Rent vs. Buy: Either Way You’re Paying A Mortgage

Rent vs. Buy: Either Way You’re Paying A Mortgage

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either your mortgage or your landlord’s.

As The Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

The graph below shows the widening gap in net worth between a homeowner and a renter:

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting with home values and interest rates projected to climb.

Credit: KCM Crew 

Reports Reveal Two Reasons to Sell This Winter

We all realize that the best time to sell anything is when demand is high and the supply of that item is limited. The last two major reports issued by the National Association of Realtors (NAR) revealed information that suggests that now is a great time to sell your house.

Let’s look at the data covered by the latest Pending Home Sales Report and Existing Home Sales Report.

THE PENDING HOME SALES REPORT

The report announced that pending home sales (homes going into contract) are up 3.9% over last year, and have increased year-over-year now for 14 consecutive months.

Lawrence Yun, NAR’s Chief Economist, expects demand to remain stable through the final two months of the year, and “forecasts existing-home sales to finish 2015 at a pace of 5.30 million – the highest since 2006.” 

Takeaway: Demand for housing will continue throughout the end of 2015 and into 2016. The seasonal slowdown often felt in the winter months hasn’t started and shows little signs of being near.

THE EXISTING HOME SALES REPORT

The most important data point revealed in the report was not sales but instead the inventory of homes on the market (supply). The report explained:

• Total housing inventory decreased 2.3% to 2.14 million homes available for sale
• That represents a 4.8-month supply at the current sales pace
• Unsold inventory is 4.5% lower than a year ago

There were two more interesting comments made by Yun in the report:

1. "New and existing-home supply has struggled to improve, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets."

In real estate, there is a guideline that often applies. When there is less than 6 months inventory available, we are in a sellers’ market and we will see appreciation. Between 6-7 months is a neutral market where prices will increase at the rate of inflation. More than 7 months inventory means we are in a buyers’ market and should expect depreciation in home values. As Yun notes, we are currently in a sellers’ market (prices still increasing).

2. "Unless sizeable supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home.” As rents and prices increase, potential buyers will not able to save as much for a down payment and many may become priced out of the market.

Takeaway: Inventory of homes for sale is still well below the 6 months needed for a normal market. Prices will continue to rise if a ‘sizeable’ supply does not enter the market. Take advantage of the ready willing and able buyers that are still out looking for your house.

Bottom Line

If you are going to sell, now may be the time.

Credit: KCM Crew 

Selling Your House? 5 Reasons You Shouldn’t For Sale By Owner

Selling Your House? 5 Reasons You Shouldn’t For Sale By Owner

In today's market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five of those reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always, find some problems with the house
• The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 89% of buyers search online for a home. That is in comparison to only 20% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

• 44% on the internet
• 33% from a Real Estate Agent
• 9% from a yard sign
• 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Credit: KCM Crew

Merry Christmas

From Heidi's home to your home, HAVE A VERY MERRY CHRISTMAS!

A New Home For Christmas

A new home for Christmas is a gift that will last a lifetime! 



Contact Heidi Buchberger RE/MAX Realty Center to purchase a new home this Christmas! 

How Long Does It Take To Save A Down Payment?

n a recent study conducted by Builder.com, researchers determined that nationwide it would take “nearly eight years” for a first-time buyer to save enough for a down payment on their dream home.

Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage a renter spends on housing in each state and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.

According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state:

What if you only needed to save 3%?

What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states as shown in the map below.

Bottom Line

Whether you have just started to save for a down payment, or have been for years, you may be closer to your dream home than you think! Meet with a local real estate professional who can help you evaluate your ability to buy today.

Credit: Keeping Current Matters

Home Equity Increasing as Home Prices Rise

  Some Highlights:

• 91.9% of homes in the US have positive equity
• 256,000 homes regained equity in the third quarter of 2015
• 37.5 million homes have significant equity (defined as more than 20%)

10 Houseplants You Can't Kill

Stock your home with these agreeable, hearty specimens and all your friends will be jealous of your green thumb.

• Aspidistra
• Bromeliads

 

Variety of Flower Colors

• Fiddle Leaf Fig
• Haworthia
• Parlor palm
• Pothos
• Rhipsalis
• Snake plant

 

Snake Plant & ZZ Plant Co-Exhist Happily!

• Yucca
• ZZ Plant

Credit- STEVE ASBELL

8 Mistakes that Decrease Your Home's Value

8 Mistakes that Decrease Your Home's Value
 
Keeping up your home’s curb appeal shows more than pride of ownership. It shows respect for your neighbors. When or if you decide to sell, a well-maintained home means it will sell faster and likely for top dollar. Similarly, maintaining your home’s interior is likely to pay off in the end.

Real estate experts told House Beautiful Magazine these eight missteps could cost you in the long run:

Landscaping without thinking ahead – Trees planted too close to the house or driveway without much thought about how big they will get can cause major problems later – like roots causing breaks in the pavement or interfering with sewer or water lines.

Letting the entryway languish – Unkempt shrubbery around the front entry, or a door that needs updating makes people wonder what else has been let go inside.

Choosing funky paint colors – Don’t choose an exterior paint color that is too far afield of neighbor homes and stay away from contrasting trim colors that distract instead of attract the eye.

Neglecting the small stuff – Watch out for dirty windows, torn screens or broken light fixtures that show a distinct lack of care.

Hanging on to old appliances – Pay attention to the age and quality of your kitchen appliances. A stovetop that is too old and scratched to be cleaned properly is a turn-off. In addition, appliances that aren’t energy-savers are costing too much money to run.

Skipping a deep clean – Details matter when it comes to home care. Look out for dirt in the window tracks, dirty grout in the tile or badly stained carpets.

Thinking too small – A small bathroom will seem smaller when tiled with small tiles than with larger ones. Peruse dêcor magazines for ideas that help to open your space.

Neglecting wood floors – Water and vinegar dulls them over time. If you can’t afford to refinish them, have them buffed every few years.

Copyright© 2015 RISMedia

10 Everyday Habits to Make Any Small Space Dweller Happier at Home

Alana's Brooklyn Railroad

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There are plenty of habits everyone should adopt to keep a home reasonably clean and tidy. Here are ten worth practicing in any size home, but especially vital for people living in small spaces when even a small amount of clutter can make your home look and feel messy.

1. Make your bed each morning. In a small room, the bed may take up half the space or more so if it's not made it will look unkempt even if everything else is in order.
2. Take care of your dishes as soon as you're done with them. If you have a dishwasher, put them in it. If you don't, try to wash them right away or, at the very least put them in the sink. Keeping counters clear in a small kitchen is key.
3. Process your paper mail each day. Small space living is a constant fight against "piles". Try to deal with your mail soon after you bring it in—recycle, file, shred, etc.—so you don't end up with even a small pile (which is always a slippery slope).
4. Digitize as much as you can. If you have a piece of paper that *might* be important, but you're not sure—take a photo of it and then recycle it.
5. Straighten as you go. Get in the habit of straightening and returning things to their homes as you walk around your home. Gabbing on the phone? This is an ideal time to do some straightening.

Christina's Sunny South Austin Digs

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6. Put your coat and bag away as soon as you get home. Don't drape them on a chair or leave them on a table. As my husband likes to say "don't put it down, put it away."
7. Deal with in-store or online returns as soon as you can. Don't let boxes or packages or items clutter up your space and don't take the risk that you will lose receipts and other documentation.
8. Break down unwanted cardboard boxes immediately and take them outside to recycle as soon as you can.
9. Cook from your pantry. How many half boxes of pasta are in your cabinet? Or cans of beans you bought for a recipe and never used? Be vigilant about using stuff up before your cabinets are a complete jumble.
10. Put your clothes away each night before bed. Don't let them accumulate at the end of your bed, on a chair or, the worst, on the floor.

Do you have any useful habits in your small home to defend against clutter and mess?

(Image credits: Sherrie and Oliver ; Kate Bowie Carruth )

10 Things to Toss From Your Kitchen in the Next 10 Minutes

Got a small window of free time? Use it to de-clutter your cook space in a flash by unloading these extraneous items.

• Duplicate tools. (You don’t need three whisks or four graters.)
• Mismatched mugs. (Buy a nice-looking set instead.)
• Chipped plates.
• Takeout menus. (They’re all online.)
• Ketchup and soy sauce packets.
• Worn-out water bottles.
• Specialty glassware you keep on the top shelf and never use. (Examples: tiny cordial glasses, heavy beer steins.)
• Lids without a pot.
• Kiddie plates (i.e. princess- or Elmo-themed) that your preteens have grown out of.
• Restaurant takeout containers. (Invest in a unified set that will instantly neaten up your shelves and refrigerator

Pets Need A Healthy Home for the Holidays

The holidays are a time for family – and that includes the four-legged members! Here are some tips to keep animals safe during seasonal celebrations.

2016 Home Buying Force Full of Millennials

2016 Home Buying Force Full of Millennials

2016’s Buying Force

Fueling the increase in total sales, realtor.com® predicts three distinct segments of home buyers to dominate: older millennials (25 to 34 years old); younger Generation Xers (35 to 44 years old), and retirees (65 to 74 years old), Smoke says.

Millennials: Millennials are expected to make up the largest demographic of buyers in the coming year at 30 percent of the existing home market.

“Driven by increasing income, millennials will seek out homes that meet the needs of their growing families – putting the most weight on the safety of the neighborhood and the quality of the home,” according to realtor.com®’s forecast. “Commute time and a preference for older homes have these buyers looking in city centers and closer-in suburbs.”

Contact Heidi Buchberger RE/MAX Realty Center to BUY your next home!

262-443-2672

heidi.buchberger03@gmail.com

WHY YOUR REALTOR MAY SAY "YOU'RE FIRED!"

Posted by Debbie Drummond on Friday, November 20th, 2015 at 6:41pm.

THE "DO NOT" LIST WHEN BUYING & SELLING YOUR HOME

The Real Estate profession attracts a variety of personalities.  Most who succeed in real estate do so because they care about helping their clients.  Having to "fire" a client is not something agents look forward to.  In fact, we may go out of our way to avoid firing a difficult client.  

Realtors don't get paid until you buy or sell your home.  They have no choice but to fire clients who insist on counter-productive tactics.  These are some things to avoid if you don't want to hear "You're Fired!"

REALISTIC BUYERS & SELLERS FINISH FIRST

Buying a home can be similar to buying a car.  Look at the payment estimator on the website for a luxury car like Lexus or Mercedes.  Ask for a vehicle you can buy or lease for $250/month with no money down.  You get zero results.  

The same is true when buying a home.  If you want a home with a pool in the most popular area, you won't find it for the economy price.

An experienced Realtor will help you understand the current market.  They'll help you decide how much to offer.  When the offer is accepted they will guide you through each step of the home buying process.

If you insist on making a lowball offer, your Realtor may let you try it once or twice.  Sellers may counter or simply reject low ball offers.  While you're waiting for the seller's response, another buyer may come along and make a better offer.  If you continue making lowball offers, smart agents will stop wasting their time on you.

The Price isn't RIGHT!  When marketing homes for sale, Realtors invest their time and money.  Professional photographs, virtual tours and advertising expenses can add up.  The best marketing in the world won't sell a home if the price isn't right. Many Realtors reject over-priced listings rather than wasting their time and money.

If you disagree with the price your Realtor suggests, let them know you disagree but give them a chance to show how they arrived at the price.  Remember, even Zillow admits they are not 100% accurate.  If your Realtor has comps supporting their price, chances are good your Realtor is right and the online evaluation is off.  Remember, the online valuations have not seen your home or the comps.

TIME IS OF THE ESSENCE

One of the most frustrating clients Realtors encounter is the one who ignores the paperwork.  When you're buying a home, not performing in a timely manner can have consequences.  Some of the most challenging clients are the ones who procrastinate until the last minute.  Missed deadlines can put deals in jeopardy.  They may even trigger penalties such as a per diem for closing delays.

Buyers who fail to have inspections performed during the due diligence period may waive their right to do them.  Once the due diligence period has passed, contingencies based on inspections are considered removed.

If you're buying a home in a Homeowner's Association, take time to review the HOA documents as soon as you receive them.  The HOA documents are an important contingency.  If you find them objectionable you must cancel within the specified time frame.  In Nevada, buyers have 5 days to review the HOA documents.  Find something objectionable?  You can cancel within the five day period and get your deposit back.  Wait longer and your Earnest Money Deposit is at risk.

Loan Documents are necessary.  Providing all necessary documents to the lender is another area where delaying can cause problems.  Today's underwriters must follow stricter guidelines.  Once they review the initial documents, they will usually have another list of items for the buyer to provide.  The new documents may lead to requests for more.  Buyers who delay getting items to the lender may not get their loan approved in time.  

Sellers must co-operate with the time frame.  Those who don't allow buyers access for inspections and appraisals can put themselves at risk.  HOA documents need to be ordered so the buyer has time to review them.  Disclosures need to be completed, signed and provided to the buyers.  Delays in these areas can delay closing.  

One of the most common problems with sellers is not moving out in time.  Most Wisconsin escrows close in 30-45 days. The buyer is entitled to a "Final Walk Thru".  In order for the buyer to do their walk thru, you need to move out.  Start packing as soon as you accept the offer.  It's a good idea to schedule moving out after they've performed inspections and removed contingencies.  You must be out before closing so the buyer can do their final walk thru.  If necessary, you can put your possessions in storage.

HOW MUCH HOME CAN YOU AFFORD?

Most Realtors have at least a couple of experiences with unqualified buyers.  Newbie agents may be timid about getting buyers pre-approved before showing them homes.  Experienced agents may occasionally have a client who has a pre-approval but something gets them dis-approved.

Few things are more frustrating than spending days chauffeuring a buyer all over town only to find out they can't buy a home. It's frustrating for the Realtor who could have used the time for other activities.  It's embarrassing and frustrating for the buyer who finds their dream home only to learn they can't buy it.  The embarrassment and frustration can easily be avoided by finding out how much house you can afford before going to look at homes.

New agents may be willing to take a chance showing homes to buyers without pre-approvals.  This isn't a good idea.  There are better ways to get to know the neighborhoods.  Try previewing homes for sale, attend broker opens and network with experienced agents.  Letting a buyer into the car is a liability for any agent.  Realtor safety is one concern.  Have an accident with a buyer in the car and insurance can skyrocket.  Agents shouldn't risk taking out a buyer who isn't pre-approved.

Many of today's sellers demand that buyers be pre-qualified before they can see their home.  This is definitely true in the luxury home market.  High end home owners are not only concerned that unqualified buyers will waste their time.  It becomes a security concern.  Luxury home buyer paying cash?  Sellers will want to see a proof of funds or letter from the buyer's financial institution to verify that the buyer can afford the home.

Buyers who will not get a pre-approval or provide a proof of funds will find themselves low on the totem pole with top agents. This is true in any price range.  It's more important in the luxury home market.  Over the years, I've had many calls from buyers who want to see high end homes.  Legitimate buyers understand when asked for a pre-approval or proof of funds.  Most would expect the same from buyers viewing their home.  A simple letter from a financial adviser can verify your assets without revealing account numbers or your identity.

FEDERAL FAIR HOUSING LAWS MUST BE FOLLOWED

If you suggest that you'd prefer buyers of a certain nationality, religion, etc., a smart agent will not list your home.  Aiding a seller who wants to discriminate is one of the easiest ways for a Realtor to jeopardize their license.  Not to mention they can get stuck with huge fines.  You can also be liable if you are found guilty of discrimination.

Most sellers are more concerned about getting the best price for their home than trying to pick and choose the buyer.  They focus on the buyer's financial qualifications instead of color or religion.  Experienced Realtors inform sellers that they follow Federal Fair Housing Laws and walk away from sellers who insist that their home should only be shown to "x" buyers. 

Buyers who want to be in a neighborhood that's predominantly a particular race are another form of discrimination.  Fair housing laws prevent Realtors from steering buyers to or from specific neighborhoods.  This means Realtors cannot tell you that a neighborhood is or isn't "safe".  

Realtors can suggest you consult with the local Police Department.  In Milwaukee, the official Metro Police Department website has a crime mapping tool.  Besides researching online, it's always a good idea for buyers to drive by properties that interest them at various hours.  Even in the best area, you can find that neighbor who likes to have parties until 5:00 a.m.  These are little details that even the best Realtor won't know.

HOW TO SUCCEED WHEN BUYING AND SELLING YOUR HOME

Our Realtor friend, Bill Gassett wrote a great article "10 Things Buyers Do that Realtor Hate".  When I read the article, I had to smile because he captured things that Realtors find irritating.  The reason the 10 things are so annoying is they are sure fire ways to fail.  

If you insist on sabotaging the Realtor's efforts, your agent will not only be annoyed but you won't succeed in buying or selling your home as easily as you could have.  Realtors deal with home buyers and sellers everyday.  If your Realtor is getting annoyed, your actions may be like shooting yourself in the foot.

Call Now

Heidi Buchberger RE/MAX Realty Center 262-443-2672

heidi.buchberger03@gmail.com