Home buyers say they want the latest design trends in their next property—but 70 percent admit to having outdated features in their current house, according to a new consumer survey by home builder Taylor Morrison. The most common of these outdated features are:
Linoleum floors (40 percent)
Popcorn ceilings (29 percent)
Wood paneling (28 percent)
Ceramic tile countertops (28 percent)
Shag carpeting (19 percent)
Avocado green appliances (8 percent)
“This is why real and virtual house hunting is so popular,” says Taylor Morrison Chair and CEO Sheryl Palmer. “We all love to daydream and envision ourselves in a beautiful new environment. But keeping up with ever-evolving preferences for paint colors, home features, new technologies, and how we expect to use our homes over the years is difficult. We also know that home interior preferences vary by generation, by home style, by region, and even by city.”
Taylor Morrison found that the features home buyers say they most desire are:
Better energy efficiency (62 percent)
Personalized floor plans (58 percent)
Easier maintenance (56 percent).
Also, the interior features home shoppers called most essential are:
The House passed legislation Tuesday to reauthorize the National Flood Insurance Program for five years, which would include reforms. But because the bill—which is backed by the National Association of REALTORS®—still needs Senate approval, it’s unclear whether the long-sought five-year extension will be passed before Dec. 8, when the NFIP is set to expire. Lawmakers could instead pass another short-term extension to give them time to debate NFIP reforms and pass a long-term reauthorization.
NAR President Elizabeth Mendenhall said REALTORS® want to work with lawmakers to avoid a lapse in the program. “REALTORS® know first-hand what happens when the NFIP expires, and it isn’t good for consumers, businesses, or our communities,” she said.
Flood insurance is required for any property that’s in a flood zone and has a federally related mortgage. Any loan backed by Fannie Mae, Freddie Mac, the FHA, the VA, or the Rural Housing Services is a federally related mortgage.
The House bill is called the 21st Century Flood Reform Act, and the measures it provides include:
An authorization of $1 billion in new money to elevate, buy out, or mitigate high-risk properties.
A cap for flood insurance premiums at $10,000 per year for homeowners.
Removal of hurdles to the private flood insurance market, which often offers better coverage at a lower cost than the NFIP.
Provisions for community flood maps and a homeowner’s ability to appeal their flood designation.
Better alignment of NFIP rates to match a property’s true risk, particularly for inland and lower-value properties.
Improvement of the claims process for flood victims.
Provisions for properties that are repeatedly flooded, which account for 2 percent of NFIP policies but 25 percent of claim payments.
“We appreciate the leadership that members of Congress have shown passing sound reforms, which will strengthen the program, protect property owners, and deliver good results for taxpayers,” Mendenhall said.
Home buyers say tight inventory and rising home prices are causing several negative trends in the housing market. According to ValueInsured’s latest Modern Homebuyer Survey, a quarterly report based on more than 1,000 responses, buyers say the following trends will leave the housing market in a weaker position:
The “no inspection” trend: 58 percent
The “offer sight unseen” trend: 57 percent
The “co-buying with strangers” trend: 54 percent
The “cashing out from retirement savings” trend: 37 percent
The 30-year fixed-rate mortgage reached its highest average since July this week.
“The 10-year Treasury yield ticked up 6 basis points, while the 30-year mortgage rate jumped 5 basis points to 3.95 percent,” says Sean Becketti, Freddie Mac’s chief economist. “Today’s survey rate is the highest rate in nearly four months.”
Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 16:
30-year fixed-rate mortgages: averaged 3.95 percent, with an average 0.5 point, rising from last week’s 3.90 percent average. Last year at this time, 30-year rates averaged 3.94 percent.
15-year fixed-rate mortgages: averaged 3.31 percent, with an average 0.5 point, rising from last week’s 3.24 percent average. A year ago, 15-year rates averaged 3.14 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.21 percent this week, with an average 0.4 point, falling slightly from last week’s 3.22 percent average. A year ago, 5-year ARMs averaged 3.07 percent.
Most home buyers put in the effort to save for their down payment, but that is only a fraction of the cost they should expect for homeownership. There are many other lesser-known costs that can sometimes come as a shock to buyers. Make sure your home shoppers plan accordingly for the following extra expenses, including:
Earnest money: The amount of earnest money required varies by state and local market. In a slower market, $500 to $1,000 might suffice. But a home with multiple bids may require a larger deposit of 2 percent to 3 percent of the offer price. Reassure buyers that the earnest money they put down will go toward the purchase of the home. To avoid being scammed, experts recommend making sure buyers receive a receipt and confirm the deposit is payable to a reputable third party, such as a real estate brokerage, legal firm, escrow company, or title company.
Inspection fees: Home inspections aren’t required prior to closing, but they are highly recommended in the real estate industry. The typical inspection may cost between $300 to $500, according to the U.S. Department of Housing and Urban Development. The home inspector may be able to spot any problems in the home and may be able to prevent a more costly repair later on.
Closing costs: These costs cover things like notary services, title company search fees, attorney expenses, real estate transfer taxes, insurance premiums, and more. Again, these vary by state and on the value of the property. Financial experts recommend setting aside 2 percent to 5 percent of the purchase price for closing costs. These funds must be available on closing day.
Mortgage reserves: Home buyers shouldn’t close on a home without a dime left in the bank. They’ll likely be required to show extra personal financial reserves, which are accessible liquid assets available to withdraw from after their mortgage closes. Lenders have different requirements, and some may not require it. But many lenders often want to see some type of assets left to show that buyers can continue to make mortgage payments even if they face a financial setback.
Moving costs: The cost of hiring a moving company or renting a truck can add up, too. And buyers will want to buy new furniture or items to decorate their home, so those costs will need to be factored in as well.
Maintenance costs: Many financial experts recommend putting aside 1 percent of a home’s value per year for maintenance expenses. On a $250,000 home, for example, that would mean budgeting $2,500 annually.
You can do these upgrades without major remodel work!!!!
Install under-cabinet lighting. This simple project is low in cost and leaves a big impact, giving the whole kitchen a beautiful glow. Try LED rope lights that plug into an outlet or battery-operated single lights.
Clear the counters. This is imperative for sellers. Change out the dish drying rack for a smaller dish drain that fits over one side of the sink.
Create kitchen zones. For example, set aside space for a “breakfast zone” where the coffeemaker and toaster sits along with a fresh fruit basket and napkins.
Rethink cabinets. If your clients are considering an update, cabinets that reach the ceiling are an ideal use of space. But if that’s out of the question, clear off the dusty tops and declutter the space so there’s visible storage. Place an indoor, shade-friendly plan to add some life to the space.
Choose one appliance to update. Consider the kitchen space itself and what would have the most impact. If the kitchen opens into a family room, a quieter new dishwasher could be a game changer for some buyers.
Home features—particularly those that are technology-based—have a stronger pull on millennial home shoppers than the promotion of brand names, according to a new survey by John Burns Real Estate Consulting, conducted with 20,000 new home shoppers. Millennials tended to show a preference for tech-focused amenities that could make their lives simpler.
Young adults born in the 1980s and 1990s are half as likely as their parents’ generation to rank brand as the most important factor when selecting products in the home. They do check reviews online before buying, so the survey showed online reputation is also important to them.
The young adults born in the 1990s are more likely to pay an extra $3,500 for a smart-tech refrigerator than older adults. Younger adults may have less income to spend, but they showed a higher preference for technology, according to the survey.
“We believe that understanding your target buyer will help you make better business decisions,” notes Steve Basten, senior consultant, and Todd Tomalak, vice president of research, for John Burns Real Estate Consulting. “When marketing to older adults, focus on brand. When marketing to younger adults, focus more on features.”
Instead of popping the champagne after your clients officially become new homeowners, how about setting up a photo shoot to help them document the occasion?
First-time buyers are showing greater interest in sharing their status as new homeowners with their peers online, so many real estate pros are staging photo shoots to help them capture and share the moment on social media. The photos may include props such as a “First Home” sign, or the buyers may pose with their hands forming a heart shape around their newly obtained house keys. Other real estate pros have even captured a couple dancing in the bedroom.
For example, Joey and Morgan Cabibbo, a couple who bought a home in Boerne, Texas, hired a professional photographer a few days after they closed on the purchase. The photographer captured Joey Cabibbo giving his wife a piggyback ride in front of their wooden garage door and stone three-arch entryway. The couple eventually shared on Instagram one of the photos depicting them sitting on their new front lawn with a “sold” sign.
Another couple, Blair Pomeroy and her husband, Matt, did a photo shoot in their new home in Florence, Ky., after they bought it in 2015. One photo showed them testing a paint sample on the wall by drawing an outline of a house. Above the drawing, Blair wrote “home sweet home” and drew three hearts coming out of the chimney. The couple used the photo on invitations to their housewarming party.
Real estate professionals say such post-closing photo shoots are great for their business. “It creates kind of like a domino effect,” Corey Maurice Gilmore, an associate broker at Capstone Realty in Huntsville, Ala., told The Wall Street Journal. “I see a lot of people—a lot of circles of friends—buy houses around the same period of time because they are seeing their friends make home purchases.”
New England is full of remnants of America’s past. Whether they’re battlegrounds or historic monuments, there are stories around nearly every corner. And in a state full of history, this Massachusetts home just might be the oldest house currently on the market in the entire country.
Built in 1694, this Georgetown home is a classic example of First Period architecture. For the relatively modest price of $549,900, you can claim ownership of the three-bedroom, 2.5-bath property known as the Dickinson-Pillsbury-Witham House. It sits on an 8.5-acre lot, which also comes with an 18th-century barn and shed.
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Past owners expanded the home on two occasions. A chimney and rooms on one side, including a distinctive enclosed staircase, formed the original structure of the home. Rooms were added on the other side of the home in the years after it was built. In the 19th century, there was a second, larger addition.
A real yard. Closets bigger than your average microwave. The freedom to decorate however you darn well please! Making the switch from renting to owning is exhilarating, but many rookie homebuyers find the process trickier to navigate than they expected.
This is why we created our First-Time HomeBuyer Checklist. The 12-month timeline will help you sidestep common mistakes, like paying too much interest or getting stuck with the wrong house. (Yep, it happens!)
12 Months Out
Check your credit score.Get a copy of your credit report at annualcreditreport.com. The three credit bureaus (Equifax, Experian, and TransUnion) are each required to give you a free credit report once a year. A Federal Trade Commission study found one in four Americans identified errors on their credit report, and 5% had errors that could lead to higher rates on loans. Avoid last-minute bombshells by checking your score long before you’re ready to make an offer. And work diligently to correct any mistakes.
Determine how much you can afford. Figure out Lenders are happy to lend you as much as your debt load allows. But will that amount make you house poor? Ask yourself, how much house do I really want to afford?Read More In5 Surprising (and Useful!) Ways to Save for a Down Paymenthow much house you can afford and want to afford. Lenders look for a total debt load of no more than 43% of your gross monthly income (called the debt-to-income ratio). This figure includes your future mortgage and any other debts, such as a car loan, student loan, or revolving credit cards.
There are plenty of calculators on the web to help you determine what you can afford. If you’re pushing the limits, start reducing your debt-to-income ratio now. To get a reality check on what you may actually be spending every month, use this worksheet.
Make a down payment plan. Most conventional mortgages require a 20% down payment. If you can swing it, do it. Your loan costs will be much less, and you’ll get a better interest rate. If, however, you’re not quite able to save the full amount, there are many programs that can help. FHA offers loans with only a 3.5% down payment. But they require mortgage insurance premiums, which will drive up your monthly payments. The U.S. Department of Housing and Urban Development (HUD) provides a list of nonprofit homebuying programs by state. Also check with credit unions; and your employer might even have an assistance program.
As you’re planning your savings strategy, keep in mind that banks like you to “season” your money. That is, they like to see that you’ve had stable funds in your account for 60 to 90 days before applying for a loan. Don’t worry: You can still use a financial gift from a family member or bonus received near the time you buy.
9 Months Out
Prioritize what you most want in your new home. What’s most important in your new home? Proximity to work? A big backyard? An open floor plan? Being on a quiet street? You’ll make a much better decision on what home to buy if you focus on your priorities. If it’s a joint decision, now is the time to work out any differences to avoid frustration and wasted time. Perhaps most important: Know what trade-offs you’re willing to make.
Research neighborhoods and start visiting open houses. But now’s when the fun begins, too. Use property listing sites, such as realtor.com, to find out about neighborhoods, public transport, and cost of living.
Start visiting open houses to get an idea of what kind of homes are in your price range and what neighborhoods appeal the most. Seeing potential homes will also keep you motivated to continue reducing your debts and saving for your down payment.
Budget for miscellaneous homebuying expenses. Buying a home has some miscellaneous upfront costs. A home inspection, title search, propery survey, and home insurance are examples. Costs vary by locale, but expect to pay at least a few hundred dollars. If you don’t have the cash, start saving now.
Start a home maintenance account. Speaking of saving, start the good habit now of putting a little aside each month to fund maintenance, repairs, and home emergencies. It’s bad enough to have to call a plumber. It’s worse if you’re paying credit card interest on that plumbing bill.
6 Months Out
Collect your loan paperwork. Banks are very particular when it comes to mortgage loans. They demand a lot of paperwork. What they’ll want from you includes:
W-2 forms — or business tax return forms if you’re self-employed — for the last two to three years
Personal tax returns for the past two to three years
Your most recent pay stubs
Credit card and all loan statements
Your bank statements
Addresses for the past five to seven years
Brokerage account statements for the most recent two to four months
Most recent retirement account statements, such as 401(k)
If you start collecting these documents now, it’ll lessen the stress when it’s time to get your loan. Bonus: Looking closely at your loan documents each month will also help you stay focused on saving for your down payment and keeping your debt-to-income ratio low.
Research lenders and REALTORS®. Start interviewing REALTORS®, specifically buyers’ agents. A buyer’s agent will work in your best interest to find you the right property, negotiate with the seller’s agent, and shepherd you through the closing process. Your agent also can be instrumental in finding a lender who’s familiar with first-time home buyer programs.
Even better, look for a mortgage broker, who will shop for a competitive loan rate for you among multiple lenders, unlike a bank, which can only offer its own products.
3 Months Out
Get pre-approved for your loan. At this point, if you’ve been following this timeline, your credit score, paperwork, and down payment should be on track. You’ve done your research on lenders and buyers’ agents. Now it’s time to start working with them. First you’ll need to get pre-approved for a mortgage.
Make an appointment with your lender or mortgage broker and bring all your paperwork. He’ll run a credit check on you and tell you how much of a loan you’re approved for. It often makes sense to borrow less than the maximum the lender allows so you can live comfortably. Draft a budget that accounts for mortgage payments, insurance, maintenance, and everything else you have going on in your life.
Start shopping for your new home. One you’re pre-approved, the buyer’s agent you’ve chosen will be able to target homes that meet your priorities in your price range. This way you won’t be wasting time looking at homes you can’t afford.
2 Months Out
Make an offer on a home.It usually takes at least four to six weeks to close on a home. So if you have a firm move-out date, allow enough time to deal with any hiccups that can delay closing.
Get a home inspection. One of the first things you’ll want to do after an offer is accepted is have a home inspector look at the property. If the home inspector finds something that needs repair, that’s a common example of something that can delay closing.
In the Last Month
Triple-check that all your financial documents are in order and review all lending documents before closing. You’re in the home stretch! If you’ve been keeping your documents up to date, and your down payment is in reserve, these final steps are the easiest. Reviewing the mortgage documents is probably the most difficult. Your agent can help guide you through them.
Get insurance for your new home. Don’t forget to secure insurance before closing. You’ll need to bring proof of insurance to closing.
Do a final walk-through. Do a final walk-through of your new home, usually a day or two before closing, to make sure the home is in the shape you and the seller have agreed upon.
Get a cashier’s check or bank wire for cash needed at closing. Make sure you get an exact amount of cash needed for closing. You’ll get that number a few days before closing so you can secure a cashier’s check or arrange to have the money wired. Regular checks aren’t accepted.
