Yajnesh Rai

First Time Buyer’s Guide to Finding Good Real Estate • RealtyBizNews: Real Estate News

A home is likely to be the most expensive investment that you’ll make in your lifetime – it’s just as a big of an event for the experienced buyer as it is for rookies. It isn’t something that you should take lightly or jump in with out doing the proper research. Before making a big purchase, it’s recommended that you conduct a home inspection as there are potential hazards that are commonly found during such inspections.

Buying a home is an exciting time and you may feel compelled to just get the hassle over with and start living in your new home, you should resist this urge to rush the process. Before spending hundreds of dollars on a home inspection, there are a couple things to look for that can indicate the overall “health” of a house that you can look for all on your own!

Roof Age

Getting a roof replaced is one of the most expensive renovations that comes with owning a home. A roof’s lifetime can vary drastically depending on the type of material used. Shingled roof can last for as little as 15 years or up 50 years and beyond. A metal roof will likely last even longer than a shingle roof, however there isn’t much in the way of cosmetic appeal behind metal roofs. When viewing a property, there are many ways to get a good grasp on the actual age of a roof. Take a look at the “key-ways” on the roof, if they are spaced far apart, it will generally signify that the roof hasn’t been replaced recently. It’s also a good idea to check for loose, missing or warped shingles

Plumbing

When you walk through the house, check all the sinks, faucets and toilets to make sure they are draining properly and that there are no leaks coming from the pipes. Check to see if the water pressure from the faucets and showers are acceptable to your liking. Double check that the toilets are tightly secured and not loosened at the base, while also flushing properly. The last thing you are going to want to have is a beautiful house in need of a complete plumbing overhaul.

Electrical Service

There are many different types of electric services that range from brands, fuses, and amperage. Many homes will have a 100 AMP circuit breakers, however it is still very common to find houses with “old-fashioned” fuse boxes. Many new homes are being 200 AMP circuit breakers and Generac commercial generators installed somewhere on the property to match their electrical output. Make sure the house has the kind of electrical output that is maintained in a way that is preferable to you. Getting an older style fuse box, may be part of the appeal when buying an older home if you are in to legitimate antique homes. However, this may not be satisfactory to the modern homeowner.

Remember, buying a home is a big investment and it shouldn’t be taken lightly. If you see any potential problems with any of the above features, don’t be afraid to keep looking. This is your future that you’re talking about – don’t settle for anything less!

Impact of Rising Rates Spreads Through Mortgage Industry | CBN.com

With U.S. mortgage rates increasing, homeowners with variable loans will be the most affected at first. The rises will have a ripple effect across the sector, however, because experts expect more increases from the Federal Reserve.

News from the mortgage sector is that average rates for a 30-year fixed-rate mortgage have now reached 4.38 percent on average; a rate not seen since April 2014. Though many homeowners may have fixed rates at a lower level, the rising interest will have an increasing effect on many. For example, predictions for the number of refinance applications expected in 2017 have already been halved by lenders. There may be a short-term surge in new mortgage applications as borrowers try to get a home loan at current rates before they increase further.

Despite the concerns, consumer borrowing rates are still low compared to historic levels. Kroll Bond Rating Agency’s senior managing director, Chris Whalen, said, “This economy has gotten so conditioned to 2% and 3% mortgage rates that there is sticker shock.”

Some of those hit worst will be borrowers shopping for home equity lines of credit (HELOCs). Interest rates have already risen for these consumers wanting to borrow against their property value. It means that current borrowers will see increased payments within one to three billing cycles. Those with adjustable-rate mortgages (ARMs) will also note a considerable increase in the years to come.

If you have such a home loan or line of credit, it’s worth taking the necessary precautions to ensure that you can afford the repayments, whether this is reducing your expenses, increasing your income or, for those on an ARM, shopping around for a fixed-rate mortgage.

Discover how the increase in mortgage rates is predicted to affect different products in the mortgage and home loan industry over the next few years.

More Shortages Abound: Homebuilding Dips | Realtor Magazine

Fewer new homes and apartments are in the pipeline, which may press housing shortages even more in the new year.

Housing production – which includes multifamily and residential – posted a sharp decline in November, dropping nearly 19 percent month-over-month. Overall housing production is now at a seasonally adjusted annual rate of 1.09 million units, the Commerce Department reports. Permits – a gauge of future homebuilding – was also down in November, dropping 4.7 percent.

The latest follows a glowing report in October that showed single-family starts at the highest level in nine years. Still, even October’s high was more than 15 percent below long-run averages.

“People have said to us on many occasions that housing is back to normal,” says Doug Duncan, the chief economist at Fannie Mae. “It’s definitely not normal from a supply perspective.”

The builder’s tradegroup is still predicting single-family production to increase over the coming months. The volatile multifamily sector, on the other hand, is expected to level off at a solid rate “as the market finds balance between supply and demand,” says Robert Dietz, the National Association of Home Builders’ chief economist.

Single-family starts dropped 4.1 percent in November to a seasonally adjusted annual rate of 828,000. Multifamily production plummeted 45.1 percent to 262,000.

Combined single- and multifamily starts posted drops in all four major regions of the U.S. last month, led by the Northeast (a 52.1 percent month-over-month drop), the West (22.1 percent decrease), Midwest (14.2 percent drop), and the South (9.3 percent drop).

Broken out, single-family permits did post a modest 0.5 percent increase to a rate of 778,000 units in November. Multifamily permits dropped 13 percent to 423,000.

“Year-to-date, single-family starts are up 9.6 percent and the overall trend in this sector remains positive,” assures NAHB Chairman Ed Brady. “Builder sentiment is strong and we can look forward to growth in the single-family market in the year ahead as the industry adds workers and lots, and Washington policymakers provide regulatory relief for small businesses.”

Easy Ways to Enhance the Home’s Entryway | Realtor Magazine

The entrance to the home is where buyers often form some of their first impressions of the interior of the home.

However, too often, “the entryway gets neglected because it isn’t necessary in the same way that a living room sofa is,” Larina Kase, an interior designer and home stager in the Philadelphia area, told realtor.com®. “But it’s actually one of the simplest and least expensive areas to decorate to get the biggest impact.”

That said, many entryways suffer from overcrowded coat racks and oversized furniture that is making the area feel less appealing and less spacious, designers say.

Here are a few simple things you can try to spice up the home’s entryway:

Add a mirror: “Every entryway needs a spectacular mirror, especially in small spaces,” says Jack Menashe of Menashe Design in New York. “It makes them optically larger and adds depth. Plus, who doesn’t want to check themselves out before they leave the house?”

Light it up: Add a small lamp on a table for a welcoming glow.

Fresh flowers: Try an orchid, potted plant, or vase of cut blooms to add a touch of nature and color.

A bench: If there’s space in the entryway, have a place to sit down and that ideally has some storage underneath it too. Add a colorful pillow to brighten up the space too.

Mortgage Rates Continue Upward Trend | Realtor Magazine

Mortgage rates were on the move for the seventh consecutive week.

“As was almost-universally expected, the FOMC (Federal Open Market Committee) closed the year with its one-and-only rate hike of 2016,” says Sean Becketti, Freddie Mac’s chief economist. “The consensus of the committee points to more rate hikes in 2017. However, the experience of this year combined with the policy uncertainty that accompanies a new Administration suggests a wait-and-see outlook. … If rates continue their upward trend, expect mortgage activity to be significantly subdued in 2017.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 15:

• 30-year fixed-rate mortgages: averaged 4.16 percent, with an average 0.5 point, rising from last week’s 4.13 percent average. Last year at this time, 30-year rates averaged 3.97 percent.
• 15-year fixed-rate mortgages: averaged 3.37 percent, with an average 0.5 point, increasing from last week’s 3.36 percent average. A year ago, 15-year rates averaged 3.22 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.19 percent, with an average 0.4 point, increasing from last week’s 3.17 percent average. Last year at this time, 5-year ARMs averaged 3.03 percent.

Tight Inventories to Press Buyers Through ’20? | Realtor Magazine

Home buyers face narrow options searching for homes in many markets, and will continue to face constrained supplies for at least four more years, writes Lawrence Yun, the chief economist for the National Association of REALTORS®, in his latest column at Forbes.com.

Inventories remain stubbornly low. At the end of October, there were 2.02 million homes listed for sale, which equates to about a 4.3-month supply. Yet, a balanced market should offer closer to a 6- to 7-month supply.

The low supplies have led to home prices outpacing Americans’ income growth for the past five consecutive years. From 2011 to 2016, the median home price has increased by 42 percent compared to the median household income gain of only 17 percent.

“Such disparity hurts affordability and is unsustainable over the long haul,” Yun writes.

More homes for sale are needed and home builders are the key, Yun notes.

“It cannot be a simple case of existing homeowners listing their home,” Yun adds. “Keep in mind that nearly all home sellers are also home buyers, and thereby not truly providing a net increase to the inventory.”

Instead, home builders need to ramp up construction, and investors who purchased homes to rent out need to unload those rental properties onto the market, Yun says.

With landlords still able to command high prices, Yun says it’s doubtful investors will sell their single-family rentals anytime soon. As such, any substantial gains in inventories likely will rest on home builders.

Economists say about 1.1 to 1.2 million net new households are formed each year. Further, about 300,000 to 400,000 older, uninhabitable homes are demolished. As such, new-home construction needs to be around 1.5 million per year to keep pace, Yun’s research shows.

However, from 2007 to 2016, the average new-home construction has hovered around 870,000 per year.

In total, Yun estimates the country is short by 8.3 million housing units.

“The bottom line is that we need a few years of above-normal construction activity, say 1.7 million housing starts per year,” Yun notes. “Only then will we see a slight rise in vacancy rates to help lessen the rent growth pressure and bring the inventory of homes for sale to a more balanced market.”

Fed Hikes Rates: The Mortgage Impact | Realtor Magazine

The Federal Reserve hiked short-term interest rates Wednesday, in a move largely predicted by economists. So, what does this mean for mortgage rates and buyers?

First off, the Fed does not set mortgage rates. Short-term rates are different from long-term rates. Mortgage rates typically follow long-term bond rates, such as the 10-year U.S. Treasury note. Longer-term rates typically adjust before the Fed makes a move.

Indeed, mortgage rates have risen near to 60 basis points since the presidential election. More than twice the quarter-point increase that the Fed voted on Wednesday.

The Fed announced that it expects to raise short-term rates three times next year by a total of 75 basis points.

“That means rates like we’ve seen for most of the past five years are indeed history,” writes Jonathan Smoke, realtor.com®’s chief economist, in his latest column. Mortgage rates in the 3 percent range are gone.  

“Mortgage rates will move higher before the Fed acts again, so if the Fed carries out its three planned hikes in 2017, we could come close to 5 percent on 30-year conforming rates before the end of next year,” Smoke notes.

On Wednesday, the average 30-year conforming rate was just under 4.2 percent.

Smoke believes that rates are more likely to move in the month ahead of each key Fed policy meeting. As such, the important meetings to note are in March, June, September, and December 2017.

How big of an impact could rising rates have in the coming months? A median-priced home would be $978 per month payment at Wednesday’s rate of 4.2 percent (and assuming a 20 percent down payment), realtor.com® notes. Take that rate to 5 percent, the monthly payment jumps up to $1,074, nearly $100 more.

“If you intend to buy next year and finance the purchase with a mortgage, acting sooner rather than later will cost you less,” Smoke says is the message to home buyers.

Here Come Housing’s Headwinds in 2017 | Realtor Magazine

Under a backdrop of rising mortgage rates and shrinking consumer confidence, expect modest gains in existing-home sales in the new year, according to the National Association of REALTORS®’ 2017 housing forecast, released Wednesday.

The decline in affordability in many parts of the country is taking a toll on the public’s outlook about their housing market, says Lawrence Yun, NAR’s chief economist.

“Rents and home prices outpacing incomes and scant supply in the affordable price range has been a prominent headwind for many prospective buyers this year,” Yun says. “Making matters worse, the unwelcoming reality of higher mortgage rates since the election is likely further holding back confidence. Younger households, renters, and those living in the costlier West region — where prices have soared in recent months — are the least optimistic about buying.”

Still, a majority of more than 2,700 households surveyed by NAR say now is a good time to buy a home, but consumer confidence has retreated significantly among renters. Fifty-seven percent of renters say now is a good time to buy, down from 68 percent a year ago. Meanwhile, 78 percent of homeowners say now is a good time to make a home purchase.

Despite this year’s dip in buyer enthusiasm, existing-home sales are expected to close 2016 at 5.42 million, 3.3 percent more than 2015 and making it the best year since 2006 (6.47 million), NAR reports. Sales in 2017 are forecast to grow by about 2 percent and reach 5.52 million.

“Although the economy is expected to continue to expand with around 2 million net new job creations, existing home sales are expected to see little expansion next year because of affordability tensions from rising mortgage rates and prices continuing to outpace income growth,” says Yun.

The national median existing-home price is forecasted to rise around 5 percent this year and by 4 percent in 2017.

Met with rising home prices, home buyers will also see higher mortgage rates in the new year. Mortgage rates are expected to jump to about 4.6 percent by the end of next year. The higher mortgage rates could also slow the pace of homeowners listing their homes for sale, NAR notes.

“Some would-be sellers may be reluctant to move up or trade down — especially if they’ve refinanced in recent years,” Yun says. “That’s why it’s extremely necessary for home builders to step up their production of homes catering to buyers in the affordable price range. Otherwise the nation’s low homeownership rate will struggle to shift higher in 2017.”

Nevertheless, there are some silver linings in the look ahead. Yun predicts buyer demand will stay strong for the most part due to continued job growth and more millennials reaching their prime buying years. Plus, the share of households believing the economy is improving increased to 54 percent in the fourth quarter and is at its highest level since NAR’s survey debuted a year ago. The most optimistic about the economy are those under the age of 44, living in urban areas, and having higher incomes. 

5 things you need to know to buy a home this holiday | Sponsored | journalstar.com

December is a busy month for most people. But that doesn’t mean you have to hang up your home search with your stockings! If you keep these holiday home buying tips in mind, you’ll have plenty to celebrate for the new year.

1. Be ready to compete.

Traditionally, home sales slow during the holiday season, which means fewer buyers in the market to compete against. However, the few buyers out there are serious, so you’ll still need to bring your best offer and be pre-approved for financing.

 

2. Stay alert.

With limited inventory of homes for sale and serious buyers to compete with, it’s important that you know about price changes and new listings as soon as they hit the market. With HomeRealEstate.com’s Property Watch tool, you can save a search with your criteria and get daily e-mail alerts when matching homes enter the market or your price range.

3. Know the right people.

Over the holidays, a lot of sellers stop advertising their home for sale; however, they are still working with an agent in case the right buyer comes along. If you hire an agent with a large network, you will likely have more opportunities to access homes that aren’t being publicly marketed.

4. Limit spending.

While it may be tempting to buy that 4K TV on sale, any big purchases or financing will hurt your ability to close on a loan. Talk to your loan officer before any big spending.

5. Stay close.

This might be the year to host your holiday get-togethers at your place, so you can make sure you’re available so you can get in to see that perfect home right away.

Got the Need for Speed? 10 Timely Tricks for Buying a Home in a Hurry | Realtor.com®

Buying a home can be a mind-numbingly slow process, broken up by periods of confusingly frantic activity. It goes something like this:  Look at a zillion homes before you think you’ve found one. Hurry up and get in your offer … and then wait. Submit a million letters to the underwriter … and then wait. And don’t even get us started on closing. The average time for closing on a loan is 50 days, according to Ellie Mae, and the process can often take even longer.

But sometimes you don’t have the luxury of waiting. Maybe you’re moving from another state and need a place to live now. Or maybe your current home sold significantly faster than expected—and if you don’t find a new place, the deal will die.

Regardless of the reason, if you’ve got the need for speed, real estate transactions can fly through quickly. But you’ve got to have a little luck and a lot of preparation. Here’s what you need to know before kicking off the buying sprint.

 

1. Pick your Realtor® carefully

The No. 1 secret to purchasing a home super-quickly? Find a Realtor intimately familiar with your preferred area—one who knows which homes are about to hit the market.

“This will give you a head start in finding out if that listing is right for you,” says Adriana Mollica, a Realtor in Beverly Hills, CA.

2. Ask questions early

The home-buying process can be mind-blowingly confusing—especially if you’re a first-time buyer. You shouldn’t feel guilty about peppering your agent with questions, but getting the most important ones resolved early on will expedite the process.

“When you fall in love with a home in a competitive market, you need to be prepared to sign the offer fast and submit it before the deadline,” Mollica says. “There may be some questions you want to ask your lender, lawyer, or accountant. If you wait until the offer to ask these questions, you may miss the deadline.”

3. Get pre-approved (not just pre-qualified)

It’s a good idea to get pre-qualified for a mortgage before starting your house hunt—but a pre-approval is a necessity if you’re eager to close quickly. The two are vastly different beasts: A pre-qualification requires little more than a quick conversation with your lender and perhaps a peek at your credit score.

A pre-approval basically front-loads the entire underwriting process. (Be warned: It might not eliminate all underwriting concerns.)

It “makes your offer look stronger,” Mollica says. “It also minimizes any surprises that may delay or force a cancellation during escrow.”

4. Be narrow-minded

Agents often tell buyers to stay open-minded about homes that don’t fit their wish list precisely. But if you’re in a rush, it’s best to be particular about the homes you see. Just don’t bring a super-long list of attributes you think you need. Define your absolute, must-have features and only look at homes that fit that list.

But first, “consult with your Realtor to determine if your wish list is possible in your area and price range,” says Michael Shaffer, a broker associate with LIV Sotheby’s International Realty in Greenwood Village, CO. If you run out of homes to see that check all your boxes, you may want to review your criteria.

5. Look for slow sellers

Often, the sellers who are most motivated to move quickly are those who haven’t been able to sell their home for a while.

“Ask your Realtor to look into homes that have been on the market for a long time,” Schaffer says. “In some markets, that may be a week or two. In others, it could be a year or more.”

6. Make a strong offer

Now isn’t the time for underbidding—even if you’re convinced that all that ratty wall-to-wall carpeting should lower the asking price.

“Make sure your offer is as strong as possible, with your Realtor’s expertise and guidance,” Schaffer says.

That doesn’t just mean offering a lot of money. You can also offer a larger down payment and more earnest money. And that fast closing date will definitely help. Remember: Sellers who aren’t worried about the buyer backing out are more likely to accept an offer.

7. Be prepared to waive contingencies

When you’re buying a home, it’s standard to throw in some contingencies. (A contingency is a clause in the offer that allows you to walk away from the deal under certain circumstances—with all of your cash in hand.)

But if you’re looking to buy in a hurry, you might have to take a deep breath and bypass some of those bad boys. Just beware: Waiving certain contingencies can spell trouble down the line—and possibly land you in a money pit. Choose your battles—and your concessions—carefully.

8. Have your paperwork in order

Even with a pre-approval—the buying process requires reams of paperwork. Get everything together beforehand: At least three months of bank statements, pay stubs, letters of explanation for any weird or unusual expenses. If your mom’s giving you cash for the down payment, make sure the payment is documented.

When you think you’ve provided enough proof of everything, double it. The more documentation, the better, when you’re trying to buy fast.

“In most cases, things get held up because paperwork and information isn’t readily available,” says Raena Casteel, a Realtor with the Casteel Little Real Estate Group in Tucson, AZ. Even the smallest omission could end up delaying your closing for a week.

9. Write a letter

If you can’t eliminate contingencies or offer more money, and the sellers aren’t moved by a quick closing, consider writing them a personal letter. Tell them about the children you plan on raising in the house, or about your love for the home’s vintage ’20s details.

“Sellers often want the highest price, but oftentimes, offers come in very similar,” Mollica says. “Your letter could be the edge in getting the seller to choose your offer.”

Keep it short—nobody wants to read your autobiography. (Sorry.) One or two paragraphs are all you need to prove your worth.

10. Don’t tell the seller

Beyond writing a quick closing date into your contract, don’t hint to the seller you’re desperate for a home.