Why You Should Sell Now… Before Winter Hits

by The KCM Crew on November 16, 2015 in For Sellers, Move-Up Buyers

http://goo.gl/AaYHqX


People across the country are beginning to think about what their life will look like next year. It happens every Fall. We ponder whether we should relocate to a different part of the country to find better year-round weather or perhaps move across the state for better job opportunities.
Homeowners in this situation must consider whether they should sell their house now or wait. If you are one of these potential sellers, here are five important reasons to do it now versus the dead of winter.

1. Demand is Strong

Foot traffic refers to the number of people out actually physically looking at home right now. The latest foot traffic numbers show that buyers are still out in force looking for their dream home. These buyers are ready, willing and able to buy…and are in the market right now!
As we get later into the year, many people have other things (weather, holidays, etc.) that distract them from searching for a home. Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing supply is still well under the 6 months’ supply necessary for a normal market. This means that, in many markets, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.
There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future.
Also, new construction of single-family homes is again beginning to increase. A study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference).
The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.

3. The Process Will Be Quicker

One of the biggest challenges of the housing market in recent times has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 18.1% from now to 2019. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate below 4% right now. Rates are projected to rise by this time next year.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

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

by The KCM Crew on November 9, 2015 in For Buyers, Interest Rates

http://goo.gl/90NPxN


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 October 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.

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.
According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.4% from this time last year and are predicted to be 4.7% higher 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.

Waiting until after the Holidays Isn’t a Smart Decision

by The KCM Crew on November 5, 2015 in For Sellers

http://goo.gl/J010xB


Every year at this time, many homeowners decide to wait until after the holidays to put their home on the market for the first time. Others who already have their home on the market decide to take it off the market until after the holidays. Here are six great reasons not to wait:
1. Relocation buyers are out there. Companies are not concerned with holiday time and if the buyers have kids, they want them to get into school after the holidays.
2. Purchasers that are looking for a home during the holidays are serious buyers and are ready to buy.
3. You can restrict the showings on your home to the times you want it shown. You will remain in control.
4. Homes show better when decorated for the holidays.
5. There is less competition for you as a seller right now. Let’s take a look at listing inventory as compared to the same time last year:

6. The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will make a comeback in 2016. This will lessen the demand for your house.

Bottom Line

Waiting until after the holidays to sell your home probably doesn't make sense.

Homeownership is Still a Huge Part of the “American Dream”

by The KCM Crew on November 2, 2015 in First Time Homebuyers, For Buyers

http://goo.gl/t3TVWj


There have been some who have voiced doubt as to whether or not the younger generations still consider buying a home as being part of the “American Dream”. A study by Merrill Lynch puts that doubt to rest.
According to their research, every living generation still believes that owning a home is in fact important. Here are the numbers:

This should not surprise us as many studies have revealed the benefits enjoyed by the families who own their own home. One such study was done by the Joint Center of Housing Studies at Harvard University that addressed a major financial benefit to owning your own home: forced savings. The report explains:

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

The Merrill Lynch study proves this point with the following data on home equity (a form of savings):

Bottom Line

There are many reasons that owning a home makes sense. The financial reasons are powerful. As one participant in the Merrill Lynch study put it:

“When I was younger, I always worried about that monthly mortgage payment. Now that I am retired, I have the peace of mind of knowing I own my home free and clear.”

Why You Should Hire A Professional When Buying A Home!

by The KCM Crew on October 27, 2015 in First Time Homebuyers, For Buyers, Move-Up Buyers

http://goo.gl/26i8V4



Many people wonder whether they should hire a real estate professional to assist them in buying their dream home or if they should first try to go it on their own. In today’s market: you need an experienced professional!

You Need an Expert Guide if you are Traveling a Dangerous Path

The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and ready for you to move in to can be tricky. An agent listens to your wants and needs, and can sift out the homes that do not fit within the parameters of your “dream home”.
A great agent will also have relationships with mortgage professionals and other experts that you will need in securing your dream home.

You Need a Skilled Negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.
Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family?
If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

2016: Homeowner’s Net Worth Will Be 45x Greater Than a Renter

by The KCM Crew on October 26, 2015 in First Time Homebuyers, For Buyers

http://goo.gl/IIUA0G


Every three years the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).
In a recent Forbes article the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater.
The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

Put Your Housing Cost to Work For You

Simply put, homeownership is a form of ‘forced savings’. Every time you pay your mortgage you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.
The latest National Housing Pulse Survey from NAR reveals that 80% of consumers believe that purchasing a home is a good financial decision. Yun comments:

“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”

Bottom Line

If you are interested in finding out if you could put your housing cost to work for you through homeownership, meet with a real estate professional in your area who can guide you through the process.

Here Come the Millennials!!

by The KCM Crew on October 22, 2015 in First Time Homebuyers, For Buyers, Millennials

http://goo.gl/N168gY


Many have been wondering when the much anticipated move by Millennials’ into homeownership would actually take place. We know the belief in owning a home is there.
According to a recent Merrill Lynch study, eighty one percent of Millennials believe “homeownership is an important part of the American Dream”. This compares favorably to previous generations.

The obstacle seemed to be employment. It appears that is about to change.
The most recent jobs report disappointed many economists. However, the silver lining in that cloud of doubt was Millennials. Jonathan Smoke, realtor.com Chief Economist, reported:

“About 33% of civilian jobs created over the last 12 months have been for the young adults who are most likely to buy their first home. This should help support continued growth in the share of homes purchased by first time buyers, as economic success has been influencing older Millennials to jump into the housing market this year.”

Selma Hepp, chief economist at Trulia, concurred:

“The faster rate of job growth among Millennials will continue to bolster both the rental and for-sale housing markets for an extended period of time.”

It appears that Millennials will be entering the housing market in great numbers in the very near future.

Family Wealth Grows as Home Equity Builds

by The KCM Crew on October 21, 2015 in For Buyers

http://goo.gl/P1QI1p


With residential real estate values rising quite substantially in most parts of the country over the last few years, many homeowners are seeing a major increase in their family’s wealth as equity continues to build in their house.
A recent study by the Joint Center of Housing Studies at Harvard University revealed that home equity grew nicely last year and has grown dramatically over the last five years…

Buyers looking today may not see the same build-up in equity but could still do quite well.
Let’s assume you went into contract in the next six weeks and closed on a $250,000 home in January. If we take the house value projections from the last Home Price Expectation Survey, here is how your equity would grow over the next four years:

Bottom Line

Homeownership has historically been a great way for the average American family to build wealth over time.

Buying a Home Remains 35% Less Expensive than Renting!

by The KCM Crew on October 19, 2015 in First Time Homebuyers, For Buyers

http://goo.gl/10F0bG

In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage throughout the 100 largest metro areas in the United States.
The updated numbers actually show that the range is from an average of 16% in Honolulu (HI), all the way to 55% in Sarasota (FL), and 35% Nationwide!

The other interesting findings in the report include:

• Interest rates have remained low and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation. “In the past year, these two trends have made homeownership even more affordable compared with renting.”
• Some markets might tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
• Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.  

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, lock in your housing cost with a mortgage payment now.

Do You Really Think Your Landlord Pays for Repairs?

by The KCM Crew on October 15, 2015 in First Time Homebuyers, For Buyers

http://goo.gl/RBRZN8



A recent article that appeared on Nasdaq.com addressed the issue of whether it is best to buy or rent in today’s real estate environment. The article was very fair in discussing both options.
However, there was one portion of the article that we questioned. One of the experts was quoted as saying:

“For some people, the choice is very clear: Buying a home can be more costly, given the cost of the purchase itself, plus taxes and insurance, plus maintenance and repairs.”

This argument is often made in defense of renting. However, we don’t believe it makes logical sense. They claim that, as a renter, you won’t have the expenses of “taxes and insurance, plus maintenance and repairs”. Do they really believe that the landlord pays all those expenses for their tenants?
The vast majority of landlords own rentable real estate as a form of investment. As any other investor would, they expect to make a return on that investment (ROI) - otherwise known as profit. In order to make a profit, the landlord needs to include EVERY expense they incur into the rent…AND THEN ADD A PROFIT MARGIN!!
We think it is incorrect to advise a prospective renter that they won’t have the same expenses that a homeowner would have. They just pay those expenses to a landlord with a “premium” built in.

Local Home Trends

Are Millennials Finally Entering the Market?

http://goo.gl/tzDoHw

It appears that Millennials are finally beginning to enter the housing market. In a recentreport, CoreLogic looked at the annual net change in household formations over the last decade (see graph below):

It appears this is the year that Millennials are finally moving out of their parents’ basements and finding a place of their own. And they are not all renting

According to the National Association of Realtors’ latest Existing Home Sales Report, the percentage of first–time buyers rebounded to 32 percent in August, up from 28 percent in July and matching the highest share of the year set in May.

What has kept the others from buying a home?

Recent surveys have revealed that there are major misunderstandings as to what is required to get a mortgage in today’s lending environment. Many Americans believe you need at least a 780 FICO score and a 20% down payment.

In reality, neither is required. Here are the mortgage statistics (FICO score, % of down payment, mortgage interest rate and debt-to-income ratio) for Millennials who have completed the mortgage process in the first half of this year according to realtor.com:

Bottom Line

More and more Millennials are beginning to enter the housing market. As they begin to better understand the mortgage process, we will see even greater numbers buying a home.

New Home Sales Surge

by The KCM Crew on October 13, 2015 in For Buyers, For Sellers, New Construction

http://goo.gl/CziZR0

According to the latest report from the US Census Bureau and the Department of Housing and Urban Development, newly constructed home sales jumped 5.7% month-over-month and 21.6% year-over-year to an annual pace of 552,000.
Many buyers are looking to the new homes market to make up for the lack of existing home sales inventory. National Association of Home Builders Chief Economist David Crowe explains:

"Today's report indicates the release of pent-up housing demand as the overall economy strengthens, consumer confidence grows and mortgage interest rates remain low. The housing market should continue to move forward at a modest but more persistent pace throughout the rest of 2015."

Regionally, the Northeast led the way with a 24.1% increase in new home sales, followed by the South (7.4%) and West (5.4%). Sales in the Midwest declined by 9.1%.
The inventory of new homes for sale currently sits at a 4.7-month supply down slightly from July (4.9) and significantly from August 2014 (5.4).
Buyers who purchased a new home were willing to spend more to get the amenities that they wanted. The median home price for new homes was $64,000 higher than existing homes in August at $292,700!
Approved applications for building permits increased 3.5% over July and 12.5% over this time last year. Permit applications are seen as a strong indicator of builder confidence in the market.

Bottom Line

Buyer demand continues to outpace inventory of homes for sale. If you are thinking of selling your house this year, now may be the time to list before builders have a chance to replenish the supply of new homes.

The Final Numbers On How A Columbus Short Sale Reduces Losses

Columbus OH – On our last blog post, we ran some numbers on why a short sale reduces a lender's losses by 20% compared to a foreclosure.

Today I am going to add all the numbers together. That way we can see exactly how much this lender lost by not accepting the short sale.

I am using the real life example of a short sale that was listed for sale for $425,000. The lender turned down an offer for $385,000 and ended up selling the home for $230,000.

Let's add up the costs.

$155,000 in sales price loss. ($385,000 minus $230,000.)

$30,318.75 in lost interest income. ($385,000 lent at 4.5% interest over 21 months.)

$11,411.89 in property taxes that would have been paid by the short sale buyer, but instead were paid by the lender. ($6,521.08 annual property taxes over 21 months.)

$3,000 in estimated foreclosure costs. (This is to pay the foreclosure attorney and the court costs.)

$4,200 in Homeowner's Insurance. ($200 monthly times 21 months.)

$203,930.60 in total lost because they didn't accept the short sale offer. Ouch! I don't care how rich you are (or how many bailouts you received), that is a lot of money.

Yes, these numbers are correct. Real estate is an expensive business. It costs a lot of money to own and maintain a house.

Just look at how much you spend on your mortgage, property taxes, homeowner's insurance, maintaining your house, and mowing your yard. Now multiply that by 21 months. Make sense?

Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at rickandrobin@rickandrobin.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 614-439-2730.


Columbus Loan Modification Help, Columbus Short Sales, Columbus Short Sale Realtor. Columbus OH Short Sales. Columbus Realtor.


The views expressed here are Robin's personal views and do not reflect the views of Coldwell Banker King Thompson.

This information on The Final Numbers On How A Columbus Short Sale Reduces Losses is provided as a courtesy to our viewers to help them make informed decisions.