Remodeling Before Selling? Think Small

Remodeling Before Selling? Think Small

Finding a Dream Home in the New Year

Finding a Dream Home in the New Year

Boomers Plan to Pass $17T in Equity to Children

Boomers Plan to Pass $17T in Equity to Children

Single-Family Home Loan Limits Rise to $806,500

Single-Family Home Loan Limits Rise to $806,500

Protecting Against AI Voice Scams

Protecting Against AI Voice Scams

Buyers Among Those Anxiously Awaiting Rate Cuts

Buyers Among Those Anxiously Awaiting Rate Cuts

Colors to Avoid When Selling a Home

Colors to Avoid When Selling a Home: Adding color is a hot trend in home design lately, but be careful which color you choose.

Better, Not Bigger, Homes Among 2024 Design Trends

Better, Not Bigger, Homes Among 2024 Design Trends: NAHB: Buyers say they want smaller homes now and are looking for homes around 2,070 sq. ft., compared to 2,260 sq. ft. 20 years ago.

Is an Assumable Mortgage Right for You?

Is an Assumable Mortgage Right for You?

Average Long-Term Mortgage Rate Eases to 6.63%

Average Long-Term Mortgage Rate Eases to 6.63%

South Florida Buyers, Renters to See Positive 2024 Changes

South Florida Buyers, Renters to See Positive 2024 Changes

Fannie Mae Sees Positive Home Price Growth Through 2025

Fannie Mae Sees Positive Home Price Growth Through 2025

‘Buy Now, Refinance Later’ Mortgage Deals Luring New Homebuyers

‘Buy Now, Refinance Later’ Mortgage Deals Luring New Homebuyers

67% of Buyers Willing to Live with Ghost Roommate

67% of Buyers Willing to Live with Ghost Roommate: How hard is it to find the perfect home? If it has the right location and price, 7 out of 10 homebuyers are willing to overlook poltergeist shenanigans.

Making an Offer: 5 Mistakes to Avoid

DAILY REAL ESTATE NEWS | WEDNESDAY, MAY 10, 2017

In competitive housing markets across the country, making an offer that sticks has become increasingly difficult. Ensure your client doesn’t make the process even tougher by succumbing to one of these common mistakes.

Delaying

“Time kills deals,” says Andrew Sandholm of BOND New York Properties in New York. “Dragging your feet means you could wind up paying more in a bidding war situation or missing out on the property altogether.” Buyers need to be ready with their paperwork, such as bank statements, a preapproval letter, and documents supporting proof of funds, from the day they begin house-hunting mode. That way they can pounce quickly with an offer when they do find a home they like.

Making an offer for their preapproved amount

Smart buyers are getting preapproved to show a seller they’re financially able to purchase a home. However, Chuck Silverston, principal at Unlimited Sotheby’s International Realty in Brookline, Mass., warns buyers against using that document to come up with an offer amount.

“Many buyers come in with a preapproval for the exact offer price, but when you’re competing against other offers, including cash offers, you want to show financial strength,” Silverston says. “An exact preapproval could make a listing agent nervous because not only does the buyer not have any wiggle room to negotiate, but they might no longer qualify if interest rates rise.”

Submitting a lowball offer

Lowballing a seller often backfires, particularly in a seller’s market. “A lowball offer that isn't backed up with math or comparable sales data is disrespectful and could turn off the seller and possibly mean you will miss out on the property completely,” Sandholm says.

Waiving inspection contingencies

“I don't care whether it’s new construction or even your mom’s house you’re buying from her – get it inspected,” urges Joshua Jarvis of Jarvis Team Realty in Duluth, Ga. Further, if you waive the inspection contingency in your offer, you may lose the earnest money if you later back out of the deal.

Not presenting yourself well enough

In a seller’s market, buyers need to take steps to make sure they look good in the eyes of the seller. “In today’s highly competitive environment, the listing agent is trying to determine which buyer will be the easiest to deal with,” Silverston says. Buyers may want to avoid pointing out every defect, making nitpicky queries, or questioning the seller’s tastes.

“Basically buyers who act less than enthusiastic will see themselves at a competitive disadvantage when sellers are comparing multiple offers,” he says.

Source: “In It to Win It: Land Your Dream Home By Avoiding These 7 Mistakes on Your Offer,” realtor.com® (May 10, 2017)

If Buyers Want to Save Money: Tell Them to Shop

DAILY REAL ESTATE NEWS | FRIDAY, APRIL 28, 2017

Home buyers who don’t gather more than one quote when shopping for a mortgage may be losing out on some savings to their monthly payments.

Read more: Consumers Turn to Non-Banks for Mortgages

Lenders can offer a wide dispersion of rates, up to 50 basis points or 0.5 percent, after controlling for factors like the borrower’s down payment and credit score. That could be the difference between a 3.5 percent versus a 4 percent mortgage rate, according to a recent study by two economists at the Consumer Financial Protection Bureau, who culled mortgage data from 2014.

The authors offer up a scenario of what would happen if consumers had done an additional search for rate offers. Just one extra search could potentially reduce a borrower’s monthly payment by $8.63, on average. Adding five more searches could help them reduce their payments by $17.03 per month (that’s about $204 over just one year in savings). That said, the borrower’s initial offer may end up being the strongest in some cases, despite additional searches, the authors also note.

But in general, the researchers say that borrowers’ shopping around forces lenders to compete and likely will reduce the costs the borrower will end up paying.

“Tell your clients, especially first-time buyers, to shop more,” notes the National Association of REALTORS® Economists’ Outlook blog, interpreting the study’s results. “It may save them money. They should use websites that quote multiple lenders and get multiple offers on their own from large retail lenders, smaller banks or credit unions, and mortgage banks. But always consider the total cost, which includes the lenders’ fees and other services.”

Source: “Sometimes, Shopping Will Save Your Clients Money!” National Association of REALTORS® Economists’ Outlook blog (April 25, 2017)

Quicken quietly offers 1% downpayment loans

 

NEW YORK – June 29, 2016 – Quicken Loans has been fairly hush about its latest offering of a super low downpayment mortgage, even as rival bank giants like Bank of America, Wells Fargo and JPMorgan Chase all tout their new 3 percent down mortgage products. But late last year, Quicken Loans quietly began offering 1 percent downpayment mortgages.

The program emerged from a partnership between Quicken and Freddie Mac in October 2015 and was structured as part of Freddie Mac's Home Possible Advantage program, which requires a 3 percent downpayment.

However, Quicken Loans offers its customers a 1 percent down because it grants the extra money to the borrower, Bill Banfield, Quicken Loans' vice president of capital markets, told HousingWire in an interview.

"We require 1 percent from a consumer and we give the consumer a 2 percent grant, so the client has 3 percent equity immediately," Banfield told HousingWire.

The 1 percent downpayment loans are available only for those purchasing a home, and they can only be used on a single-family home or condo – second home and investment properties or co-ops aren't included. They must have a FICO score of 680 or above and earn less than the median income for their county. Their debt-to-income ratio must be 45 percent or less.

"We want to try to help people and do it in a smart way," Banfield told HousingWire. "For us, it was really a question of, if you want to provide access to credit, how do you do it responsibly? How can you help people? If first-time buyers are struggling, are there smart ways to help them while still balancing access to credit? … We wanted to have a conventional option to get people into more homes."

Source: "Quicken Loans Now Offering 1% Down Mortgages," HousingWire (June 24, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

NAR: Pending homes sales at a 10-year high

NAR: Pending home sales at a 10-year high

 

WASHINGTON – May 26, 2016 – Pending home sales rose for the third consecutive month in April and reached their highest level in over a decade, according to the National Association of Realtors® (NAR).

All major regions saw gains in contract activity last month except for the Midwest, which saw a meager decline.

The Pending Home Sales Index – a forward-looking indicator based on contract signings for homes that have not yet sold – hiked 5.1 percent higher to 116.3 in April from an upwardly revised 110.7 in March. Year-to-year, it's 4.6 percent above April 2015 (111.2).

After last month's gain, the index has now increased year-over-year for 20 consecutive months. Vast gains in the South and West propelled April's pending sales in April to its highest level since February 2006 (117.4), says Lawrence Yun, NAR chief economist.

"The ability to sign a contract on a home is slightly exceeding expectations this spring, even with the affordability stresses and inventory squeezes affecting buyers in a number of markets," Yun says. "The building momentum from the over 14 million jobs created since 2010 and the prospect of facing higher rents and mortgage rates down the road appear to be bringing more interested buyers into the market."

Mortgage rates have remained below 4 percent in 16 of the past 17 months, but Yun says it remains to be seen how long they will stay this low. Along with rent growth, rising gas prices – and the fading effects of last year's cheap oil on consumer prices – could edge up inflation and push rates higher. For now, Yun foresees mortgage rates continuing to hover around 4 percent in coming months, but inflation could potentially surprise the market and cause rates to increase suddenly.

"Even if rates rise soon, sales have legs for further expansion this summer if housing supply increases enough to give buyers an adequate number of affordable choices during their search," adds. Yun.

Following the housing market's best first quarter of existing-sales since 2007 (5.66 million) and a decent increase (1.7 percent) in April, Yun expects sales this year to climb above earlier estimates and be around 5.41 million – a 3.0 percent boost from 2015. After accelerating to 6.8 percent a year ago, national median existing-home price growth is forecast to slightly moderate to between 4 and 5 percent.

Pending sales in the Northeast climbed 1.2 percent to 98.2 in April, and are now 10.1 percent above a year ago. In the Midwest, the index declined slightly (0.6 percent) to 112.9 in April, but it's still 2.0 percent above April 2015.

Pending home sales in the South jumped 6.8 percent to an index of 133.9 in April – 5.1 percent higher than last April. The index in the West soared 11.4 percent in April to 106.2, and it's now 2.8 percent above a year ago.

© 2016 Florida Realtors®  

Related Topics: Home sa

The New-Home Market Leads the Charge

Keeping you updated on the market! For the week of June 22, 2015

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MARKET RECAP The New-Home Market Leads the Charge Many commentators were disappointed in the headline number, but they shouldn't have been. The headline states that housing starts posted at 1.036 million on an annualized rate for May. The consensus was looking for starts to post in the 1.1-million neighborhood. If we compare May with April, we see an 11.1% drop-off in starts. The numbers appear disappointing, until you dig a little deeper. April, which was already a strong month for starts, was revised up to 1.165 million. That's a 22.1% month-over-month increase when compared to March. Seeing starts throttle back in May after such a strong showing is no reason to sulk. Indeed, it should be expected. To expect continual double-digit monthly increases is to expect the impossible. The trend in permits is another reason to embrace the future. Permits were up a very stout 11.8% to 1.275 million potential starts. Permits are a leading indicator, and this leading indicator posted its best number since August 2007. Given the bullish outlook on new-home construction, no one should be surprised that homebuilders are feeling upbeat these days. The NAHB Home Builder Index spiked five points to 59 in June. This is the highest reading since September 2014. To be sure, sentiment can change and markets can turn. But for the past year, home builders have become increasingly upbeat. Sales and construction activity has generally supported rising optimism. We don't expect that to change over the remainder of 2015. Of course, the percentage of new-home sales is relatively small compared to existing-home sales. Our bread is mostly buttered on existing-home sales. On that front, sales have trended higher in recent months. Still, they've had a tough time hanging about the important five-million mark on an annualized rate. The good news is that it appears more likely that sales will hover above five million. A recent report from CoreLogic shows that another 254,000 residential properties regained positive equity in the first quarter. This trend of rising positive equity ensures more supply will come to market, which will lead to a rising sales trend. What's more, the Federal Reserve appears willing to maintain an accommodating stance. We've said repeatedly since the beginning of the year that a Fed interest-rate hike was unlikely for June. In the latest Fed meeting, officials showed no inclination to raise the federal funds rates. What's more, it remains unlikely the fed funds rate will be raised before fall. The Fed is still looking for labor-market improvement (mostly wage growth) and more consumer-price inflation. And when the Fed does move to raise the fed fund rates, it will likely do so in very small increments. That said, let's not take this as a guarantee of low mortgage-lending rates. The market can and has overridden Fed desires. The Fed might not move to raise interest rates; this doesn't mean the market won't.

 

Economic Indicator	Release Date and Time	Consensus Estimate	Analysis
Existing Home Sales (May)	Mon., June 22, 10:00 am, ET	5.23 Million (Annualized)	Important. Data on equity and housing formations point to rising sales.
New Home Sales (May)	Tues., June 23, 10:00 am, ET	525,000 (Annualized)	Important. Trends in starts and builder optimism will lead to rising sales.
Mortgage Applications	Wed., June 24, 7:00 am, ET	None	Important. Purchase activity should hold the higher levels established in recent months.
Personal Income (May)	Thurs., June 25, 8:30 am, ET	0.4% (Increase)	Important. Wage growth is accelerating and portends strength in home sales.

 

Should We Start Worrying About Bubbles? With home prices exceeding pre-bubble highs in many markets, more people are asking: Should we be concerned about another market bubble? There are no guarantees, but this market looks significantly less frothy than it did in early 2008. For one, mortgage-debt levels remain reasonable. Bank of America reports that mortgage debt as a percentage of real estate owned was at an all-time high of 63% just before the market-bubble burst. Today, it's down at 44%, which is a normalized and sustainable percentage. A more obscure indicator also points to a bubble-free market. When markets get bubbly, they induce a tsunami of new participants. Using California as a proxy for the whole, CalculatedRiskBlog.com data show that the number of real estate agents peaked at the end of 2007. Today, the number of salesperson licenses is off 33.5% of the peak. The number is at March 2004 levels. In other words, people aren't blindly rushing into a perceived gold rush. That's a sign of market health. In short, we don't see a market distorted by bubbles. To the contrary, we see a clearly sustainable market.

Article Courtesy of Patti Wilson, American Momentum Bank.

A Very Positive Sign on the Housing Front

Keeping you updated on the market! For the week of May 25, 2015

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MARKET RECAP A Very Positive Sign on the Housing Front We have a slightly different take on the world than most market commentators. Most commentators focus on consumption as the driving force behind the market. We focus more on production. To be sure, everything that is produced is produced to be consumed itself or to be used to produce something for final consumption. But consumption is always preceded by production. You have to produce before you can consume. For this reason, we put a little more weight on housing starts – production – than most. We were encouraged to see that housing starts blew past most economists' estimates in April. Specifically, starts rose to 1.135 million on an annualized rate. This is the highest monthly rate of starts in many years. More good news is found when you dig deeper into the data. The important single-family segment posted at 733,000 starts, 16.7% higher than in March. Permits, which portend future starts, rose 3.7%. We expect to see starts maintain this elevated level through the summer months. Granted, the surge in starts was partly attributable to downtime in March due to lousy weather. That said, the surge is more than weather driven. There is legitimate rising demand for new homes. This is reflected in home builder sentiment, which continues to maintain a 50-or-higher reading. The latest survey shows builder sentiment posted at 54 in May. Anything above 50 is positive. This is another reason we expect starts to maintain these elevated levels. A new home sale precedes an existing home sale. Existing home sales were disappointing, but not egregiously so. Sales were down 3.3% to 5.04 million on an annualized rate in April. Limited supply remains the bugaboo, particularly in the starter market. Young people still find it difficult to grasp the bottom rung. We remain confident, though, that entrepreneurial activity will eventually rectify this problem.

 

Economic Indicator	Release Date and Time	Consensus Estimate	Analysis
New Home Sales (April)	Tues., May 26, 10:00 am ET	490,000 (Annualized)	Important. The pick up in starts points to stronger new home sales through the summer season.
Mortgage Applications	Wed., May 27, 7:00 am, ET	None	Important. Rising rates have taken some steam out of purchase activity, but activity should pick up when borrowers realize higher rates are the new normal.
Pending Home Sales Index (April)	Thurs., May 28, 10:00 am, ET	1.0% (Increase)	Important. The uptrend in contracts points to rising sales activity heading into summer.
Gross Domestic Product (1st Quarter 2015)	Fri., May 29, 8:30 am, ET	1.0% (Annualized Decrease)	Important. Contracting economic activity in the first quarter is one important reason the Fed will not move to raise interest rates.

 

Why the Fed Doesn't Really Matter at This Point Here we are in the waning days of May and it appears highly unlikely the Federal Reserve will move to raise the federal funds rate in June. At the beginning of the year, June was the month most everyone pointed to for the first increase in nearly 10 years. We were skeptical then, and we repeatedly stated our skepticism in subsequent months. Our skepticism was well founded. In the latest policy meeting minutes (from late April) officials said in the most explicit terms yet that they're unlikely to raise the fed funds rate in June. After watching the economy stumble through the winter, many at the meeting were doubtful the criteria for a rate increase would be met. The fed funds rate is supposed to have a cascade effect. Once it starts to rise, all other rates eventually rise too. But as we know, longer-term interest rates have been rising without prompting from the Fed. The yield on the 10-year U.S. Treasury note frequently posts above 2.25% these days. The rate on the 30-year fixed-rate mortgage loan is frequently quoted above 4%. We think investor sentiment has changed. Investors are no longer willing to buy bonds – Treasury bonds in particular – that offer a negative real yield (a yield that does not compensate for inflation). Though the yield on all bonds and notes in the U.S. is nominally positive, many fail to maintain purchasing power over time when inflation is factored in. Consider it this way: If you earn 1% on your savings and consumer price inflation is running at 2%. After a year, you're 1% in the hole. You've lost purchasing power. Investors have been willing to put up with negative real interest rates because the Fed was continually driving interest rates lower through quantitative easing. The Fed stopped quantitative easing in October (though it continues to reinvest the proceeds of maturing bonds into new bond purchases.) Investors know the Fed won't drive yields any lower. Last month, we warned that markets can change, and change in a hurry. That has certainly happened with the sharp rise in interest rates in general and mortgage rates in particular. Could we see 3.75% on the 30-year fixed-rate loan a month from now? Anything is possible, but what's possible isn't the same as what is probable. Article courtesy of Patti Wilson, American Momentum Bank.