5 Critical Tips For Buying In A Seller’s Market

5 Critical Tips For Buying In A Seller's MarketThis summer, quality homes are being scooped up almost as fast as they’re being listed – and for top price. Yes, it’s a seller’s market out there, which is great news if you’re planning to list your home. For those looking for a home, the competitiveness can be frustrating and aggravating.

Frustrating as it may be, there’s plenty of reason for buyers to stick it out until their offer is accepted. For starters, interest rates are still fairly low. And secondly, there are great homes out there if you act fast enough.

How can you successfully get that dream home in a seller’s market? Here are some top tips:

Stay Dedicated

Make sure that you and your Realtor are on the same page with your must-haves for your new home. Then, make sure you check for new listings daily. If any look good, make an appointment to see it that day. Don’t wait, or it will likely be gone. It can be tempting to make an offer based on listing photos alone, but be very wary of doing this. Go out and see it – and do it quickly.

Start With Your Best Offer

With some good properties gone in a matter of hours, this is no time to nickle and dime a seller. What’s more is that the seller will be unlikely to even entertain the offer and counter it. The best practice in competitive times is to start with your very best offer on the property and give the seller something to seriously consider. Chances are your offer isn’t the only one they’ll be receiving. You want it to make an impression.

Include A Personal Note

Even though they’re essentially getting rid of their property, sellers often like to work with a buyer who is going to appreciate and care for the home they’re purchasing. That’s where a personal note included with your offer to the seller can come in handy. In your note, talk about the things you love about the home and how you know it will be the perfect fit for you and your family. You can even up the ante and include a family photo. 

Make A Significant Earnest Money Deposit

Generally speaking, the larger your earnest money deposit, the more serious of a buyer you are. In a seller’s market, you will want to look for any competitive advantage over the others that are likely to make an offer on a particular property. A big deposit can serve as that advantage.

Stay Patient

Like we said in the opening, a seller’s market can be frustrating for buyers – so try to stay patient. The right home is out there for you, and good things come to those who wait. 

Contact your trusted mortgage professional to get your pre-approval today.

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What’s Ahead For Mortgage Rates This Week – July 16th, 2018

What’s Ahead For Mortgage Rates This Week – July 16th, 2018Last Week’s economic readings included reports on inflation, mortgage rates, new jobless claims and consumer sentiment.

Inflation Slows in June

The Consumer Price Index for June inched down to 0.10 percent growth in June as compared to May’s reading of 0.20 percent. Core inflation, which excludes volatile food and energy prices, rose 0.20 percent, which matched expectations and May’s reading of 0.20 percent.

Year-over-year inflation rose by 2.90 percent. This was the highest rate of growth in six years. Inflation increased by a year-over-year rate of 1.60 percent in the prior year.

While inflationary growth signals strengthening economic conditions, it can also cause challenges for consumers if inflation outpaces wage growth. In recent years rapidly, rising home prices have outstripped inflation and wage growth.

Mortgage Rates Rise as New Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week for the first time since June. Rates for a 30-year fixed rate mortgage rose one basis point to an average of 4.53 percent; The average rate for a 15-year fixed rate mortgage rose three basis points to 4.02 percent.

The average rate for 5/1 adjustable rate mortgages rose 12 basis points to 3.86 percent. Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 6/1 adjustable rate mortgages. Analysts said that global economic trends caused the 10-year Treasury yield to rise as investors moved away from stocks.

First-time jobless claims fell by 18,000 claims to 214,000 new claims filed; this approached the lowest level of new jobless claims in 49 years. Analysts said that current low levels of new claims showed the healthiest jobs markets since the dot com boom in the 1990s.

Fewer first-time jobless claims suggested that more workers are confident about quitting their current jobs for new jobs. Improved consumer confidence in job security could mean that more consumers will be ready to buy homes.

Consumer sentiment also dropped in July according to the University of Michigan’s Consumer Sentiment Index.  Consumer sentiment fell to an index reading of 97.1 as compared to expectations of 98.9 and June’s reading of 98.2.  Concerns over recently imposed tariffs caused consumer sentiment to dip.

Whats Ahead

This week’s scheduled economic reports include readings on retail sales, the National Association of Home Builders Housing Market Index and Commerce Department readings on housing starts and building permits issued. Weekly readings on mortgage rates and new jobless claims will also be released.

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In-Law Apartments Provide Tangible Benefits For Home Owners

In-Law Apartments Provide Tangible Benefits For Home OwnersMany homeowners are looking for ways to maximize on their investment. One idea that is gaining popularity is a space set aside for aging parents known as an In-law apartments. These additions are living spaces that can set a property apart from others on the real estate market.

In-law apartments generally enjoy a private entrance and include things like a private bathroom, bedroom, kitchen and living room. Although generally smaller than the main residence, in-law apartments provide all the elements of a home. Because these living spaces are often built after the original floor plan was conceived, spaces such as walk-out basements, garages or separate wings of a homes are converted.

The size and location of this unit is also dictated by adherence to local zoning ordinances and building codes. Once they are established, the door to turning them into a straight rental unit may be opened. If you are considering buying or selling a home with an in-law apartment, consider these benefits.

Benefits Of An In-Law Apartment

In terms of buying or selling a property that includes a separate residence, there are pragmatic reasons they are seen as attractive. These may include the following.

  • Elder Care: Our valued parents and grandparents will come to a point where they require some assistance from younger loved ones. An in-law apartment allows homeowners to offer them a private living space while providing effective care. In-law apartments are wonderful spaces that allow you to give back to aging family members in a dignified setting.
  • Building Relationships With Grandparents: The economic and time pressures placed on working families often compels parents to place children in daycare or after-school programs. While these are certainly viable options, they may be secondary to family members. An in-law apartment may create an opportunity to have a grandparent or other family member spend quality time with your child. In-law units can enhance the bonds of family while maintaining a level of privacy.
  • Guest Space: With family members relocating for employment opportunities, the ability to spend time together has become increasingly difficult. An in-law apartment provides a space for extended stays.
  • Rental Income: An in-law apartment that gains approval can be an excellent revenue-generator. That extra income can help offset mortgage, insurance and tax costs. That makes homes with rental units attractive to buyers.
  • Increase Property Value: Home improvements such as decks, smart technology and other amenities tend to add to a property’s value. Not only does an in-law apartment include all of the necessities of a living space, it can also bring in revenue. That’s why in-law apartments provide added value for home sellers.

If you are considering buying a home that may include an in-law apartment or if you are planning to do some remodeling to accomodate long-term guests, be sure to mention this to your trusted mortgage professional. This increase in property value and potential income can open doors to additional financing options for your property.

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The Case for Making a “Smart” Garage

The Case for Making a Smart GarageEnergy-efficiency, smart electronics and automation have come home to the rest of the house, but many garages still look and feel like neglected warehouses. Why not update the lighting and add some high-tech features that will bring your garage into the 21st Century. Doing so will make your life easier and need not cost a fortune!

Rethink Room Function

Most homeowners use the garage for more than a car park. If it’s part storage room, part play space and part project area, manage the corresponding needs for specialized task lighting, additional circuits for a second refrigerator or freezer, conveniently located space for gadgets, gizmos, bikes and sports gear, and how you’ll deal with yard equipment and gardening tools and trash receptacles. A comprehensive lighting/electrical plan will be a great benefit.

Power Up 

Consider your lifestyle, and plan for the uses and activities you envision in the garage. Whether you have built-in storage cabinets, a fully-equipped home workshop, a hobby center, or play space for neighborhood kids, you’ll need handy receptacles for air compressors, charging stations and a variety of portable tools and devices. Trailing extension cords from the receptacle on a door opener is not only unsafe, but inconvenient. If you have or are considering an electric or hybrid vehicle, think about a car-charging station; it will require a 220-240 volt circuit.

Become Energy Efficient

Install sleek, energy efficient recessed cans, and use LED bulbs for bright, attractive general garage lighting that offers greater flexibility than typical fluorescent tube fixtures. They are available for both new construction and remodeling. Also look at insulated garage doors with a row of windows for natural light. Add insulation to walls and ceiling if necessary. Modern garage door openers have advanced safety sensors and lighting timers; but those that are truly smart allow you to monitor operation and control opening and closing via smart phone app as well as by wireless remote.

Go Hands-Free

It’s not uncommon for exterior lighting to be motion-activated, particularly if you have a long driveway or security spotlights on your home’s perimeter. But you can also automate interior lighting, either with motion sensors, or by using door-jamb switches. You’ll love the convenience of never having to fumble in the dark for a light switch!

Tie the Garage Into Home Security

In addition to an intrusion alarm and various sensors for your home’s interior, incorporate air quality sensors and fire and water detectors, even a security camera, in your garage space. Home security is a major concern among potential buyers.

If you’re in the market for a new home, make sure to contact your trusted mortgage professional to get started on the pre-approval process as soon as possible.

 

 

 

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Rebuilding Costs: Rethinking How Much Homeowners Insurance You Really Need

Rebuilding Costs Rethinking How Much Homeowners Insurance You Really NeedBuying a home comes with numerous financial planning obligations. It’s far from a turn-key operation and one of the significant challenges involves developing a working knowledge about things often outside your area of expertise.

For example, working as an educator, police officer, investment banker or office staffer does not necessarily make you an expert about home repairs or insurance coverage. Yet, the average homeowner is tasked with carrying a certain level of homeowners insurance coverage without a strong working knowledge.

Many homeowners just purchase enough insurance to cover the purchase price or take the advice of others. Both of those methods could prove wildly deficient.

Rethinking Total Replacement Costs

A distinct difference exists between a home’s purchase price, assessed value and total replacement costs. Let that idea sink in a minute. What you paid for your home and it’s assessed value have zero to do with what it would cost to rebuild in the event of a total loss!

If you based your homeowners coverage on purchase price or estimated value, the word that comes to mind is “Yikes.” Here’s why.

Construction costs are based on prevailing market prices that include building materials and labor costs. These vary from region to region and can pique do to materials shortages and shifting prevailing wages. National home-building averages run anywhere from $117 to $125 per square foot. But, even as you read this article, that could change.

Beyond the fundamentals of calculating home construction costs on a square-foot basis, consider that rebuilding your home means that some type of catastrophe occurred. Whether that was a hurricane, tornado, flooding, fire or another disaster, there will likely be cleanup costs.

Before starting new construction, the damaged property will likely need to be razed and damaged materials removed. That comes at a cost.

Building permits and licenses will come at an additional cost. An architectural blueprint and design may need to be secured and that also comes at a cost. The permitting process can be challenging and that could result in you having to rent a temporary residence while your home is rebuilt. Obviously, there are plenty of unforeseen expenses.

Specialty Building Costs

Although average building costs per square foot are a viable standard measure, many homes enjoy specialty items.

Consider that you own a home built decades ago. The high-quality building materials used in construction may be considered specialty items today. They may inevitably be far more expensive than common building materials. If you want the home fully restored, that could cost more than the estimated average.

Accents such as rounded archways or plank-board floors are also more expensive to replace than many average materials. Those are all considerations that need to be tallied when insuring a home.

How To Recalculate Homeowners Insurance

Take the time to calculate the square footage of your home against average construction costs in your area. Factor in specialty items, permitting, razing and other potential hidden costs. Add 10-20 percent. According to some insurance experts, the average home is underinsured by upwards of 22 percent. After the carrier has paid out the coverage limit, overages could become out-of-pocket expenses.

Don’t hesitate to consult with a reputable home builder or insurance expert. Full coverage means accurately accounting for all of the rebuilding costs. 

Contact your trusted mortgage professional to inquire about current rates for home construction loans, referrals to an insurance agent and more.

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Working From Home: 5 Best Tips To Make It Work

Working From Home 5 Best Tips To Make It WorkCarving out space for a home office isn’t always easy, but if you have the option to work from home even part of the time, it’s essential to have a space that works for you.

Here are 5 great ways to meet those needs:

Adapt A Closet

A guest room closet with bi-fold doors can become a perfect workspace with the addition of a shelf at the proper height to hold a computer or calculator and proper task lighting. Hang a bulletin board or add open shelving on the back wall. Multiply the functionality with a small cabinet or a portable file rack. The advantage of going to work in a closet is that you can close it off completely without having to do a daily cleanup. 

Grab A Corner From Living Room or Bedroom

Tuck a table desk into a corner of the living room or bedroom, assuming that you can work during the day when others aren’t sleeping or actively “living” in the space. Small table desks serve a variety of purposes, from serving snacks to displaying artwork, and are perfectly adaptable as work space, with a minimum of effort. All you really need is a good lamp and a nearby electrical plug in order to create an office. 

Claim Space In A Wide Hallway

With a space as narrow as about 30 inches and minimal depth, it’s possible to set up a small tabletop and chair to serve your needs for making phone calls, organizing schedules or planning appointments. It may not be ideal, but if space is at a premium it can be functional for short bursts of work at home.

Look For Multi-Purpose Furniture

A home office can exist in a den or dining room that has either a credenza or a tall cabinet with doors. Think about your needs, and seek out furniture that will fill the bill. Traditional period “secretaries” with closed door storage and a fold-down desktop are perfect, but even ramshackle armoires can be repurposed as office cabinets. 

Look For Unused Space

If you have a mostly empty storage room, even if it’s located in the garage, clean it out and clean it up. Add proper lighting, and even a portable heater or air conditioner. Brighten the space with fresh paint and an area rug, find second-hand furniture at garage sales or estate sales, and get creative with accessories. 

Be Aware Of Your Needs

There are two primary requirements for a home workspace, no matter what kind of work you do: storage space for the tools, supplies, files and accessories that you need; and privacy. It’s nice to be able to close the door on your work and “go home,” so the more insulated your home office is from other family activities, the more efficient it will be. Even if space is minimal, it can work for you!

Be sure to contact your trusted mortgage professional to get started with the pre-approval process as soon as you are in the market for a new home.

 

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What’s Ahead For Mortgage Rates This Week – July 9th, 2018

What’s Ahead For Mortgage Rates This Week – July 9th, 2018Last week’s economic releases included monthly readings on construction spending, public and private sector job growth and June’s national unemployment rate. Weekly readings included Freddie Mac mortgage rates and new jobless claims.

Construction Spending Rises in May

According to the Commerce, construction spending rose 0.40 percent in May; public sector construction spending rose 0.70 percent and private sector spending rose by 0.30 percent. Residential construction rose by o.80 percent, which analysts regarded as a good sign for the economy. Building more homes has long been identified as the only solution for persistent housing shortages that cause high demand for homes and rapidly rising home prices.

Analysts said that volatility and heavy revisions to government reporting, construction spending readings are subject to significant change. April’s reading of 1.90 percent growth was downwardly revised to 0.90 percent growth.

Mortgage Rates and New Jobless Claims Fall

Freddie Mac reported lower mortgage rates last week. Rates for a 30-year fixed rate mortgages were three basis points lower at an average of 4.52 percent. 15-year fixed rate mortgages averaged 3.99 percent and were five basis points lower than for the previous week. Rates for 5/1 adjustable rate mortgages averaged 3.74 percent and were 13 basis points lower than for the prior week.

First-time jobless claims fell last week to 231,000 new claims as compared to 200,000 new claims expected.and 244,000 new claims were filed in the prior week.

Unemployment ticks up as Public and Private Sector Job Growth Slows

ADP payrolls fell to 177,000 private sector jobs were added in June as compared to 189,000 jobs added in May. The Commerce Department reported 213,000 public and private sector jobs added in June, which beat expectations of 200,000 jobs added in June. 244,000 jobs were added in May.

The National unemployment grew to 4.0 percent in June as compared to May’s reading of 3.80 percent. Analysts attributed the rise in the unemployment rate to 600,000 new job seekers entering the market in June.

Whats Ahead

This week’s scheduled economic reports include readings on inflation, core inflation and consumer sentiment. Weekly readings on mortgage rates and new jobless claims will also be released.

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Top Uses Of A HELOC

Top Uses Of A HELOCHomeowners who have equity built up in their homes can tap into that equity using a home equity line of credit, or HELOC. This financial tool can be a great way to accomplish a number of financial goals.

Here are four excellent uses of a HELOC for homeowners to consider.

Consolidating Costly Debts

Credit card debt and other types of consumer loans are costly, unless a debtor is lucky enough to have a no-interest card. Borrowers can consolidate that debt into a HELOC, which is much more affordable because it is a secured debt.

This advantage only works if the borrower stops adding to the debt problem. A HELOC becomes a valuable tool to get rid of debt quickly when used properly.

Create An Emergency Fund

Most people do not intend to end up in credit trouble, but emergencies happen. Emergency home repairs, job loss, or car repairs can quickly add up to unwanted debt.

A HELOC provides homeowners the option to have an emergency fund. Should one of these emergencies pop up, the homeowner can use the HELOC for an affordable source of funds.

Home Repairs That Add Value

Some home repairs add value to the property, but are also expensive. A HELOC can provide a source to fund these repairs. Because they put value back into the property, homeowners may be making wise use of their equity when using the HELOC in this way.

To make this work well, homeowners should choose repairs that do add to the home’s value. Since the cost of the repairs comes from the equity, the home’s owner should recoup the costs later when selling the home.

Funds For Investing

Finally, homeowners can use funds from a HELOC to get started in investment. This is risky, because the loan is paid regardless of how successful the investment is, but it can give a homeowner the chance to start investing for the first time.

Similarly, retirees can sometimes use HELOC funds to supplement retirement income if investments are struggling. This is a temporary solution to give investments a chance to recover, but for those living on a fixed income it is very helpful to have this option.

The HELOC is a valuable tool for homeowners that allows them to tap equity when it is needed. Since they have spent years building up this equity, homeowners should not fear using it when it can help with their financial goals.

Contact your trusted loan professional to find out if a HELOC may be right for you. 

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Seller-Paid Closing Costs In A Seller’s Market? Yes, It’s Still Possible

Seller-Paid Closing Costs In A Seller's Market Yes, It's Still PossibleFor first-time home buyers, closing costs are a major hurdle for home ownership. Coming up with a down payment and several thousand dollars for closing costs can be hard without home equity to tap.

To help, buyers often ask sellers to cover all or some of these costs. In markets favoring buyers, this is a common habit, but when the market switches to favoring sellers it becomes harder. Sellers who know they may get multiple offers are less likely to say “yes” to this request.

Yet even when the market favors sellers, buyers can still ask for this help. It all depends on how the offer is presented. Here’s how to potentially make it look appealing, even with other offers on the table.

Buyers Need To Consider The Total Amount

Many sellers build negotiation room into their asking prices. This means they anticipate some offers coming in that are lower than their asking price.

Buyers asking for closing costs can offer the full asking price or more than the asking price to make the offer more appealing.

For example, if the buyer needs $2,000 in closing costs, and offers $2,000 more than the asking price, the seller won’t stand to lose money and will find the offer more appealing. This, in effect, rolls the closing costs into the loan.

On the flip side, if a buyer makes an offer well below the asking price, then also asks for closing costs, the seller is likely to say no.

Buyers Should Consider Other Components Of Their Offer

Sometimes the problem the buyer faces is a lack of cash to cover the closing costs, particularly when using a no- or low-down payment loan option. To make the offer more appealing, buyers should look at the rest of the offer’s terms.

For example, a buyer may ask for closing costs but overlook other contingencies, such as non-urgent repairs. This makes the offer appealing, because the seller’s costs even out.

Buyers Can Offer To Close Quickly

Another way to make seller-paid closing costs something a seller will accept is moving the closing date up. Most sellers want to sell quickly, so the faster the buyer can close, the better the offer may look.

For buyers in a seller’s market who need closing cost help, the key is to make all other aspects of the offer appealing. By doing so, these buyers may just get the closing cost help they need to move forward with their home purchase.

One of the best things to do before entering into negotiation is to have your mortgage funding pre-approved. Contact your trusted home loan professional to get started today.

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What’s Ahead For Mortgage Rates This Week – July 2nd, 2018

What’s Ahead For Mortgage Rates This Week – July 2nd, 2018Last week’s economic reports included readings from Case-Shiller housing market indices and data released on new and pending home sales. Weekly releases on mortgage rates and first-time unemployment claims along with the Consumer Sentiment Index for June were also posted.

Case-Shiller Reports Rapid Home Price Growth in April

April home prices ticked downward by one-tenth percent for the National Home Price Index, which reported 6.40 percent growth year-over-year. Case-Shiller’s 20-City Home Price Index also dipped by one-tenth percent to 6.60 percent year-over-year. Analysts note that home prices continue to outpace wage growth and inflation, which limits affordability for many prospective home buyers.

Seattle, Washington held the top spot on the 20-City Home Price Index with year-over-year home price growth of 13.10 percent; Las Vegas, Nevada followed with year-over-year home price growth of 12.70 percent and San Francisco, California reported home price growth of 10.90 percent year-over-year. New York, New York was the only metro area to report negative home price growth. Analysts said recent tax law changes and a glut of new apartments impacted home prices.

New Home Sales Rise as Pending Home Sales Fall

Sales of new homes rose in May to a seasonally-adjusted annual level of 689,000 sales. Analysts expected 668,000 sales based on April’s downwardly-revised reading of 646,000 new homes sold. Year-to-date, sales of new homes were 8.80 percent higher than for the same period in 2017.

Rapid home price growth has been driven by high demand and limited inventories of homes for sale. Supplies of new homes dipped from a 5.40-month supply in April to a 5.20-month supply of homes for sale. Real estate pros consider a six-month supply of homes an average inventory.

Pending home sales dipped in May by -0.50 percent,  as compared to April’s reading of -1.30 percent. Low supplies of available homes have sidelined buyers who haven’t found homes that they want or can afford. High demand has created bidding wars and cash buyers in some markets have sidelined moderate-income buyers and those who need financing to purchase homes.

Mortgage Rates Mixed, New Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week. Rates for a 30-year fixed rate mortgage fell by two basis points to 4.55 percent. Rates for a 15-year fixed rate mortgage averaged 4.04 percent and were unchanged from the prior week.

The average rate for a 5/1 adjustable rate mortgage was four basis points higher at 3.87 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 227,000 first-time claims filed from the prior week’s reading of 218,000 claims filed. Analysts expected 220,000 initial jobless claims.

Consumer sentiment fell to an index reading of 98.20 in June as compared to May’s reading of 99.30. according to the University of Michigan.

Whats Ahead

This week’s scheduled economic news includes readings on construction spending and minutes of the most recent meeting of the Fed’s Federal Open Market Committee, Labor sector readings on Non-Farm payrolls, ADP payrolls and national unemployment will also be released.

Weekly reports on mortgage rates and new jobless claims will be released on schedule.  U.S. Financial Markets will be closed on Wednesday in observance of Independence Day.

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