2 Major Myths Holding Back Home Buyers

Urban Institute recently released a report entitled, “Barriers to Accessing Homeownership,” which revealed that “eighty percent of consumers either are unaware of how much lenders require for a down payment or believe all lenders require a down payment above 5 percent.”

Myth #1: “I Need a 20% Down Payment”

Buyers often overestimate the down payment funds needed to qualify for a home loan. According to the same report:

“Consumers are often unaware of the option to take out low-down-payment mortgages. Only 19% of consumers believe lenders would make loans with a down payment of 5% or less… While 15% believe lenders require a 20% down payment, and 30% believe lenders expect a 20% down payment.”

These numbers do not differ much between non-owners and homeowners; 39% of non-owners believe they need more than 20% for a down payment and 30% of homeowners believe they need more than 20% for a down payment.

While many believe that they need at least 20% down to buy their dream home, they do not realize that programs are available that allow them to put down as little as 3%. Many renters may actually be able to enter the housing market sooner than they ever imagined with programs that have emerged allowing less cash out of pocket.

Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

Similar to the down payment, many either don’t know or are misinformed about what FICO^® score is necessary to qualify.

Many Americans believe a ‘good’ credit score is 780 or higher.

To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.

As you can see in the chart above, 53.5% of approved mortgages had a credit score of 600-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.

Source: Keeping Current Matters | The KCM Crew 013018

5 Secrets to Selling Your Home Faster

Are you looking to sell your house quickly and for a for a great price? Many homeowners find it challenging to get their homes out of the market. This may be because you have a lot of competition in your area, have an older property or buyers are having difficulty securing an affordable mortgage.

Amy Pritchett, a commercial and residential real estate expert from London Office Space, offers five secrets to selling your home faster. These tips will help you sell your home fast. There is no reason to wait months or even a year to sell your house!

1. Get property valuations from different appraisers

Find out what your house is actually worth by having multiple professionals look at your home. Having your house properly valued and knowing what it is worth in the current market will affect the chances of it being sold.

With multiple valuations from different appraisers you will be able to gauge the most accurate and reasonable price to place your home. They will take into factors like the state of your property, value of properties nearby and current market conditions.

2. A staged home will sell faster

According to UpNest.com, 90% of buyers use the internet for their home search and for this reason a well-staged home with images and video tours will generate more buyer interest. A staged house means arranging your furniture in the best way to showcase your floor plan and make use of the space.

This will also speed up the sale of your property. The Real Estate Staging Association found that homes staged before listing sit on the market for an average of 23 days and sell 87% faster than homes staged post listing.

3. Prioritize the kitchen area

This is the area that all home buyers will look at first and it is also a really important area of the house. Many experts will even say that you are not selling a home - you are selling a kitchen. If your kitchen looks dated then you will run the risk of buyers knocking off thousands for your asking price.

The quickest way to update your kitchen include fresh paint and new cabinet hardware. Make sure to use neutral paint colors with a blank canvas so buyers can imagine their own style.

4. Depersonalize your home

The more personal things you have in your house, the harder you're making it for potential buyers to imagine themselves living there. This is why it’s really important to remove most of your personal stuff. You can put it into storage if you need to. This includes any photos, keepsakes or collections.

5. Invest in quick fixes

Investing in quick updates is a really great way to sell your home faster. It is also a smarter option than over upgrading where you run the risk of shrinking profit margins. Consider doing things like adding fresh paint to the walls, cleaning or replacing curtains, replacing door handles and fixing leaky faucets. These changes are easy and affordable to make and can drastically increase the look of your home.

Attract buyers now

Remember that buyers are looking for square footage, space, great lighting and up-to-date or new fixtures and appliances. If you are looking to sell quickly, then you really should invest some time and money into making your home more appealing to the average buyer in both practical and visual terms.

Source: Realty Times | Amy Pritchett 012918

5 Reasons Millennials Choose To Buy

Some Highlights:

• “The majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons — including control of living space, flexibility in future decisions, privacy and security, and living in a nice home.”
• The top reason millennials choose to buy is to have control over their living space, at 93%.
• Many millennials who rent a home or apartment prior to buying their own homes dream of the day when they will be able to paint the walls whatever color they’d like, or renovate an outdated part of their living space.

Source: Keeping Current Matters | The KCM Crew 012618

Gap Between Homeowners & Appraisers Narrows To Lowest Mark In 2 Years

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 4% or more over the next twelve months. One major challenge in such a market is the bank appraisal.

When prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.

In the latest release, the disparity was the narrowest it has been in over two years, as the gap between appraisers and homeowners was only -0.5%. This is important for homeowners to note as even a .5% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home)

The chart below illustrates the changes in home price estimates over the last two years.

Bill Banfield, Executive VP of Capital Markets at Quicken Loans urges homeowners to find out how their local markets have been impacted by supply and demand:

“Appraisers and real estate professionals evaluate their local housing markets daily. Homeowners, on the other hand, may only think about their housing market when they see ‘for sale’ signs hit front yards in the spring or when they think about accessing their equity.”

“With several years of growth, owners may have more equity than they realize. Many consumers use the tax season at the beginning of the year to reevaluate their entire financial life. It also provides a good opportunity for them to consider how best to take advantage of their equity while mortgage interest rates and borrowing costs are still near record lows.”

Bottom Line 

Every house on the market must be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, meet with an experienced professional who can guide you through this and any other obstacles that may arise.

Source: Keeping Current Matters | The KCM Crew 012418

Where Did Americans Move In 2017?

Some Highlights:

• Atlas Van Lines recently released the results of their annual Migration Patterns Survey in which they tracked their customer’s movement from state-to-state over the course of 2017.
• Idaho held on to the top spot of ‘high inbound’ states for the 2nd year in a row followed by Washington.
• The ‘outbound’ states seem to draw a line straight across the country from Connecticut to Wyoming.

Source: Keeping Current Matters | The KCM Crew 011918

What Impact Will The New Tax Code Have On Home Values?

Every month, CoreLogic releases its Home Price Insights Report. In that report, they forecast where they believe residential real estate prices will be in twelve months.

Below is a map, broken down by state, reflecting how home values are forecasted to change by the end of 2018 using data from the most recent report.

As we can see, CoreLogic projects an increase in home values in 49 of 50 states, and Washington, DC (there was insufficient data for HI). Nationwide, they see home prices increasing by 4.2%.

How might the new tax code impact these numbers?

Recently, the National Association of Realtors (NAR) conducted their own analysis to determine the impact the new tax code may have on home values. NAR’s analysis:

“…estimated how home prices will change in the upcoming year for each state, considering the impact of the new tax law and the momentum of jobs and housing inventory.”

Here is a map based on NAR’s analysis:

Bottom Line

According to NAR, the new tax code will have an impact on home values across the country. However, the effect will be much less significant than what some originally thought.

Source: Keeping Current Matters | The KCM Crew 011818

Wondering If You Can Buy Your First Home?

There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family, others might think they are too young, and still, others might think their current income would never enable them to qualify for a mortgage.

We want to share what the typical first-time homebuyer actually looks like based on the National Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first-time buyer:

Bottom Line

You may not be much different than many people who have already purchased their first homes. Meet with a local real estate professional today who can help determine if your dream home is within your grasp.

Source: Keeping Current Matters | The KCM Crew 011618

Thinking Of Selling? Now Is The Perfect Time

It is common knowledge that a great number of homes sell during the spring-buying season. For that reason, many homeowners hold off on putting their homes on the market until then. The question is whether or not that will be a good strategy this year.

The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring as compared to the rest of the year? The National Association of Realtors (NAR) recently revealed the months in which most people listed their homes for sale in 2017. Here is a graphic showing the results:

The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,680,000.

That number spiked to 1,970,000 by May!

What does this mean to you?

With the national job situation improving, and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring; they are out looking for homes right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition amongst buyers.

Bottom Line

It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home today.

Source: Keeping Current Matters | The KCM Crew 011518