 percent higher than a year ago.

“Despite the 30-year-fixed mortgage rate being almost 50 basis points lower than a year ago, refinance activity has been extremely sensitive to rate increases as the pool of borrowers who can benefit from refinancing continues to diminish,” says Mike Fratantoni, MBA’s chief economist.

Meanwhile, applications for home purchases were down 3 percent for the week, now at the lowest level since February. But some economists say this may have more to do with increasing home prices than rates. 

The average on a 30-year fixed-rate mortgage rose to 3.69 percent last week, up slightly from 3.65 percent, MBA reports. Nevertheless, about half of mortgage agencies report actual rates higher than 4 percent, Inside Mortgage Finance reports.

New-Home Sales Posted Solid Gain in First Half — Update – NASDAQ.com

Sales of newly built homes rose at a solid pace in the first half of 2016, offering fresh evidence of healthy momentum in the U.S. housing market as home-buyers enjoy low interest rates.

Purchases of new single-family homes increased 10.1% in the first six months of the year compared with the same period in 2015, the Commerce Department said Tuesday.

Sales were up 3.5% in June from a month earlier to a seasonally adjusted annual rate of 592,000, the strongest monthly sales pace since February 2008. Sales in June were up 25.4% compared with a year earlier. Economists surveyed by The Wall Street Journal had expected a June sales pace of 559,000. May sales were revised up to a 572,000 annual rate from an earlier estimate of 551,000.

Sales of newly built homes account for only about 10% of total U.S. homebuying activity. Data on purchases of new homes are volatile from month to month and subject to later revision. The estimate that sales rose 3.5% in June from the prior month came with a sizable margin of error — 23.9 percentage points, according to Tuesday’s report.

While the pace of home construction and purchases of new homes remain depressed compared with levels seen during past economic expansions, the market for newly built homes has gained strength in recent years. New-home sales were up 14.6% in 2015 compared with the prior year after rising 1.9% in 2014, 16.6% in 2013 and 20.3% in 2012.

The housing sector has offered a steady tailwind for overall U.S. economic growth over the past few years. Fixed residential investment contributed 0.52 percentage point to the first quarter’s 1.1% growth rate for gross domestic product, the broadest measure of goods and services produced across the U.S. economy, according to Commerce Department data.

Sales of previously owned homes, which make up the bulk of U.S. home purchases, rose 1.1% in June from the prior month to a seasonally adjusted annual rate of 5.57 million, the strongest pace since February 2007, according to the National Association of Realtors. Sales of existing homes were up 3% compared with June 2015.

News Corp, owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.

U.S. home sales have been bolstered by historically low interest rates. The average rate for a 30-year fixed-rate mortgage was 3.57% in June, down from 3.98% in June 2015, according to Freddie Mac.

“Both home sales and construction have been gradually improving, and residential investment made a noticeable contribution to GDP growth over the past year,” Federal Reserve Chairwoman Janet Yellen said in a June speech. “Housing has been supported by low mortgage rates, and while mortgage credit is still difficult to obtain for households with low credit scores or hard-to-document income, those with good credit histories are generally able to borrow at very favorable terms.”

Still, inventories have been tight, putting upward pressure on home prices. There was a 4.6-month supply of existing homes available for sale at the end of June at the current sales pace, the Realtors group said last week.

There was a 4.9-month supply of newly built homes available at the end of June, according to Tuesday’s report. That was the smallest supply in more than a year.

“While the months’ supply figure will move around with changes in the sales rate, with the absolute level of inventories low, it will be changes in demand for new homes that will drive single family housing starts,” MFR Inc. Chief U.S. Economist Joshua Shapiro said in a note to clients. The median sale price of a new home sold in June was $ 306,700, up 6.1% from a year earlier, the Commerce Department said.

Qualifying for a Mortgage – Zillow

A basic truth: A mortgage loan holds your house and land as collateral; it’s not pound of flesh, but the loss can seem just as life-threatening.

In most cases, a lender does not really want to end up with your house. They want you to succeed and make those monthly payments that make the world (or at least the U.S. world) go ’round. So when you apply for a loan, the lender will scrutinize your financial situation to make sure you are worth the risk.

You need to get your paperwork in order before you find a lender, but first you should understand the basic facts.

 

• Down payment. Traditionally, lenders like a down payment that is 20 percent of the value of the home. However, there are many types of mortgages that require less. Beware, though: If you are putting less down, your lender will scrutinize you even more. Why? Because the less you have invested in the home, the less you have to lose by just walking away from the loan. If you cannot put 20 percent down, your lender will require private mortgage insurance (PMI) to protect himself from losses. (However, if you can only afford, for example, 5 percent down, but have good credit, you can still get a loan, and even avoid paying PMI.

• LTV. Lenders look at the Loan to Value (LTV) when underwriting the loan. Divide your loan amount by the home’s appraised value to come up with the LTV. For example, if your loan is $70,000, and the home you are buying is appraised at $100,000, your LTV is 70%. The 30 percent down payment makes that a fairly low LTV. But even if your LTV is 95 percent you can still get a loan, most likely for a higher interest rate.

• Debt ratios. There are two debt-to-income ratios that you need to consider. First, look at your housing ratio (sometimes called the “front-end ratio”); this is your anticipated monthly house payment plus other costs of home ownership (e.g., condo fees, etc.). Divide that amount by your gross monthly income. That gives you one part of what you need. The other is the debt ratio (or “back-end ratio”). Take all your monthly installment or revolving debt (e.g., credit cards, student loans, alimony, child support) in addition to your housing expenses. Divide that by your gross income as well. Now you have your debt ratios: Generally, it should be no more than 28 percent of your gross monthly income for the front ratio, and 36 percent for the back, but the guidelines vary widely. A high income borrower might be able to have ratios closer to 40 percent and 50 percent.

• Credit report A lender will run a credit report on you; this record of your credit history will result in a score. Your lender will probably look at three credit scoring models, they will use the median score of the three for qualifying purposes. The higher the score, the better the chance the borrower will pay off the loan. What’s a good score? Well, FICO (acronym for Fair Isaac Corporation, the company that invented the model) is usually the standard; scores range from 350-850. FICO’s median score is 723, and 680 and over is generally the minimum score for getting “A” credit loans. Lenders treat the scores in different ways, but in general the higher the score, the better interest rate you’ll be offered.

• Automated Underwriting System. The days when a lender would sit down with you to go over your loan are over. Today you can find out if you qualify for a loan quickly via an automated underwriting system, a software program that looks at things like your credit score and debt ratios. Most lenders use an AUS to pre-approve a borrower. You still need to provide some information, but the system takes your word for most of it. Later on, you’ll have to provide more proof that what you gave the AUS is correct.