Buying With Friends Isn’t Like Renting

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You’ve been living with your best friend since freshman year of college, and it’s been a blast. So why not pool your money and go in on a house together? After all, it’s easier to buy when you have two incomes.

It’s true that co-buying a home with friends or family can make it easier to own a home. And it can reduce your upfront costs.

But there are a few unique differences to co-buying. Here are three you should consider and discuss before you jump into the process.

1. What type of ownership will you have?
Don’t assume that splitting the mortgage determines the ownership.

If one person will be paying a larger portion, you might want to be tenants in common. This also allows you to transfer or sell your share of the property at any time. But if you want to divide the ownership equally, you can choose to be joint tenants.

2. How are your credit scores looking?
When two buyers are on a mortgage app, lenders use the lowest credit score to determine the interest rate.

Do you both have excellent credit? If not, you could have only one person on the mortgage loan, but you’ll only be able to count one income to determine the loan size.

3. How will you pay your bills each month?
This sounds like a minor detail, but it’s important to be on the same page about finances before the bills come in.

Will you pay bills out of a joint household account? Or will one person pay the full bill and have the other pay them back?

Once you’ve discussed your plans for the finances and ownership, your best bet is to have a legal agreement prepared ahead of time.

Have more questions about co-buying a home? Reach out today to discuss your needs and get the process started.

Posted on July 11, 2019 at 6:19 pm
Chris Reis | Category: Uncategorized

DIY Doesn’t Mean Doing It All Yourself

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How handy would you say you are? Can you fix a leaking faucet or install a new backsplash? Do you own all the drills, power saws and sanders used by the pros?

It can be tempting to DIY it all — especially if you’re on a budget. After all, you can have an active role in improving your home, and save cash to put toward other things. Why wouldn’t you want to?

The truth is not all projects are suited for a DIYer — no matter how much of a shiplap expert you might be.

If you’re considering a few renovations, here’s when to put on your toolbelt and when you might want to call a pro:

In the Kitchen: You can probably replace a sink, reface your cabinets or install a new dishwasher.

Want to move the sink or add recessed lighting? You’ll want a pro.

In the Bathroom: Installing new floor tiles, upgrading your toilet seat or changing your showerhead are all tasks you can do.

If you want in-floor radiant heating or to install a tub where there isn’t one, bring in a pro.

On the Exterior: Looking for more curb appeal with a new garden bed and a fresh coat of paint on your front door? Have at it.

Substantial upgrades like installing a skylight, repairing your roof or repaving your driveway are better suited for a professional.

Structural Changes: If you’re super handy, you can probably install drywall or relocate a door.

But if you’re changing an area that’s load-bearing? Definitely call a pro.

Remember, DIY doesn’t mean doing everything yourself. You’ll want to hire a professional for anything that requires specialized knowledge. There’s no shame in asking for help from an expert.

Want to discuss what home renovations might improve your property’s value? Get in touch today.

Posted on June 30, 2019 at 7:07 pm
Chris Reis | Category: Uncategorized

Don’t Get Blindsided by Closing Costs

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Have you ever decided to buy something, only to find out about additional costs at the end? The last thing you want is to be surprised by unexpected fees – especially at your closing.

You’ve made your financial calculations. Extra charges at the eleventh hour could make all your plans go bust.

But you can’t just skip the closing – that’s when the legal ownership is transferred.

Want to avoid being blindsided at your closing? Here’s how to plan ahead for closing fees:

What’s the deal with closing costs?
Closing costs typically run about 2% to 5% of the purchase price and are paid to lenders, attorneys and other third parties. Buyers often have more closing costs than sellers because most fees are related to the new mortgage loan.

Common closing costs for buyers:

  • Loan processing fees
  • Home appraisal and inspection fees
  • Property taxes

Common closing costs for sellers:

  • Mortgage payoff fees
  • Title transfer fees
  • Attorney fees for handling the closing

How can you lower the costs?
After applying for a mortgage, you’ll receive a Loan Estimate from the lender. It summarizes the loan terms, such as the loan amount, interest rate and all closing costs. Comparing Loan Estimates from different lenders is important.

Page 2 of the Loan Estimate also details the services you can shop around for, such as surveys, appraisals and title searches.

Are closing costs ever negotiable?
Yes. A seller or buyer sometimes agrees to pay part or all of the other party’s closing costs. This is something we can negotiate into the purchase agreement.

As for paying the closing costs? Some lenders will allow you to roll the cost into your mortgage. However, you’ll pay interest on it for the life of the loan. Paying cash upfront is a smarter option if you have the funds available.

Have more questions about closing on a home? Or are you ready to get your home search started? Reach out today.

Posted on June 13, 2019 at 7:16 pm
Chris Reis | Category: Uncategorized

Don’t need it? Then don’t pay for it.

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You know all those fantastic home features you hear your friends gushing about in their new home? The top-notch school district and Jacuzzi? The spacious third level and even more abundant yard?

Well, there’s nothing wrong with any of those things. But they’re not right for everyone.

In fact, for some buyers, they might even be a waste of money.

Are you on the hunt for a home this year? Give careful consideration to whether you’re paying for features you’ll use.

Want to know the three that people often overpay for?

The Biggest House on the Block
Have three dogs and a few active toddlers? Then room to run is a must. Is it just you and your spouse? Springing for a five-bedroom corner lot might not be worth the cash.

Buying tip:
Buy for the space you need and are planning for – not the extra level you might use someday. You can always buy a move-up property if your plans change.

A Highly Rated School District
Great schools are important if kids are in your future – or if you have little ones already. But if that’s not in the cards for you, plotting your homebuying plans around them isn’t necessary.

Buying tip:
You may find more affordable properties, and property taxes, if you search outside those school districts.

Custom Amenities
Home theaters, quartz countertops and pools are popular amenities that many buyers are willing to pay top dollar for. Are you?

Buying tip:
Focus on the amenities you know you’ll use often and get the most value from.

It’s not always easy to evaluate your short- and long-term needs. That’s why it’s essential for us to discuss how your future plans will affect your homebuying goals.

Do you need help finding your perfect-fit home with features you’ll love (and use)? Reach out today to get started.

Posted on May 30, 2019 at 8:13 pm
Chris Reis | Category: Uncategorized

Do’s and Don’ts of Presale Home Repairs

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You’ve decided it’s time to sell your home. Your neighbor just sold for a pretty penny, but they also spent a lot on remodeling and renovations. Does that mean you need to upgrade your home to sell?

Is it worth trying to sell as is? Or will your home be passed up and stuck on the market?

Fortunately, full-scale remodels aren’t required to sell your home. Sure, a home reno might fetch more money, but it’s not always worth the time and effort.

So how do you know what’s worth fixing up? Here are the do’s and don’ts of pre-listing home renovations:

Do:

  • Fix trip hazards throughout (and around) the home. Uneven flooring and sidewalks, broken stairs and off-kilter ramps aren’t just noticeable to touring buyers; they’re a downright danger.
  • Fix pet damage and lingering odors. Scratches on doors, torn window screens and holes in the yard will only make buyers wary of further pet damage on the property.
  • Fix water stains. Even if you’ve fixed the pipes or plumbing issues, buyers may still worry about mildew or mold problems.

Don’t:

  • Make partial updates to older kitchens and baths. Mixing old and new elements only highlights the age of the space. You need to commit to a full upgrade or let the buyer do a comprehensive remodel on their own.
  • Decorate the home with trendy or bold colors. Neutral colors photograph better, make the space look larger and help buyers reimagine the house with their belongings. Bold and bright colors do the opposite.
  • Renovate beyond what your neighbors have done. Buyers are going to offer what comparable sales suggest, no matter how much money you’ve poured into remodeling.

A few repairs and upgrades can certainly make your home more marketable. But a full-scale remodel? That’s not necessary in most cases.

Are you ready to sell? Get in touch today for a comprehensive review and marketing plan for selling your home.

Posted on May 16, 2019 at 8:14 pm
Chris Reis | Category: Uncategorized

Have you checked out the neighborhood?

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You wouldn’t pick out shoes before choosing an outfit, right? Or buy car accessories without first deciding if you want a truck or a sedan?

Well, house hunting should be treated the same way.

You shouldn’t search for a dream home without vetting neighborhoods or experiencing the new area for yourself.

If the area doesn’t meet your needs, the property may not provide a dream scenario. So how do you make sure you’ve found the right neighborhood? Keep these details in mind:

Cost of Living
Are the property taxes and HOA fees trending upward? Are there mostly trendy boutiques and high-end businesses in the area, or does it have a good mix of local and national retailers?

Planned commercial development could affect the long-term affordability of the area. However, having more access to retailers and entertainment could enhance your lifestyle.

Commutes and Social Life
How close do you want to be to the friends and family you visit the most? How far are you willing to drive to get to the restaurants, theaters or stores that you frequent?

It’s understandable to prioritize your work commute, but keep in mind the other places you visit on a daily or weekly basis.

Long-Term Goals
How does the community fit into your future goals? Are there good schools, parks or sports leagues for your family?

A thriving community adds to your quality of life. And it’s a good sign for future home values.

Want to try before you buy? Where possible, consider renting a unit in the area for a few days through a short-term rental site. Experiencing the neighborhood like a resident can help you to decide if it fits your current and future needs.

Are you looking for a new home? Get in touch if you’d like to see a neighborhood report.

Posted on April 25, 2019 at 8:15 pm
Chris Reis | Category: Uncategorized

No Bubble Here! How New Mortgage Standards Are Helping

No Bubble Here! How New Mortgage Standards Are Helping | Simplifying The Market

No Bubble Here! How New Mortgage Standards Are Helping

Real estate is shifting to a more normal market; the days of national home appreciation topping 6% annually are over and inventories are increasing which is causing bidding wars to almost disappear. Some see these as signs that the market will soon come tumbling down as it did in 2008.

As it becomes easier for buyers to obtain mortgages, many are suggesting that this is definite proof that banks are repeating the same mistakes they made a decade ago. Today, we want to assure everyone that we are not heading to another housing “bubble & bust.”

Each month, the Mortgage Bankers’ Association (MBA) releases a measurement which indicates the availability of mortgage credit known as the Mortgage Credit Availability Index (MCAI). According to the MBA:

“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.).” *

The higher the measurement, the easier it is to get a mortgage. During the buildup to the last housing bubble, the measurement sat at around 400. In 2005 and 2006, the measurement more than doubled to over 800 and was still at almost 600 in 2007. When the market crashed in 2008, the index fell to just over 100.

Over the last decade, as credit began to ease, the index increased to where it is today at 186.7 – still less than half of what it was prior to the buildup of last decade and less than one-quarter of where it was during the bubble.

Here is a graph depicting this information (remember, the higher the index, the easier it was to get a mortgage):

No Bubble Here! How New Mortgage Standards Are Helping | Simplifying The Market

Bottom Line

Though mortgage standards have loosened somewhat during the last few years, we are nowhere near the standards that helped create the housing crisis ten years ago.

Posted on December 13, 2018 at 9:38 pm
Chris Reis | Category: Uncategorized

Don’t Get Caught in the Rental Trap in 2019

Don’t Get Caught in the Rental Trap in 2019

Every year around this time, we take time to reflect and plan for next year. If you are renting your current home but have dreams of homeownership, your plan for the new year may include buying, and you wouldn’t be alone!

According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying in the next 5 years, with 38% planning to buy in the next 2 years!

When those same renters were asked why they disliked renting, 52% said that rising rental costs were their top reason, and 42% of renters believe that their rent will rise every year. The full results of the survey can be seen below:

Don't Get Caught in the Rental Trap in 2019 | Simplifying The Market

It’s no wonder that rising rental costs came in as the top answer! The median asking rent price has risen steadily over the last 30 years, as you can see below!

Don't Get Caught in the Rental Trap in 2019 | Simplifying The Market

There is a long-standing rule that a household should not spend more than 28% of its income on housing expenses. With nearly half of renters (48%) surveyed already spending more than that, and with their rents likely to rise again… why are they renting?

When asked why they haven’t purchased a home yet, not having enough saved for a down payment (44%) came in as the top response. The report went on to reveal that nearly half of all respondents believe that “a 20% down payment is required to buy a home.”

If the majority of those who believe they haven’t saved a large enough down payment believe that they need 20% down to buy, that means a large number of renters may be able to buy now!

Bottom Line

If you are one of the many renters who is fed up with rising rents but may be confused about what is required to buy in today’s market, let’s get together to help you on your path to homeownership.

Posted on December 12, 2018 at 3:48 pm
Chris Reis | Category: Uncategorized

How to Simply Increase Your Family Wealth by Paying for Housing

How to Simply Increase Your Family Wealth by Paying for Housing | Simplifying the Market

How to Simply Increase Your Family Wealth by Paying for Housing

Everyone should realize that unless you are living somewhere rent-free, you are paying a mortgage – either yours or your landlord’s. Buying your own home provides you with a form of ‘forced savings’that allows you to use your monthly housing costs to increase your family’s wealth.

Every month that you pay your mortgage, you are paying off a portion of the debt that you took on to purchase your home. Therefore, you own a little bit more of your home every month in the form of home equityAs your home’s value increases you also gain home equity.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).

The latest data from their Q4 2018 Survey revealed that home prices are expected to round out the year 5.8% higher than they were in January. For the next 5 years, home values will appreciate by an average of nearly 3% a year.

This is still great news for homeowners!

For example, let’s assume a young couple purchases and closes on a $250,000 home in January. Simply through their home appreciating in value, those homeowners can build their home equity by nearly $40,000 over the next five years.

How to Simply Increase Your Family Wealth by Paying for Housing | Simplifying the Market

Let’s look at the potential equity gained over the same period of time at some higher price points:

How to Simply Increase Your Family Wealth by Paying for Housing | Simplifying the Market

In many cases, home equity is a large portion of a family’s overall net worth.

Bottom Line

If your plan for 2019 includes entering the housing market to purchase a home, whether it’s your first or your fifth, let’s get together to make your plan a reality!

Posted on December 11, 2018 at 4:45 pm
Chris Reis | Category: Uncategorized

What If I Wait A Year to Buy a Home?

What If I Wait Until 2019 To Buy A Home? | Simplifying The Market

What If I Wait A Year to Buy a Home?

National home prices have increased by 5.4% since this time last year. Over that same time period, interest rates have remained near historic lows which has allowed many buyers to enter the market and lock in low rates.

As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price but instead about the ‘long-term cost’ of the home.

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Insights Reporthome prices will appreciate by 4.8% over the next 12 months.

What Does This Mean as a Buyer?

If home prices appreciate by 4.8% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

What If I Wait Until 2019 To Buy A Home? | Simplifying The Market

Bottom Line

If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

Posted on December 10, 2018 at 3:17 pm
Chris Reis | Category: Uncategorized