As a New Year’s resolution, I’ve decided to DO MORE GOOD in my community. From small things like picking up litter in the street, to bigger things (like what I’m about to say…) – little by little, one step at a time, I’m going to try to be a better person.
Here’s the big change I want to make:
For every house I sell in 2016, I’m going to donate $1,000 of my commission to the charity of my client’s choosing.
I’m not just trying to make a token gesture as a marketing gimmick. I chose $1,000 because it’s a significant amount, and for some smaller non-profits, a gift of this size can make a real difference.
I’m hoping to donate at least $10,000 this year!
This is where you come in: If you’re thinking about selling your home or buying one, please give me the opportunity to earn your business, and together we’ll DO MORE GOOD.
Not moving? Tell your friends and family about my offer. I’ll gladly donate $1,000 to the charity of their choice, PLUS $100 to the charity of yours!
Here’s the fine print: The donation must be made to a registered 501(c)(3) non-profit organization. As much as I’d like to, I won’t donate more than 100% of my take-home commission.
Sure, your buyers like the house they’re considering, but do their pets? It’s a question that’s coming up more frequently, and it’s causing builders to put the needs of their clients’ four-legged friends front and center. From designing homes with amenities including ‘smart’ pet doors and elaborate washing and grooming areas, to creating separate living spaces for pets, it’s clear that pets are an important factor when helping clients buy or remodel a home.
Standard Pacific Homes was one of the first builders to make pet comfort a priority. Last year they built model homes that offered a pet suite as an optional amenity. These suites included 170 square feet of pet housing, wash and water stations, automated feeders, comfortable bedding, cabinets for pet toys and food, and access for a puppy run.
Since then, more buyers are seeking out homes that keep their pets’ needs on the forefront, and with 79.8 million pet-owning households throughout the country, the demand for pet-friendly homes could grow significantly. Now other builders are seeing the importance in designing a home that is a perfect fit for pets.
“We are finding that pet owners are growing more aware of the benefits of designing homes with pets in mind,” says Rhyse Altman, an architect designer with Visbeen Architects in Grand Rapids, Mich. “What we are most concerned with is making it easier for their pets to eat, sleep, play, etcetera, on their own terms with as much independence as possible. The last thing a pet owner wants is to be tripping over food dishes, staring at a kennel in the middle of the living room, smelling the litter box or getting up in the middle of the night to let the dog out.”
Source: The Washington Post
You may have heard that it is extremely difficult to get approved for a home loan to buy or refinance a condominium. That was the case for several years after the housing market crashed, but lenders finally have loosened the rules on condo financing.
Borrowers seeking to get a condo loan these days will find more lenders to choose from and more condominiums that are eligible for financing. Mortgage giants Fannie Mae and Freddie Mac have eased some of the requirements on loans for condos, and a growing number of lenders offer loans that go outside the box of the condo rules in conventional financing, says industry experts.
You’ll still need good credit and stable income to qualify for a condo loan — just as you would with a loan to buy a house. But you are less likely to face restrictions relating to the property itself. When approving a condo loan, the lender wants to make sure the building is financially stable. Because the financial stability of a condo project depends on the owners paying their bills, lenders tend to view condo loans as a riskier investment than a house. Lenders are more flexible when analyzing condominiums’ financial stability.
Late in 2014, Fannie issued new guidelines to lenders allowing them to issue loans in developments where up to 15 percent of the owners were 60 days past due on monthly payments. The threshold had been 30 days. Another change made it easier to finance condos in new developments. Still, many condo buildings don’t meet Fannie and Freddie’s requirements; however, there are several options that have now become available for portfolio lending, as well.
It’s more affordable to buy a home now in most U.S. metros than it was 15 years ago, even for millennials putting down less money on a home, according to a Zillow analysis of third-quarter income and home value data.
Renters, however, continue to pay an increasing share of their income to their landlords as rents soar and incomes remain flat.
On average, homebuyers making the nation’s median income and purchasing the typical U.S. home spend 15.3% of their income on their monthly house payment, down from the historical norm of 22.1% during the pre-bubble period from 1985 to 1999. In contrast, renters spent 29.9% of their monthly income on rent in the third quarter of 2014, up from 24.9% historically. Younger buyers, earning less money in many areas and making smaller down payments on a home, should expect to spend slightly more of their income on mortgage payments – 17.4%.
Homes for younger buyers remain affordable thanks to continued low mortgage interest rates and their tendency to shop for less expensive homes. Continuously rising rents across the country could drive more people into the home-buying market, but they also make it more difficult for first-time buyers to save for a down payment.
“Despite rising home values, homeownership remains very accessible for buyers that can scrape together a down payment – even if that down payment is relatively modest – find a home to buy and secure financing,” said Zillow Chief Economist Stan Humphries. “But what keeps me up at night is the fact that it still remains so difficult for so many potential buyers to make those particular stars align, largely because renting is so unaffordable these days. It’s very difficult to come up with a down payment when so much of your monthly paycheck – especially on an entry-level salary – is going to your landlord instead of into your savings. Buying conditions are getting better every day, and in time the allure of fixed housing payments and building wealth through home equity will draw more buyers out of rentals and into homeownership.”
Borrowers need not avoid shopping around for the best mortgage deal out of fear that allowing multiple lenders to “pull,” or check, their credit will chip away at their score! The notion that a flurry of credit inquiries from lenders will lower a borrower’s score is a common misconception, experts say.
The truth is that five inquiries are likely to have no more impact than one, provided they are made within a compressed period of time. When it comes to home loans, as well as automobile financing and student loans, “in both the FICO and VantageScore credit scoring systems, there is logic in place that protects consumers’ credit scores from any negative impact caused by multiple inquiries as a result of rate shopping,” said John Ulzheimer, a credit expert with Credit Sesame, a website that helps consumers manage credit.
With FICO (the scoring model required by Fannie Mae and Freddie Mac), credit inquiries for home loans that are less than 30 days old are ignored and have no impact, Mr. Ulzheimer said. Inquiries older than 30 days are looked at, but multiple inquiries from lenders made within 45 days of one another are treated as one inquiry. With VantageScore, the window is 14 days.
First off, the mere fact that you’re reading this means that you were already considering moving (perhaps buying a home… perhaps a rental). Nevertheless, let’s really drive the point home with these 10 signs that it’s time to move. If 2 or more apply to you – contact me!
- You can’t stand your neighbors, the never-ending construction, or noise from surrounding businesses.
- You thought it was “cozy” when you moved there. Now you realize it’s just way too small.
- You don’t have a/c, and last summer you told yourself “There’s no way I’m staying here another summer.”
- You’re really into Pinterest, but you can’t do any of the coolest things where you currently live.
- Your priorities have changed.
- You now have kids and need another bedroom
- You want more outdoor space
- The kids are grown and you’re ready to downsize
- You realized you like to cook and electric stoves suck.
- You can’t figure out where the fruit flies are coming from or how to get rid of them.
- You realized you’re the youngest person in building/neighborhood.
- The novelty of hosting friends and family with no real dining table has worn off.
- You read all nine of these, and plan to continue reading.
- You’ve been saving up for years, reading lots of articles, watching your friends buy their first homes, and have been waiting for exactly this article to give you that nudge you needed!
So, now what?
That’s easy – contact me. I can answer your questions, get you headed in the right direction, and help you all the way through the buying process. I can even help in many situations where you want to rent a home or condo.
Want to go the even-more passive route? Click here to visit the website I’ve set up for first time home buyers. Read through the crash course and some of the other materials to gather a broad understanding of the buying process… Then contact me.
Based on increasing home prices, fluctuating mortgage rates, increased population and soaring rents, there may never be a better time in real estate to purchase a San Fernando Valley home or condo than right now. Here are five major reasons purchasers should consider buying now.
1. Competition is about to Increase for the best home or condo available in the best location at the best price.
Every spring a huge surge of prospective purchasers enter the San Fernando Valley housing market. All these potential home buyers will want the best home available in the best location and at the best price. They will be competing for the “steals and the deals” in the market. Missing any opportunity to get that “once-in-a-lifetime deal today” that “will no longer will be available tomorrow” will only increase as the market heats up.
2. Price Increases Are on the Horizon
In Southern California, Core Logic reported home prices on average are expected to appreciate by 4-5% in 2015. For first time home buyers, it will most likely cost them more both in price and in interest rate if they continue to wait on the sidelines. First time buyers need patience and guidance to better understand the real estate inventory available to them and the long term benefits of home ownership. For move-up buyers, it will wind-up costing them more in real dollars as the home they want to buy will appreciate at approximately the same rate as the house they own now, especially if they own a smaller “starter” home and they want a bigger “family” home.
3. Owning a Home Helps Create Family Wealth
Upfront, the decision is whether to be a landlord or live in the home. In either case, most likely, a mortgage is required. The benefits of being a landlord are that the tenants pay the mortgage when they pay their rent. And the benefit of not being a landlord, and paying the mortgage by oneself, is the pride and joy that comes with maintaining a valuable piece of appreciating property. The Federal Reserve, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.
4. Interest Rates Are Projected to Rise
The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will sit comfortably in the 4% range by the spring of 2015. That is an increase of almost .500% of a point over current rates. That’s a difference of over $30 for every $100,000 borrowed.
5. Buy Low, Sell High
The benefits of owning real estate come down to long term capital appreciation. Most would all agree that when buying, “buy at the lowest possible price and sell at the highest possible price”. Housing can create family wealth as long as this simple principle is followed. Today’s real estate market is selling at relatively low prices compared to where it will be next year and the year after that. So, now really is the time to buy.
For many Americans, the jump into the new year marks an important step forward toward achieving a New Year’s resolution, and saving for a down payment to buy a home may be among them. But that goal can take some time, and lots of savings commitment.
Thirty-seven percent of recent home buyers say it took them six months or less to save for a down payment to buy a home; 15 percent saved for six to 12 months; and 10 percent say they saved for 12 to 18 months for a down payment, according to the 2014 Profile of Home Buyers and Sellers Survey, published by the National Association of Realtors®.
Saving for home ownership often requires some sacrifices too, recent buyers reported. Seventy-two percent of home buyers say they cut spending on luxury or non-essential items in order to save for a down payment, 56 percent reduced their spending on entertainment, and 45 percent trimmed their clothing budget in order to save more.
But there is hope: Many buyers often find out they may not need as much down payment as they originally thought to purchase a home. For first-time home buyers, the median down payment is 6 percent, and 13 percent for repeat buyers. “There’s still misperception out there that a much higher down payment is needed, while that’s not the reality,” said Lawrence Yun, NAR’s chief economist.
What’s more, for Americans who are able to save for a down payment to purchase a home, they often find meeting this New Year’s resolution has a big payoff in the end. “Seventy-nine percent of recent buyers believe their home is a good financial investment, and many believe it is a better financial investment then stocks,” Yun notes about NAR’s survey findings at a recent blog post at NAR’s Economists’ Outlook blog. Source: NAR
The number of homes on the market is distressing – being down to a 3.3 month supply is a record low. A 6 to 7 month supply is considered a normal, healthy market. We were approaching a 6 month supply in August, but that reversed later in the year. This drives prices up, and lowers the number of sales, as their are just not enough homes available to meet buyer demand.
Nobody knows why more people are not putting their home on the market. Some reasons may be:
- Not enough equity to sell and have a down payment to buy another. As prices rise this will cause an increase in sales. However, prices were higher in 2014 than 2013, yet there were fewer sales.
- Sellers can no longer qualify, or feel they can not qualify for a home purchase. They feel they can not buy, so they will not sell. Qualifying standards are becoming easier so this should cause an increase. One thing that will limit this increase is the restrictions in the Dodd, Frank Financial Reform law which requires lenders to verify borrower’s incomes using tax returns or W2’s. This makes stated income loans difficult to get. Many self employed people write off so much that they are not able to show enough income to qualify. Many of them feel stuck in their homes and can not move because they got their loans when stated income loans were common, and now could no longer qualify for a home loan. They can’t buy or refinance to a lower rate. They have accepted staying in the home they bought when these loans were available.
- In higher end markets people who have owned their homes for a long time have such high gains that they are not willing to sell because they would owe so much in taxes. They also feel stuck in their homes, and often decide not to move when they learn how much taxes they would owe. Prior to 1995 people could sell their personal residence and purchase another of equal or greater value and defer the gain, paying no taxes. This allowed homeowners to defer gains until they eventually sold and did not repurchase or died and the value stepped up. Back then the amount excluded from taxes was only $125,000 and only one time, but the repurchase deferment made no tax due when they sold because they bought another. When the law changed to the $250,000 per individual taxpayers and $500,000 per married joint filers the deferment was eliminated. It did not matter whether you bought another or not. People with larger gains must pay federal capital gains tax, the healthcare tax, and state income tax on the gain that exceeds the $250,000 or $500,000. It works out to at least one third of the taxable gain. This law really penalizes someone that has been a home a long time. People should consider selling once they have been in a home for 2 years and have made more than the $250,000 or $500,000 as any further gain will be taxable. Staying too long could cause people to become stuck in their home!
- Hedge funds and institutional investors have bought up a lot of housing. Many homes were purchased by these investors and rented when prices were lower, especially foreclosures. These homes don’t look like they will be sold anytime soon.
I would expect, and the experts have predicted more sales in 2015 than 2014, but not a large increase. We are about 14% below the average amount of sales since this data began being collected in 1988. Considering the amount of new housing and the growing population that just does not make sense. With such low inventory levels and low interest rates we will see a surge in prices. There simply is not enough homes for sale to meet buyer demand. I’d buy now as waiting will price you out of where you are looking and you will have to move to a less expensive area.
President Obama announced last week a new policy that will reduce annual mortgage insurance premiums (MIP) on FHA loans. The National Association of REALTORS® estimates that a reduction in the annual MIP of .50 to .85 percent will enable many first-time borrowers and other borrowers who are typically undeserved by the lending community to obtain home loans and help them into the buying market (and out of renting!)
Ray Brousseau of Carrington Mortgage Services, which specializes in FHA loans for first-time borrowers and those with a FICO score below 640, offers the following tips for consumers who wish to buy a home with an FHA loan with this new lower MIP:
- Buying a house with an FHA loan is now more affordable in many cases, so check back with your preferred lender about how much home you may now qualify for with this reduction. 50 bps off the premium could amount to either meaningful savings on a monthly basisor an opportunity to purchase more home. Remember you will still have to demonstrate your qualifying income; FHA loans are government backed and require full documentation from borrowers.
- Always consider what you can comfortably afford. While you may be able to “buy more home” with this reduction—getting you more for your money—be aware of your monthly cash flow so you don’t bite off more than you can chew long term.
- Take action now. More people may now start to look for a home, which means competition could spike in your preferred area. When competition increases, home prices rise as well. This could also mean a rush of new loan applications for lenders, which could mean extended loan closing times (like what occurred in 2013 when the average loan closing time topped 50 days for an FHA home purchase loan).
- If you already own, consider refinancing. With mortgage rates at 20-month lows and a reduction in the premium, borrowers may be able to achieve monthly savings by refinancing. Borrowers with an FHA loan have a potential opportunity to reduce their monthly payment with a user friendly refinance option called an FHA Streamline loan, which is typically faster to close than a regular refinance because no appraisal is required, and there are no out-of-pocket costs.Cash-out refinancing may also be an option, but be responsible. This shift in the market will allow some individuals to take cash out of their loans to pay for things like college tuition, weddings, etc. but don’t take out more than you can afford to repay.
- Discuss the opportunity of a reduced term loan (25, 20, 15 or 10 year loan) with your lender. This could not only result in interest savings through the reduced term, but may also lower your rate and offer an opportunity to take advantage of the annual MIP savings.
- Don’t let anxiety about financing a home paralyze you. Certain lenders offer educational tools to help keep you knowledgeable and informed throughout the loan process.
This article was originally posted here.