What You Need to Know About Buying a House in Summer 2018

Want more house for your money? Flexibility is in this season.

The sun is high and hot—and so is the competition for buying a home.

Thinking about buying a home this summer? The sunniest time of year is great for exploring new neighborhoods and visualizing future patio parties during viewings. But before you start any serious shopping, it’s important to understand what the housing market is like for buyers right now, and what you can do to end up with the best home—and the best price—for you.

The housing market should be just as strong this summer as it’s been all springExisting home sales and list prices have risen this year, and starter home inventory has plummeted by 14 percent. But there are perks to house hunting right now, too. Here are some facts and tips to help you get the most out of this year’s summer housing market.

Summer Market Facts

  • Prices drop during the summer.

    Summer may be a busy home-buying season, but it’s not as crazy as spring. In fact, prices drop from May through October. If you can hang on until late August, you could find a really great deal—that’s when nearly 14 percent of listings get a price cut.

  • PMI is getting more affordable.

    There’s good financing news, too: Private mortgage insurance (PMI) is getting cheaper after PMI lenders MGIC and Radian lowered their rates this spring.

    “That’s going to cause most of these PMI companies to be competitive, which is going to bring them all down,” Knoxville real estate agent Nic Nicaud says. Because PMI is typically required when homebuyers have a down payment of less than 20 percent, that means it’ll be cheaper for some buyers to get into homes sooner.

Summer 2018 Homebuying Tips

  • Don’t discount older listings.

    When homes are flying off the market within days, it’s easy to think a listing that’s a week or so old is a red flag. Minneapolis real estate agent Danny Dietl says that’s not always the case. In his experience, it’s often because a buyer got cold feet and pulled out of a deal on a perfectly good house. But thanks to the assumptions people make about older listings in busy markets, the delay can cause the price to come down.

  • Consider a fixer-upper.

    In a competitive market, it’s important to be flexible. That could mean going with a fixer-upper, even if you were imagining a move-in ready dream home. There are just more of them out there: The number of starter homes on the market is shrinking, but there are 8.3 percent more fixer-uppers among them than there were six years ago.

    If you’re dead-set against a fixer-upper, Dietl says to be prepared to move quickly. “There’s only ever going to be a couple of options at a time,” he says. “And when new listings come on, it’s going to be pretty ferocious.”

  • Get to know the neighborhood.

    In competitive markets, it’s tempting to make an offer on any available property that fits your criteria, but if it’s in the wrong neighborhood, you may never end up feeling at home in your house.

    Take the time to do some community scouting before making an offer. You might notice convenient parks and new playmates for your kids—or be relieved to find more nightclubs than strollers on your block. You can even find out what your future neighbors have to say about the area with the new What Locals Say feature on listings throughout Trulia.

  • Make the strongest offer—even if it’s not the highest.

    Obviously, now is not the time for low-ball offers. But the strongest offer isn’t always the highest one. Dietl says cash offers are often the secret to a winning bid. “You can even actually be the highest offer by thousands of dollars, and a cash offer may take precedence,” he says.

    Sure, coming up with a cash offer could be tough for many buyers. But there are other ways to make a strong offer that don’t require gobs of money: Including generous contingencies, like a shorter closing or inspection period, and writing a great offer letter can help make your offer stand out.

     

    Posted by Patrick Dunn on Trulia

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Buying a Home Can Be Scary… Unless You Know the Facts [INFOGRAPHIC]

Some Highlights:

Many potential homebuyers believe that they need a 20% down payment and a 780 FICO® score to qualify to buy a home, which stops many of them from even trying! Here are some facts:

  • 40% of millennials who purchased homes this year have put down less than 10%.
  • 76.4% of loan applications were approved last month.
  • The average credit score of approved loans was 724 in September.

Posted by The KCM Crew

 

The REAL Reasons Americans Buy a Home

We often talk about the financial reasons why buying a home makes sense. But often, the emotional reasons are the more powerful, or compelling reasons. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.

The top 4 reasons to own a home cited by respondents were not financial.

1. It means having a good place to raise children & provide them with a good education

From the best neighborhoods to the best school districts, even those without children at the time of purchasing their home, may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.

2. You have a physical structure where you & your family feel safe

It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.

3. It allows you to have more space for your family

Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.

4. It gives you control over what you do with your living space, like renovations and updates

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?

The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:

5. Owning a home is a good way to build up wealth that can be passed along to my family

Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?

Bottom Line

Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in their life, now is a great time to reflect on the intangible factors that make a house a home.

Posted by The KCM Crew

Balancing Act: 3 Ways Credit Card Debt Affects Mortgage Rates

Credit card debt can affect your mortgage rate — but it doesn’t have to keep you from getting a loan.

Buying a home is a bucket list item for many of us, but it can be difficult to finance such a massive purchase. Especially if you have credit card debt — or no credit at all — you may struggle to persuade a bank officer to sign on the dotted line.

But understanding how credit works isn’t always easy. Here are the answers to three common questions about credit and how your credit card debt affects mortgage rates.

1. Does my credit card balance affect my ability to get a favorable mortgage loan rate?

Yes. Depending on your bank, most mortgage loan officers will want to know that you have the assets/cash to pay off your outstanding credit card balance. If you don’t, you may be subject to a higher interest rate.

Worried that you won’t get a loan at all? This comes down to your credit history. Credit history is the largest factor in determining your credit score, so if you’ve paid off card balances in full for some time, you should be OK. But if your history shows you defaulted on your credit card debt, you may have a harder time getting a loan.

Tip: Most lenders will check your credit in the final stages of loan approval, so don’t run up card debt right before your closing date. Even if you’ve already been approved for a favorable loan rate, this can cause the lender to cancel your loan or delay closing.

2. Will a lack of credit affect my future mortgage opportunities?

Maybe. There are ways to secure a mortgage loan even without credit. You can apply for a government-backed mortgage — or an FHA loan — which is designed for low-income, first-time homebuyers. There is quite a bit of paperwork involved (you’ll have to prove that you’ve paid rent, bills, etc.), and you’ll most likely be required to put down a larger down payment than is required with a traditional loan (20% down compared with as little as 3.5% down).

You also could ask someone with good credit to co-sign on a loan for you. If you don’t have any credit at all, the co-signer can help. Just make sure they understand that the payment of the loan will affect their credit report for years to come.

If you’d rather not ask a friend or family member to co-sign, and an FHA loan isn’t right for you, consider waiting six months to a year and using that time to start establishing good credit on your own. Keep your balance to less than 25% of your card’s credit limit and pay it off monthly.

3. What is the best way to pay off credit card debt?

There is no one right way to pay off the debt, but there are a variety of approaches. Consider consolidating your debt by transferring balances from your high-interest credit cards to a low-interest card. Be aware that transfers include fees, usually around 3% to 5% of the balance amount.

Then control your spending. Cut out unnecessary purchases. Even the smallest savings can really add up.

Finally, pay more than your minimum payment. This will keep your credit score healthy, which can help you land a mortgage loan in the future.

Posted by Katie Morell on Trulia

5 Reasons to Hire a Real Estate Professional Today!

Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened due to the projections of higher mortgage interest rates & home prices as the market continues to recover.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream.

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $208,700 compared to $235,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

Dave Ramsey, the financial guru advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

Posted by The KCM Crew on Keeping Current Matters

Mortgage Rate Changes Over the Years-Lock in Now!

Some Highlights:

  • With interest rates still around 4% now is a great time to look back at where rates have been over the last 40 years.
  • Rates are projected to go up a full percentage point by this time next year according to Freddie Mac.
  • The impact your interest rate makes on your monthly mortgage cost is significant!
  • Lock in a low rate now while you can!

Relocating to an Unfamiliar Area? Here’s How to Get Your Bearings

Choosing a home in an unfamiliar neighborhood can be nerve-racking, but it’s almost inevitable when moving to a new city—or even across town. There’s a lot at stake: The wrong decision can cost you money and peace of mind.

Here are some tips to guide you in your search.

Mission: Neighborhood reconnaissance

As with any house hunt, you should first figure out your budget and what you would need, want, and like to have in a house and in a neighborhood. But if you’re relocating across the country, your biggest challenge will be doing long-distance recon on your new hometown.

While you can’t gain access to private social networks such as Nextdoor until you verify you have an address in a neighborhood, a little cybersleuthing will reveal insights on day-to-day life and concerns in areas you’re scouting.

Once you know the general area in which you’d like to live, websites such as City-Datacan collect and analyze data from numerous sources to create detailed profiles of U.S. cities, including information from crime rates to weather patterns. Homefacts includes similar information, then drills down further, listing neighborhood statistics such as median home price, homes for sale, and foreclosures.

AreaVibes can help you narrow down a search; after you type a ZIP code or city in which you’d like to live, you can adjust metrics such as amenities, crime, cost of living, and housing prices to compile a list of neighborhoods that match your “livability” needs.

In addition, many regional newspapers or magazines routinely publish online rankings of their best neighborhoods. Listly has lists of five-star New York real estate communities and blue chip Massachusetts real estate communities, so it may be worth a search to see whether there is a similar list for an area in which you’re interested.

Speaking of lists, Livability regularly develops city rankings for a range of topics, including small towns, college towns, and overall best places to live.

The Chamber of Commerce in many towns will also provide a guide for people who are relocating. Also, look for news on property taxes in recent years—falling property taxes likely mean that communities have had to cut back on public services.

If you have children, you’ll want to read up on local public schools on GreatSchools.org, as well as determine what day care and after-school activities are nearby. Even if you don’t have children, good schools are a major factor in determining home values in a neighborhood.

No neighborhood is perfectly tranquil, but check CrimeReports.com for crime reports and maps to get a sense of where an area falls on the spectrum. You should also visit theNational Sex Offender registry and FamilyWatchdog.us, which will identify registered sex offenders living in the area. NeighborhoodScout.com will consolidate crime, school, and real estate data in one report, as well as compile lists on safe cities and neighborhoods with good schools.

Draw on a professional’s expertise

If there is one time above all when you’d really benefit from working with a real estate agent with deep knowledge of an area, it’s when moving to a new town.

A knowledgable professional should be able to provide recommendations and compile background information on neighborhoods and homes that fit your needs and price range. Come prepared with a neighborhood or neighborhoods you like, and he or she can give you more information or suggest similar alternatives.

Get down with the locals

Once you’ve done the research and found a neighborhood you like, drive by several times during the day and at night. Look for the following:

  • Are there many “for sale” signs on lawns?
  • Are there any abandoned or boarded-up houses in the vicinity?
  • Is there a lot of trash on the sidewalks?
  • Is the neighborhood close to a shopping or business area?
  • How well are neighborhood parks maintained?
  • Is street parking restricted after school and during rush hour?

Also try to attend a few open houses in your neighborhood of choice. It’s a good way to get a feel for local property values, and to walk around the area. If you see residents out and about, try to talk to them to get their perspective on the community.

If you have time, try to get a drink in a local bar or a cafe and talk to people there. Apps like Meetup and AroundMe will help you connect with people in a town that have similar interests, as well as help you find the nearest hot spot.

These will be your potential neighbors, so they will provide valuable impressions on whether you’ll be pleased with where you eventually live.

Posted by Patricia-Anne Tom on realtor.com