The Impact of Rising Prices on Home Appraisals

The Impact of Rising Prices on Home Appraisals | Keeping Current Matters

The fact that residential home prices are increasing substantially in most regions of the country is music to the ears of homeowners. However, if you are in the process of selling your home, make sure you realize the major challenge a hot real estate market creates.

Each house must be sold twice; once to a buyer and a second time to an appraiser who represents the bank that will grant the purchaser a mortgage to buy the home (unless it is an “all cash” purchase). In a real market with escalating prices, the second sale may be the more difficult. And a recent survey by Quicken Loans reveals that the gap between what a homeowner believes is the value of their home compared to an appraiser is widening.

Appraisal vs. Homeowner Value | Keeping Current Matters

This could lead to an increase in the percentage of real estate transactions being challenged by a ‘short’ appraisal (where the appraiser value is less than the contracted price of the home).

Bottom Line

Whether you are a buyer or a seller, you must be prepared for this possibility as it may result in a renegotiation of the price of the home.

Two Graphs That Scream List Your House Today

Two Graphs That Scream You Should List Your House Today! | Keeping Current Matters

The spring and summer months have always been known as a very popular time for homebuyers to start the search for their dream home. This year is no different!

We all learned in school that when selling anything, you will get the most money if the demand for that item is high and the inventory of that item is low. It is the well-knownTheory of Supply & Demand.

If you are thinking of selling your home, here are two graphs that strongly suggest that the time is now. Here is why…

DEMAND

According to research at the National Association of Realtors (NAR), buyer activity this year has far outpaced the same months in 2014. Purchasers who are ready, willing and able to buy are in the market at great numbers.

Foot Traffic | Keeping Current Matters

According to NAR, “Foot Traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.”

SUPPLY

The most recent Existing Home Sales Report from NAR revealed that the current supply of housing inventory is at a 5.1 month supply, which remains below the 6-months necessary for a normal market.

Inventory of Homes for Sale | Simplifying The Market

Buyer demand is far outpacing the supply of homes available for sale.

Bottom Line

Listing your house for sale when demand is high and supply is low will guarantee the offers made will truly reflect the true value of your property.

Sellers Dilemma: OTM, FSBO or List Again?

Sellers Dilemma: OTM, FSBO or List Again? | Keeping Current Matters

At the end of June, in every region of the country, hundreds of homeowners have a tough decision to make. The ‘listing for sale agreement’ on their house is about to expire and they now must decide to either take their house off the market (OTM), For Sale by Owner (FSBO) or list it again with the same agent or a different agent.

Let’s assume you or someone you know is in this situation and take a closer look at each possibility:

Taking Your Home off the Market

In all probability, after putting your house on the market and seeing it not sell, you’re going to be upset. You may be thinking that no one in the marketplace thought the house was worthy of the sales price.

Because you are upset, you may start to rationalize that selling wasn’t that important after all and say,

“Well, we didn’t really want to sell the house anyway. This idea of making a move right now probably doesn’t make sense.”

Don’t rationalize your dreams away. Instead, consider the reasons you decided to sell in the first place. Ask your family this simple question:

“What made us originally put our home up for sale?”

If that reason made sense a few months ago when you originally listed the house, chances are it still makes sense now. Don’t give up on what your family hoped to accomplish or on goals your family hoped to attain.

Just because the house didn’t sell during the last listing contract doesn’t mean the house will never sell or that it shouldn’t be sold.

Re-Listing with your Existing Agent

For whatever reason, your house did not sell. Perhaps you now realize how difficult selling a house may be or that the listing price was too high, or perhaps you’re now acknowledging that you didn’t exactly listen to your agent’s advice.

If that is the case, you may want to give your existing agent a second chance. That’s a perfectly okay thing to do.

However, if your agent didn’t perform to the standard they promised when they listed your home you may want to either FSBO or try a different agent.

For Sale by Owner

You may now believe that listing your house with an agent is useless because your original agent didn’t accomplish the goal of selling the house. Trying to sell the house on your own this time may be alluring. You may think you will be in control and save on the commission.

But, is that true? Will you be able to negotiate each of the elements that make up a real estate transaction? Are you capable of putting together a comprehensive marketing plan? Do people who FSBO actually ‘net’ more money?

If you are thinking about FSBOing, take the time to first read: 5 Reasons You Shouldn’t For Sale by Owner.

List with a New Agent

After failing to sell your home, you may no longer trust your agent or what they say. However, don’t paint all real estate professionals with that same brush. Have you ever gotten a bad haircut before? Of course! Did you stop getting your hair cut or did you simply change hair stylists?

There is good and bad in every profession—good and bad hair stylists, agents, teachers, lawyers, doctors, police officers, etc. And just because there are good and bad in every line of work doesn’t mean you don’t call on others for the products and services you need. You still get your hair cut, see a doctor, talk to a lawyer, send your kids to school, etc.

Bottom Line

You initially believed that using an agent made sense. It probably still does. Contact a local real estate professional and discuss the possibilities.

JUST LISTED: $212,000 – 6912 Tierra Green Way 3 Bedrooms 2 Baths, 1395 sq ft

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Pride of ownership – one owner and it shows. In the community of Florin Glen, this 3 bedroom 2 bath one-story is ready for a wonderful new owner. Popular open floor plan concept reveals a spacious living room dining room combo upon entering the home, beautiful parquet hardwood flooring throughout the lovely kitchen which opens up to a large family room with wood burning fireplace, spacious bedrooms, and an incredible backyard complete with covered patio, perfect for entertaining and more.

OPEN HOUSE SAT & SUN 1-4
Sept 26 and Sept 27

 

 

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64.2% of Millennials Put Down Less than 20%

64.2% of Millennials Put Down Less than 20% | Keeping Current Matters

Digital Risk recently polled Millennials about the housing market. Among their findings was the fact that nearly two-thirds of the generation who have recently purchased a home, have done so with less than 20% down; with 36% putting down less than 5%!

Here is a graph detailing the results:

Millennial Down Payments | Keeping Current Matters

This means that more and more American’s between the ages of 18 and 34 stopped paying their landlord’s mortgage and started building their own family’s wealth.

Millennials aren’t the only ones taking advantage of lower down payments.

The Federal Reserve Bank of New York found that if the down payment required to purchase a home went from 20% to 5%, a renter’s Willingness To Pay (WTP) increased by 40%.

Willingness To Pay | Keeping Current Matters

The problem is that thirty-six percent of Americans still think a 20% down payment isalways required when buying a home. Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

Bottom Line

If you are one of the many renters now realizing that the home of your dreams is obtainable, contact a local real estate professional who can guide you through the process.

Annual Street Repairs Scheduled to Start in Elk Grove Neighborhoods

Public Information Office, Elk Grove Police Department

**New slurry seal and asphalt overlays will restore neighborhood streets to like new condition**

Preventing potholes and keeping local streets in good condition is the goal of the City’s annual Street Repair Project. The City’s Public Works Department has announced that pavement maintenance work scheduled in several neighborhoods throughout Elk Grove will begin next week and extend through November.

Annual pavement maintenance projects extend the life of the pavement and avoid more costly repair or replacement of streets. The pavement maintenance being done this year includes asphalt slurry seal and asphalt overlay. This work includes replacing small areas of damaged pavement, sealing cracks, placement of the slurry seal or asphalt overlay treatment, and replacing striping as needed. The work will restore the surface quality to like new condition.

This work requires temporary full street closures. During the closures, residents will need to park their vehicles on adjacent streets until the roads are reopened to traffic. Barricades with “No Parking” signs will be placed on affected streets 48 hours in advance of the street closures. Residents affected by the work will also receive door hanger notices not less than 3 days in advance of the scheduled operations. A complete listing and map of the streets scheduled for repairs can be found on the City’s web site at http://www.elkgrovecity.org/street-repair.

Preparation activities such as crack sealing and replacement of damaged pavement will begin as early as Monday, September 28th. Slurry seal operations are expected to begin on October 22nd and continue through November 5th. Asphalt overlay and final striping will take place in late October and early November.

The City appreciates the public’s patience during these pavement maintenance activities. For more information regarding the project, please visit the web page or call the City’s Public Works hotline (916) 478-2256.

Stop Paying Your Landlord’s Mortgage!

Stop Paying Your Landlord's Mortgage | Keeping Current Matters

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage – either your mortgage or your landlord’s.

As The Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.

The graph below shows the widening gap in net worth between a homeowner and a renter:

Increasing Gap in Family Wealth | Keeping Current Matters

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since home values and interest rates are projected to climb.

Where Are Mortgage Rates Headed? This Fall? Next Year?

Where Are Mortgage Rates Headed? This Fall? Next Year? | Keeping Current Matters

The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate the greater the payment will be. That is why it is important to look at where rates are headed when deciding to buy now or wait until next year.

Below is a chart created using Freddie Mac’s July 2015 U.S. Economic & Housing Marketing Outlook. As you can see interest rates are projected to increase steadily over the course of the next 12 months.

30 Year Fixed Rate Prediction | Keeping Current Matters

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

Dr. Frank Nothaft, the SVP & Chief Economist for CoreLogic, had this to say in their latest MarketPulse:

“If you are thinking of buying a home and have the financial means to do so, this could be a good time to take a look at the neighborhoods you are interested in. We expect home prices in our national index to be up about 4.3% in the next 12 months, and mortgage rates are also likely to increase over the next year.”

If both the predictions of home price and interest rate increases become reality, families would wind up paying considerably more for their next home.

Bottom Line

Even a small increase in interest rate can impact your family’s wealth. Meet with a local real estate professional to evaluate your ability to purchase your dream home.

An Easy Way to Find the Perfect Real Estate Agent

An Easy Way to Find the Perfect Real Estate Agent | Keeping Current Matters

There is a plethora of real estate information available today in the news and on the internet. It can be extremely confusing at times.

If you are thinking of buying or selling, you need an agent who can help make sense of this rapidly evolving housing market. You need an agent who can help you price your home correctly at the beginning of the selling process. You need an agent who can help you determine 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 so much easier.

But, how do you identify which agents truly understand what is happening and will take the time to simply and effectively explain what it means to you and your family?

One simple way is to check out the agent on social media. What are they posting on Facebook and Twitter? Are they using their social media platforms to share relevant, helpful information or are they just posting cherry pie recipes and cartoons? The best agents are committed to educating the consumer so they can feel confident when they are buying or selling a home.

What they are posting online will help you determine which agents meet the criteria that Dave Ramsey suggested you look for: someone with the heart of a teacher!