Category: Real Estate

Ready to Sell? This Is Your Real Estate Sales Strategy – Real Estate 101 – Trulia Blog

Follow these five steps to get your house market-ready.

What do doctors, firefighters, accountants, computer engineers, and teachers all have in common? At one point or another during the course of their lives, they’ll all probably sell a home. But while some professions may give you great communication skills (which could come in handy with buyers) or make you a boss at crunching the numbers (all the better to compare mortgages), House Selling 101 probably isn’t a prerequisite for any of them. Of course, that’s why real estate agents are trained to list and sell your beloved San Francisco, CA, home for sale, but it doesn’t hurt to study up on some real estate basics.

Consider the following real estate sales strategy. Follow these five steps, and you’ll be well on your way to jump-starting your home sale.

1. Be vigilant with your belongings. Now is the time to tackle those organization and cleaning projects. The detritus of life tends to stack up in our living spaces, which may be fine for every day but isn’t great for selling. Make the adage “less is more” your mantra and divide your belongings into two piles: one to take to the new place, one to toss or give away. (Or try following a flow chat for decluttering tips.) And remember, packing items away doesn’t mean shoving them in the hallway closet. Buyers will very likely open every cabinet and drawer, so those spaces should be tidy too.

Pro tip: Get a head start on packing and moving to your new home by renting a portable storage unit. Take a few days to pack the unit with displaced and off-season items, then call up the storage company to get it hauled away to the storage yard while you show your house. Once you’re settled in your new place, give them another call and have your stuff brought to your new home. Easy!

2. Find a real estate agent. As you’re getting your house in order, start the hunt for a real estate agent. You’re not looking for just any agent; you need a real star to get you to the finish line. Put the word out to your network and don’t feel like you have to work with someone because they are family. Once you have some referrals, take the time for an interview and get to know their selling style. If said agent declines the interview request, they’re probably not for you — proceed to the next one on your list. If they seem almost right, keep looking until you find a great match. It’s worth the time investment to find the right agent.

3. Dig out all relevant paperwork. While you’re cleaning and scrubbing, keep an eye out for paperwork that’s been stashed in random places throughout the years. Warranties, installation invoices, mortgage records — pull together all the documents you need to sell a house. Buyers hope for an active, informed seller who is involved with the details of their home. The best practice is to have all the paperwork you need for the seller’s disclosure notice. If you can’t find the documents, you can always select “I don’t know” on the form (but keep in mind, your home sale may suffer from the lack of information).

4. Schedule a strategy session with your real estate agent. Purging and cleaning were the warm-up act. Now you’re ready for the main event. After you’ve signed on the dotted line with your real estate professional, schedule a walk-through before listing and take your agent’s feedback seriously. They know what color to paint that old maroon accent wall, how to stage the living room so it looks 20% bigger, and how to deal with outdated kitchen cabinets. They also know how to allocate your dollars to impress potential buyers.

5. Repair and remodel. Work your way through your agent’s list of recommended repair tasks. If they advise a couple of remodel projects, make these a priority so listing photos can be scheduled. Remember, your agent is plugged in to the local market and has insider knowledge that can help your home compete in a crowded market.

Buying a House Without Your Spouse: Community Property Edition – ZING Blog by Quicken Loans | ZING Blog by Quicken Loans

One of the more beautiful sayings in Spanish in my opinion is “Mi casa es su casa.” That translates to “My house is your house.”

That sentiment has a lot to do with the intention behind community property laws. Nine states have laws that say things you buy when you’re married become property of the couple. Depending upon the type of loan you get, this can affect your application for a mortgage. If you can’t make the monthly payment, your spouse may still be responsible for the payments regardless of whether they’re on the loan.

If you’re considering applying without your spouse, there may be cases where it still makes sense to do so. Let’s look at some considerations.

Where and When Does It Apply?

The first thing to figure out is whether community property applies in your state. The following nine states have communal property laws on the books that apply to married couples:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

Residents of Alaska also have the option of creating community property estates, but it’s not required that they do so.

There’s another huge caveat to the community property guidelines I’m about to go over:

The following rules concerning debt and credit only apply in the case of FHA and VA loans. If you get your loan through Fannie Mae or Freddie Mac, those loans follow traditional guidelines and the debt and credit of your non-borrowing spouse isn’t factored into the loan.

My Debt Is Your Debt

In those states where community property is in effect, a lender is required to request a credit report from the non-borrowing spouse when doing an FHA or VA loan. Investor guidelines on these particular loans require them to consider a number of factors that could impact approval.

Debt-to-income (DTI) Ratio

Lenders need to consider this because a borrower’s debt has to be figured into the qualifying debt-to-income (DTI) ratio. Let’s do a quick example on how DTI is calculated.

Let’s say I make $3,000 a month. My car payment is $300. Housing is $700 and I have a credit card bill of around $300 per month. My DTI is 43% ($1,400/$3,000).

On FHA and VA loans in community property states, spousal debts are included in DTI regardless of whether the spouse is on the loan.

Charge-offs and Collections

Charge-offs and collections on accounts occur when payments on debt are considered well past due and the creditor doesn’t think they are likely to collect. At that point, they’ll place a mark on your credit report. Although you can’t fully remove accounts that have been charged off or gone into collection from your credit report for seven years, you can pay them off in full or sometimes work out a payment plan to deal with the obligations.

If your spouse has charge-offs or collections to pay off, they may affect your DTI. This is true for certain FHA and VA loans. One thing to note is that if the collections are in the name of your spouse, you may not have to wait 12 months prior to applying in order to get a VA loan. The collections just need to be paid off at closing.

Judgments and Liens

If your spouse has judgments or property liens, those can also affect your ability to close a loan and, in some instances, are required to be paid off. Exactly how it works depends on the type of loan you’re getting.

Credit

You’re probably wondering at this point why you would bother applying alone in a community property state if your spouse’s debt and credit report are taken into account anyway?

While your spouse’s credit report has to be ordered on FHA and VA loans to take a look at the debts, the credit score is not taken into account. This means you can’t be denied for a mortgage if your spouse has a bad credit score. In contrast, if you apply together, all scores are taken into account for both clients.

We hope this has cleared up some of the factors involved in applying for a mortgage in community property states, but a lot of this depends on the specific type of loan you’re getting. If you still have questions, call us at (800) 251-9080. You can also leave your questions in the comments and we’ll answer them or get them to the right people.

For the First Time in Weeks, Rates Move Lower | Realtor Magazine

On the heels of last week’s decision by the Fed to keep rates unchanged, mortgage rates dropped slightly this week, after four straight weeks of increases.

“The Federal Reserve’s decision last week to maintain the current level of the Federal funds rate combined with the reduction in their forecast for growth triggered a 3-basis point drop in the 10-year Treasury yield,” says Sean Becketti, Freddie Mac’s chief economist. “As a consequence, the 30-year mortgage rate declined 2 basis points to 3.71 percent. However, comments this week by several members of the Fed, including the presidents of the Richmond, San Francisco, and Atlanta banks, indicated that a June rate hike is still on the table.”

Freddie Mac reports the following national averages with mortgage rates for the week ending March 24:

• 30-year fixed-rate mortgages: averaged 3.71 percent, with an average 0.5 point, dropping from last week’s 3.73 percent average. Last year at this time, 30-year rates averaged 3.69 percent.
• 15-year fixed-rate mortgages: averaged 2.96 percent, with an average 0.4 point, falling from last week’s 2.99 percent average. A year ago, 15-year rates averaged 2.97 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 2.89 percent, with an average 0.5 point, dropping from last week’s 2.93 percent average. Last year at this time, 5-year ARMs averaged 2.92 percent.

Pros and Cons of 6 Common Roof Types | Realtor Magazine

Are you familiar with the most common roof types? Century 21’s blog recently reviewed the pros and cons of these popular options:

 

1. Asphalt shingle—The most common roofing material

• Pros: Available in a wide assortment of colors; affordable; simple to install
• Cons: Shorter life spans; often have lower levels of insulation compared to other roof types

2. Wood shake

• Pros: Natural, rustic look
• Cons: Flammable; more prone to mold or rot; limited life span (similar to asphalt shingles)

3. Metal—Various types available (aluminum, steel, copper, and copper-asphalt are the most popular)

• Pros: Strong and durable; high solar reflectance for efficient home cooling/heating
• Cons: Often the most expensive choice

4. Ceramic and cement tile

• Pros: Durable; energy efficient
• Cons: Expensive; heavy (may require extra framing for support)

5. Slate roofing

• Pros: Extremely durable; sustainable; many variations in thickness/color
• Cons: Expensive; heavy (may require extra framing for support)

6. Synthetic roofing

• Pros: Durable; affordable
• Cons: May absorb moisture

5 Home Fixes Not Worth It at Resale | Realtor Magazine

Bathroom remodels and additions may offer some of the fewest paybacks at resale, at least when compared to 20 other popular projects.

The National Association of REALTORS® and the National Association of the Remodeling Industry released a report showing some of the home renovation projects that offer the biggest and smallest returns when selling a home.

The report found that installing a new roof and refinishing hardwood floors was worth every penny of the cost at resale. But which of the 20 projects evaluated offered the smallest percentage back when home owners went to sell their home?

Bathroom addition

• Average cost: $50,000
• Recouped at resale: 52%

Master suite addition

• Average cost: $112,500
• Recouped at resale: 53%

Closet renovation

• Average cost: $3,500
• Recouped at resale: 57%

Bathroom renovation

• Average cost: $26,000
• Recouped at resale: 58%

New wood-frame windows

• Average cost: $26,000
• Recouped at resale: 58%

5 tips for first-home buyers in today’s market – CBS News

Families looking to buy their first home are in for a world of hurt. Starter homes are in short supply, which makes it tougher for buyers to not only find an acceptable property but also to negotiate on price and terms. Not surprisingly, that’s locking out many first-time buyers and depressing the number of trade-up homes on the market, too.

Since 2012, the number of starter homes listed for sale has fallen 43.6 percent, and the inventory of trade-up properties is down 41 percent, according to research conducted by Trulia, a real estate website. That’s fueling a vicious cycle, pushing up prices and making the market increasing unaffordable, site officials say.

“Those who are making their first foray into the housing market are worse off than they’ve been in years,” said Ralph McLaughlin, chief economist for Trulia. “They’re going to have to shell out more cash for the down payment and use a greater share of their income to make the mortgage.”

Of course, the pain is not evenly distributed around the country. In looking at the 100 largest metropolitan areas, Trulia found some cities where homes of all types were easily affordable and others where all but the highest wage-earners would be locked out.

In many parts of Ohio, for example, you can buy a starter home for roughly the same price as a luxury car. In Dayton, the median starter home sells for $45,000. A similar home would cost $41,248 in Toledo and just under $59,000 in both Akron and Cleveland. In Detroit, a starter home costs less than a Ford Fusion. The median starter home: $17,500, according to Trulia. The Fusion’s sticker price: $22,610.

By way of contrast, in most major cities in California, starter homes are completely unaffordable on a starter salary. Defining a first home as one priced in the bottom third of the listed inventory, Trulia found that its median price listed for a whopping $714,000 in San Francisco, $585,713 in San Jose, $416,000 in Orange County and $327,450 in San Diego.

To put this in perspective, you’d need $9,000 in cash for the standard 20 percent down payment on a starter home in Dayton, but $142,800 for the down payment in San Francisco. The Dayton resident’s mortgage would set him back $172 per month, while the San Francisco resident would shell out $2,727 monthly, assuming both financed with 30-year fixed-rate mortgages at 4 percent.

Indeed, a Los Angeles resident could easily buy what Trulia classifies as a luxury home — those priced in the top third of listed inventory — in Dayton ($206,375) and have enough left over to buy a Tesla ($101,500) for less than the price of a starter property in Los Angeles ($329,000).

Perhaps not surprisingly, another recent study found that most renters plan to continue renting, saying it’s simply the more affordable choice. Among those who would like to buy, 36 percent felt that saving enough for a down payment would be a substantial hurdle, while 30 percent thought the monthly mortgage payments would be the biggest challenge, according to a survey released last week by Freddie Mac.

What do you do if you’re dead-set on buying in one of the less-affordable cities? Five things:

1. Get pre-approved. Getting okay’d for a mortgage ahead of time does two good things for you. It establishes what lenders think you can afford, which allows you to zero in on just the homes that fit your budget. And it reduces the number of contingencies you’d have on your offer. The fewer contingencies you have, the more attractive you look to a seller, said Brett Furman, a long-time real estate agent and author of “What You Really Need to Know About Selling Your House.”

2. Avoid new debt. If you buy a car right before trying to close on a home, your lender could back out of your home financing, Furman added. That’s because the lender knows what you may only realize six months into home ownership — the costs and responsibilities of home ownership can be overwhelming. Don’t take on additional financial obligations until you’ve had some time understanding the full economic impact of home ownership.

3. Talk to your landlord. McLaughlin said he bought his first house from his landlord. If you’re renting a single-family home and like it, you may be able to do the same. Buying from your landlord has many advantages. First, you know what’s wrong and right about the house. You know whether it needs repairs. And if you buy it, there’s no need to hire movers. Another potential savings is that the landlord won’t have to pay a realtor and may be willing to split that cost savings with you by selling for comparatively less.

And assuming you’ve been a good tenant, the seller has built up a level of trust in you. If you don’t have quite enough for a traditional down payment, your landlord might be willing to carry a second loan. After all, he’s been getting regular monthly payments from you for years. Carrying a second mortgage isn’t dramatically different than collecting rent.

4. Save like crazy. You’ll need a substantial nest egg to handle a down payment, of course, but other costs are likely to be involved in closing the deal. And once you own the home, you’ll be on the hook for maintenance, repairs, property taxes and insurance — all expenses that you left to your landlord in the past.

5. Get an inspection. The low end of the market often is filled with “fixers.” Buying a house that needs cosmetic help can be a great way to get a good deal. But if your fixer has structural problems — a cracked foundation, bad roof, plumbing or electrical issues — the cost of repair can turn your bargain into a money pit in no time. A professional inspector should be able to spot those costly issues. That allows you to ask the seller to make repairs before the sale closes or to walk away before the repairs sink your budget.

5 Common Misconceptions About Real Estate | Zillow Porchlight

Popular misconceptions about real estate make many people hesitant to get into the home-buying or -selling game. And that’s a shame.

If you’re considering buying or selling a home, don’t let the following conventional wisdom stop you. There’s not as much truth to it as you think.

Misconception: You don’t need a real estate agent to buy a home now that all the information is online

Today it’s more important than ever to have a great local real estate agent on your team. And there’s no cost to you, so why not get an experienced pro on your side?

It’s no longer about agents having access to the proprietary data — it’s all out there. But since buying a home is such an infrequent transaction in your life, you need someone along on your journey who knows and studies the market, understands the process and can act as an adviser to help you interpret the data.

And buying a home is not just a financial transaction. It’s incredibly emotional, and you’ll want a teammate to help diffuse the feelings, navigate the ups and downs, and steer you in the right direction.

Misconception: You need 20 percent down to buy a home

This is the biggest misconception for millennials, who are often burdened with huge student loans but still want to be homeowners.

After the credit and housing crisis, it became very difficult to get a mortgage. Lenders were strict, and financing killed deal after deal.

Today, however, it is possible to get a loan with as little as three percent down. Yes, that’s true.

But while lending standards have loosened, it’s no slam dunk today. You must have great credit, verifiable income and assets to back you up. But you don’t necessarily need a 20-percent down payment.

Misconception: My home’s value is whatever the appraiser says it is

The market value of a home is determined by what willing and able buyers and sellers agree on in an open market and arm’s length transaction.

Other than that, a homeowner or would-be seller can only rely on a recent appraisal for a bank refinance.

It’s helpful to understand that a home’s appraised value typically comes in below the market value. Factors such as views, finishes, fixtures or neighborhood specifications can affect your home’s appraisal.

Misconception: Spring is the best time to sell a home

Traditionally, many buyers come to the market in the spring to secure a new home before the start of the following school year in September. This decades-long trend has made people think spring is the best time to list a home for sale.

But not all buyers today are families with kids. Buyers are single women, downsizers, baby boomers and people who don’t know — nor care — about the school calendar.

The best time to sell your home is when inventory is low, and that’s the dead of winter. Later in the year is better because buyers are still home shopping through the holiday season.

Misconception: You don’t need to have open houses to sell homes

Many people believe that, with the advent of online listings, open houses are unnecessary. It’s not true.

Open houses are in the DNA of real estate, and the more you make your home available to potential buyers, the better chance you have of selling it.

When you host an open house, you are literally opening the door to let buyers come through and fall in love with your home. Without an open house, they might never set foot in the door.

Have Mortgage Rules Made It Tougher to Buy a House? | Credit.com | stltoday.com

The “Know Before You Owe” mortgage rules that went into effect last October have slowed the homebuying process a bit, but overall it hasn’t made it more difficult — for buyers and sellers, anyway — according to mortgage adviser Casey Fleming.

“I have seen homeowners frustrated because the process took longer than they thought,” Fleming, author of loanguide.com, said. But buyers and sellers have extended their contracts “in every single deal that I’ve ever been involved in.”

Those delays stem from the new rules, which require additional paperwork and disclosures for lenders. The new, standardized forms spell out exactly how much a borrower must pay for closing costs and how much each monthly payment will be as the loan ages and potentially adjusts, right up until its term ends.

 

They’re great changes for buyers because they make the total cost of the mortgage very clear before they finalize the purchase. Lenders, however, have been “in a tizzy” over the changes, Fleming said.

“The problem is that there are very severe penalties (for lenders) for not getting it right,” Fleming said, offering an example of a lender who, because of a math error in determining the lifetime costs of an adjustable-rate mortgage — part of the new paperwork and disclosure rules — had to eat about $15,000 because of the error, even though it would have had no financial impact on the borrower.

In a nutshell, borrowers must now get the new standardized forms at least three days before closing on their loan. Before, changes could be made right up to and even during the closing.

Before the change, homebuyers received the “HUD-1 Settlement Statement” — short for the U.S. Department of Housing and Urban Development — at closing, when they were already busy signing dozens of forms. (Note: It was always possible to ask for a preliminary HUD-1 several days before closing and some mortgage lenders did provide advance copies.) The HUD-1 looks a bit like an accountant’s ledger or an IRS tax form. Borrowers were also presented with a separate Truth in Lending Act (TILA) disclosure.

Both the HUD-1 and the TILA disclosure have now been replaced by a single “Closing Disclosure” form. This form is still several pages long, but designed to be easier to read. The cover page includes clear representations of monthly payments, total payments, closing costs, prepayment penalties, balloon payments and potential interest rate changes during the life of the loan. Everything on page one of the document is a direct response to complaints about many practices that tripped up consumers during the housing bubble.

 

Real Estate Watch: No, there isn’t a housing bubble? – The Island Now: Business

Is there a Bubble in Housing? Absolutely Not!  

Everything in the world, for the most part is supply and demand economics.  

When one has a reduced supply, which is what we have at the current moment and a greater demand, that is not able to be satisfied, you have pressure on the current smaller inventory, to increase in price and existing not for sale property to increase in value. 

However, seven to nine years ago, as the market was crashing and supply was increasing and demand was waning and prices followed suit, going lower; as well as existing home’s values.  

Building permits also came to a screeching halt throughout the country, because of the lack of demand and tightened money supply and lending requirements.  

Because of all these changing variables it might take 20 years and more, to even come close to satisfying current and future demand.   

The greatest demand is coming from the Millenials, who were born between 1982 and 2000, and who number approximately 83.1 million as noted in the most recent U.S. census.  

The continued increase in the Hispanics and Asian populations (non-white) and those under 65 and over (13 percent) (expected to increase to 20 percent by 2050 and the upwardly mobile in incomes, and those that have been living at home or in rentals, saving more and more money for a down payment to enter the home market to grab a piece of the “American Dream.”   

The pressure on prices to increase has no end in sight.  There will also be shifts in population trends and movements due to higher prices, taxes, jobs etc that will also have an impact on supply.  

Population increases of 42 percent in the U.S., are predicted for the age groups 15-64 between 2000-2050, and reduction of those populations; 10 percent in China, 25 percent in Europe, 30 percent in South Korean and 40 percent in Japan.

It is how fast the builders can catch up with the ever expanding demand over the last five years that will determine when and if the next bubble will come to pass.  

Of course there are always exceptions to the rule of supply and demand, if some U.S. or global event occurs to squash the current demand.  

The huge question arises as to whether we will continue to spend and borrow and our huge debts now and in the future will continue to rise; will have some kind of effect on housing market based on higher interest rates.  

Right now, it isn’t happening.  If we raise interest rates too much that will slow the housing market, as well as everything else that is tied to it; however, if we keep them too low, that is not helpful to all involved and dependent on a return on their fixed incomes.  

Dammed if you do and dammed if we don’t.  It is a perfect storm, low interest rates, low supply of housing and higher demand, and I am hoping for continued positive outcomes going forward, but I am not totally 100 percent sure!

The problem with Long Island, especially in Nassau County, is the lack of buildable land to satisfy the ever increasing demand.  

Even Suffolk County, with a lot more usable land to build on, is ever increasingly being grabbed up and held in a land trust, to keep any building from happening.  

But again, the water supply will become an ever increasing major issue on the expansion of any future construction, as was mentioned in last weeks article.  

All these facts point to the lack of supply in the future and the increase in prices in Long Island and many other areas around the U.S.  

However, will many areas of Long Island become so expensive that only the rich and super wealthy be able to live here?  

Lastly, what is also keeping our bubble in check,  is the fact that more people are leaving New York.  

Our children, family and friends continue to leave as they have been over the years, since the lack of reasonable housing will continue to force them to find other venues and move where it is more affordable. 

4 Credit Tips for Buying a New Home | Money.com

Here’s what you really need to become a homeowner.

This may come as a surprise, but you don’t need a perfect credit score to buy a home or get a mortgage.

In some cases, your credit just needs to be sufficient. Good, bad, ugly or indifferent, as long as your credit score matches the criteria of the mortgage size and property type you are looking for, you may be able to get financing.

Here’s a quick cheat sheet of the top three most commons mortgages and their basic credit score requirements.

 

• FHA loans. You’ll generally need a credit score of at least 600. There are lenders that do FHA Loans with credit scores as low as 580, but it’s going to come at a cost. Expect the lender to go through your file with a much finer-toothed comb if your score is at 620 or below. Conversely, if your credit score is 620 or higher, not only will you get better rates and fees, but you’ll also have an easier loan process.
• Jumbo Loans. You’ll generally need a credit score of at least 680. You will also generally need at least 30% equity when buying or refinancing a home. A 700 or better score yields better rates and terms and requires less down (possibly as little as 20%).

Of course, a good credit score generally helps you net better terms and conditions. If you have some credit challenges preventing you from getting a mortgage with competitive rates and fees, here are some strategies straight from a mortgage pro that could improve your situation.

1. Pay Down Debt/Rapid Re-Scoring

Some mortgage lenders have a credit doctor service, known as rapid re-scoring, available through their credit reporting company. This service allows them to run statistical credit modeling: the lender plugs in a certain credit score needed, an algorithm analyzes your complete credit portfolio and outlines what can be done to get you to that aforementioned threshold.

Oftentimes, high credit utilization (the amount of debt you are carrying versus your total available credit) is the culprit for a low score. In those instances, paying down certain credit accounts could make you more creditworthy — and mortgage eligible — within short period of time.

 

2. Time

If buying a house is a longer-term goal, time can be your friend. Credit history is a large component of a healthy credit score. Make your payments on time, keep the amount of debt you are carrying low and avoid late payments of any kind. These smart spending habits show that you are responsible with your obligations and will bolster your credit score eventually.

 

3. Quit or Resolve Disputes

In order to get a mortgage, you generally cannot have any accounts in dispute on your credit reports. At the same time, simply removing a dispute from your credit report can make your credit score drop. The reason? Credit scoring models generally ignore information being disputed, like an account with a late payment, which would otherwise hurt your credit score.

In order to circumvent these problems, work to resolve any disputes. (You can find more about getting errors off of your credit reports here.) You can also consider handling any issue you may have with a lender directly in lieu of filing a formal dispute with the credit bureaus. Here are some tips for negotiating with creditors.

 

4. Put More Money Down

Putting more money down to buy a home could put you in an entirely different mortgage category and help you bypass certain credit scoring problems.

Remember, if you have been told “no” by a bank or lender, you owe it to yourself to get a second or third opinion. What’s more, your credit score could improve from month to month, depending on what’s holding you back, so keep an eye on it in the meantime.