One More Time… You Do Not Need 20% Down To Buy NOW

 

A survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less. 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.

2. FICO Scores

The survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower. The average conventional loan closed in March had a credit score of 753, while FHA mortgages closed with a 685 score. The average across all loans closed in March was 722. The chart below shows the distribution of FICO Scores for loans approved in March.

 Bottom Line

If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, sit down with a professional who can help you understand your true options.

Source: Keeping Current Matters / The KCM Crew / 04262016

If You Are Thinking of Selling, Now Is The Time

If you thought about selling your house this year, now may be the time to do it. The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market. Jonathan Smoke, the Chief Economist of realtor.com, in a recent article revealed that:

“Would-be buyers face a dilemma: There will be more homes on the market over each week of the next three to four months, but there will also be even more prospective buyers. We are entering the busiest season of home buying with the lowest amount of inventory in three years. To be competitive, buyers should get pre-approved for a mortgage and be ready to act quickly if they find a home that meets their needs.”

Smoke goes on to say:

“Listings are growing as they normally do this time of the year, but because demand has been growing faster than supply, homes are selling faster. So the monthly trend is the normal seasonal pattern, but the year-over-year decline is reflective of demand being stronger than supply for more than a year, which is resulting in fewer homes available and faster-moving inventory.”

In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction including the inspection, appraisal and financing contingencies.

Bottom Line

As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.

Source: Keeping Current Matters / The KCM Crew 04182016

HOW TO CHANGE A ZESTIMATE

Location is the key factor in how Zillow determines a Zestimate. Changing a Zestimate requires editing your home facts. Often a cul-de-sac or a large plot goes undervalued because of the school district, zip code, or city the property is located in. Understand that a Zestimate is a changing estimate of a home’s value.

Farms in the Philadelphia suburbs are a rarity. This makes Zillow’s Zestimate a challenging thing to do. Every home owner should value their property according to their own wishes. You can make a lot of money when selling your house.

The algorithm that Zillow uses to determine a houses Zestimate doesn’t always narrow down a specific properties exact location. Zestimates rather perceive a home’s value according to Zillow’s proven algorithm.

So, how accurate is a Zestimate?

Nationally, the Zestimate has a median error rate of 7.9% according to Zillow.com. If a home was for sale for $500,000 the Zestimate range would be $539,500 – $460,500. If a home was for sale for $100,000 the Zestimate range would be $107,900 – $92,100. A Zestimate could value a property at $921,000 and the house could be worth 1 million dollars.

Talk to a real estate agent or an appraiser to get another estimate for a houses value. Zestimate’s aren’t always accurate.

 

Source: Realty Times | Nathaniel Wenger 04132016

COOL HOUSES THAT USED TO BE OTHER THINGS

A traditional home just not doing it for you? The loft frenzy -- especially when those lofts were being converted from old factories and warehouses connected with homebuyers in part because they offered the opportunity to do things a little bit differently. Namely, without walls and, in some case, real ceilings. But these structures go well beyond converted lofts. "Warehouses, factories, barns, and churches are commonly repurposed into residences, but for the adventurous buyer with a budget for renovation, no structure is off limits as a potential home," said CNBC. Indeed. If the idea of living in something that never had any intention of being an abode, of bending its will to become shelter while still keeping its unique characteristics, check out these cool homes. There's nothing new about factories that have been converted to lofts. But we love how this one still has the industrial structure in place.

BUZZBUZZHOME Ever look around the bank while waiting in line to speak to the teller and think, "This would make an amazing home!"? Cathy Calhoun did. After the Spring City, Pennsylvania bank she once worked in closed, "She bought the vacant building in 1989 for $52,000 with plans to renovate it and live there," said HGTV.

HGTV "The once-grungy basement vault -- where she admits she once feared to go -- has been transformed into a luxurious sauna -- keeping the original vault door intact, of course."

HGTV If you're looking for some height and don't mind climbing stairs and living in a narrow space, perhaps an old water tower, like this one in the Netherlands, is for you. "This 1931 water tower was converted in 2002 into a nine-level modern private home using steel, concrete and glass, including a three-story window," said CNBC. Living in an old lighthouse offers a similar feel, with the added advantages of being right on the coast and offering one of the more spectacular ocean views around.
CNBC "The Morgan Point Lighthouse has stood on Connecticut's Fishers Island Sound since 1868," said This Old House. "An advertisement in a 1995 Wall Street Journal led its current owner to the empty, neglected structure. Nearly $1 million was spent on its reconstruction, which included a new lantern and various nautical details designed by the architect - a former Coast Guard engineering officer."

This Old House Call it the original tiny home. This 1945 red caboose railroad car sitting on more than four acres on Mercer Island, Washington has been home to the Davidsons for 30 years, said CNBC.
CNBC Looking for something with a little more space? How about a church. This collection of townhouses that "resemble a hip Tribeca loft" in Holland used to be a 19th century church, said Fast Company. "Gone are the pulpits and the altars and the endless pews and the little old Dutch ladies worrying their Rosaries. In their stead, you've got bleached white walls and aggressively cool contemporary art -- all arranged under a 46-foot-tall nave, the original 1911 stained glass windows throwing light just yonder."

Fast Company A fire station, like this one built in the 1930s in East Providence, RI, may just be the ultimate space to turn into a home. Many already have large gathering areas, plus the fire pole makes for a great conversation piece.
Small House Swoon Source: Realty Times, Jaymi Naciri 04032016

The Top 5 Reasons You Should Not For Sale By Owner

 

In today's market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers. Here are five of those reasons:

1. There Are Too Many People to Negotiate With Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always find some problems with the house
• The appraiser if there is a question of value

2. Exposure to Prospective Purchasers Recent studies have shown that 89% of buyers search online for a home. That is in comparison to only 20% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet Where do buyers find the home they actually purchased?

• 44% on the internet
• 33% from a Real Estate Agent
• 9% from a yard sign
• 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years. The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money when Using an Agent Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission. Studies have shown that the typical house sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Source: Keeping Current Matters | The KCM Crew 03282016

3 Charts That Scream ‘List Your Home Today’

In school we all learned the Theory of Supply and Demand. When the demand for an item is greater than the supply of that item, the price will surely rise.

SUPPLY

The National Association of Realtors (NAR) recently reported that the inventory of homes for sale stands at a 4.4-month supply. This is considerably lower than the 6-month inventory necessary for a normal market.

DEMAND Every month NAR reports on the amount of buyers that are actually out in the market looking for homes, or foot traffic. As seen in the graph below, buyer demand in February significantly outpaced the last six months.

Many buyers are being confronted with a very competitive market in which they must compete with other buyers for their dream home (if they even are able to find a home they wish to purchase). Listing your house for sale now will allow you to capitalize on the shortage of homes for sale in the market, which will translate into a better pricing situation.

HOME EQUITY

Many homeowners underestimate the amount of equity they currently have in their home. According to a recent Fannie Mae study, 37% of homeowners believe that they have more than 20% equity in their home. In reality, CoreLogic’s latest Equity Reporttells us that 72.6% actually do!

Many homeowners who are undervaluing their home equity may feel trapped in their current home, which may be contributing to the lack of inventory in the market.

Bottom Line

If you are debating selling your home this year, meet with a local real estate professional who can evaluate the equity you have in your home, as well as the opportunities available in your market.

Source: Keeping Current Matters/ The KCM Crew 03222016

The Main Reason to Use a Real Estate Professional when Selling Your House

Every homeowner hopes to accomplish five goals when selling their home:

1. Sell it for the best price
2. Sell it within a predetermined time
3. Sell it with the least amount of hassles
4. Close on the sale the same day they move into their new home

The fifth reason is the most obvious and the most important:

5. They want to make sure it sells.

In order to dramatically increase the chances that the house sells, a homeowner should list with a real estate professional in their market. Why? Because agents have access to the vast majority of the available buyers!! According to the National Association of Realtors’ (NAR) recently released 2016 Home Buyer and Seller Generational Trends Report, 87% of all buyers purchased their home through a real estate agent or broker. And more that 8 out of 10 buyers in every age group used an agent (see chart below).

Bottom Line

If you want your home sold, the best way is to go where the buyers are. The NAR study revealed that the vast majority of purchasers will use an agent when they buy. Meet with a local real estate professional today if you want the best chance of selling.

Source: The KCM Crew/Keeping Current Matters 03162016