Wallpaper: The Stay or Go Dilemma | Realtor Magazine

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Wallpaper: The Stay or Go Dilemma

While wallpaper is once again an attractive decorating trend for homeowners looking for textures and accents, it’s not for everyone. Designer Jessica Lagrange of Jessica Lagrange Interiors in Chicago works primarily with luxury clients who love wallpaper. Here’s what she advises about the “stay or strip” decision before listing a home.

1. The clash test. Some wall coverings are neutral, such as those with small patterns, intriguing textures in soft hues, or subtle metallic finishes. These are assets if they’re chosen in conservative or traditional colors, Lagrange says. The litmus test is how severely the print clashes with a range of furnishings and artworks.

2. An education campaign.There are wallpaper treatments that are extraordinary, such as some scenic wallpapers that cost thousands of dollars. Listing agents should have a strategy in place to educate buyers and other agents who aren’t familiar with wallpaper. If buyers aren’t interested, sometimes wallpaper can be removed and reused by the seller, Lagrange says.

3. Be willing to part with the paper.Big-personality wallpapers can be exciting in small doses, such as accent walls. But not everyone will agree. A seller should be ready to remove wallpaper if a buyer isn’t wild about it.

4. Get real.If a paper looks worn, dirty, or ripped and can’t be repaired, then the sellers need to remove it rather than having it become an eyesore during showings—no matter how much they love it, she says.

Report: Buyers Far Less Likely to Face Bidding Wars | Realtor Magazine

Home shoppers will likely face less competition in their offers, and that may allow them more time during their house hunt.

A new report from Redfin shows that only 13 percent of offers written by agents on behalf of their customers faced a bidding war last month—down significantly from 53 percent a year ago.

“Buyers have heard the market has slowed, so now they’re trying to get all of their ‘wants,’ not just their ‘needs,’ ” says Kalena Masching, a Redfin real estate pro in Palo Alto, Calif. “They’re waiting until they find a home they can check more boxes—for instance, three bedrooms instead of two or a higher rated school. In general, they are being more judicious as they think through their purchase. Meanwhile, many sellers have not yet recognized that the market has shifted.”

The number of homes for sale has been slightly increasing in several markets, which has left fewer home buyers competing for each home. In December, the number of homes for sale had grown by 5 percent over a year ago.

Several West Coast markets continue to be among the most competitive, but many are seeing fewer bidding wars compared to a year ago. Portland, Ore.; Denver; and San Diego each saw less than one out of five offers face a bidding war, down from more than half of offers a year earlier, Redfin reports. San Francisco, Los Angeles, and Seattle posted the biggest year-over-year percentage drops in bidding wars.

Meanwhile, the least competitive housing markets in January that overall saw the fewest bidding wars were Miami (3 percent), Dallas (6 percent), and Houston (6 percent).

How Homeowners Are Confused About Disaster Insurance | Realtor Magazine

As the threat of natural disasters increases—from hurricanes in the Gulf to wildfires in California—the real estate industry has learned that many homeowners in hazardous areas don’t have insurance policies that will fully cover the cost to rebuild. Such financial burdens add to affected homeowners’ anxiety, while also forcing insurance carriers to re-evaluate the accuracy of their coverage.

Homeowners who are underinsured may be more likely to walk away from their mortgages and abandon their properties. CoreLogic Chief Economist Frank Nothaft says that was a prominent trend in the aftermath of natural disasters in 2018. Affected areas have seen a spike in delinquency rates, while other parts of the country are seeing a decline, he notes.

But many homeowners may mistakenly believe that their insurance payouts should equal the market value of their homes. “Many homeowners assume the cost to rebuild a property should be equal to what they paid for the property,” CoreLogic notes. “However, insurers determine reconstruction cost values (RCVs) using sophisticated residential estimating tools that deliver RCVs at today’s prices. Reconstruction cost value is the cost to replace or rebuild a home to original or like standards at current material and labor costs within a certain geographical area. Meanwhile, a home’s market value is the price a consumer is willing to pay for the home.”

Reconstruction cost values average nearly 12 percent more than new construction costs, according to research from CoreLogic. To be properly covered, a home should be insured for the amount it would cost to rebuild at current prices for building materials and labor costs, CoreLogic notes. Read a Q&A on common questions homeowners have about insurance coverage at CoreLogic’s Insights blog.

Why 2019 Promises to Be Better for Buyers | Realtor Magazine

After inventory and affordability challenges in 2018, prospective home buyers may have better chances of scoring a property this year. Affordability will remain an issue in some high-priced markets, says realtor.com® Chief Economist Danielle Hale, but overall, the national market is looking brighter for buyers who have stayed on the sidelines. Here’s why.

More homes are for sale. For the last few years, a limited number of listings has given buyers fewer choices. But housing experts predict more robust inventory this year. “For buyers, there is going to be more inventory, so that’s a bright spot,” Hale says. “The downside of that bright spot is it might not be in their price range.” The supply of homes for sale under $300,000 may not grow significantly, but they’re also not decreasing, she adds.

Home price growth is slowing. Home prices will still rise but at a much slower pace than the last few years. Hale predicts a 2.2 percent increase in home prices this year, down from last year’s nearly 5 percent growth. “We do still anticipate rising home prices, particularly for below-median-priced homes, so buyers in that price range may have some incentive to buy sooner rather than later,” Hale says. On the flip side, “as rising costs raise the bar to homeownership, some would-be buyers will be knocked out of the market. [That means] remaining buyers may have less competition to contend with than they saw in 2018.”

Mortgage rates are lower. The 30-year fixed-rate mortgage has backed away from the 5 percent mark, decreasing early this year. That means lower borrowing costs for buyers. The 30-year fixed-rate mortgage averaged 4.41 percent last week. “That’s definitely a huge opportunity for buyers because it drastically improves affordability,” Hale says. “And I think that if these low rates persist for a little while, then we’ll actually see stronger sales than we originally forecast.”

Housing Experts: Finance Guarantee Is Key to Mortgage Reform | Realtor Magazine

An explicit federal guarantee of financing for 30-year fixed-rate conventional mortgages must be part of any effort to reform or replace Fannie Mae and Freddie Mac, lawmakers and real estate leaders said Thursday at a policy forum hosted by the National Association of REALTORS®. “We all want to keep the 30-year fixed-rate mortgage,” Rep. Sean Duffy (R-Wis.) told hundreds of REALTORS®, real estate industry leaders, and policy professionals at NAR’s forum on housing finance reform. “We want a government backstop. We’re not getting rid of the federal backstop.”

 

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Preserving the federal guarantee is one of NAR’s priorities as lawmakers consider what to do about the two secondary mortgage companies, which were put under conservatorship after the housing meltdown. Fannie and Freddie are now making money again.

NAR released its own plan for reforming the companies at the forum. The proposal envisions reforming Fannie Mae and Freddie Mac into a federally chartered private utility. The utility would have a mission-oriented board and enhanced regulator, use the two companies’ common securitization platform, and maintain the explicit federal guarantee for catastrophic risks while having private shareholders in the utility take the first-place risk.

Robert Broeksmit, president and CEO of the Mortgage Bankers Association, who spoke on a panel of real estate experts, agreed with NAR and other groups about the importance of preserving the federal guarantee. He said legislation released in the House Financial Services Committee provides a good starting point for reform because it shows the guarantee can attract bipartisan support. “With the explicit guarantee, it gives license to successors [on the committee] to move with that part solved,” said Broeksmit.

Industry groups raised concerns with one proposal that has been floated in Washington, which would recapitalize Fannie Mae and Freddie Mac and then release them to package mortgage-backed securities to investors without a federal guarantee. “We need to get past recap and release,” said NAR President-elect Vince Malta.  “We need to maintain the $5 trillion [Fannie-Freddie] footprint and work toward meaningful reform.”

The two most recent chairs of the House Financial Services Committee, Jeb Hensarling (R-Texas) and Barney Frank (D-Mass.), both of whom are now retired from Congress, also agreed the federal guarantee should be part of any long-term solution. “There’s a potential grand bargain to be had,” said Hensarling.

At the forum, Timothy Pataki, special assistant to President Donald Trump for the Office of Public Liaison, said reform of the mortgage system is a priority of the administration. “The White House expects to announce a comprehensive reform proposal shortly,” he said.

Benefits of an AC Tune-Up | Home Matters | AHS

With warmer temperatures soon to come, don’t be caught off guard with a broken AC. An AC tune up can extend your system’s life and efficiency, keeping you cool and comfortable.

With the holidays over, we’re looking forward to spring – and with it, annual AC tune-ups! It’s important to get your air-conditioning unit tuned up by a professional before the summer season hits, so your home can stay cool and comfortable during the hottest months.

Many American Home Shield® customers may not know that AC tune-ups are an added benefit of their home warranty plan.  So, before you schedule an AC tune-up with another company, call American Home Shield. Customers can begin scheduling their AC tune-ups in March. An AC tune-up can help ease the worry and expenses that can result from a faulty air conditioner.

What Problems Can a Faulty Air Conditioner Cause?

A faulty AC unit can cause all kinds of problems, ranging from tripped circuit breakers to leaky ducts, low air flow, and even environmental pollution from refrigerant leaks. Faulty wiring in an air conditioning unit can create a potential fire hazard, as well as tripping the circuit breaker. Refrigerant leaks not only present an environmental hazard, but can harm your AC’s efficiency and degrade its performance.

Of course, the most obvious problem with a faulty AC is that it fails to cool your house. In some climates, things can get very uncomfortable indeed while you wait for a repairman. Failing to maintain your unit properly increases the chances that your AC will quit working during the hottest weeks of the year, and can cause it to sustain irreparable damage.

How Can an AC Tune-Up Help?

Getting an AC tune-up this spring can catch small problems before they become big ones, potentially lowering your AC repair and maintenance costs. Small problems tend to become bigger, more expensive problems if they’re not dealt with right away. With new AC units costing an average of $5,414 nationally, it pays to make sure your unit lasts as long as possible. Tune-ups can extend the life of your air-conditioning unit while lowering your maintenance costs.

A spring tune-up is a sensible and smart thing to do. AC tune-ups help you keep your home comfortable, allowing your AC to cool your home with efficiency. They can help reduce your utility bill and help provide more control over the temperature inside your home.

When Is the Best Time to Get an Air Conditioning Tune-Up?

The best time to get an AC tune up is in the early spring, before temperatures climb and you need to start cooling your home for the summer. If you can’t get your AC tuned up in the spring, try to have it done as early in the summer season as possible.

Why Should You Leave AC Tune-Up to the Professionals?

It takes a properly trained professional to perform these tasks competently and correctly:

• · Check and calibrate thermostats
• · Test temperature split
• · Check refrigerant levels and system pressures
• · Perform amp draw on condenser motor, evaporator motor, and compressor
• · Rinse condenser coils
• · Check contactors and condensate lines
• · Clean or replace (owner supplied) filters
• · Clean and tighten electrical connections
• · Test capacitors and check A/C operations
• · Test safety switches and limit switches

Because air conditioners contain environmentally hazardous refrigerants and have delicate components, it can save you time, money, and headaches to have a professional evaluate your AC for potential problems and perform regular maintenance. With AC tune-ups being an added benefit of your American Home Shield home warranty plan, there’s no reason to risk doing it yourself. Professional service is completed in a timely manner, so you spend your free time doing something you want to do, and you won’t have to worry about accidentally breaking your AC while you’re trying to service it.

With spring almost upon us, it’s time to think about scheduling your 2019 AC tune-up. Tuning up your AC unit in the spring, before hot weather sets in, can help prevent future problems with the unit later, so you can stay cool all summer long. If you’re an AHS customer, make sure you’ve created a MyAccount profile so that when the time comes for a tune-up, it’ll be a simpler way to request service. 

Equity Rich Properties Surge to Record High | Realtor Magazine

Homeowners should have felt richer in 2018. Equity rich properties comprised 25.6 percent of U.S. properties with a mortgage in 2018, according to a newly released report from ATTOM Data Solutions, a real estate research firm.

 

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In the fourth quarter, more than 14.5 million U.S. properties were considered equity rich, where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value. That represents a new high in ATTOM Data’s records dating back to the fourth quarter of 2013.

The metro areas with the highest share of equity rich properties in the fourth quarter of 2018 were San Jose, Calif. (72 percent); San Francisco (60.7 percent); Los Angeles (48.5 percent); Honolulu (40.2 percent); and Oxnard, Calif. (39.2 percent).

“With homeowners staying put longer, homeownership equity will most likely continue to strengthen,” says Todd Teta, chief product officer with ATTOM Data Solutions. “Those that are seriously underwater may find themselves coming up for air as they continue to pay off excessive legacy mortgages or sell. This report helps to showcase a story of West Coast markets having the highest share of equity rich homeowners versus the South and Midwest markets, who continue to have stubbornly high rates of seriously underwater homeowners.”

The report showed that more than 5 million—or 8.8 percent—of U.S. properties with a mortgage remained seriously underwater in 2018. “Seriously underwater” is when the combined estimated balance of loans secured by the property is at least 25 percent higher than the property’s estimated market value. The metro areas with the highest share of mortgages seriously underwater included Baton Rouge, La. (20.7 percent); Youngstown, Ohio (19 percent); New Orleans (10 percent); Toledo, Ohio (18 percent); and Scranton, Pa. (17.7 percent).

Has Spring Sprung Early for the Housing Market? | Realtor Magazine

Demand for housing is picking up and housing analysts are pointing to lower mortgage rates as the main reason. The spring buying season may be coming early.

In Coppell, Texas, a suburb of Dallas, real estate pros reported a traffic jam of buyers lined up on the front stairway to get into an open house.

 

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“It kind of caught us a little bit off-guard,” Laura Barnett, a real estate professional with RE/MAX DFW Associates in the Dallas area, told CNBC about the sudden uptick in buyer demand. “We actually did get a surge of buyers coming in. And, matter of fact, I worked with two this weekend, one of which is under contract; another is about to be.”

The 30-year fixed-rate mortgage increased for most of 2018 and neared 5 percent, prompting home sales to decrease. However, rates have been moderating in recent weeks, and potential home shoppers are taking advantage. The 30-year fixed rate mortgage averaged 4.46 percent last week, Freddie Mac reports.

Mixed with the lower rates, home prices are slowing too. Home prices in December were up 4.7 percent annually, the smallest gain in more than six years, according to CoreLogic, a real estate data firm.

“When you see those numbers coming down, you want to go, ‘OK, this is the time to buy,’” Celena Vittorio, a home shopper in the Dallas area, told CNBC. “You certainly don’t want to buy at the top of the market.”

Also in buyers’ favor recently, the share of homes with price cuts increased in January. The share of price reductions increased in 39 of the 50 largest markets, an analysis from realtor.com® found. The most expensive markets saw the largest price cuts.

The cities with some of the largest reductions in list prices were in Las Vegas (up 16 percent); San Jose, Calif. (up 9 percent); Seattle (up 8 percent); Orlando, Fla. (up 6 percent); and Phoenix (up 5 percent).

Real estate pros are responding to the increase in traffic by trying to get the homes that were going to wait to list until the spring ready to go to the market earlier.

Buyers are taking advantage of the price reductions and lower mortgage rates. “We don’t want to miss that opportunity, so we’re trying to get busy with our listings and start getting our listings on the market early,” Barnett told CNBC.

4 Things to Be on Alert for When Buying an Older Home | Realtor Magazine

Older homes often come with plenty of character and possibly even a lower price. But buying a home that has been around for a while can also mean dealing with age-related problems.

 

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RISMedia’s HouseCall has tips during the home inspection process for home shoppers to watch for before purchasing an older home, including:

Watch for electrical issues.

Older homes could have dated wiring and electrical panels that may not be able to keep up with today’s needs, so be sure to check that that the house is up to code. Also, insulation on old wiring can pose a safety hazard, RISMedia’s HouseCall warns. Have an electrician look over the home to be sure everything is in order.

Carefully inspect the roof.

In general, roofs often need to be replaced every 10 to 20 years. Learn the last time the roof was replaced and how it was done. Some homeowners may just add new shingles on top of the old roof, which is not viewed by housing experts as the best way to replace an entire roof. Also, check for loose shingles, leaks, and the type of materials used on the roof. “A composite shingle roof will cost less to replace than a clay tile or slate roof,” RISMedia notes. “The pitch of the roof can also drive up costs—a roof that is particularly steep may be challenging to replace and repair.”

Check the foundation.

Address any potential foundation issues immediately. Older homes could have foundations that are cracked, sunken, uneven, or otherwise in need of repair. A structural engineer can closely inspect a foundation and alert you to potentially costly problems.

Check for lead paint.

Older homes may have lead paint, which can lead to serious health problems. It was banned in the U.S. in 1978, but homes built before then may still have it. In fact, about 87 percent of homes built before 1940 contain lead-based paint, according to RISMedia. Make sure that it is professionally removed.

You Don’t Always Need a High Credit Score to Get a Great Rate | Realtor Magazine

Buyers don’t necessarily need an 800-plus FICO credit score to get the best rate on a mortgage. Depending on the market, some buyers with a 700 FICO score could get nearly as attractive a mortgage rate as an applicant with an 800-plus score, according to a new analysis for the Washington Post completed by LendingTree. The analysis was based on more than 1 million actual loan offers during 2018.

Lenders turn to FICO scores—which range from 300 to 850—to assess a borrower’s risk. The general rule of thumb has always been that the higher the applicant’s score, the less the risk of default, and therefore, the lower the interest rate the lender would charge.

 

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For example, as of last week, a score of at least 760 on a $300,000 fixed-rate 30-year mortgage could get an average mortgage quote of 4.14 percent. But a borrower with a credit score of 620 would get a 5.73 percent rate quote for the same amount..

However, the differences are getting less pronounced. According to the analysis, borrowers last year making a 5 percent down payment with a credit score in the 670–679 range received mortgage rate offers averaging 5.2 percent. However, borrowers with scores above 800 making the same 5 percent down payment received offers averaging 4.78 percent—a much smaller spread than in the past. The analysis found similar smaller gaps between high and low credit scorers who had down payments of 20 and 25 percent as well.

“Although scores and down payments are indeed crucial risk components that factor into a lender’s offer, market conditions and competition also can affect the size of rate benefits to lower-FICO borrowers compared with high-FICO borrowers,” writes Ken Harney, a national real estate syndicated columnist for The Washington Post. “In actual application situations, lenders who want to increase their loan business to home buyers may dig deeper into the credit pool and offer relatively more attractive rate deals to people whose scores are not pristine.”

Indeed, Tendayi Kapfidze, LendingTree’s chief economist, told The Washington Post that this was likely due to a more challenging market for lenders in 2018 as demand for refinancings shrunk. They looked to be more competitive to attract more home purchase applications.