Yajnesh Rai

5 Myths That Keep Buyers on the Sidelines | Realtor Magazine

Consumers can have a lot of assumptions about the housing market. Some of those beliefs may cause them to miss out on a great house. HouseLogic.com recently featured some of the biggest misconceptions that buyers have, including:

 

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1. Assuming you need 20 percent for a down payment. Buyers who may be waiting to save 20 percent for a down payment on their home purchase may end up missing out. About 60 percent of home buyers actually put down less than 6 percent on their home purchase. If buyers have less than 20 percent, a lender may require a monthly fee called private mortgage insurance, or PMI. But home shoppers will be able to start building home equity sooner, and likely will be able to snag a lower mortgage rate now, rather than waiting months or years.

2. An online home value estimator is always accurate. Several real estate websites offer a home value estimator to see what a home is worth—but consider this a ballpark on value, not a fact. For example, the online estimator may not take into account the seller’s recent renovations or the condition of the home. A real estate professional will take the actual home and the current market into account to give consumers a more accurate number of what the home is worth.

3. Refusing to consider homes that don’t have everything on your list. A list of everything a buyer wants in a home is a starting point, but compromising is likely for some features. Help your clients distinguish the must-haves from nice-to-haves. For example, a home with laminate countertops can easily be switched out for quartz, but the home’s location cannot be changed.

4. Judging a house on price alone. Buyers might find an appealing home that’s way under budget. But if the home is in need of some major TLC, you’ll need to factor in the fix-up costs to show your client whether it’s still that great a deal. Calculate beyond the mortgage payment to include costs such as utilities, homeowner or condo fees, and any remodeling ideas.

5. Fixating on a few grand. Maybe your buyer offers $198,000, but the seller won’t budge from $200,000. Advise your client to consider the big picture: Is it worth it to lose the house over $2,000? On a big purchase like a home, the additional $2,000 could add just $8 a month to the mortgage payment. Your client may want to consider trimming something out of their monthly budget to avoid missing out.

Solar on Residential Homes is becoming Increasingly Popular

 

Investment trends: Consumers have historically invested in remodelling kitchen and bathrooms to increase the value of their homes. Installing solar and energy storage systems is added to the list recently. Not only does it increase the value of homes beyond the cost of the system, but it also pays for itself.

 

Benefits of Solar system:

 

1. If correctly sized, solar system has a potential to pay for itself in 5~7 years or lesser. That can be a 15%-20% or higher return on investment. 
2. Take advantage of the 30% tax credit offered by IRS before it is reduced after next year and eventually phased out. Please talk to your CPA how you can take advantage on your 2018 taxes. You should have installed your system in 2018. 
3. Protect against increase in utility rates. PG&E has increased cost of power by over 163% in last 7 years (23% increase every year). 
4. PG&E is planning a major change in billing plans starting 2019. All residents will be moved from current tiered plans to Time-Of-Use plans. This could increase cost of power by up to 15% ~ 25%
5. Electric cars are becoming a norm in California. They consume significantly more power than most homes currently use. Solar system reduces cost significantly for car charging at home instead of using utility power. 
6. Storage systems back essential systems such as Internet, security systems, IP phone lines, lights and essential appliances in case of power failure. 

Ownership considerations

1. Own vs lease: Leasing solar system sounds cheaper option. However it is generally 6x more expensive than owning a system. Leasing puts a 20 year lien on your property and you might not be able to sell or refinance until lease is paid off. After 20 years you don’tt own the system either
2. System selection: There are many products in the market. Some of the recent solar products launched in 2017 and 2018 are significantly better than older technology. Look for solar panels that are 350W or more. If a vendor tries selling you panels that are 335W or smaller is size, walk away. These are obsolete, and inefficient. Such products are not being manufactured any more. Chances are some of the panel manufacturers are out of business and unable to provide product warranty.
3. Installer selection: Although there are popular brand names for installing solar systems, small / local installers provide best value, service, and pricing. 

 

After going through 5-6, I found a solar energy company (Nabu Solar) that also specializes in home and commercial building energy analytics (EnerSaaS). I have been pleased with the knowledge, workmanship, and quality of work delivered by this company. Besides pricing, \tThey have few advantages over traditional solar companies. I am happy to make introductions.

 

Thanks

Will the Housing Market Pass or Fail the ‘5 Percent’ Test? | Realtor Magazine

The 30-year fixed-rate mortgage—the most popular loan for home buyers—is inching closer to the 5 percent range. The rise in mortgage rates coincides with years of home price increases. Could this erode affordability more and cause would-be buyers to sideline themselves from the housing market?

 

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The Mortgage Bankers Association reports mortgage rates have surged to 4.97 percent. When including fees, most 30-year borrowing costs have already reached 5 percent or higher. The higher mortgage rate translates to about $35,000 more on interest on a $220,000 loan over 30 years, Reuters reports.

“Higher interest rates is a headwind for housing, but it’s not a major obstacle right now,” Ward McCarthy, chief economist at Jefferies & Co. in New York, told Reuters.

But some economists are seeing it as eroding housing affordability. “The rise in mortgage rates this summer to their highest level in seven years has made it more difficult for potential buyers to afford a home,” Frank Nothaft, chief economist for CoreLogic, said in a statement about a new report from CoreLogic that showed a rise in home prices continues in several markets. 

Last week, the Federal Reserve voted to raise its key interest rate. It also strongly hinted that several more rates are ahead. While mortgage rates aren’t directly tied to the Fed’s benchmark rate, they are often influenced by them.

Following the Fed’s move, National Association of REALTORS®’ Chief Economist Lawrence Yun declared the “era of super-low mortgage rates is over.” But he was quick to note that the Fed’s move was occurring because of an improving economy. “Therefore, home sales should hold steady as the opposing forces of higher rates and more jobs neutralize each other,” Yun said in a statement. “[But] home price growth will surely slow as higher interest rates limit the stretching of the home buyers’ budget.”

The rising rates may push some consumers to buy sooner rather than later.

“Affordability at least currently is average in this period of time,” McCarthy told Reuters. “The rise in mortgage rates has encouraged some people to move into the market now.”

Amazon Partners With Builders to Put Alexa in New Homes | Realtor Magazine

Amazon is partnering with homebuilders to bring its Alexa voice assistant to more new housing units as a standard smart-home feature. The online retailer recently announced it has partnered with Plant Prefab, a California-based company that uses sustainable materials to build prefabricated single-family and multifamily homes. The move comes after Amazon introduced more than a dozen Alexa-controlled smart-home devices, including a microwave oven and doorbell.

“Voice has emerged as a delightful technology in the home, and there are now more than 20,000 Alexa-compatible smart-home devices from 3,500 different brands,” Paul Bernard, director of the Alexa Fund, said in a statement. “We’re thrilled to support [Plant Prefab] as they make sustainable, connected homes more accessible to customers and developers.” Amazon also has partnered with Lennar, one of the nation’s largest homebuilders, to preinstall Alexa in all of the builder’s new homes.

Plant Prefab is trying to use automation to speed up construction projects and lower costs. The company says its prefab method cuts construction time in half and costs up to 10 percent to 25 percent less than a traditional home. “In the housing-crunched major cities like Los Angeles, New York, and San Francisco—along with areas like Silicon Valley—it takes too much time to build a home from groundbreaking to occupancy. And labor shortages, construction delays, and increased construction costs are exacerbating this trend even further, making homes increasingly less affordable,” says Plant Prefab CEO Steve Glenn.

Meanwhile, the smart-home market is seeing explosive growth in new technology products. It’s expected to grow to a $53 billion industry by 2022, according to Zion Market Research.

Tenant Troubles: Who Is Responsible for Problems in Your Rental?

Who foots the bill when the maintenance issues roll in? It depends, so get to know your tenant rights.

One of renting’s major benefits is that you don’t have to worry about upkeep, maintenance and expensive repairs. So when things go bad — your dishwasher stops working, the roof is leaking or the bugs just won’t go away — your first call is usually your landlord.

But how do you know what’s really their responsibility and what falls to you? And what do you do if they refuse to handle the repairs?

Read on for the most common rental issues and how to get them fixed quickly.

Water damage & mold

Easily one of the nastiest discoveries you can find in your home, mold is a common problem — especially in humid or rainy climates. And while most mold doesn’t cause health problems, some types can cause respiratory issues, headaches and allergy symptoms.

Since there’s no easy way for the average tenant to know if the mold in their home is dangerous or not, it’s always best to ask your landlord to get rid of it.

While there’s no federal law that dictates mold exposure limits in rental housing, some states and cities have put guidelines in place. But, even if your state doesn’t have specific mold regulations, your landlord is still responsible for providing safe, livable housing.

In addition to requesting that your landlord remove the mold, make sure they find the source of the mold, whether it’s a leak in the roof or around the windows, failing plumbing, or a basement that’s not watertight. If the underlying water damage isn’t addressed, the mold will likely return.

The one time a landlord may be able to reject your request for mold remediation is if they believe it’s a result of your behavior — if you don’t keep your home well-ventilated, don’t clean regularly or run a humidifier too much.

Broken appliances

Your landlord is responsible for keeping any appliances that came with the unit in good working order. They’re also required to do the preventive maintenance that keeps your appliances up and running, like replacing worn hoses or servicing the air conditioner.

If you brought some of your own appliances, like a microwave or a washer and dryer, you’re typically responsible for repairing and replacing them.

Perhaps the most important appliance your landlord is responsible for is your furnace. Local and state laws require landlords to provide adequate heating, so if you’re having trouble keeping your home warm, reach out to your landlord immediately.

In some warm-weather states, landlords are also required to provide air conditioning. It may not be required in other states, but if your unit has air conditioning, your landlord is required to maintain it.

Pests

Remember when we said that landlords are required to provide tenants with a safe, livable space? That includes pest-free living, but there are a few more gray areas with pests than with other maintenance issues.

Whether your landlord is responsible or not depends on a few factors, including the state you live in, the type of rental unit and the type of pest. For example, in some states (but not others), landlords are legally required to manage bedbug infestations, which are an increasingly common issue.

In some states, landlords are responsible for all pest control, unless you’re renting a single-family home and they can prove that the pests are a result of you not keeping your home clean.

No matter where you live and what local and state regulations are, let your landlord know about any kind of pest as soon as possible. A good landlord should want to address these issues quickly to avoid having them spread to different units.

What if my landlord isn’t cooperating?

In a perfect world, your landlord would fix every problem, without issue, in a timely manner. But in the real world, that doesn’t always happen.

Consider these tips for getting landlord repair issues handled quickly and completely:

• Report even small issues. That tiny leak under your bathroom sink may not seem like a big deal now, but it could cause a serious mold problem down the road. Always let your landlord know about issues as soon as you notice them, before they can get worse.
• Make repair requests in writing. Don’t make repair requests verbally. Instead, send them via email so you have a paper trail and documentation with a date and time stamp.
• Always have renters insurance. It’s an affordable way to protect your belongings in case of damage caused by landlord negligence, plus a variety of other issues. It’s typically very affordable and can be purchased online in a matter of minutes.
• Reread your lease. You (hopefully!) read your lease when you first signed it, but if you’re having issues with your landlord refusing to do repairs, take another look at your lease paperwork and see what they — and you — have already agreed to.
• Get help from a local tenants’ rights organization. If your landlord isn’t addressing major repair issues, find a local tenants’ rights organization on the U.S. Department of Housing and Urban Development website. They can help you identify local and state laws that apply to your situation and provide resources for additional assistance.

Mortgage Rates Surge to 7-Year High After Fed Hike | Realtor Magazine

Mortgage rates surged to their highest averages since 2011 following the Federal Reserve’s announcement Wednesday that it is raising its benchmark interest rate by a quarter point. The 30-year fixed-rate mortgage jumped to 4.72 percent, up from 4.65 percent last week.

 

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“The robust economy, rising Treasury yields, and the anticipation of more short-term rate hikes caused mortgage rates to move up,” says Freddie Mac Chief Economist Sam Khater. “Even with these higher borrowing costs, it’s encouraging to see that prospective buyers appear to be having a little more success. With inventory constraints and home prices starting to ease, purchase applications have now trended higher on an annual basis for six straight weeks.”

Khater also notes that consumer confidence is at an 18-year high, and job gains continue to hold steady. “These two factors should keep demand up in the coming months, but at the same time, home shoppers will likely deal with even higher mortgage rates,” Khater says. Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 27:

• 30-year fixed-rate mortgages: averaged 4.72 percent, with an average 0.5 point, rising from last week’s 4.65 percent average. Last year at this time, 30-year rates averaged 3.83 percent.
• 15-year fixed-rate mortgages: averaged 4.16 percent, with an average 0.5 point, rising from last week’s 4.11 percent average. A year ago, 15-year rates averaged 3.13 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.97 percent, with an average 0.3 point, rising from last week’s 3.92 percent average. A year ago, 5-year ARMs averaged 3.20 percent.

Why Were Fewer Contracts Signed in August? | Realtor Magazine

Pending home sales continued to fall last month, marking the eighth consecutive month for annual decreases, the National Association of REALTORS® reported Thursday. The drop in contracts may be a sign of a growing number of buyers who are being priced out of the market, economists warn.

 

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NAR’s Pending Home Sales Index—a forward-looking indicator based on contract signings—fell 1.8 percent to a reading of 104.2 in August. Contract signings are now 2.3 percent lower than a year ago.

The largest declines last month were in the West, where home prices have risen the most. “[This] clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points,” says Lawrence Yun, NAR’s chief economist.

The decline in sales contracts has also coincided with fewer homes on the market. But that may soon change—a record high of Americans now say it’s a good time to sell their home, according to NAR’s third-quarter Housing Opportunities and Market Experience survey. 

“Just a couple of years ago about 55 percent of consumers indicated it was a good time to sell; that figure has climbed to 77 percent today,” Yun says. “With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains. However, with indications that buyers are beginning to pull out, price gains are going to decelerate and potential sellers are considering that now is a good time to list and bring more properties to the market.”

 

© National Association of REALTORS®

First-Time Home Seller | Steps to Selling a House | Tips for Sellers

Selling, a famous salesman once said, is essentially a transfer of feelings.

You love and cherish your home. You want the next owner to fall in love with it, too — through photos, through words, and through the experience of walking through your front door. But, perhaps most, you want to get the price you want.

This isn’t a small task. Selling a home requires work. It requires time. The journey isn’t always easy. There will be frustrations. But when you seal the deal and move on to your next chapter  — wow, what a blissful, boss feeling.

Below, we preview and link to each step in your journey.  We’ll discuss how to know what you want (and what your partner wants, if you’re selling together). How to understand the market, and ways to make a plan. And most importantly? How to create relationships with experts and trust them to help you get the job done.

Now, let’s talk about selling your house.

Jump to a specific home selling step using these links:

Know What You Want | Do Your Research | Interview and Select an Agent | Price Your Home | Prep Your Home for Sale | Market Your Home | Showcase Your Home | Receive Offers | Negotiate With the Buyer | Negotiate Home Inspection Repairs | Close the Sale

Know, Exactly, What You Want

First things first: You need to know what you want (and what your partner wants) in order to sell your home with minimum frustration. Why are you moving? What do you expect from the process? When, exactly, should you put that For Sale sign in the yard? We can help you get your thoughts in order with this home selling worksheet.

Do Your Research

Unless you bought your home last week, the housing market changed since you became a homeowner. Mortgage rates fluctuate, inventory shifts over time — these are just a few of the factors that affect the state of the market, and every market is unique. Educate yourself on what to expect. Start with our study guide on the market. 

Related Topic: Sell a Home: Step-by-Step

Interview and Select an Agent

This is the most important relationship you’ll form on your home selling journey. Pick the right agent and you’ll likely get a better sales price for your house. Here’s how to find and select the expert who’s right for you.

Price Your Home

How much is your home worth? That’s the … $300,000 question. Whatever the number, you need to know it. This is how your agent will help you pinpoint the price.

Prep Your Home for Sale

Today, home buyers have unfettered access to property listings online, so you have to make a great first impression — on the internet and IRL. That means you’ll have to declutter all the stuff you’ve accumulated over the years, make any necessary repairs, and get your home in swoon-worthy condition. Here’s how to stage your home. 

Market Your Home

Home buyers look at countless listings online. The best-marketed homes have beautiful photos and compelling property descriptions, so they can get likes — which can amount to buyer interest — on social media. Some agents are even using videos, virtual tours, texts, and audio messages. It’s time to consider how to promote your property.

Showcase Your Home

One of the best ways to get buyers in the door is to have an open house. This is your chance to show off your home’s best assets, and help buyers envision themselves living there. Know how your agent will organize, advertise, and host the event to ensure it’s a success.

Receive Offers

Yes, you might get offers plural, depending on your market. Assuming you’ve collaborated with your agent, you’ve likely positioned yourself to receive attractive bids. Your agent will review each offer with you to determine which is best for you. (Read: The offer price isn’t the only factor to consider: Here’s why.)

Negotiate With the Buyer

To get the best deal for you, you’ll likely have to do some negotiating. Your agent will help you craft a strategic counteroffer to the buyer’s offer, factoring in not only money, but contingencies, etc. Let’s talk about how to ask for what you want.

Negotiate Home Inspection Repairs

Ah, the home inspection. It’s as much a source of anxiety for buyers as it is for sellers. Nonetheless, most purchase agreements are contingent on a home inspection (plus an appraisal, which will be managed by the buyer’s lender). This gives the buyer the ability to inspect the home from top to bottom and request repairs — some even could be required per building codes. The upshot: You have some room to negotiate, including about certain repairs. Once again, your agent will be there to help you effectively communicate with the buyer.

Close the Sale

Settlement, or closing, is the last step in the home selling process. This is where you sign the final paperwork, make this whole thing official, and collect your check. Before that can happen though, you’ll have to prepare your home for the buyer’s final walk-through and troubleshoot any last-minute issues. We’ve got you covered with this closing checklist. 

Homeowners Reveal Their Top Nonnegotiable Amenities | Realtor Magazine

Home shoppers are unwilling to negotiate on certain amenities, and prime among them are central air conditioning and a private patio or backyard, according to a new survey of more than 1,000 homeowners conducted by remodeling site Porch.com. On the other hand, prospective buyers are less likely to consider stainless steel appliances or a swimming pool as deal-breaking must-haves.

Renters and homeowners differ quite a bit in their priorities, the survey found. While homeowners ranked central air, private backyard areas, and guest bedrooms as high priorities, renters ranked central air, an in-unit washer and dryer, and pet-friendly building policies as their top amenities.

 

© Porch.com

 

Flooring matters to many homeowners. More than one in four consider hardwood floors to be the most essential amenity in their house, according to the survey. So what are homeowners most willing to splurge on? It differs by age group, according to the chart below.

 

© Porch.com

Fall Brings Price Drops for a Quarter of Homes | Realtor Magazine

The fall season is cooling down more than the temperature outside; it’s also putting a much-needed chill on hot housing markets, where home prices have become unaffordable to the average buyer. More than one in four home sellers dropped their asking price last month, according to a new report by real estate brokerage Redfin. With inventory starting to inch up, sellers are facing stiffer competition in the market and adjusting their price expectations, according to the report.

 

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Nearly 27 percent of homes that were listed in the four weeks ending Sept. 16 saw a price drop, according to the report. Redfin defines a price drop as a reduction in the home’s value between 1 percent and 50 percent. The areas seeing some of the biggest price drops year over year are Las Vegas; San Jose, Calif.; Seattle; Atlanta.

“After years of strong price growth and intense competition for homes, buyers are taking advantage of the market’s easing pressure by being selective about which homes to make an offer on and how high to bid,” says Redfin Senior Economist Taylor Marr. “But there are some early signs of a softening market, and the increase in price drops may be another indicator that sellers are going to have trouble getting the prices—and the bidding wars—that they may have just months ago. Instead, many are finding their homes are sitting on the market without much interest until they start reducing their prices.”