The Cost of a Home Is Far More Important than the Price

Article In Its Entirety Credited to Keeping Current Matters

The Cost of a Home Is Far More Important than the Price | MyKCM

Housing inventory is at an all-time low. There are 39% fewer homes for sale today than at this time last year, and buyer demand continues to set records. Zillow recently reported:

“Newly pending sales are up 25.5% compared to the same week last year, the highest year-over-year increase in the weekly Zillow database.”

Whenever there is a shortage in supply of an item that’s in high demand, the price of that item increases. That’s exactly what’s happening in the real estate market right now. CoreLogic’s latest Home Price Index reports that values have increased by 5.5% over the last year.

This is great news if you’re planning to sell your house; on the other hand, as either a first-time or repeat buyer, this may instead seem like troubling news. However, purchasers should realize that the price of a house is not as important as the cost. Let’s break it down.

There are several factors that influence the cost of a home. The two major ones are the price of the home and the interest rate at which a buyer can borrow the funds necessary to purchase the home.

Last week, Freddie Mac announced that the average interest rate for a 30-year fixed-rate mortgage was 2.87%. At this time last year, the rate was 3.73%. Let’s use an example to see how that difference impacts the true cost of a home.

Assume you purchased a home last year and took out a $250,000 mortgage. As mentioned above, home values have increased by 5.5% over the last year. To buy that same home this year, you would need to take out a mortgage of $263,750.

How will your monthly mortgage payment change based on today’s lower mortgage rate?

The Cost of a Home Is Far More Important than the Price | MyKCM

This table calculates the difference in your monthly payment:That’s a savings of $61 monthly, which adds up to $732 annually and $21,960 over the life of the loan.

Bottom Line

Even though home values have appreciated, it’s a great time to buy a home because mortgage rates are at historic lows.

Tips to Win a Bidding War: You’re In, Now What?

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You’ve decided you just can’t live without this home, now you want to WIN! Here are some tips to get that home (with your REALTORS® help, of course!)

Get pre-approved. Smart homebuyers are pre-approved before their home search so if this situation arises, you’re possibly already one-step ahead of the competition. This pre-approval letter lets the seller know you’re already on your way to mortgage approval for a home you can afford and a good prospect to close on the home.

Present an all-cash offer. If you can afford it, offer cash. This eliminates the need for an appraisal, bank approval for a loan, and contingencies that may be required by lenders. It also lets the seller know you can buy the house TODAY.

Increase your offer. Ask your REALTOR® for guidance on an appropriate amount for your counteroffer. With an increase in offer comes an increase in mortgage payments – you want to make sure you stay within a monthly amount that you can afford. Also, if financing, the home needs to appraise for the amount of your offer or you could be faced with your lender denying the mortgage or a lot of cash out of pocket to make up the difference in value.

Eliminate contingencies. Most of the time, your REALTOR® will advise you to keep certain contingencies to protect you from issues with a home. If you want to come out on top of a bidding war, you may need to eliminate as many contingencies as possible, but be careful here, the more you eliminate, the greater your risk and less protection you have in buying a particular home.

Use an escalation clause in your offer. This lets the seller how much you are willing to raise your offer if competing bids come in. Always include a price you won’t exceed. Most REALTORS® do not recommend an escalation clause because it shows your hand for future negotiations and lets the seller know exactly how much you are willing to pay, but it can help lead to a successful result in a highly competitive market.

Be flexible on your closing date. Sometimes, being flexible can be as attractive as a higher price. If you don’t need to move by a specific date, consider giving as much flexibility as possible to the seller on closing date, making repairs, and other important deadlines.

Increase your earnest money. This lets the seller know you are very serious and that you don’t need your lender to increase the loan amount.

Write a personal letter. Although the jury is out on whether a personal letter is a good idea or not, there are times when a sincere expression of how much you love a home can tip the scales with a seller.

Listen to the advice of your REALTOR®. An experienced and knowledgeable agent can help you gain the upper hand in a bidding war, let you know which strategies may be most attractive to a particular seller, and also keep you realistic and grounded in knowing how far you can and should go to win the war.

Bidding Wars: What are They and When Should You Stay Out or Walk Away?

photo credit to Diane Saatchi

You’ve been house hunting for weeks, possibly months, and you’ve finally found the ONE! Unfortunately, you’re not the only one who thinks you’ve found the perfect home, and now you’re faced with a bidding war. What is it? When should you stay out completely? And when should you just walk away?

What is a bidding war?

A bidding war is a real estate term used when a seller receives multiple offers on their home in a short amount of time. Unfortunately, it also means the seller can wait and see if buyers are willing to raise their offers and make concessions in their efforts to make sure their offer is the most attractive. A bidding war is a tight spot for a homebuyer; however, with an experienced REALTOR®, you can navigate the process to win the home of your dreams, stay out of the war, or know when it may be time to just walk away.

When to stay out of a bidding war?

There are times when it does not make sense to get in a bidding war on a house no matter how much you love it – for instance, there are multiple cash offers way above asking price. Keep a steady check on your emotions and be able to let go and move on to another house that will fit you and your families needs, as well as your pocketbook.

When to just walk away?

There are also times you find yourself in a bidding war already, but it may be better to just walk away. Consider bowing out under the following conditions:

The home needs major repairs. If you anticipate the home will need major repairs with an outlay of cash, you may be better off looking for another house. A bidding war could eat up funds you were planning on using to make these repairs and leave you stranded with a home you can’t afford to fix.

The home is already at the top of your budget. If you’ve made your best offer out of the gate, which you should in a competitive market, you should stay out of a bidding war. Chances are you’ve been preapproved for a certain amount, and the house may not appraise for the higher price bidding wars often lead to. If that’s the case, the bank may reject your mortgage or cause you to reach deep to come up with the funds in cash to make up the difference. Hold firm to your budget and know when to walk away if need be.

Getting into a bidding war is stressful. Know when to fold and find a new home by preparing in advance and keeping emotions in check.

Prepare Your House for the Fall with This Maintenance Checklist

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Fall maintenance goes beyond just changing the wreath on your door! What better way to kick off the coming soon cooler whether than a maintenance checklist to guide you through fall preparations to avoid a winter mishap!

Take a tour of your own home and check all the weather stripping. Replace any cracked or missing strips, which can comporomise your heating efficiency. New weather stripping is fairly inexpensive and will save you a bundle in heating costs!

Replace your furnace filters. This should be done every 3-6 months. Air filters are rated and priced per air filtration effectiveness and estimated longevity.

Now is a good time to check your gutters and downspouts if you didn’t do so after last winter. Autumn leaves will soon be your gutter’s nemesis, so consider having some sort of leaf guards to save gutter-cleaning time and possible water damage from clogged drainage.

Check for concrete cracks that can get worse when water freezes and expands, causing the cracks to widen and the concrete to deteriorate. Patching compounds are an easy remedy and will help maintain the concrete’s integrity.

To avoid freezing pipes, drain your outdoor faucets, and stash your hoses out of the cooler weather.

When springtime comes knocking, you will enjoy your yard more if your lawn turns green quickly. Be sure and fertilize your lawn prior to winter.

Protect the investment in your outdoor furniture by storing everything or protecting it from the elements with furniture covers.

Why Is It so Important to Be Pre-Approved in the Homebuying Process?

Why Is It so Important to Be Pre-Approved in the Homebuying Process? | MyKCM

You may have heard that pre-approval is a great first step in the homebuying process. But why is it so important? When looking for a home, the temptation to fall in love with a house that’s outside your budget is very real. So, before you start shopping around, it’s helpful to know your price range, what you’re comfortable within a monthly mortgage payment, and ultimately how much money you can borrow for your loan. Pre-approval from a lender is the only way to do this.

According to a recent survey from realtor.com, many buyers are making the mistake of skipping the pre-approval step in the homebuying process:

“Of over 2,000 active home shoppers who plan to purchase a home in the next 12 months, only 52% obtained a pre-approval letter before beginning their home search, which means nearly half of home buyers are missing this crucial piece of paperwork.

This paperwork (the pre-approval letter) shows sellers you’re a qualified buyer, something that can really help you stand out from the crowd in the current ultra-competitive market.

How competitive is today’s market? Extremely – especially among buyers.

With limited inventory, there are many more buyers than sellers right now, and that’s fueling the competition. According to the National Association of Realtors (NAR), homes are receiving an average of 2.9 offers for sellers to negotiate, so bidding wars are heating up.

Pre-approval shows homeowners you’re a serious buyer. It helps you stand out from the crowd if you get into a multiple-offer scenario, and these days, it’s likely. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war and land the home of your dreams.

Danielle Hale, Chief Economist for realtor.com notes:

“For ‘a buyer in a competitive market, it’s typically essential to have pre-approval done in order to submit an offer, so getting it done before you even look at homes is a smart move that will enable a buyer to move fast to put an offer in on the right home.’”

In addition, today’s housing market is also changing from moment to moment. Interest rates are low, prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals (a loan officer and a real estate agent) making sure you take the right steps along the way and can show your qualifications as a buyer at the time you find a home to purchase.

Bottom Line

In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. If you’re ready to buy this year, let’s connect before you start searching for a home.

Article posted by Keeping Current Matters, Inc and all credit for information should be given to KCM.

Spruce up a Basic Bathroom with Easy DIY Projects

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Sure, the ever-present functional bathroom is sometimes overlooked in favor of decorating other spaces, but your bathroom doesn’t have to be boring! Every little detail counts so I’ve come up with some easy DIY projects that are sure to transform that functional space to make sure it looks its best!

New paint.
A new color instantly changes the mood of a room, and the bathroom is no exception; however, you need to choose the color wisely here since the bathroom is usually one of the smallest rooms in the house. Pale blue, greens, and grays are always a great choice to give that spa-like feel to this space.

Add some art.
Bring personality to your bathroom with some wall art, use colorful tiles, or wallpaper an accent wall. These small changes make a big impact, but be sure whatever art you add has some sort of covering to protect from moisture.

Change the hardware.
Instantly and easily change the look of a bathroom by changing the hardware. A new faucet and/or cabinet pulls can help a room go from rustic to sleek or vice versa in a matter of minutes. If you’re feeling even more ambitious, change out the sink to match.

Dress up your cabinets.
Make boring cabinet fronts a thing of the past with self-adhesive paper. You can cover the entire surface, or cut out a pattern, allowing color to peek through. Options for paper are endless so get creative here and find a design that fits your style.

Mirror to the max.
Say goodbye to your plain square mirror by considering one with a unique shape, or dress it up with a painted mirror frame. You could even hang an assortment of smaller mirrors to really funk it up depending on the look and vibe you’re going for.

Your bathroom doesn’t have to lack imagination. By making some small and inexpensive changes, this lackluster space may just become inspiring!

Boost Your Home Value By Preparing for an Appraisal

You don’t need an expensive remodeling project to boost your home’s value prior to appraisal. Appraisers consider many factors, including the general condition of the interior and exterior of a home.  If you want to get the most bang for your buck, here are some projects worth undertaking BEFORE the appraisal:

Remove Clutter.  

This is one of the most important things to-do on your pre-appraisal to do list! Clutter makes it hard for an appraiser to do his/her job. Clear entryways and walkways, remove excess furniture to give more space, and create a clutter-free environment. Remember, less clutter evokes a brighter and more spacious feeling.

Refresh the Paint.

Adding a fresh coat of paint is the quickest and easiest way to add value to your home. Paint can remove years of wear and tear, make a home look less outdated, and is one of the cheapest ways to give your home a whole new look. Don’t forget to choose a neutral color that will appeal to the most people possible!

Replace Flooring.

If you don’t have the money to replace flooring, focus on fixing damaged sections and getting carpets cleaned before the appraisal.

Update the Kitchen & Bathrooms.

The kitchen and bathrooms are usually the most important rooms to potential home buyers. An update does not mean an overhaul. Keeping them clean is a MUST, but you may want to consider some low-cost upgrades such as removing wallpaper, painting cabinets, new handles, or some updated lighting as well. A few adjustments can go a long way in adding higher value.

Create Curb Appeal.

Clean up flower beds, pull weeds, make sure the yard is mowed, and put down some new pine straw or mulch.  A good first impression is a lasting impression.

Not only will these few items help net you a higher appraisal value, if these items are done prior to listing, they may even net you a higher offer price!

Enjoy the Outdoors at Home

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Over the last several months, many of us have been faced with staying at home for what seems like countless days. One of the best remedies for breaking up the tedium and alleviating stress is to head outside and get some fresh air. If you’re lucky enough to have an outdoor space, no matter how big or small, make the most of it with these ideas for improving your outdoor space. The good news: any improvements done now will help later when you’re ready to sell your home.

Create a lounge area

Did you have to cancel that beach vacation? Bring the beach home with an outdoor space with a tropical feel. Consider what would make you most relaxed – lounge chairs, chaise lounges, hammocks or an outdoor sectional. Plop some pillows on top for added style and comfort, add a table or two, maybe a few candles, a Pina Colada, and voila – the perfect atmosphere to relax in!

Concoct an outdoor bar

It may be a little while before you’re comfortable heading to your favorite dive bar or cocktail lounge, so why not create your own? Get crafty by either repurposing an old table, using cinderblocks and boards, or buy a bar online. Gather some cocktail ingredients, the Bluetooth speaker, and a few glasses and head to your favorite bar right at home.

DIY outdoor movie theater

An outdoor movie theater doesn’t have to be complicated. All you need is a white sheet, projector, and your phone to play movies, TV shows, or whatever else floats your boat these days. If you don’t have access to a projector, it’s surprisingly easy to make one – find out how here.

Consider a fire pit

Buy a firebowl to create a warm, cozy glow or DIY one from supplies you can pick up at the hardware store. Even though the summer nights are warm, nothing beats gathering around a fire with some S’mores!

Make an outdoor dining destination

We’re all getting tired of eating at home night after night. Mix it up a little by creating an outdoor dining space in the backyard or on the patio. Lay down an outdoor rug, string up some lights, add a weather-resistant dining table and chairs, and transform your evening meals.

As the days at home stretch on, it’s time to get creative both indoors and out to create a space that you want to spend a lot of time in. For more ideas on outdoor inspiration and activities to enjoy while home, visit here.

Ways to Make Your Home Office Work (No Matter Where It Is)

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As COVID-19 continues to spread, many are faced with the new normal of working from home. With children home for the summer (and in many parts for the foreseeable future), it can make it hard to stay focused. An organized and visually appealing work space can help to make you feel more productive. Here are some tips to make the most of your work space.

Designate a Space

A lot of us do not have a home office, and work routines can be easily disturbed. Designating a specific area for work, even if it’s in your kitchen, is one great way to stay in your routine and get in the right mindset. It doesn’t matter what space in your home you choose, just make sure it feels like a dedicated and functional work area. This should include good lighting, a lack of clutter, a comfortable chair, and a tech setup that lets you take and make video calls.

Check Around You

Video calls and conferences may be a part of your new work day. Take some time to look around you and think about what other people are seeing. Do you really want your colleagues to see the dirty dishes or pile of laundry? Keep things clean, uncluttered, and non-distracting.

Create a Productive Mood

This is your moment to create your dream office. Candles and music may not be allowed at your place of business, but now is the time to indulge in things that make you feel calm and inspired. Likewise, consider having healthy snacks and bottles of water nearby to avoid frequent trips to the refrigerator. Let others in the house know when you are working and that you are not to be disturbed, and your work from home days may be some of your most productive.

Move Safely During COVID-19

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If you’re worried about moving during COVID-19, by taking extra safety precautions and minimizing social contact, you can do it and safely. Here are some tips for making your move as safe and stress-free as possible.

DIY if Possible

If you can, try to manage the move on your own. If you can’t, be sure to ask moving companies about sanitation procedures in place (mask, gloves, booties). Also, be sure there is a reasonable cancellation policy in place in case of delays or changed plans due to COVID-19.

Minimize Contact

If you need a moving company, ask for a virtual quote and ask about contactless service. Forego any handshakes, pay online, and tip through a digital platform such as Venmo or PayPal.

Take Precautions

Wear masks, gloves, and booties, and have extra supplies on hand for movers. Clean frequently touched surfaces often, especially door knobs and handles. Make sure soap and paper towels are next to sinks and hand sanitizer by the doors. Buy new boxes as the coronavirus can live on cardboard for up to 24 hours; it’s not the time to use for used or recycled.

Be Transparent

Reach out to your neighbors and let them know about your move. This will give them an opportunity to avoid unnecessary contact.

Be Flexible

If you or any member of your family is experiencing coronavirus symptoms, or have come into contact with someone diagnosed with it, postpone your moving plans. Although changing plans can be a hassle, the health and safety of the community and those around you should come first.

If you need to list your home or buy a new one, get in touch and see how I can help with other safety tips, virtual tours, great photographs and more. You can move and move safely during COVID-19.