Guidance and Support Are Key When Buying Your First Home

Credit for article in its entirety given to Keeping Current Matters.

Guidance and Support Are Key When Buying Your First Home | MyKCM

In June, the number of first-time homebuyers accounted for 35% of the existing homes sold, a trend that’s been building steadily throughout the year. According to the National Association of Realtors (NAR):

“The share of first-time buyers increased in March through June—right into the heart of the pandemic period and the surge in unemployment—and is now trending higher than the 29% to 32% average in past years since 2012.” (See graph below):

Guidance and Support Are Key When Buying Your First Home | MyKCM

Why the rise in first-time homebuying?

NAR continues to say:

“The major factor is, arguably, low mortgage rates. As of the week ended July 16, the 30-year fixed mortgage rate dropped to 2.98%. With rates so low that are locked in under a 30-year mortgage, the typical mortgage payment, estimated at $1,036, has fallen below the median rent, at $1,045. For potential home buyers who were thinking of purchasing a home anyway before the pandemic outbreak and who are likely to remain employed, the low mortgage rate may be the clincher.”

Clearly, historically low mortgage rates are encouraging many to buy. With the average mortgage payment now estimated at a lower monthly cost than renting, it’s a great time for first-time homebuyers to enter the market. According to the Q2 2020 Housing Trends Report from the National Association of Homebuilders (NAHB):

“Eighty-four percent of Gen Z’s planning to buy a home are first timers, compared to 68% of Millennials, 52% of Gen X’s, and 21% of Boomers. Looking at results by region shows that over 60% of prospective buyers in the Northeast and South are buying a home for the first time. The share is above 55% in the Midwest and West.”

There are, however, challenges for first-time buyers. A recent survey conducted by NeighborWorks America also notes that understanding the homebuying process may be the most significant barrier for many hopeful homeowners:

“Homeownership is a particular challenge for many, despite high levels of interest. Americans believe there are many benefits to homeownership and half of non-owners will seek information about the process in the next few years…a large share of non-owners say the process is too challenging and only a minority know where to find advice if they wanted it. And although many would seek the guidance of community and non-profit programs, only one in three non-owners are aware of such services.”

Guidance and Support Are Key When Buying Your First Home | MyKCM

If you’re among the first-time homebuyers who feel the process is complicated, you’re not alone. If you’re not sure where to begin or you simply want help in figuring out how to save for a home, finding a trusted real estate advisor to work with is a critical step toward your success. A real estate professional can help you understand the process, review your current situation, and guide you with a plan to help you to feel confident when buying a home.

Bottom Line

If you’re interested in purchasing a home and need help getting started, let’s connect today so you can take advantage of the support available to guide you through each step of the way.

The Home Inspection: Why You Shouldn’t Skip It

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Buying a home can be expensive. Not only does that new home come with a hefty price tag, there’s all sorts of fees and closing costs associated with the purchase. It can be easy to try to cut costs, and the home inspection seems like a great place to do it, right? Well, not so fast. Before you forego that $200-$500 home inspection fee, read these reasons why you shouldn’t skip a home inspection.

  1. It Provides an “Out.” A quality home inspection can reveal critical information about a home and its systems. This allows the buyer prepare for maintenance and repairs that may be needed immediately or in the future. If a buyer isn’t comfortable with the potential costs, it presents one last opportunity to back out of the offer to purchase.
  2. Safety. A home inspection can determine any safety issues such as mold and carbon monoxide. You want to make sure you are purchasing a home that is free from these types of hazards. Make sure that your contract states that in the event that safety hazards are detected, you have the option to cancel the contract.
  3. May Reveal Illegal Additions or Installations. A home inspection can disclose whether rooms were completed without a proper permit or did not follow code, which means in essence, that the buyer is purchasing something that does not exist. This could be come a costly issue to fix.
  4. Protection. You want to protect yourself as a new homeowner against costly issues. Home inspections become even more critical when buying an “as-is” foreclosed property or short sale.
  5. Negotiating Tool. The home inspections provides a great opportunity to negotiate by asking for repairs or a reduction in price, which could mean a better deal for you as the potential homebuyer.
  6. Forecast Future Costs. A home inspector can help diagnose the current conditions of the structure and systems and approximate the costs of fixing and/or replacing things like plumbing, heating and cooling systems, or water heaters. This will help you make important decisions in budgeting, and help you determine what type of home insurance coverage or warranties to consider.
  7. Reveal the Big Picture. Home buyers fall in love with the aesthetics of a home – whether it be the color of the walls, the backyard, or the location. They can be completely blind to the issues that make a dream home a nightmare. A home inspection helps a home buyer get a picture of what they are buying.
  8. Insurance. Some companies will not insure a home that has not undergone an inspection. By getting a home inspection now, you could save time and money later.

Home inspections reveal the true picture of a property, allowing the buyer to be informed of all the perks and pitfalls a home has to offer. It is your responsibility to understand as many details as you can about the property and to ensure you are making a wise investment. Still think that home inspection is a good way to cut costs?

Get in touch for more helpful tips and recommendations when it comes to home buying and the home buying process.

Ways to Increase Your Home’s “Screen Appeal”

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With many home showings taking place online during COVID-19, it’s important to make your listing stand out “on screen.” Spend some time researching and staging your home to maximize your space and give it a neutral palette to appeal to the most prospective buyers. With stay-at-home ordinances and social distancing guidelines in place, video tours and photos are being relied on more than in-person tours so you want to make sure your home looks as good on screen as it does off.

Stage Your Space

The first step in any home staging is to remove the clutter. Put away the kids’ and pets’ toys, store or recycle magazines, and box up your pictures, refrigerator magnets and mementos for now. The less stuff on display, the more neutral your home will look and the more buyers will be able to see themselves living there. Next, consider the layout. You may have your furniture just the way you like it, but it may not be the best placement to make the most of your space on screen. Be sure to have a clear pathway between furniture pieces so your able to video. Finally, clean and dust all surfaces in sight, replace light bulbs, and open the blinds before filming so you have as much light as possible. Even beautiful spaces won’t look good if there’s not enough light.

Take Test Photos

Take some test photos before enlisting the aid of a photographer. You want your home to look its best. See how your current setup translates on screen. A photographer will take photos of the things that are there. If your home looks too cluttered or dark and dinghy, make sure you make changes before going “live” with your photos.

Do a Practice Walk-Through

If you plan on giving a video tour, and I highly suggest it, be sure to do a practice walk-through. Enlist the aid of your REALTOR® or a friend. When you do a video tour, potential buyers are only going to see what you show them. You want to make sure your highlighting your home’s best features. And don’t forget to keep the walkways clear!

Consider Virtual Staging for Empty Homes

If your home is empty, you have a few options. You can leave it empty, but remember staged homes sell faster. You can purchase furniture, a few key pieces to show the scale of a room. Or you can stage it virtually! Virtual staging digitally adds furnishings to your space. This will make your home look more natural and help to showcase the best parts of your home. There are online services and apps that make virtual staging easy.

Although people continue to buy and sell homes amid COVID-19, and you have already put a lot of thought into enhancing curb appeal, it may be time to turn inwards and up the “screen appeal.” In today’s challenging world, it may be what helps you find the buyer for your home. Contact me for additional ways on making your home look great online and off.

What is the Difference Between Being a Client or Customer in RE?

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The difference between a Client or Customer is significant in real estate; however, it’s usually not understood by the general public. What’s the difference and how does it benefit the homebuyer or seller to become a client? Read on to find out.

A Customer is serviced by an agent or broker but does not have a contractual agreement in place. The benefits of being a customer are very limited. Customers are treated honestly and fairly but that is where the duties to a customer end. Customers are “NOT represented” by the REALTOR®. Without a written agreement in place, a REALTOR® cannot offer advice or opinions and cannot negotiate on a Customer’s behalf.

A Client has a binding contractual agreement with an agent or broker in the form of a Buyer’s Representation Agreement or Listing Agreement. This contract is legally binding, and as such, entitles the Client to a higher level of service than a Customer. An agent may only give their opinion and advice to a Client. A Client is owed fiduciary duties including Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable Care. An agent is permitted to negotiate on behalf of a Client and to look out for their best interests. By entering into an agreement with a REALTOR® or agency, you are “represented” in the real estate transaction.

In summary, to receive the full benefits of a REALTOR®, a buyer or seller needs to have an agreement in place and be a Client, not a Customer.

For more information or if you have additional questions, please get in touch. I’d be happy to help!

A Historic Rebound for the Housing Market

Credit for article in its entirety to Keeping Matters Current.

A Historic Rebound for the Housing Market | MyKCM

Pending Home Sales increased by 44.3% in May, registering the highest month-over-month gain in the index since the National Association of Realtors (NAR) started tracking this metric in January 2001. So, what exactly are pending home sales, and why is this rebound so important?

According to NAR, the Pending Home Sales Index (PHS) is:

“A leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.”

In real estate, pending home sales is a key indicator in determining the strength of the housing market. As mentioned before, it measures how many existing homes went into contract in a specific month. When a buyer goes through the steps to purchase a home, the final one is the closing. On average, that happens about two months after the contract is signed, depending on how fast or slow the process takes in each state.

Why is this rebound important?

A Historic Rebound for the Housing Market | MyKCM

With the COVID-19 pandemic and a shutdown of the economy, we saw a steep two-month decline in the number of houses that went into contract. In May, however, that number increased dramatically (See graph below):This jump means buyers are back in the market and purchasing homes right now. Lawrence Yun, Chief Economist at NAR mentioned:

“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”

But in order to continue with this trend, we need more houses for sale on the market. Yun continues to say:

“More listings are continuously appearing as the economy reopens, helping with inventory choices…Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”

A Historic Rebound for the Housing Market | MyKCM

As we move through the year, we’ll see an increase in the number of houses being built. This will help combat a small portion of the inventory deficit. The lack of overall inventory, however, is still a challenge, and it is creating an opportunity for homeowners who are ready to sell. As the graph below shows, during the last 12 months, the supply of homes for sale has been decreasing year-over-year and is not keeping up with the demand from homebuyers.

Bottom Line

If you decided not to sell this spring due to the health crisis, maybe it’s time to jump back into the market while buyers are actively looking for homes. Let’s connect today to determine your best move forward.

Ways Coronavirus Will Change the Way We Design, Style & Live in Our Homes

Home is no longer just a place to unwind and rest our heads. Since the outbreak of coronavirus, our homes have had to do double and triple duty as offices, gyms, classrooms, movie theaters and more. With so many things happening under one roof, we have had to add new functionality, and this is changing the way we view our homes. The global pandemic has made an impact, and designers predict that a change to interior design is here to stay even as restrictions lift. Here are a few ways we may see change to interior spaces in the future:

Larger Home Office Spaces. As we struggled to turn bedrooms into boardrooms, and tables into desks, we may see shift in the importance of designated and larger home office space. For those living in tighter quarters, we may see more drop-down desks and stylish office furniture that can double as decor.

Defined Mudrooms & Entryways. Amid the virus, we all became more aware of the germs coming and going from our homes. Entryways became the spot to remove shoes and face masks, and it’s predicted that these new habits will lead to the reappearance of mudrooms and additional entryways that can help germs from entering the home.

Individual Private Spaces. As families isolated together, one thing became very apparent. We all need our private space! This need for privacy and alone time could bring on more nooks and layouts with distinct spaces rather than the popular oopen floor plan.

Hygienic Surfaces. Kitchens, bathrooms, and other high-traffic areas could be designed with easy-to-clean hard surfaces and materials that repel bacteria and limit the spread of germs. No-touch technology in faucets and doorbells may also see a rise in popularity.

Additional Entertaining Spaces At-Home. Weeks of sheltering in place has reinforced the idea of home as a safe haven. As people begin to gather with friends and family again, home entertaining may become more popular than ever as an alternative to public spaces such as restaurants and bars. Outdoor entertaining spaces give an inviting and safe alternative to celebrating with others in a private setting, and a shift could be coming in the importance and design of these spaces.

Three Reasons Homebuyers Are Ready to Purchase This Year

Information provided by Keeping Current Matters. All credit for article to be given to KCM.

Three Reasons Homebuyers Are Ready to Purchase This Year | MyKCM
Three Reasons Homebuyers Are Ready to Purchase This Year | MyKCM

A recent survey by Lending Tree tapped into behaviors of over 1,000 prospective buyers. The results indicated 53% of all homebuyers are more likely to buy a home in the next year, even amid the current health crisis. The survey further revealed why, naming several reasons buyers are more likely to move this year (see graph below):Let’s break down why these are a few of the key factors motivating buyers to actively engage in the home search process, and the corresponding wins for sellers as well.

1. Low Mortgage Rates

Three Reasons Homebuyers Are Ready to Purchase This Year | MyKCM

The biggest reason potential homebuyers indicated they’re eager to purchase this year is due to current mortgage rates, which are hovering near all-time lows. Today’s low rates are making it more affordable than ever to buy a home, which is a huge incentive for purchasers. In fact, 67% of respondents in the Lending Tree survey want to take advantage of low mortgage rates. This is no surprise when comparing historic mortgage rates by decade (see below):Sam Khater, Chief Economist at Freddie Mac recently said:

“As the economy is slowly rebounding, all signs continue to point to a solid recovery in home sales activity heading into the summer as prospective buyers jump back into the market. Low mortgage rates are a key factor in this recovery.”

2. Reduced Spending

Some people have also been able to save a little extra money over the past few months while sheltering in place. One of the upsides of staying home recently is that many have been able to work remotely and minimize extra spending on things like commuting expenses, social events, and more. For those who fall into this category, they may have a bit more saved up for down payments and closing costs, making purchasing a home more feasible today.

3. Re-Evaluating Their Space

Spending time at home has also given buyers a chance to really evaluate their living space, whether renting or as a current homeowner. With time available to craft a wish list of what they really need in their next home, from more square footage to a more spacious neighborhood, they’re ready to make it happen.

What does this mean for buyers and sellers?

With these three factors in play, the demand for housing will keep growing this year, especially over the summer as more communities continue their phased approach to reopening. Buyers can take advantage of additional savings and low mortgage rates. And if you’re thinking of selling, know that your home may be in high demand as buyer interest grows and the number of homes for sale continues to dwindle. This may be your moment to list your house and make a move into a new space as well.

Bottom Line

If you’re ready to buy or sell – or maybe both – let’s connect to put your plans in motion. With low mortgage rates leading the way, it’s a great time to take advantage of your position in today’s market.

Strategies for Holding an Open House Among COVID-19

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The global pandemic has wreaked havoc on how we conduct real estate, but there are buyers actively looking to buy a home right now. Thanks to updated guidelines and industry practices, it is possible to hold a safe and successful Open House.

  1. Social distance and wash hands regularly
  2. Open windows & doors to bring in fresh outdoor air.
  3. Space out home visits by a few hours or days. Limit tours to financially qualified buyers with prequalification letters in hand, just be careful to stay within the parameters of fair housing laws.
  4. Invest in a portable air purifier. Not only is this an extra safety layer, but a HEPA-based filter will show buyers that you are taking the situation seriously.
  5. Require masks and provide shoe coverings.
  6. Turn on all the lights and open doors to limit others from touching surfaces.
  7. Provide online resources such as floor plans, virtual tours, and lots of good photos. Buyers should conduct online research before requesting a visit.

Keep in mind that regulations may vary from state to state and within the local market. Be educated and informed about the recommendations and show homes and conduct Open Houses carefully. Source: Forbes.

5 Things to Do Now to Get Your House Ready to Sell

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Prepping your home for sale can take time. You want your home to put its best foot forward when it comes to listing day. Here are five things you can do now to start getting your home ready for sale.

Make repairs. Buyers want to know they are buying a home that has been well-maintained. Obvious maintenance issues, like leaking faucets or running toilets, are usually inexpensive repairs that can be easily fixed. Make all major and minor repairs before listing so potential buyers are not scared away by a mounting repair list.

Declutter. Remove excess items from your home so that it seems warm and inviting. This also gives potential buyers the ability to see themselves living in the home, not just accumulated possessions that belong to someone else.

Stage. Put away family photos and personal effects that are unique to your family. You want your home to appeal to a wide variety of buyers. Opt for neutral paint colors, decor and accessories so your home is a blank canvas that buyers can see themselves moving into with their own belongings.

Interview real estate agents. A good real estate agent will help you navigate all aspects of the home selling process. They can give you tips on accomplishing the above list, help you price your home to sell, and handle any contract negotiations. Make sure to choose someone you know you will enjoy working with.

Interview mortgage lenders. If you’re planning to buy a new home when this one sells, you may need a mortgage. Before starting your new home search, speak with a mortgage professional. They can help you get prequalified and provide an estimate of how much home you can afford so you can budget accordingly.