Weekly Real Estate

The Spring housing market is always an exciting time for both home buyers and sellers, but this year’s market is particularly unique. With so much change happening in the world over the past year, you might be wondering what’s in store for the upcoming Spring housing market. If you’re planning on selling your house this season, here are three things that you should keep in mind.

Houses That Are Priced Right Are Still Selling

Houses that are updated and priced at their current market value are still selling. This is an important point to keep in mind as the market has changed dramatically over the past year. However, it’s important to note that the need to price your house right is more crucial today than ever before. It’s clear that the Spring housing market is different from last year's, but sellers with proper expectations who lean on their realtor for the best advice on pricing their house well are still finding success. Keep in mind that the Spring housing market can be competitive, but if you price your house right, you will have a good chance of finding a buyer.

Buyers Are Still Out There

As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. However, there are still plenty of reasons why people are buying homes today. For some buyers, the higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.

Therefore, if you’re interested in selling your house this Spring, it’s important to know that there are still plenty of buyers out there. Even if some buyers have put their plans on hold due to mortgage rates, there are others who are still actively looking for a home.

The Spring housing market is always an exciting time for both buyers and sellers, and this year is no exception. If you’re planning on selling your house this season, keep in mind that houses that are priced right are still selling, there are still plenty of buyers out there, and it’s important to work with a trusted real estate advisor. With the right approach, you can take advantage of the opportunities available in the Spring housing market and sell your house for a great price.

The low inventory of homes for sale is currently the biggest challenge the housing market is facing. This lack of inventory is caused by two major factors: rate-locked homeowners and the fear of not finding something to buy. Let’s break down each of these issues and how they impact the housing market.

Rate-Locked Homeowners

Many existing homeowners are reluctant to sell their current home and move to a new one due to higher borrowing costs. This is because the average mortgage interest rate offered to buyers today is over 5%, while the average interest rate for current homeowners with mortgages is generally less than 4% with some in the 2-3% range. As a result, homeowners are opting to stay put, causing a lack of supply in the housing market. This situation is known as being "rate locked."

However, experts project that mortgage rates will gradually fall this year, which could lead to more people being willing to move. This could help alleviate the current low inventory of homes for sale.

Fear of Not Finding Something to Buy

The fear of not finding another home is the other main factor holding back potential sellers. This fear has left many homeowners on the sidelines as they wait for more homes to come to the market. This is particularly true for homeowners who want to relocate to a new area or upgrade to a larger home.

If you’re considering selling your home, it’s important to consider all your options, including newly built homes. Builders are currently offering concessions like mortgage rate buydowns and credits towards the home which could make buying a new home more attractive for potential sellers. Additionally, working with a professional realtor like myself can help you explore your options and find the right home to meet your needs.

What Does This Mean for You?

If you’re a homeowner who is rate locked or fearful of not finding something to buy, there are options available to you. For example, if you have equity in your current home, you can use it to keep the cost of your next home down. Overall, while the low inventory of homes for sale is a challenge for the housing market, it's important to remember that there are options available to both buyers and sellers. Working with a realtor like myself, we can help navigate this challenging market, put together a game plan that makes sense and find the right solution for your needs.

The bottom line is that current low inventory of homes for sale is caused by rate-locked homeowners and the fear of not finding something to buy. As mortgage rates start to come down this year and homeowners explore all their options, we should expect more homes to come on the market which will help inventory overall. If you're looking to buy or sell a home, it's important to work with a realtor to help get your game plan going.

According to a recent Harris Poll survey, the majority of Americans consider buying a home as a priority, with 28 million planning to purchase a property within the next 12 months. While homeownership offers various financial and non-financial benefits, achieving this goal can be challenging, and only around 5 million homes are expected to be sold in 2023. In this blog, we will discuss the two main obstacles preventing people from purchasing a home and provide tips on how to overcome them.

Save for Your Down Payment

One of the biggest obstacles to homeownership is saving for a down payment. In the Harris Poll survey, 34% of respondents said they did not have enough saved for a down payment. While it is a common misconception that you need to pay 20% of the purchase price for your down payment, the National Association of Realtors reports that the average down payment is 14%, and for first-time buyers, it's just 6%. To achieve your down payment goal, start by researching assistance programs and different loan types, such as FHA loans, which require as low as a 3.5% down payment for some buyers, or VA and USDA loans with no down payment requirement for qualified applicants. Remember to factor in closing costs, which are usually 1-3% of the home's purchase price, and make sure your savings do not deplete after you move in.

Improve Your Credit Score

Another obstacle to homeownership is a low credit score. In the Harris Poll survey, 30% of respondents said their credit score was preventing them from pursuing homeownership. Your credit score indicates how financially reliable you are to lenders, and a higher score usually means you can borrow more money at a better interest rate. To improve your credit score, it's best to sit down with a lender and create a game plan on whats needed to improve your credit and a timeline to get things done. You can always start by paying your bills on time and setting up automatic payments when possible. A mix of credit types, such as auto loans, credit cards, and mortgages, can also improve your score. Remember to monitor your credit score regularly and dispute any errors you find.

The bottom line is, if you're aiming to buy a home, saving for your down payment and improving your credit score are crucial steps to achieving your goal. There are various assistance programs and loan types available to help you achieve your down payment goal, and improving your credit score can help you get an affordable mortgage. Contact a trusted real estate advisor to build your team of professionals and start preparing to achieve your dream of homeownership.

Spring is typically the busiest season in the housing market, with many home buyers believing it is the best time to find a home. However, this can lead to increased competition and make it harder to find the perfect home. If you're ready to buy a home, there are several reasons why it makes sense to move before the spring market picks up.

As a homeowner, the idea of converting your home into a short-term rental (STR) property may seem tempting. However, the reality of becoming a landlord and managing an STR property can be challenging. In a recent Harris Poll survey, 28% of homeowners have considered using a rental service to temporarily rent out their home for additional income. But, owning a short-term rental comes with responsibilities that you should consider before making the leap.

Property management or work it yourself

First and foremost, managing a rental property is time-consuming and can require a significant amount of work. For example, you will need to be handy and able to make repairs yourself, or have access to an affordable network of contractors to reach out to in case of an emergency. Additionally, you will be responsible for screening tenants, fielding issues, and ensuring that your property meets the requirements of the platform you use to advertise your listing.

Moreover, there are inherent risks associated with hosting guests in your home, including the possibility of theft or damage to your property, complaints from neighbors, and regulatory violations, depending on your location. In order to avoid these issues, you may need to hire a third-party to manage your property, which could add to your upfront costs.

Location

Location is another key factor to consider when deciding whether or not to convert your home into an STR. Properties located in popular travel destinations tend to receive more rental requests and generate more revenue. However, if your home is not located in a prime travel area, you may find it more challenging to attract renters and generate consistent income.

Before deciding whether to convert your home into a short-term rental or sell it, it is essential to do your homework and research your local real estate market. Consider factors such as location, amenities, and the appeal of your property. When deciding, as your real estate agent, I can help you to determine the best course of action for your specific situation.

In conclusion, while owning a short-term rental property can be a lucrative investment, it comes with its own set of challenges and responsibilities. Careful consideration and research is essential to ensure that you are making an informed decision. Ultimately, the choice between converting your home into a short-term rental or selling it will depend on your individual circumstances, goals, and the current real estate market.

When looking to get the most for your dollar with renovations, it is important and a crucial step to finding the right ways of renovation for your property. There are hundreds of things to be renovated and updated in any home to make it feel like a brand new home just with minor but significant changes. In order to make your renovation efficient and effective, you have to decide where to start. Below we discuss the most valuable and cost effective ways of renovation and upgrading.

Painting:
The most important step is painting. The fresh and new coat of paint over the tired and old
walls give a brand new look and helps make things really pop. Compared to other types of improvements, painting is the easiest and most effective way in raising the value of your home by as much as 10%. When it comes to revitalizing your home – it's good to get your hands a little dirty and get involved in the project, but when it comes to painting, the details are critical.
For most houses, you will effectively make your money back by hiring a specialist, and it will
save you precious time and effort. For professionals, one room can be started and finished
within a few hours, with most homeowners trying to complete the same amount of work over a
few days. If you're trying to save a little cash, do the simple things that could save the contractor money, such as removing pictures and nails from the walls, washing down the walls with some soap and water, and removing the boxes around the sockets and light switches. This is going to save you some time, without upsetting your contractor.

Kitchen:

Another significant home improvement project you can do is update your kitchen.
Many buyers find the kitchen the heart of their house and investing money into new
counter tops, nice-looking cabinets, and energy-efficient appliances could make a difference
between paying the top dollar for your home when its time to sell or get less money for it.
The typical return on investment in your kitchen can be as high as 30-50%. Homeowners state that the average refurbishment costs about $6,000, but more extensive
refurbishment will go up as much as $50,000. Homeowners can often confuse their new kitchen with costly, unnecessary features such as expensive appliances and cabinets. It's easy to get wrapped up in the glamour of shiny new appliances and lose sight of the final goal, so here are some important tips to help you stay on track

High-end appliances should only be bought if you plan to keep your home for a while and also
imitate Gordon Ramsey in the kitchen – you should never buy expensive devices that you will
use once and then recycle them as a dust collector. Cabinets may usually be refurbished or painted to bring new life into them. For the counter top, granite is not the only way to go! Seek out some of the modern materials that offer competitive prices with a similar look and durability.

Flooring:
Last but not least, flooring is certainly the best bang for your buck. The first thing to consider
when installing new floors is the sub floor: a layer of plywood or other constructed materials,
such as OSB, which provide noise and heat insulation while also serving as a vapor barrier.
With different options such as laminate, hardwood, tile, and carpet, this is certainly the best way to quickly increase the value of your home.

Garage door replacement:
Anyone with an older garage knows all too well that older doors can lock, jam, or just look
unsightly. A new garage door can make your curb appeal much better as it's generally the main thing people see when driving up to your home. A new coat of paint can help but if you have dents or obvious damage, it's often best to just replace the door. 

Decks:
Outdoor living continues to be valuable to consumers, which is why adding a deck is
worth considering for your home or house. You have 2 main options with materials with composite materials and wood of course. Wood decks are harder to maintain than composite material decks, and while they're cheaper to install, you'll need to balance those savings against the potential work involved if you're doing home renovations on a property you're actually planning to stay in. Installing a deck is something you can do on your own if you have the know how, but an elevated deck can be a job best left to professionals. 

Whatever renovations you decide to do, make sure you have the time to enjoy them while you live there. It's great to update your home to sell, but if you can, you'll want to take the time to see the hard work. If you are you looking to do renovations and are unsure where to start, make sure you reach out!

The decision of whether to rent or own a home is one of the largest life decisions most people will make. The rent vs. buying debate is never ending because both sides have valid points, which is why it can be quite confusing. Often times the bias is more likely to veer towards buying because we equate owning a house with financial strength and success but renting has its own advantages as well. I will try to give you a clear picture of both sides so that you can make an informed decision in the future.  

Renting:

To be realistic, buying a house is not always easy compared to renting a place. One of the most famous myths about renting is that you are giving your money away. It is important to mention here that you always need a place to live and it will cost you money. Now it is up to your preferences and finances which is the best decision for you. Opponents of renting often say the rent you pay is the money you’ll never see again. That’s true to some extent but you are getting something in return which is shelter and safety, even if you are not financially very stable to buy a house. 

Pros of renting a house:

  ·   You don’t have to pay for maintenance:  One of the most appealing advantages of renting is that a tenant does not have to pay the maintenance and repair expenses of the property they live in. It's not the tenant’s responsibility to take care of the petty issues like leakage or painting the house which saves a tenant from a lot of expenses that would come up they owned a home. If you are somebody who wants to live a stress free life renting a place might be a better option for you than buying.

  · Flexibility: If you do not have any long term plans for staying in a city, if your plans are not certain, or maybe the nature of your job is relocation every few months and you can not make a long term commitment to purchasing a home then renting will be the better option for you. When you are renting a place, tenants do not have to make long term commitments which makes relocation a lot easier. when moving out it’s a lot easier for a tenant than for a homeowner. A tenant doesn’t have to worry about finding a buyer to sell the property to. Another factor that makes moving out easier is that tenants are usually more minimalist than a homeowner.

 · Live in the place you always dream about: How many of us have a dream about living in a nice place but cannot do so because we do not have enough money to afford it? Many of us if not all. Renting can make your dream come true if you want to rent a larger home or perhaps live in a unique location. You can temporarily live there when you can not otherwise be able to buy.

 · You don’t have to deal with the real estate market: Prices and loan interest rates of properties fluctuate, but if you are a tenant you have less exposure to these issues. You have a fixed lease and you don’t have to worry about the fluctuations of the market in the short term and mainly focusing on the rental market.

Cons of renting a house:

 · Rents can rise anytime: unless you are living in a state where rent control laws are present to save tenants from unpredictable raise in their rents, your landlord has a complete authority and control over raising your rent once the lease has expired. The best thing you can do is maintain a good relationship with your landlord, it really helps!

 · You won’t get any tax incentives: a homeowner has a deduction they can apply towards their taxes and other expenses from the returns of income tax. Renters may not get any tax benefits.

 · Less control more rules: one of the most annoying parts of renting is that you have to follow the rules of your landlord and as a tenant, you have to follow all the rules. You also have limitations to what you can do with the property.

 · Unpredictability and instability: unpredictability here refers to the idea that as a tenant you don’t know what to expect when your lease duration is over. Your landlord may raise the rates or may ask you to move out. 

Buying your own place

We love the sense of ownership and one of the reasons why “buying” often wins in the rent vs. buy debate is because we enjoy the sense of satisfaction and authority that comes from homeownership. Most of us have the ultimate goal of owning a home because it brings us joy, satisfaction and the feeling of success. In this section, I will try to elaborate on the pros and cons of buying a house.

Pros of buying a house:

 · Tax incentives: as stated earlier, if you buy a house and pay all the taxes and mortgage, it will depend on the state, but this is a big help towards your taxes and a big benefit in the long run.

 · Equity: when paying your mortgage, you are paying down how much you owe on your home and as the market increases in value, you gain equity. This equity helps build long term wealth and gives you options down the road to refinance your home for a home equity line of credit, lower monthly payments or even get some cash out of your home. 

 · Internal satisfaction: once you have bought your place the sense of satisfaction of owning your home is an amazing feeling. You do not have to worry about finding rentals to live in anymore and you have a stable roof over your head.

 · Freedom and privacy: when you are a homeowner, you make your own rules which gives you the freedom of doing everything your way. You can decorate your house the way you like and remodel because you own the entire property yourself. You also do not have to worry about inspections or your landlord coming over unexpectedly.

· Stability: owning a house gives you shelter, safety, certainty and ultimately gives you stability. You don’t have to worry about unpredictable cost raise as you would if you were a renter. You don’t have to leave or move out of the house on short notice.

Cons of buying a house:

 · High cost housing: buying a house these days can be more expensive than what we usually anticipate. Mortgage, taxes, fees and other expenses can add up when buying.

 · You have to take complete responsibility: as an owner, you have to take complete responsibility of bearing expenses of maintenance and repairing work of your home. Sometimes these unexpected costs can add up to be more than expected.

 · Long term commitment: buying a house is generally a longer term commitment due to the mortgage and tax implications you can have if you sell a home too soon. Experts suggest before buying a house ask yourself “do I see myself living in this house for the next 5-10 years?” Buying a house might not be the best option for you if you have uncertain future plans or possibly moving out of the area.

 · Harder to move out: moving out from your own home can difficult for a couple of reasons. First, you have to find a suitable buyer for your house and second, when you own a place you develop a feeling of belonging for it which makes moving out harder. 

Final thoughts:

   I hope this article has made both sides very simple and clear for you. There are a few facts that you might want to consider before making this important decision for yourself. We recommend weighing your options and possibilities. After all, in the end, its all about your vision of comfort. Do not listen to people’s opinions. Do your research and make an informed decision.

A fixer upper in real estate is considered a house that would require repair and remodel before it can be lived in. These types of homes are popular among buyers who want to renovate a house and build some sweat equity. It can be very profitable if you take the necessary measures before buying the property and plan accordingly. Selecting the right property is the first and the most important decision to make. After that, you need will need to effectively examine the detail of repairs needed and anticipate the possible costs of handling them both short term and long term. This step is one of the most important financially that you will make so ensure that you do thorough inspections of the home. One of the most underestimated factors is the expensive and professional work that may need to be done to make your property in more suitable shape. This article intends to give a larger picture of how can you buy a fixer upper. The following are a few important factors to consider before you even begin to consider this option for yourself.

Get the property inspected:  after you have found a home that is in a good location, it’s crucial to hire a professional property inspector as they can guide and educate you about the approximate cost of all the repairs or options. Not every fixer upper needs extensive repairs. Know your financial limits and expertise before buying the place and hiring a property inspector can help you do just that.

Evaluating the fixes:  there are 2 types of repairs in a fixer upper. First, are minor fixes which are mostly cosmetic fixes. The cost may range between a few hundred to several thousand dollars. The second type of fixer is major repairs that require a hefty amount of money and time. These are more expensive repairs and have a huge impact on the value of your property. Doing these major repairs though will increase the value of your property which is why working with an experienced contractor is recommended. A lot of folks underestimate the cost of repairs so plan ahead and accordingly.

How to get a loan for a fixer-upper:  This section aims to provide you with an overview of all the loan options out there to finance fixer properties and make the best out of it. Before choosing a loan program, ask yourself a few questions. How much can I borrow? How much will I need for my renovation? How long will it take to renovate the house? What kind of monthly payment are you comfortable with. Renovation loans are the best option to buy the property and renovate it at the same time. These types of loans provide you a period of time to get the repairs done as well. The following are a few options to consider.  

House renovation loans offered by the government: 

·   FHA 203(k) is a loan provided by federal housing administration which can be the most suitable option for you because it requires only 3.5% down payment and 580 credit scores. It gives the buyers loan up to $ 35,000 for renovation and offers adjustable and flexible loan rates. Usually, two types of FHA 203(k) loans are offered. 

·  Limited FHA 203(k) provides loans up to $35,000 for minor fixes or cosmetic renovations like painting the walls or refurbishing the kitchen.

·  Standard FHA 203(k) offers a loan for major fixes, in order to get this type of loan you will need a professional contractor who can help and guide you through every step of the renovation process.

·  Homestyle loans are offered by Fannie Mae which help buyer to purchase a house that needs repairs or provides a loan to repair or renovate a house that borrower already owns. Homestyle loan requires a higher credit score (620) and down payment (5%) than the FHA 203(k) option. To qualify for this loan you have to hire a professional contractor who can estimate the time required and anticipate the total cost.

 Private loans for financing repairs:

1. HELOC stands for a Home Equity Line Of Credit. This is a one-time loan, so its value does not fluctuate, payments and interest remain pretty much the same. These loans allow you to get into the home and then get funds back out after you have built some equity. For the lender, your house is the collateral, which means if you fail to make the payments, the lender has the complete right of foreclosing on your house.

2.  A cash out refinance provides you a second mortgage which is similar to a HELOC. The borrower uses the house as collateral for the lender. Typically the lender will offer you up to 80% of the value of your house according to the current market rate so you'll need to make sure you have some equity in your home.

3.  If none of the previously described options are feasible for you, applying for a personal loan might work best. You can get this kind of loan from a bank or by an online lender, although it’s not secure like other options but you do not have to put your house as collateral. To qualify personal loan your credit score is the main factor and interest rates are higher. Before taking a personal loan we recommend you to educate yourself about lenders and what options they have, choose wisely keeping in mind what suits you and your situation the best. 

I hope this article has provided you clarity about fixer upper and finances required to make it a profitable experience. Please reach out if you are ready for help in a home purchase!