Many people believe that spring is the best season to buy a home because it allows you to settle in before the kids go to school. However, there can be plenty of competition during this time from other buyers. Fall can be the perfect time for househunting. Here are three reasons why fall is the perfect time to buy a home.
Many homes that were unable to be sold during the busy spring and summer months are still available on the market for the fall season. Sellers may have been overconfident with pricing, which may be why the homes are still on the market. This gives cash-strapped buyers a seasonal advantage in negotiations. You may be able to lower your offer or add some contingencies. Motivated sellers may be more willing to do whatever it takes to sell before the holidays arrive.
Real Estate Agent Availability
Real estate agents are less busy during the fall months. Lenders, title companies, inspectors and moving companies also experience a lighter schedule. This gives them more time and energy to focus on you, making your home buying experience less stressful. As a result, you have greater flexibility when looking at potential properties at your convenience and can save money on move-in costs.
You can take advantage of tax breaks for the entire year, even when you buy a home in the fall. You can claim property taxes, mortgage insurance premiums and mortgage interest as deductions. Any prepaid taxes or insurance premiums that are paid while closing can be deducted also. You may want to consult with a tax professional to leverage any tax breaks to your advantage.
Looking to Buy a Home This Fall?
House hunting in the fall gives you the best opportunity to land a great deal on your dream home. If you are looking to buy a home, consulting the right real estate agents can make finding your new home a breeze. Voila! Real estate professionals in Minneapolis can help make the home buying experience stress-free and straightforward. Save time by submitting offers online and viewing homes at your convenience. So, call to start your search for a new home today!
Many sellers ask if curb appeal really makes that much of a difference with a hot housing market. After all, if multiple buyers want to see your home as soon as possible, why should it matter if the lawn is perfect or if the recycling bins are tucked away? The truth is the outside of the house is the first and last thing your buyer sees. Curb appeal can be so strong; some buyers fall in love with a house before they even set foot in it. No matter the market, getting top dollar for your home means prioritizing how the house looks from the outside and improving your house’s curb appeal.
Why is Curb Appeal Important?
When you sell your home, you’re usually looking to get the most money possible. But, according to the National Association of Realtors, strong curb appeal can add 7% or more to your home’s value. So, if adding a little polish to the front yard nets you extra cash, why leave the money sitting there? It only takes a few minor fixes to make the house inviting and memorable.
How Much Work Does Curb Appeal Take?
The amount of work really depends on the current state of the yard, but this doesn’t have to be an expensive undertaking. Simply tidying up will create a great first impression. Here are a few things to consider:
No Christmas in July
Are your Christmas lights still up? Is it the middle of summer? If it is, the lights need to come down. The same goes for any out-of-season décor. Leftover decorations create the impression you haven’t kept the house up to date.
It’s a Jungle Out There
Do your walkway plants grab your buyer’s ankles as they stroll by? Then, trim them back for the illusion of a bigger path.
Are there scraggly hedges blocking the view of the front window? Not only do overgrown trees and plants look messy, but they also hide great selling features—like that big, beautiful window! Cleaning the window after trimming is also a good idea.
Keep Things Lively
Keep the grass trimmed and leaves raked or mulched. If it’s fall, remove all the dead and dying potted plants and replace a few with some cheery fall mums. Keep trimming down perennials as they finish up for the year. A fresh layer of mulch will keep everything neat.
One Man’s Trash is Another Man’s Trash
You may not think your trash bins sitting at the side door are a big deal. But if you’re selling, you’re probably also looking to buy a new home. Do you want to be greeted by someone else’s garbage? If you can’t store them out of sight, put the bins out of the way, and make sure the outsides are clean.
Selling a home is a big undertaking full of little details. Voila flat-fee realtors in Minneapolis can help you get the best price possible. Contact us today to schedule an appointment.
Buying a new home is an exciting milestone in a person’s life. But, unless you are well prepared, it can also be a scary one. There are several things to take into account when considering homeownership. The most important are the financial considerations.
What Can You Afford?
The house you desire and the house you can comfortably afford may differ depending on your financial situation. You will need to look at several factors to determine how much you can afford to spend on a home. One major factor is your debt-to-income ratio or DTI.
Determining the amount of mortgage you can afford is done by figuring out your DTI. The standard rule is a 43% DTI ratio. This is the amount used by the Federal Housing Administration (FHA) for mortgage approval. The ratio is used to assess the borrower’s ability to make monthly mortgage payments. Real estate markets and current economic conditions can impact whether a lender will be more rigid or lenient when approving a loan.
The DTI ratio means that your housing expenses, including mortgage, mortgage insurance, property taxes, homeowners’ insurance, and other housing-related expenses, should not equal more than 43% of your gross monthly income.
Your mortgage is a long-term commitment, so the lender needs to be sure that you can make your payments. However, lenders understand that unexpected things can happen that may affect your ability to pay your mortgage. For this reason, your mortgage lender will consider your front-end DTI. This calculation considers the income you have with just the housing expenses alone. This ratio is ideally no more than 28%. This front-end DTI is considered because there may come a time when you may run into a financial crisis, and you would have no wiggle room to manage those unexpected expenses.
The Down Payment
Another major consideration in getting ready to buy a home is the down payment. Ideally, you want to be able to put down 20% of the price of the home. This will allow you to avoid private mortgage insurance (PMI), which is usually added to the mortgage payments.
You can buy a home without putting down 20%. Some people decide that they will not be in their home that long, or they may not want to put down that much money, to begin with. The larger down payment has its advantages, though. Your mortgage payments may be smaller, and you may have a better choice of lenders with a larger down payment.
Buying a new home is a big investment and knowing how to prepare for this milestone is helpful. At Voila Real Estate, we can help you decide if this is the right time for you to buy, and we can help you find the home you want. Contact us today to schedule an appointment.
Everyone knows that you need a closet in a bedroom to call it a bedroom, right? While this is a universally accepted de facto standard, good luck finding any type of authority that will back this up. At least not here in Minnesota. As a home inspector, this isn’t something that concerns me, but I get asked about this frequently. Thankfully, it’s pretty simple: you don’t need a closet.
There’s nothing in the Minnesota State Building Code that requires a closet. I’m not aware of a single municipality that requires a closet. There’s also nothing in the Minneapolis Housing Maintenance Code that requires a closet. In fact, they go so far as to say this in the Minneapolis Truth-In-Sale of Housing Evaluator Guidelines:
NOTE: Sleeping rooms do not need a closet to be considered a sleeping room, per MHMC, although lenders may require that sleeping rooms have closets.
So where does this so-called ‘requirement’ come from? I don’t know. It had to be a standard somewhere, at some point, or it wouldn’t have so much traction today. But still, that’s a good point that the city of Minneapolis brings up about lenders possibly requiring a closet. I’ve heard that this used to be a requirement for FHA loans. Lenders can ask for whatever they want, and as a home inspector, I don’t attempt to guess at what lenders will want.
I’ve also heard through the grapevine that real estate agents weren’t supposed to list rooms without closets as bedrooms. Apparently, that requirement went away a very long time ago, but people have long memories.
So what if you’re buying or selling a home and someone gets hung up on the closet thing? How do you get around that? Let’s start by defining what a closet really is.
The term ‘closet’ is defined by the building code as “A small room or chamber used for storage.” A chamber is “a natural or artificial enclosed space or cavity”. This means a 6″ box with a door that’s installed on the wall could be called a closet. Right?
Ok, maybe that’s silly. How about an armoire or a wardrobe? I’ve seen plenty of houses with only wardrobes in the bedrooms, and nobody had a problem with that. I’d argue that the cabinets, er… chambers shown below could be considered closets.
If someone insists that a room needs a closet to be called a bedroom, throw one of these in there. If someone argues that it’s not permanently installed, put a screw through it into the wall. There. Now it’s permanently installed.
Here at Structure Tech, we try to make a big deal about the big stuff and a little deal about the little stuff. This is little stuff.
The bottom line
Bedrooms do not need closets to be called bedrooms; at least not here in Minnesota. The next time someone tells you a bedroom needs a closet, ask for proof. If you find an authoritative reference that says a bedroom needs a closet anywhere in Minnesota, please share it with me.
The current seller’s market means homes aren’t hard to find but are difficult to land. This brings up a question we often hear: is a new construction home a better value than an existing home? The truth is that there are benefits and risks to each. So, let’s break it down.
With more and more millennial demand in the housing market, there simply won’t be enough existing homes on the market. Coupled with the current demand for homes, this opens big business for new development. While there are some advantages to choosing a newly constructed home, let’s first look at what you can realistically expect.
Supply & demand: With such high demands for housing in general, new construction costs have increased 15-20% on average
Escalation Clauses: Many developers are including clauses that make the home buyer responsible for rising costs of construction materials
Labor Shortages: Homes purchased pre-construction may be delayed in completion due to current labor shortages
Even though you can expect some hiccups in the home buying process, purchasing a new construction home does have some pluses. For example, they are often more sustainable, constructed with more environmentally friendly materials, designed with better insulation and windows, and equipped with more energy-efficient appliances.
One of the most significant factors driving the interest in newly constructed homes is that it’s much easier to find one to purchase. So, if you’re ready to buy, this might be the easiest option!
A Renovated Home
Just as with new construction, purchasing a renovated home does have its share of drawbacks as well. But there are benefits to choosing this route if you’re in the market for a new home.
Very Little Inventory: Newly listed homes are under contract almost as quickly as they are listed, giving home buyers very little time to shop for the home they truly love
Quick Decisions are Costly: The pressure to submit an offer the seller can’t pass up is intense, leading some to forgo the appraisal or inspection that can cause trouble later
May Need to Invest in Repairs: Renovated homes typically need more maintenance and repairs than new construction, and owners usually spend 5-7% of the home’s value annually
While you can expect this seller’s market to make finding the right home a challenge, there are some significant benefits once you do find the right one. For one, it’s typically move-in ready. As a result, you won’t have to wait for construction to finish so you can enjoy your new home.
If you’re ready to buy a house, which is the better value for you? The truth is that it depends on what you ultimately want in your new home and what you want out of the buying process. Either way, you can save some cash by choosing a flat rate realtor like Voila! to handle the paperwork for you.
Determining the actual value of your property can be difficult. Potential buyers can vary in their perceptions of what they are willing to pay for. Here are the top factors that influence the worth of your real estate property.
Your real estate property location is one of the biggest factors that influence the worth of your real estate property. The prices of other homes in your neighborhood can indicate what potential buyers will pay for your property. Quality schools and proximity to work and shopping opportunities can create a significant boost to overall value.
The bigger your real estate property is, the higher the value. The worth of your real estate property is typically estimated by dividing the sales prices by the total square footage. Usable space is crucial when determining square footage. Areas such as garages and unfinished basements do not add value to usable square footage. Bedrooms and bathrooms are highly valuable living spaces to boost the square footage value for your real estate property.
Upgrades and Open Spaces
Making upgrades to your real estate property can significantly boost its overall worth. The best returns on investments when it comes to updates will depend on your location. Pools can be great for expensive homes, while kitchen remodels may be best for cheaper homes. Adding open spaces and bonus spaces to your real estate property can add value to your real estate property. A few great bonus spaces include home offices, decks, wine cellars and hot tubs.
Need Help Selling Your Real Estate Property?
Mistakes can easily be made when trying to calculate the worth of your real estate property. At Voila, we strive to make the home selling process as simple as possible. Our agents can assist you in taking charge and getting the best price possible. Work with the flat fee realtors at Voila in Minneapolis – St. Paul for a home selling process that benefits the seller. You call the shots! Schedule an appointment with Voila today.
The level of equity homeowners have is at an all-time high. According to the U.S. Census, over 38% of owner-occupied homes are owned free and clear, meaning they don’t have a mortgage. Those with a mortgage are seeing their equity skyrocket too. Every time real estate values increase, homeowners get a dollar-for-dollar gain in their home equity.
“17.8 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.
The count of equity-rich properties in the first quarter of 2021 represented 31.9 percent, or about one in three, of the 55.8 million mortgaged homes in the United States. That was up from 30.2 percent in the fourth quarter of 2020, 28.3 percent in the third quarter and 26.5 percent in the first quarter of 2020.”
This surge in home equity has given most homeowners the opportunity to use that equity in one of two ways:
Refinance to cash out some of the equity or lower their current payment
Move to a home that better fits their current needs
Let’s break down the possibilities.
An abundance of equity and record-low mortgage rates can make refinancing a home very easy. Some homeowners choose to refinance so they can lower their payments. Others convert a portion of the equity to cash while keeping their monthly payment the same.
There are many homeowners who could take advantage of lower rates and higher levels of equity, but they haven’t yet. According to an Economic & Housing Research Note from earlier this month, there were over five million homeowners with a loan funded by Freddie Mac who would benefit by refinancing their loan. As of January 2021, there were:
452,122 loans with an average mortgage rate of 6.17%
1,027,834 loans with an average mortgage rate of 4.39%
3,687,780 loans with an average mortgage rate of 4.21%
With mortgage rates currently hovering around 3%, any of these homeowners would benefit from refinancing. They could lower their payments by hundreds of dollars per month or cash out large sums of equity while keeping their monthly payment the same.
If a homeowner has a $200,000 fixed-rate mortgage with a 6% interest rate and refinances that loan to a 3% interest rate, their monthly mortgage payment (principal and interest) will go from $1,199 per month to $843 per month – a savings of $356 a month, or $4,272 each year.
On the other hand, if they keep their mortgage payment the same, they could cash out a significant amount of their equity.
2. Move into your dream home
The past year prompted many households to redefine what a dream home really means, and it’s something different to everyone. Those who have a high mortgage rate could use their equity as a down payment and perhaps buy their next home without significantly raising their mortgage payment.
Suppose a person bought a house for $216,000 at the height of the market in 2006. (The median home price in May of 2006). If they put 10% down and took out a mortgage of $194,400 at 6.41% (the average rate in 2006), the monthly mortgage payment (principal and interest) would have been $1,217.
According to the National Association of Realtors (NAR), a typical single-family home has grown in value by approximately $150,000 over the last fifteen years. That means the $216,000 house would be worth about $366,000 today.
After deducting selling expenses, they would be left with about $130,000 ($150,000 minus approximately $20,000 in selling expenses).
A seller could take that equity and use it as a down payment on a new house. Let’s assume they purchased a home for $450,000 (roughly $80,000 more than the value of their current home). If they put the $130,000 down, they could take out a mortgage of $320,000 with a 3% interest rate. The monthly mortgage payment (principal and interest) would be $1,349. Therefore, they could buy a home worth $80,000 more than the one they have today and only spend an extra $132 per month.
Whether you’re refinancing your house or moving to a new home, your current mortgage rate and your level of equity are crucial in your decision-making process. Look at your mortgage documentation to find out your interest rate, and then let’s connect to determine the potential equity in your home. You may be surprised by the opportunities you have.
One of the biggest questions in real estate today is, “When will sellers return to the housing market?” An ongoing shortage of home supply has created a hyper-competitive environment for hopeful buyers, leading to the ultimate sellers’ market. However, as the economy continues to improve and more people get vaccinated, more sellers may finally be in sight.
The Home Purchase Sentiment Index (HPSI) by Fannie Mae recently noted the percentage of consumer respondents who say it’s a good time to sell a home increased from 61% to 67%. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, indicates:
“Consumer positivity regarding home-selling conditions nearly matched its all-time high.” (See graph below):
Fannie Mae isn’t the only expert group noticing a rise in the percentage of people thinking about selling. George Ratiu, Senior Economist at realtor.com, shares:
“The results of a realtor.com survey . . . showed that one-in-ten homeowners plans to sell this year, with 63 percent of those, looking to list in the next 6 months. Just as encouragingly, close to two-thirds of sellers plan to sell their homes at prices under $350,000, which would offer a tremendous boost to affordable housing for first-time buyers.”
If you’re considering selling your house, don’t wait for more competition to pop up in your neighborhood. Let’s connect today to explore the benefits of selling your house now before more homes come to the market.
Last month, in a post on the Liberty Street Economics blog, the Federal Reserve Bank of New York noted that Americans believe buying a home is definitely or probably a better investment than buying stocks. Last week, a Gallup Poll reaffirmed those findings.
In an article on the current real estate market, Gallup reports:
“Gallup usually finds that Americans regard real estate as the best long-term investment among several options — seeing it as superior to stocks, gold, savings accounts and bonds. This year, 41% choose real estate as the best investment, up from 35% a year ago, with stocks a distant second.”
Here’s the breakdown:The article goes on to say:
“The 41% choosing real estate is the highest selecting any of the five investment options in the 11 years Gallup has asked this question.”
Is real estate really a secure investment right now?
Some question American confidence in real estate as a good long-term investment right now. They fear that the build-up in home values may be mirroring what happened right before the housing crash a little more than a decade ago. However, according to Merrill Lynch, J.P. Morgan, Morgan Stanley, and Goldman Sachs, the current real estate market is strong and sustainable.
As Morgan Stanley explains to their clients in a recent Thoughts on the Marketpodcast:
“Unlike 15 years ago, the euphoria in today’s home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . . . This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.”
America’s belief in the long-term investment value of homeownership has been, is, and will always be, very strong.
Buying your first home can be fraught with trouble and expenses that could be avoided if you learn what other first-time homebuyers wish they knew going in. Here is a list to help you prepare.
Get Mortgage Pre-approval Before Looking for a Home
Don’t get attached to a particular home to buy before you are preapproved. Getting pre-approval for a mortgage tells you what you can afford. It also speeds up the offer and purchase process and helps sellers take you seriously over other offers that still require approval. You could lose out on a home if you must wait to get approved.
Monthly Payments Are as Important as the Total Home Price
When assessing the affordability of a home, even if the price fits your approved mortgage amount, it’s important to figure out the monthly payments with the taxes, interest, and insurance added. First-time buyers often underestimate this and then struggle after the sale to afford their new home.
Be Choosey About Your Lender
Make sure your mortgage lender works with and for you in a timely manner. Don’t just settle on the first one you talk to without ensuring their promptness. Compare rates and be aware that a lender who doesn’t take your needs seriously could sabotage your negotiations with a seller.
Inspections Aren’t Just a Legal Technicality
Don’t be in such a hurry for your selected home to pass inspection just so your mortgage company gives the green light. You want to dig deeper than the surface in an inspection to be sure there are no major costly issues with the house and property that you will regret later. Get a well-respected inspector to go over the home, top to bottom. Finding issues may not deter you from buying, but it may help you negotiate a better price that will mitigate the expense of getting extra repair work done after the sale.
Don’t Compromise What You Want to Save a Few Thousand Dollars
Whether you get a 15 or 30-year mortgage, a few extra grand won’t necessarily add that much hardship to the practical cost for a home that provides the size, features and value you need over time. Remember, it’s also about what you can pay monthly, which can be lessened with a higher down payment, better interest rates, lower closing costs, property taxes, and insurance. Don’t skimp on important needs, or you may grow out of the house and end up paying for another move too soon.
Be Prepared for a Wild Emotional Ride
Buying a home is a wonderful step into your independent financial goals, along with finally being a homeowner. You should also realize that many things can go wrong. Sellers can make your life difficult. Mortgage rules and paperwork is exhausting. Offers can look promising and then fall through at the last minute. Buying a home can be extremely stressful. The bottom line is to keep a check on your emotions and don’t get discouraged when circumstances change.
Using Voila! real estate services can help you make good early decisions in this crazy seller’s market. Don’t go it alone, especially in your first time buying. Let us help you walk through the process with confidence. Remember, you don’t pay for the services of a buyer’s agent since all fees are paid by the seller. Contact us today!