Interest rates are an integral factor in purchasing a home. They determine how much house a buyer can afford. Low interest rates not only give purchasers a lower monthly payment, but they also yield higher savings over the total span of the loan. Take a look at the scenario below.
Owners should also consider the overall cost of the loan when determining if it is the right time to refinance an existing mortgage — a drop of 1% in interest rate results in some surprising savings.
Many experts are predicting that these historic low rates should prevail through the end of 2021.
These are some crazy times in North Texas when it comes to buying a home. Many buyers are struggling to get a home under contract. Once they do secure a home, buyers must come to terms with the amount of money required to close the deal.
The number one task I make sure to complete when meeting with a buyer for the first time is to discuss the data on the current market. I will run analytics on current housing trends for my clients using their target area and price point.
It is important for buyers to understand these data points:
The appraisal gap is something most buyers are struggling with these days. Many believe that as long as the price they offer on a home is within the amount they have been pre-approved to purchase they can make offers for over the listing price.
However, lenders will not give loans for amounts greater than the home is worth. Therefore, if there is a gap between the amount of the purchase price and the value of the home, the buyer is responsible to provide those funds at closing.
This is just one of the complexities in today's market. This is why you need a REALTOR® on your side that understands what it takes to purchase a home. I will make sure you are prepared and know your limits when making offers. Contact me today to get started making your dream home purchase a reality.
It has been in the news, it has been reported here on this blog, and it has been the subject of some great humor. It is the current unprecedented seller's market in real estate. Inventory is extremely low and that is driving prices of homes through the roof! (pun intended)
There are many homeowners taking advantage of rising home values. Let's explore a few ways that you can use the current market to your advantage.
If you are carrying Private Mortgage Insurance or PMI, then you may be in luck! PMI is needed on many mortgages for homes where the loan value is greater than 80% of the value of the home. Meaning that if you bought a home and put less than 20% down then you are likely carrying this fee. PMI adds a few hundred dollars to your monthly payment. You can save thousands of dollars by removing this PMI.
Fortunately, it is quite simple to remove the PMI. You don't even have to refinance your loan. All you have to do is contact your mortgage company and request a desktop (or drive-by) appraisal of your home. Most mortgage companies don't even charge for this type of service. If your home value has increased enough to lift that ratio of loan to value to 80% then you should be entitled to have that PMI removed!
While you are evaluating your mortgage loan, check to see if you could also benefit from a refinance. Here is a great tool to help you decide if there is a financial benefit to refinancing your loan.
Many of my clients are also taking advantage of their increased home value to take out a home equity line of credit loan. This is called a HELOC and can be useful for taking on home renovations and updates.
Of course, if what you really want to do is buy or sell a home, I would love to help you there! Give me a call!
These are true stories:
We have not seen anything like this before in the real estate market. Most experts agree that this is NOT a bubble.
It is particularly difficult for buyers to compete in this market. However, delaying the purchase of a new home is not exactly the best strategy either. Why? Because we do not know when this is going to end. Every 30 days home values are climbing. Six months from now the home you could have bought today at $400,000 could be valued at over $500,000.
I've got some winning strategies lined up. Read on, put on your full armor, and let's get ready to rumble!!
When sellers evaluate multiple offers, they are looking for the offers that give them the least amount of risk. Undoubtedly, the biggest hurdle in a real estate transaction is getting the buyer through financing approval. The best way to strengthen any offer is to eliminate this pain point for the seller.
In a stable market, a letter from the lender saying that the buyer "checks out" would have been sufficient. No longer!
In order to write a competitive offer, you must be FULLY approved. That means that you need to turn in all the required documents to your lender and satisfy ALL underwriting conditions for approval before you even know what home you are going to buy.
If you can state on your contract that you, the buyer, do not need approval and that the finance period is ZERO days long, then you will have a leg up on the competition!
In normal housing markets, buyers need to save money to cover the down payment and closing costs associated with the home purchase. However, in the current market where homes are selling for tens of thousands of dollars above the asking price, buyers must have additional funds to cover that gap between list price and sales price. Buyers are offering an average of 8-20% over the list price in many areas.
Buyers taking out a loan for the new home, have to be able to cover the difference between the appraised value and the final sales price.
The more money you can save, the more competitive your offer will become.
Homes that are updated, modernized, and tastefully decorated will garner the most attention from buyers. These are the homes that will get the most offers. The more offers a home gets, the more likely it is to sell for WAY above list price.
If you are short on extra cash, focus on homes that might need more cosmetic updates. It very well could be less expensive to install new carpet and add a fresh coat of paint. Upgrading a few items might cost you $10,000, where buying the already updated one could cost you $50,000+ over the asking price.
Focus on houses that might need a little work. These homes tend to get fewer offers, giving you a better chance of acceptance.
You might consider moving farther out of your target area than you initially anticipated. There tends to be less competition on houses that are farther away from the metro suburbs. If you have found yourself able to work from home on a regular basis since the pandemic, this could be a good time to check out some of the outlying areas. While we are seeing a strong market even in the small towns, these homes are selling for only a few thousand over the list price as opposed to $50,000 or more in the city.
Expect to experience a lot of emotions while trying to buy a home in this market. Buyers will go on many showing appointments, place multiple offers on different homes, and face rejection often. Think about it. Most homes are getting 20 or more offers. Only one buyer is going to get accepted and the rest rejected. That is a lot of rejection.
Don't give up! Learn as much as you can about why the seller chose the winning offer and try to similarly strengthen yours. Characteristics of stronger offers include these traits:
Also, don't be discouraged if there are several people waiting to view the same home. Inventory is limited and the showing window to get in to view the home is usually only a few days.
I am ready too! I have had great success this year getting well-qualified buyers ready to take on this market. I can help you get there! Just contact me today to get started!
The real estate market is red hot right now. If you have been thinking about selling - this is the time! In order to get the best offer possible, you should be aware of a few helpful suggestions. Below are some strategies to consider prior to putting your house on the market.
Homes are in high demand in today's market. You should get your home in front of as many buyers as possible. Selling your home "by owner" or to a friend will not accomplish this result. Using a REALTOR® will allow your home to be in the MLS database. This listing is then syndicated out to thousands of internet portals like Zillow and REALTOR.com. This exposure drives up demand, which could bring multiple offers. An increase in offers, means more competition and money for you.
Home preparations and staging are still important when selling a home. However, buyers today are more apt to overlook minor cosmetic issues like worn carpets or aging paint colors. Consult your real estate agent for the crucial items that need to be addressed prior to listing your home.
Don't be lured by stories of homes selling over asking price. This is true, but you must consider the appraisal value of your property when pricing it for sale. If you list your home above the appraised value, it might not close due to the buyer not having the money to cover the overage. Listing the home within the appraisal value could still bring in multiple offers and drive up the selling price. When buyers offer more than the list price for a home, they include an appraisal addendum that states, up-front, that they intend to cover the difference in appraised value versus closed sales price.
Look at all offers you are presented with. Often times the best offer for a seller is not the highest price. You need to consider if the buyer is offering incentives - a free leaseback, payment of title, or other fees that could benefit you. A real estate agent can provide you with a spreadsheet that compares all offers. This will allow you to make an informed decision regarding the best terms with least amount of risk.
Not all houses and neighborhoods are alike. The homes that are being sold above market price could have some amenities that other homes do not have. Pools, large yards, and community features drive up the offer. Sellers should be aware of the realistic selling price of their home. Your REALTOR® will study the latest sales in your neighborhood and get a better idea of what to expect.
🏠💨The real estate market is moving fast. If you are planning to sell your home, you need to be prepared. Your home will be inspected as soon as it goes under contract. Buyers are paying top-dollar for a home these days, and they expect red-carpet treatment when it comes to repairs. Additionally, cash buyers may be closing in as little as ten days, and you want to avoid any conditions that could delay the closing and your payout.
To ensure a smooth inspection and repair negotiation, consider the following tips. These will help you have your home in great shape so that you can reap all the rewards that a brisk seller's market brings you.
Give me a call if you would like a detailed plan to get your home on the market.
Don't forget, if you want an accurate home evaluation, complete this form. I will give you a detailed subjective analysis and not a blanket computer-generated model estimate.
With a new year often comes new goals.
I thought it would be a great time to ask some essential questions about your real estate goals for 2021.
Please take the survey below and let me know your plans because no matter what your real estate projects are for the new year, I am here to serve.
When it comes to buying a home - especially in the current market - we have found that buyers that are educated and prepared are happiest with the outcome. Take a look below at five great ways to prepare to buy a home.
If you find the perfect home now, don’t risk losing it because you’re trying to guess where the housing market and interest rates are going. Those factors usually don’t change fast enough to make a difference in an individual home’s price.
It’s natural to want reassurance for such a big decision, but too many ideas from too many people will make it much harder to make a decision. Focus on the wants and needs of the people who will actually be living in the home. If you are seeking advice from a parent or close friend - bring them with you to view the homes. Don't wait to discuss it with them after you are under contract. That could cost you money.
Keep this in mind: PRICE - LOCATION - FLOORPLAN - everything else can be changed! If it’s in the right location, then you may accept a yard a bit smaller than you had hoped. As long as the floorplan works for you, you can always change the flooring materials or paint colors. Make a list of your top priorities and focus on things that are most important to you. Let the minor issues go.
Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price or refusing to budge may cost you the home you love. The key to successful negotiation is understanding both sides and figuring out the best-case scenario for each party.
Don’t wait until you’ve found a home to get approved for a mortgage, investigate insurance, or consider a moving schedule. Being prepared will make your bid more attractive to sellers.