Yajnesh Rai

I’m Buying a Newly Built Home — Do I Need a Realtor®? – Buy – realtor.com

Buying a new home is exciting. You get to build your dream from the ground up, choosing your lot, your model, interior finishes and upgrades. But like any home purchase, buying new construction is serious business, an expensive transaction with many financial implications.

That’s why it’s a good idea to obtain representation from a Realtor® when considering a new home purchase. Here’s why:

Builder sales reps represent the builder. Often builders have their own agents on site to answer questions, assist people who walk in, and ultimately help with a purchase. Builder reps provide a valuable service: They can explain differences between models and floor plans and share information about financing options, upgrades and specials. But it’s important to remember that builder reps represent the builder, as they are contractually obligated to do. “Realtors® are trusted resources for real estate information and can help home buyers navigate the increasingly complex home-buying process,” said National Association of Realtors® President Gary Thomas. “The buyer agency agreement ensures the buyer that his or her Realtor® will represent the interests of the buyer alone and not the seller.”

 

Fiduciary responsibility. One of the most important considerations for any buyer is fiduciary responsibility. When you retain the services of a Realtor®, their responsibility is to you. That means you have an expert who is looking out for your best financial interests, an expert who’s contractually obligated to protect you. A Realtor® can help you navigate the new-construction contract; help you understand how specific clauses, riders and upgrade options affect you; and make sure you know what you need to before you sign on the dotted line.

Negotiating a better deal. Finding the right model and picking your upgrades is the fun part. Once you’re ready to sign the contract, a Realtor® can work on your behalf to negotiate the terms, from upgrade options to financing and closing costs. In addition, a Realtor® can present other options for financing or might be able to work with the builder’s lender directly to get you a better rate for your mortgage.

Shepherding your new home to closing. Signing a contract with a builder is just the beginning. You must also line up financing, work with title companies and attend numerous inspections throughout the construction. A Realtor® can manage that process and can accompany you on inspections to ensure you’re not missing anything at each construction milestone.

NAR: Home Prices Maintain Strong Growth | Realtor Magazine

Tight inventories of homes for sale helped push home prices higher in the first quarter. The median price of existing single-family homes rose in 87 percent or 154 of 178 of the major metro areas across the U.S. in the first quarter, according to the latest quarterly report by the National Association of REALTORS®. What’s more, 28 metro areas, or 16 percent, saw double-digit increases from a year ago.

Regional Breakdown

Here’s a closer look at how existing-home sales fared across the country in the first quarter:

• Northeast: Existing-home sales dropped 4.1 percent in the first quarter but are 11.2 percent above the first quarter of 2015. Median single-family home price: $249,400, up 1.8 percent from a year ago.
• Midwest: Existing-home sales held steady in the first quarter but are 6.1 percent higher than a year ago. Median single-family home price: $167,900, a 7.3 percent increase compared to a year ago.
• South: Existing-home sales rose 5.2 percent in the first quarter and are 3.6 percent higher than the first quarter of 2015. Median single-family home price: $192,100, 5.8 percent above a year earlier.
• West: Existing-home sales climbed 0.9 percent in the first quarter and are 2.1 percent above a year ago. Median single-family home price:  $315,900, a 7.1 percent increase from a year ago.

Source: National Association of REALTORS®

“The solid run of sustained job creation and attractive mortgage rates below 4 percent spurred steady demand for home purchases in many local markets,” says Lawrence Yun, NAR’s chief economist. “Unfortunately, sales were somewhat subdued by supply and demand imbalances and broadly rising prices above wage growth. As a result, the path to home ownership so far this year remains strenuous for a segment of prospective buyers in the most competitive areas.”

The median existing single-family home price was $217,600 in the first quarter nationwide. That is up 6.3 percent from a year ago, according to NAR’s data.

“Current home owners in many metro areas — especially those who purchased a home immediately after the downturn — have enjoyed a sizeable boost in housing equity and household wealth in recent years,” Yun says. “At a time of stagnant wage growth and mounting rent increases, the same cannot be said for renters. Their inability to reach the market because of affordability and supply restrictions is contributing to rising wealth inequality in the U.S.”

Only 24 areas or 13 percent of the metro areas analyzed posted lower median prices compared to a year earlier.

Total existing-home sales – which include single-family and condo sales – climbed 1.7 percent to a seasonally adjusted annual rate of 5.29 million in the first quarter. Existing-home sales are 4.8 percent higher than the 5.05 million pace a year ago.

“In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing-sales since 2007 (5.66 million),” Yun says. “The demand for buying is there, but unless the stock of new and existing-homes for sale increases significantly – especially in several markets in the West – the housing market will struggle to reach its full potential.”

The supply of homes for sale remains tight. By the end of the first quarter, 1.98 million existing homes were available for sale nationwide, fewer than the 2.01 million homes for sale at the end of the first quarter in 2015.

Homebuilders Say Major Uptick Coming | Realtor Magazine

Steady job growth, low mortgage rates, and pent-up demand is prompting an increase in the demand for new single-family homes, and homebuilders say they’re ready to build them.

That said, builders say they’re being met with plenty of headwinds that could subdue some construction, such as a shortage of lots and labor and tight access to construction and development loans.

“Builders remain cautiously optimistic about market conditions,” says Robert Dietz, chief economist of the National Association of Home Builders, in a Spring Construction Forecast Webinar on Thursday. “2016 should be the first year since the Great Recession in which the growth rate for single-family production exceeds that of multifamily. And we see single-family growth accelerating in 2017 as the supply side chain mends and we can expand production.”

NAHB forecasters predict that single-family production will see a 14 percent uptick this year to 812,000 units, and then rise another 19 percent to 964,000 units in 2017.

Single-family starts will reach 64 percent of historically normal levels by the fourth quarter of this year and rise to 77 percent of normal by the end of 2017, NAHB reports. By the end of 2017, the top 20 percent of the largest states will reach at least 102 percent of normal single-family production levels, compared to the bottom 20 percent, which likely will still remain below 65 percent, NAHB reports.

“Consumer surveys suggest the ultimate goal of millennials is to purchase a single-family home in the suburbs,” says Dietz. “We see growth for single-family looking ahead. The recovery continues and is dictated by demand side conditions and supply side headwinds.” 

How I bought a house at age 25 – May. 6, 2016

Emily Brown’s phone rings often with friends seeking advice about money.

Brown is only 26, but she already owns a house and has socked away a nice amount of money for retirement in both a 401(k) and Individual Retirement Account (IRA). Oh, and she has a renter who pays $900 a month, enough to cover her entire mortgage.

As her friends and family like to say, she’s “got it figured out.”

Brown doesn’t work on Wall Street or Silicon Valley. She’s an accountant in Cleveland, Ohio, who bought her home at age 25 when she earned about $50,000 a year.

‘I didn’t want to live paycheck to paycheck’

Friends tried to convince her to live closer to “the action” in downtown Cleveland. But she did her research and realized that between the high rent and paying for parking, it wasn’t worth it. So she instead chose to buy a “fixer upper” home for $107,000 in a suburb. A tenant was already living in part of the duplex home. Brown was happy to extend the lease and have her stay.

Only about 20% of Americans own their home by age 25, according to the Census.

She credits her financial savvy to three things: Parents who stressed frugality, reading the book “Rich Dad Poor Dad” and going to college during the Great Recession.

“Living through 2008 and seeing people lose their jobs taught me you have to prepare for anything,” Brown told CNNMoney. “I wanted a game plan, not living paycheck to paycheck.”

Brown’s advice: Save, save, save

Her money plan is simple: work hard, save a lot, and buy property you can afford.

It’s hardly a novel idea. Way back in 1758, American founding father Benjamin Franklin wrote an essay called “The Way to Wealth.” His conclusion: “If you would be wealthy, think of saving as well as getting.”

She has budgets for everything and works hard not to go over. Much like eating healthy, Brown views money as a choice you make every day. She drives an older car, a 2009 Ford Escape SUV with “a big old dent.” Friends joke that she doesn’t come out for drinks after she’s spent her fun budget.

And student loans? Brown has those too. She borrowed about $35,000 to attend Baldwin Wallace University in Ohio. She worked jobs in college, managing to pay down about $6,000 of her loans while still in school. Since graduating in 2012, she’s continued to pay more than the amount due every month. Her balance now is just $10,000.

Open an IRA at a young age

But Brown says her biggest “a-ha” money moment came from starting an IRA. When she was in high school, she worked at an ice cream shop called Dairy Dock in Vermilion, Ohio. At age 18, she had about $100 saved from her pay.
Her father suggested putting it in a saving account or certificate of deposit (“CD”), but the interest was so low — nearly 0% — that the bank recommended Brown open an IRA and consider investing the money in a stock market fund.

“I thought it was the craziest thing I had ever heard,” Brown admits about starting a retirement account at age 18. “But those little amounts have grown immensely.”

Sacrifices today can pay off big time

In 2008, as Wall Street was in meltdown mode, Brown started university and majored in finance and accounting. Her professors stressed saving and investing early, so she kept putting money into her IRA from her summer jobs and internships. After graduating college in 2012, she landed a full-time job as an accountant and began to put $250 a month away in her IRA religiously.

At her current job, she also opened a 401(k) retirement plan and contributes 6% of her salary, which her company matches.

Brown’s smarts and financial maturity even impresses the pros. When Yvette Butler, president of Capital One Investing, hears of Brown, her reaction is: “She’s my idol … I wish more of us started saving for retirement at 18.”

Simple Tips to Sell Your Home for the Right Price This Summer

If you are considering putting your home on the market, summer may be the perfect time. The frenzy of the spring buying season has ended, meaning there are fewer houses listed and competing for buyers’ attention. Tax refunds have been sent out, so potential buyers who have been saving for a down payment may now have the funds they need. And families hoping to get settled into a new home before the school year starts are abundant.

According to the National Association of Realtors, more than 40% of all home sales occurred during the months of May through August last year, meaning summer buyers are serious buyers. People visiting an open house in the summer aren’t window-shopping — they are looking for their next home.

So how can you make your house stand out in this market? Here are a few simple tips to help increase your chances of quickly finding the right buyer for your home this summer.

Maintain or revamp your home’s curb appeal

Your front yard is your home’s first impression, so make sure that it’s welcoming. Don’t let your lawn and flowerbeds suffer in the summer heat; keep all your plants well hydrated and mulched. Keep the grass trimmed by mowing as much as needed. Replant any unsightly brown spots and plant colorful seasonal flowers. And if your home’s façade is looking a little faded, give it a fresh coat of paint and perhaps spruce up your front porch or walkways.

Freshen up outdoor spaces

Pools can be huge selling points during the sweltering summer months, so if you have one, play it up by making sure the water is crystal clear and there is no debris floating on top. If your home has a patio, deck or outdoor kitchen, keep it clean and make any necessary repairs. These projects can be completed inexpensively and may make a much larger difference in the perceived value of your home.

Keep the inside cool and inviting

During the summer months, some people may spend more time inside to avoid the heat. Use this to your advantage during your open house by making your home extremely comfortable.

Houses can become hot and stuffy this time of year, so it is important to keep the air conditioning running. Just be careful with the temperature; you’ll want to make sure it’s not so cold that potential buyers will be searching for their sweaters, but cool enough that they won’t want to head back out into the heat.

Make sure to greet potential buyers the way you would guests and provide refreshing drinks. During the hot summer days, bring out a cold pitcher of lemonade or a cooler full of bottled water for would-be buyers. Embracing the season and spending a few extra dollars can help you stand out among the other houses for sale. It also can help potential buyers form a happy mental picture of spending the summer in this home and perhaps increase the dollar amount of potential offers.

 

Neighborhood Factors to Consider When Buying a Home – ZING Blog by Quicken Loans | ZING Blog by Quicken Loans

If you’re in the market to buy a home, you’ve probably been concerning yourself with the features of your new house. How much space do you need? How many bedrooms and bathrooms? Does it have a first floor laundry? What about a patio or deck? That’s in addition to everything related to the mortgage.

All of these are necessary questions to answer, but the house itself is only part of what makes a home. There’s a saying in real estate that it’s all about location, location, location. It’s cliché, but there’s a lot of truth in it.

This post is all about how you can evaluate a neighborhood to make sure it’s right for you. Everyone has different priorities, so there are a lot of factors to consider.

The Neighbors

I’m not suggesting you give each of your potential new neighbors a 40-question survey covering everything from their favorite musical genre to their feelings on the Oxford comma, but there are certain questions you probably want to ask about the neighborhood when you evaluate houses.

For example, if you have a young family, are there other young families in the neighborhood? Will the kids have plenty of boys and girls to play with or will you have to drive to playdates or the park?

On the other hand, maybe you wouldn’t mind living in a neighborhood where the median age skews a little older. You might be fine with music on the radio, but you might not be down with midnight electronic dance music raves that are more likely in college neighborhoods.

Your real estate agent should be able to tell you a bit about the makeup of the neighborhood to help you get a sense of the people you’ll be around and potentially hanging out with.

School District

This is especially important to think about if you have kids. If your children are younger than school-age or switching schools, does this area feed into a good district to give your children a high quality education?

If you don’t plan on having your child change schools, is the neighborhood close enough to make busing or the drive be feasible? Can you make the drive short-term and have them switch schools at the beginning of the school year or when they graduate to middle or high school?

Even if you don’t have kids, you should know about the school district your new place is in. It affects your property taxes and you still have a vote when the district proposes a millage.

The local high school can also be a source of entertainment as they often put on free or inexpensive programs and events for the community, so that’s something to consider.

Distance to Amenities

Everyone always thinks of the distance to work or school, but there are a variety of other things you should take into account as well.

How far is the new house from your primary care doctor or dentist? If it’s too long of a drive, are you willing to make a switch? You might have a similar decision over the veterinarian or doggy daycare.

While we’re on animals, how close is the nearest dog park or walking trail? The four-legged family members need somewhere to get rid of that pent-up energy, especially if you don’t have a large yard.

Are you a movie buff? Maybe you want to know where you can find the nearest theater with those fancy leather chairs and a bar.

You might also want to be close enough to a big city to experience all the nightlife, concerts and sporting events that go along with it.

Price of Proximity

One thing to think about when we talk of the distance to various attractions is the premium price you may pay to be close.

For some, the extra money may be worth it. I work in downtown Detroit and it’s cool to realize I’m a few blocks from Comerica Park and the Fox Theatre. It would definitely be advantageous to live down here and have everything within walking distance. You may even be able to get by with a bike instead of a car in a city.

On the other hand, you may be able to save a little money on the deal by settling for a commute to the big entertainment venues in your area. Think of it as a gas vs. home savings equation.

Sell Your Home for More Money With These Tips

All home sellers hope their place will fetch a big, fat price. And while you can’t control everything that determines a house’s market rate—like, say, the state of the stock market or the quality of your local school district—there are plenty of things within your power that can nudge that number higher. A lot higher, in fact.

Granted, manipulating your home’s selling price will take some work, and usually some money. But time and again, these proven strategies make a big difference in final sales prices. Try a few, then prepare to do a victory dance on the big day you get your offer(s).

Tactic 1: Bite the bullet and make smart upgrades

Yes, overall renovations to your home will nudge up the price, although not always as much as you might hope: According to Remodeling magazine’s 2016 Cost vs. Value Report, you’ll get back an average of 64% on whatever upgrades you paid for. But that ROI varies widely based on what type of improvement you do. The most profitable upgrade is—drum roll—insulating your attic. It may not be all that sexy, but you’ll recoup 116.9% of your costs. It’s the only home reno in the report that redeems more money than you spend!

Tactic 2: Boost your curb appeal

You Realtor® has probably already told you: One surefire way to jack up your sale price is to knock ’em dead before they even reach your front door. So spend some time and do it for real. Improving your home’s curb appeal can increase your sale price by up to 17%, a Texas Tech University study found. Basic landscaping such as trimming hedges, pulling weeds, and pruning trees is a must.

You can add pops of color by planting flowers in the front yard and placing potted plants on each side of the front door, says Kimberly Sands, a broker at Coldwell Banker Advantage in Apex, NC. Consider installing white panel lighting along railings, fences, or doorsteps to make your home’s exterior visually appealing for evening showings. Other low-cost projects to improve your home’s appearance include putting a fresh coat of paint on the front door, updating the house numbers, and adding porch furniture.

Tactic 3: Create the illusion of more space

It goes without saying that a higher square footage fetches a higher sum, but you can’t do anything about that, right? Not so fast: Your home’s actual specs don’t matter as much as how spacious rooms look when you’re standing in them. So be sure to create an open, inviting space. That entails removing large pieces of furniture such as the oversize coffee table (it might look nice, but it could be blocking foot traffic).

Not enough room in the garage to stow everything? Look into renting a storage unit, says Jennifer Baxter, associate broker at Coldwell Banker RMR in Suwanee, GA. If your home has beautiful hardwood floors, show them off by removing large rugs, and clear off your kitchen’s counter space by putting away blenders, coffee makers, toaster ovens, and other small appliances, she advises.

Buyers are particularly attuned to closet space, so move off-season clothes into storage. “You want to give the illusion that your closet is so large that you can’t fill it,” she says.

Tactic 4: Hire a professional home stager

Have “eclectic” design tastes? Your personal aesthetic might put off some buyers, so move all your knickknacks into storage and hire a home stager. It’s true that these professionals—who tweak your space to make it more appealing to buyers—aren’t cheap, but they can be well worth it.

On average, staged homes sell for a whopping 20% more money than nonstaged ones. Staging may be particularly important if you’re in the process of moving, and some rooms are vacant. Make sure your living room and kitchen are fully furnished, since they’re the most important rooms to buyers, according to the National Association of Realtors®’ 2015 Profile of Home Staging survey.

Tactic 5: Pick a neutral color palette

Maybe you painted your daughter’s room pink, or thought lime green was perfect for the master bedroom. (We all make mistakes!) However, boldly colored walls can turn off buyers, says Katie Wethman, a Washington, DC–based Realtor and founder of the Wethman Group. So consider hiring a professional to repaint the house throughout in a neutral color such as off-white or beige. Or if you have the time, you can cut costs by painting it yourself.

3 Renovation Mistakes to Avoid | Realtor Magazine

Home renovations can be costly. Add a mistake to it, and the costs can skyrocket even more.

Emerick Architects has taken on dozens of commercial and residential renovation projects over the last 16 years, and their architects recently shared some of the most common renovation mistakes in an interview with Curbed.com.

1. Succumbing to “fashion architecture”: The architects point to home owners who try to be too trendy with their renovations. “People try to treat architecture like fashion,” Melody Emerick told Curbed.com. “And architecture takes a long time to build, uses a lot of resources, and needs to last a while.” Trends can quickly fade. Instead, she says it’s important to stay true to the character of the house and be careful when updating the home’s structure. “You can change out a countertop or tile, but it’s a lot harder to re-do windows and doors,” she says. “Make these the highest quality that you can and it will be money well spent.”

2. Ignoring proportions: Too often, home owners just focus on the results but fail to consider the process enough. “People will just want to add on and say, ‘I want a family room that’s 12 by 18 feet,’ rather than seeing if that fit is right for the character of the house and how it flows,” says Emerick. She recommends keeping a close eye on proportions, such as the size of windows and doors as well as ceiling height, to make sure the renovation fits the home.

3. Rushing the renovation: Renovations take time and shouldn’t be rushed, she says. “It takes longer than you think,” says Emerick. “And that’s because it usually takes home owners a while to process the changes.” Talk to experts early on to understand the deadlines involved. Add 10 percent more time to a project than originally anticipated, she suggests.

Set Buyers Straight on These 5 Mortgage Myths | Realtor Magazine

Borrowers still have a lot of confusion when it comes to mortgages; from closing costs to minimum down payment requirements and questions over credit scores. Some mortgage myths are even preventing some would-be home buyers from entering the market too.

The National Mortgage News recently highlighted some of the following mortgage myths that still seem to perplex borrowers, including:

1. Closing costs: New mortgage rules that took effect last fall, TILA-RESPA, are providing borrowers with a clearer picture of mortgage closing costs prior to settlement. However, those expenses can still come as a shock to your clients. They may be surprised to see the costs of closing on a home loan when they receive their Loan Estimate disclosure upfront.

2. Who can cover closing costs: Borrowers may believe that they are the only ones who can pay their closing costs. However, closing costs also can be offered as a seller concession.

3. The credit-less: Consumers who don’t have credit cards may think their lack of debt history will be a positive when applying for a mortgage. However, lenders are looking for how well consumers manage their debt and a lack of history could be problematic in qualifying a borrower.

4. Minimum requirements for qualifying: Home buyers may be under the impression that their credit needs to be a lot more stellar to qualify for a mortgage than it actually needs to be. To qualify for a Fannie Mae-backed loan, borrowers only need a 3 percent down payment and a minimum FICO score of 620.

5. Eligible tax breaks: Mortgage interest deductions are not limited to just primary residences. In some situations, second-home loans and home equity loans of credit may also be eligible.

Warren Buffett: There Is No Bubble in Real Estate – Fortune

Says it won’t cause the next financial crisis.

Warren Buffett says now is a good time to buy a house, though not as good as it was four years ago. Still, Buffett says he thinks the chances of housing prices collapsing are very low.

“I don’t see a nationwide bubble in real estate right now at all,” says Buffett.

Buffett made remarks at the annual meeting Berkshire Hathaway BRK.A -0.05% , which took place on Saturday in Omaha. “In Omaha and other parts of the country people are not paying bubble prices for real estate,” says Buffett.

Earlier in the day in response to a question about banks, Buffett said he did think derivatives are a “ticking time bomb.” But when it comes to housing and mortgage loans, Buffett said, while real estate was certainly a problem in 2008, he didn’t think that would be the source of the next problem for the financial system. “I don’t think we will have a repeat of that,” says Buffett.

In Berkshire’s 2012 annual letter, Buffett recommending housing as an undervalued asset. Buffett said housing is not as good a deal as it was in 2012, but he didn’t think housing looked overpriced now either. Prices nationwide have rebounded a lot and now stand near where they did in 2007. Some analysts have warned that housing prices are set to plunge.