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Buying • January 9, 2023

Should I Buy a Home After 60?

by Suzanne Volkman

While you might not immediately associate retirement with homeownership, buying a home after age 60 can be thrilling and financially savvy. Instead of looking for highly rated school districts, you can find the ideal combination of comfort, affordability and proximity to those who matter most. That said, no matter your circumstances, buying a house as you near retirement age can have a lasting impact on your retirement finances. Here’s what you should consider before buying a house after age 60.

A financial advisor can help you figure out when buying a home makes sense for your financial plan.

Pros of Purchasing a Home After Age 60

Purchasing a home after age 60 can be a wise financial move. Here are four common benefits:

Opportunity to build equity. No matter where you are in life, equity is a powerful financial tool. When your home value rises above the amount left on your mortgage, you’re building equity. For example, if you have a $300,000 home and your mortgage loan balance is $200,000, you have $100,000 of equity.

You can use equity to pay for various needs, such as home repairs, paying off debt, or funding a vacation. In addition, the more equity you have, the more potential profit you’ll make by selling your home. Therefore, building equity gives you financial leverage in numerous situations.

Tax breaks. Homeownership means tax breaks! Depending on your circumstances, you may be able to take advantage of the following:

  • Mortgage interest deduction. If you bought your home before December 16, 2017, you can likely deduct $1 million of interest paid on your mortgage if you’re married and filing jointly. If you became a homeowner after that date, you can deduct $750,000 instead (and deduct half of those limits if you’re married filing separately or single).
  • State and local tax (SALT) deduction. You can deduct a maximum of $10,000 of state and local property taxes annually (half that amount if you’re married filing separately or single).
  • Home improvement interest. As a homeowner, you can borrow against your equity through a home equity loan or home equity line of credit (HELOC) to pay for home improvements. In addition, you can deduct your interest payments on your taxes. This deduction only applies when you use these financial products to pay for home improvements.

Security. Housing is currently in high demand and renters can lose their homes at the whim of landlords or economic instability. On the other hand, if you have a fixed-rate mortgage, your housing payment won’t change after you move in. As a result, homeownership gives you solid financial footing and a consistent monthly housing bill that won’t jump because of market fluctuations.

Establish a legacy to leave behind to your heirs. A well-maintained home is an asset and buying one after age 60 means decades of homeownership for you and future generations. By passing on your home to your heirs, you can provide them a financial foundation from which to build. Housing is usually a family’s largest monthly expense and removing that for your children or grandchildren is a tremendous benefit.

Cons of Purchasing a Home After Age 60

While homeownership after age 60 can bring a host of positives, here are three common drawbacks before signing the dotted line on closing day:

Maintenance and repair costs. A home is an asset and a responsibility. Once you move into a new home, you inherit seemingly limitless chores and tasks: mowing the lawn, cleaning the gutters and getting rid of pests, to name a few. Plus, as you age, you might become unable to get up on ladders or spend hours raking leaves, meaning you’ll pay for these services.

In other words, homeownership brings physical and financial demands for the care of your property. Therefore, saving money for upkeep is essential. It’s recommended to budget 1% to 4% of your home’s value for annual repairs and maintenance. For instance, you might have a $250,000 home. In this case, you would budget $2,500 to $10,000, depending on your situation.

Closing costs. Buying a home is exciting, but closing day can exhaust your savings. For example, you’ll pay for loan origination fees, home inspections, and title insurance during the home-buying process. As a result, you can expect to pay between 3% and 6% of your loan balance in closing costs. Moreover, these expenses are separate from your down payment, meaning you’ll likely need tens of thousands of dollars to purchase a home.

Lack of flexibility when circumstances change. A significant benefit of renting is the lack of commitment. For example, if you want to pick up and move across the country as a renter, you wait for your lease to end (or break it early if you can afford it) and leave your apartment or rental home behind. Once you hand over the keys, it’s a clean break.

On the other hand, homeownership makes it more challenging to pull up your roots at a moment’s notice. Selling or renting out your home takes time, effort, and more money. Therefore, if you like moving frequently, homeownership can be a hindrance instead of a blessing.

Key Considerations When Buying a Home After Age 60

Buying a home after age 60 is a serious financial commitment. Here are three key points to keep in mind when making your decision:

Housing timeline. If you envision spending the next 20 years in your next home, homeownership is likely an excellent move. However, as the number of years you’ll live in the home decrease, the benefits of homeownership decrease. Specifically, living in a home for less than five years after buying will likely nullify the financial gains from tax breaks or increases in home value. As a result, it’s wise to ask yourself what your plan is for the next decade or two. If it involves moving multiple times, a home might be a liability rather than an asset.

Evaluate the real estate market. Your region’s real estate market is unique from the other side of the state or country. For example, urban areas can be more affordable for renters than homeowners. On the other hand, you might find an affordable slice of land in the countryside that perfectly suits you. Therefore, it’s a good idea to weigh your preferences against your local housing market. A high supply of homes and modest interest rates can help make buying a home affordable.

Identify the home that suits you. After age 60, you might want to spend your time on something other than mowing grass or shoveling snow. So, it’s crucial to ask yourself what type of home is realistic to own. Acres of land might be out of the question unless you can afford help taking care of it. On the flip side, a condominium with built-in lawn care can provide comfort and convenience.

Is Buying a Home After Age 60 a Good Idea?

Buying a home after 60 can make sense if you have sufficient monthly income and find an affordable home. In addition, if you’re physically capable of maintaining the home or can pay for extra help, homeownership won’t become burdensome. Lastly, if you have family you’d like to leave the home to, you can enjoy decades of living in a house that will someday belong to your children and grandchildren.

On the other hand, buying a home after 60 can hurt you financially. For example, if you plan on moving in five years or less, the expenses of homeownership will cost more than the financial benefits. Plus, you’ll have to sell or rent out the home when you want to move. As a result, homeownership can incur responsibilities you may not want to shoulder, especially if you’re retired and want to travel.

Bottom Line

Buying a home after age 60 can be a blessing or curse, depending on your circumstances. While you can reap tax advantages and leave a legacy for your family, owning a home is a commitment with definite financial implications. Therefore, evaluating your financial capabilities and your plan for the next few decades can help you decide whether it’s best to put down your roots as a homeowner or become a renter with fewer responsibilities.

Tips for Buying a House After Age 60

  • Homeownership affects your monthly budget and overall financial plan. A financial advisor can help you ensure that buying a home makes sense for your financial plan.
  • Preapproval from your lender is critical to making a serious offer on a home. Without preapproval, sellers don’t know if you have the financial backing necessary to purchase a house. So, before browsing through homes, it’s best to shop around for a lender and submit your financial information (tax returns, W-2s, pay stubs, bank statements, etc.). Once you receive approval, you can make offers with confidence.
Buying • January 9, 2023

How to make your homebuying dreams come true

by Suzanne Volkman

The past couple of years have been a wild ride for the housing market. With historically low mortgage rates, buyers were entering the market at an unprecedented rate—a rate so fast that supply couldn’t keep up with demand. As the pandemic progressed, prices soared while homes were swept off the market within hours.

Eventually, mortgage rates increased as well, making 2022 the year for increases in both home prices and mortgage rates—a costly combination that caused many buyers to retreat to the sidelines hoping for better luck next year. But now that next year is here, many of the homebuying headlines are painting a grim picture of the housing market.

If your goals for 2023 include buying a home, you might be wondering if you’ve set yourself up for failure. But it’s not all doom and gloom out there. With a little planning ahead, and a whole slew of loan options and programs to offer, we can help you reach that 2023 goal of getting into the home of your dreams.

So, what can you do if you were hoping to make 2023 the year for homebuying success?

Try for a temporary buydown

Giving you the peace of mind that comes along with a fixed-rate mortgage, this option allows you to keep your payments low for the first year or two of your loan but still know exactly what all your future payments will look like.

An upfront deposit at closing allows your mortgage rate to essentially be “bought down” for a specified period of time. This upfront deposit can come from sellers or builder partners. We offer five different Rate Reduce programs to help you ease into your new home and mortgage payment as you build equity.

It’s often during the first few years in a new home where owners are looking to make purchases that help to make a house a home—furniture, fittings and accessories, paint projects, etc.—but it’s not necessarily an ideal time to be adding extra costs to your budget. Our Rate Reduce programs can help to give you a little breathing room while you’re just getting acclimated to your new monthly mortgage payment.

Amplify your options with an ARM

Similar to our buydown programs, ARMs  (adjustable-rate mortgages) offer the potential for lower monthly payments at the beginning of the loan. With an initial fixed-rate period (usually for five, seven or 10 years) featuring a low introductory rate, ARMs can be an attractive option for those looking for and adjustment period (pardon the pun) with their mortgage payments.

This initial fixed-rate period is followed by a variable-rate period for the remainder of the loan. Though ARMs aren’t for everyone, they can be an excellent option for those who don’t plan on staying in their home for longer than five to 10 years.

If you do plan on staying in your home for longer than 10 years, there’s also always the opportunity to refinance when you’re getting close to the conclusion of your fixed-rate period. The risk with relying on refinancing is that you’ll be at the mercy of the market at that time. But if you keep an eye on current rates, you might be able to find an ideal time to refinance. Working with a good loan officer is key, too. Our loan officers will even reach out to you if they foresee an opportunity that could be beneficial for you.

Don’t forget about down payment assistance programs

Are you a first-time homebuyer? If so, there might be a down payment assistance program that could help give you a boost. Sound too good to be true? There are tons of options out there and you could end up being surprised by your eligibility. From state to federal programs to neighborhood- to occupation-specific options, both government agencies and private organizations have programs worth investigating.

A down payment can be a hurdle for many first-time buyers. There are instances where buyers are ultimately paying the same amount in rent as their monthly mortgage would cost, but just don’t have a large enough down payment to make buying a possibility. This is where a down payment assistance program proves to be invaluable—allowing buyers to start building equity sooner.

Consider community lending

These types of programs create alternatives for buyers who don’t necessarily meet the industry-standard, traditional mortgage qualifications. With more flexible guidelines, someone who might not have otherwise been approved for a mortgage could find the financing they need to become a homeowner through a community lending option.

We’re also seeing more of these programs not limiting requirements to income but looking at lending areas that may be underserved as a whole. It’s worth inquiring whether the neighborhood you’re looking to buy in would fall under this category. Your loan officer will be able to find that information out for you.

Turn your current home into your dream home

Maybe you’ve found yourself a fixer-upper, but you’re concerned with how you’re going to cover the costs of the much-needed repairs. Or maybe you’ve stretched your home budget to the limit (or know that you will once you make your move) after your down payment, closing costs and now new monthly mortgage payment, and you’re wondering how you’re going to fill your new rooms.

First of all, it’s fine to take your time with this. Don’t expect to have every room in your new home perfectly furnished right after you move in. If you’re going from a two-bedroom apartment to a three-bedroom home, it’s likely it’s not just the extra bedroom that you’re going to need to fill with new furniture. You might be looking at the addition (all at once) of a family room, dining room, living room, basement, back patio—all kinds of furniture-less new rooms.

A personal loan allows you to make some of these big-ticket purchases together with a set budget in the amount of your loan. You’ll know exactly how much your monthly payment will be, so you don’t have to worry about fluctuating bills. If you put these larger purchases on a credit card, but still need to use the card for other purchases before paying off your balance entirely, you’ll be unsure of what your bill will look like each month.

Personal loans also typically offer significantly lower interest rates than credit cards, as well as more time to pay off your purchase or project. While some credit cards offer balance transfers or a 0% APR for an introductory period, even the best of these promotional offers extend out for about only 15-21 months. Then once this introductory period is over the APR generally shoots up into the double digits, with some of the best-rated introductory offers adjusting to as high as a 27.99% variable APR. Personal loans offer a fixed rate for a specified number of years.

HELOC for home updates

If you’re already a homeowner and hoping to move because you’re looking for an upgraded kitchen, bathroom, extra bedroom—you name it—you might be able to use a HELOC (home equity line of credit) to make some of those updates to your current home without having to move.

A traditional HELOC is a revolving line of credit that turns your equity into money you can use for almost anything. Using your property as collateral, a HELOC sometimes comes in the form of a second mortgage (but not always). The amount you can borrow will depend on the amount of equity you’ve built up.

There are non-traditional HELOCs available as well. These function slightly differently, as the full amount is deposited into your bank account after loan approvals, so you aren’t paying as you go. These HELOC options are still a line of credit and typically offer the flexibility to draw more funds once you’ve started to pay back your initial deposit.

With a HELOC, you can use your home to improve your home—and bonus points if these improvements also boost its overall value. We have a great resource for gathering both estimates of potential projects as well as information regarding what your return on investment (ROI) might look like. Our article can help you decide when to stick with the basics and when to consider springing for a luxury version.

Conclusion

When it comes to getting into your dream home—or fixing up your current home to make it everything you’re looking for—there are so many options. A good loan officer will be able to help you clear some of the homebuying hurdles you’re facing. Make sure to speak with someone you trust to help you navigate all the options available to you.

 

https://www.grarate.com/article/making-your-homebuying-dreams-come-true

Home Improvement • Selling • December 20, 2022

Thinking of selling in the spring? Here are home improvement projects you should tackle now (and which to skip)

by Suzanne Volkman

Sellers gearing up for the spring home shopping season need to roll up their sleeves now and spruce up their homes if they want to attract a shrinking pool of buyers. Investing in improvements, maintenance and repairs could pay off when it’s time to sell. New research conducted by The Harris Poll finds a majority of recent sellers (65%) take on at least two home improvement projects to prepare their home for sale, while Thumbtack data finds they can invest about $5,400 on average when hiring a professional to complete the most common projects.

The survey finds that sellers who sold their home within the past two years most commonly completed interior painting (40% did this), carpet cleaning (35%) and landscaping (33%) before listing their home for sale.

Data from Thumbtack shows the average cost of those projects adds up to $5,388, but can average as much as $8,249 in metro areas like Seattle–Tacoma and as little as $4,102 in metro areas like Miami–Fort Lauderdale. In addition to location, costs for these home improvements can vary based on the size and scope of the project. For instance, smaller landscaping projects, such as flower planting, lawn upkeep and shrub trimming, can cost several hundred dollars, while larger projects involving tree planting and sprinkler installation can cost thousands.

“These projects can instantly boost a home’s online curb appeal,” said Amanda Pendleton, Zillow’s home trends expert. “An inviting outdoor space, clean floors and a fresh coat of paint — particularly in the right color — can deliver a powerful signal to potential buyers that a home is well-maintained and contemporary. While sellers may be reluctant to shell out for these projects up front, those improvements can ultimately pay off, either by helping a home sell faster or for more money.”

Nearly 3 in 4 recent sellers (74%) believe the improvement projects they completed to prepare their home for sale helped their home sell. The top projects that recent sellers say helped sell their homes were interior painting (27%) and landscaping (21%).

“A well-maintained home is one of the best ways for homeowners to attract buyers,” said David Steckel, home expert at Thumbtack. “Thumbtack research finds a well-maintained home can sell for about 10% more than a similar home in average condition. Buyers are making life’s biggest investment, and they want the peace of mind that they’re investing in a home that was well cared for.”

When considering which projects to skip, only 11% of recent sellers thought appliance repair or replacement, and roof repair, maintenance or cleaning helped sell their home. Meanwhile, fewer than 1 in 5 of recent sellers (17%) believe completing a kitchen renovation to prepare their home for sale helped sell it. While costs vary depending on the work done and materials chosen, this project can average $10,355.

Neglecting needed repairs and minor cosmetic updates can lead to seller regret, particularly in today’s shifting market. The Zillow survey found that 30% of recent sellers think more home improvements or repairs would have helped them get a higher sale price. Separate research finds that about 2 in 3 real estate agents believe today’s sellers are mistaken if they think they don’t need to make home improvements before selling.

Late April is traditionally the best time to list a home for sale, which means now is the time to get a jump on any repairs or improvements. Previous research found that the top seller’s regret is that they didn’t start the process of preparing their home for sale sooner. And one-quarter of sellers who made at least one home improvement before listing their home for sale say it took longer than expected.

Today’s housing market is far different than the frenzied pandemic era of bidding wars and record-fast sales. A recent study finds that homes are now lingering on the market for a median of 54 days, 45% longer than last year. However, the listings that are finding buyers are doing so in 18 days nationwide, suggesting the most appealing homes are still moving very quickly. A trusted local real estate agent can help sellers decide which projects are worth the investment based on the market in their neighborhood, and Thumbtack can help homeowners find a local professional to get the job done.

 

If you need financial assistance with preparing your home to list, call me! With RealVitalize and Coldwell Banker Realty, we can get the job done with no out of pocket expense to you.

-Suzanne

Market Trends • Real Estate • December 13, 2022

NorCal Sales & Trends for November 2022 vs November 2021

by Suzanne Volkman

NorCal Sales & Trends for November 2022 vs November 2021 For Sale / Sold / Days on Market / Sold vs Original List Price / Median Price.

Information provided by David Woods of Lennar Title Company. Click here for a better look!

Buying • Market Trends • Real Estate • Selling • December 6, 2022

Home buyers’ and sellers’ biggest misconceptions in a shifting market

by Suzanne Volkman

The housing market is rapidly rebalancing, but buyers and sellers are struggling to keep up with the changes. A new survey of real estate agents finds the most common misconception among would-be buyers is that home prices will crash, while sellers are holding on to outdated expectations of bidding wars and quick sales.

Nearly half of agents (46%) say the biggest misconception among aspiring home buyers is that home prices will significantly fall, while more than a third of agents (35%) say prospective buyers mistakenly think they should wait for high mortgage rates to come down.

“Buyers may think it’s better to wait out the market, but in reality, there is more opportunity in this market than I have seen in the past five years if buyers approach real estate as a long-term investment, ” said Michael Perry, an agent who leads The Perry Group in Salt Lake City, Utah. “If prices or mortgage rates take a meaningful dip, all those sidelined buyers will likely come rushing back to the market, driving up competition and prices. If a buyer can purchase today, they have bargaining power, more options and more time to find the right home, instead of being rushed into a purchase they might regret.”

Research finds a rapid drop in home values is unlikely. Home value forecasts predict a flattening of home values over the next year, with prices increasing 1.3% by September 2023. Fewer new listings will keep upward pressure on prices. Meanwhile, some housing economists believe mortgage rates are more likely to rise than to fall as inflation pressures remain strong.

With volatile mortgage rates, 44% of agents say the most important action first-time buyers can take is to line up financing before home shopping.  First-time buyers should also understand what they’re willing to compromise on before shopping for a home. More than a quarter of agents (28%) say the biggest mistake first-time home buyers make is failing to separate their wants from their needs.

Buyers do appear to be taking advantage of today’s more favorable market. Nearly 3 in 5 agents say buyers are taking more time to consider a home (56%) and making offers below list price more often (55%). More than 40% of agents say today’s buyers are including more contingencies in their offers (43%), such as inspection and appraisal contingencies designed to protect buyers from unexpected costs.

Sellers, meanwhile, may be holding onto outdated expectations. A vast majority of agents say it’s a common belief among sellers to expect multiple offers on their home (81%), a price above market value (79%), a quick sale (79%) and no need to cut their price (74%).

“Sellers can no longer put a for-sale sign outside their home and expect the offers to pour in,” said Koby Sway, an agent with The Briley Team in Omaha, Nebraska. “They have to roll up their sleeves and make necessary repairs and home improvements before listing their home for sale. And it’s more important than ever to get the pricing right when competing against other sellers for a smaller pool of buyers.”

Nearly 3 in 4 agents say pricing a home correctly is the most important seller strategy (73%). Competitively priced listings are going under contract in 19 days nationwide, 10 days faster than they were prior to the pandemic, while other homes are lingering on the market a median of 54 days. More than a quarter of sellers have been forced to cut their home’s listing price (28%), the highest share since 2018.

Real Estate • November 30, 2022

Real estate is the safest investment you can make today, millionaires say—Here’s why

by Suzanne Volkman
If you’re planning for retirement, you’ve most likely watched your 401(k) plan run away like a car on a roller coaster. Each upward movement is a long, slow creep to a dramatic crest, met with an expected fall that takes your anxiety with it.
If not in stock and bond markets, where are affluent consumers currently parking their wealth? The answer to that question can be a lot of things: art, handbags, jewelry. One should always check with their investment advisor, but in reality, luxury real estate is considered one of the safest long-term investments one can add to their portfolio.

This year, my team at Coldwell Banker put a closer lens on the habits and sentiments of the affluent to get a pulse on the top trends currently dominating the luxury landscape. We conducted a survey of more than 2,000 U.S.-based high-net-worth consumers, paired with our annual fall report newly dubbed, “The Trend Report.”

80% of the respondents agree that real estate is a safe investment. In addition, consumers are more than three times more likely to think that 2023 will be a better time to invest in real estate than was 2022—rising by a whopping 42% from only 11% a year ago.

Together, these insights help us better understand what else is driving affluent consumers’ desire to invest in real estate, where they’re purchasing properties, and their attitudes on the value of a trusted advisor.

Through the Coldwell Banker Global Luxury program, our affiliated agents sold $267 million in luxury homes sales every day during 2021—up 59% from 2020. With the guidance of our luxury specialists, clients have been able to reap huge returns on the sale of their homes by making property enhancements—in addition to installing chic furnishings and lush landscaping—paving the way for them to place those profits growing their real estate investment portfolio.

SEEKING STABILITY

Affluent consumers are gravitating towards real estate that gives them financial, emotional, and psychological security.

I spoke to industry legend Jade Mills, president of Jade Mills Estates and Coldwell Banker Global Luxury Ambassador, about her firsthand expertise in the luxury market. According to Jade, “luxury buyers still have leverage to purchase investment properties, with many of them taking advantage of lower prices in areas where the market is softer.”

Real estate has always been one of Americans’ favorite long-term wealth-building assets—and it shows in our survey. More than 77% respondents currently own an investment property, with nearly two-thirds of them owning two or more investment properties.

“Real estate is the best investment one can ever make,” noted Jade. “I don’t just sell property, I own property too, and it has done nothing but go up. For example, there are certain areas in California where prices never really go down. You just don’t make that kind of return on investment in the stock market.”

Not only can a long-term investment in real estate generate income to obtain financial security, but it also creates a path to generational wealth. More than 45% of survey respondents say they purchase real estate as an inheritance for their children.

SHIFTING LIFESTYLE FOOTPRINTS

Many wealthy buyers today are looking for smaller secondary homes and investment properties, particularly in traditional centers of luxury. 72% of survey respondents who are planning a home purchase in the future said that the new home would be a second residence, rental property, or vacation home.

“People want homes that are move-in perfect; there’s currently a sweet spot for homes priced between $3 to $4.5 million in Southern California,” Jade explained. “Not only that, but the neighborhood, schools, and community amenities are all major factors that buyers look at when purchasing a home. As real estate agents, we keep up with these insights to be ‘in the know’ for our clients.” Again, for true investment guidance, one should still seek the opinion of their investment advisor.

Interestingly, 25% of respondents who purchased a home during the pandemic were dissatisfied, and location was found to be one of the primary drivers of their discontent. Nearly 41% of respondents cited that their next purchase would be based on investment opportunity, eyeing prime locations like New York and California.

Among their reasons? 40% said that quality of life remained at the top of their priority list, underscoring the long-term strength of these historic epicenters of wealth.

PROFESSIONAL GUIDANCE

The unparalleled advice and white glove service of a trusted advisor when buying or selling a home has never been more vital than today. Nearly 90% of survey respondents have used a real estate agent to assist them in the purchase of their home, and plan to do so again in the future.

Star agents like Jade have quickly become the key to aspirational lifestyles. These agents understand luxury buyers’ unique needs for privacy and have the connections to access the other specialized amenities they desire.

“The deep connections I’ve built—both in real estate and across other luxury sectors within fashion, design, exotic cars, etc.—have helped me deliver incomparable service and expertise to my clients that keep them coming back,” Jade said.

GOING FORWARD

Despite the headlines, the trends tell a clear story about the resiliency of luxury market segments today and their value beyond the price tag. As buyers seek stability, safe-haven investments, and security, the demand for luxury continues to drive the resilience of the market.

To read the full Trend Report and learn more about Coldwell Banker’s exclusive luxury insights, please visit https://blog.coldwellbankerluxury.com/the-trend-report-2022.

Michael Altneu is vice president for Coldwell Banker Global Luxury. Follow Michael at @cbgl.michael on Instagram and @MAltneu on Twitter.

Uncategorized • November 16, 2022

7 Reasons It’s Worth Buying a House at the End of the Year

by Suzanne Volkman

The end of the year is upon us, and you still haven’t found a new home. Friends and family are likely advising you to put your real estate search on pause until spring, but something tells you this isn’t the best idea.

This is definitely a time to go with your instincts and keep searching, as your dream home — and an amazing deal on it — might currently be on the market or soon making its debut. GOBankingRates spoke with several real estate agents who shared seven advantages of buying a house at the end of the year.

Connect With a Highly Motivated Seller

“Ask yourself this, who thinks it is a good idea to put their home on the market around the holidays or sell their home so they have to move during the holidays?” said Greg Hriso, a real estate agent at Homie Colorado. “Typically, a more motivated seller.”

During this time of year, he said buyers can take advantage of the opportunity to pick up a home with little-to-no-competition.

“Once the snow flies, most sellers still on the market have a pretty important reason for selling,” he said. “Otherwise, why deal with strangers with snow on their shoes touring your home at inconvenient times?”

If you’re concerned about the affect rising interest rates will have on your monthly payment, he said buying at this time of year can help you save money.

“There is also a better chance of getting seller concessions to buy down the interest rate this time of year,” he said.

Score Builder Incentives

“Depending on a home builder’s fiscal year, there may also be more incentives to get existing inventory off their books,” Hriso said. Therefore, he said buyers might be able to get some of the best builder incentives of the year to move into a brand new home.

“One of the best deals I ever got for a client was on a builder’s existing inventory that they really wanted closed before December 31,” he said. “The client and I still talk about what a great deal that was every time we see each other.”

Be Home for the Holidays

“I have had buyers that wanted to close a week before the major holidays like Thanksgiving and Christmas to be able to enjoy the city and host in their new homes,” said Andy Feiwel, a real estate agent with Compass in New York City. “New York City is always an extremely festive and vibrant place during the holidays with window displays, tree lighting ceremonies and lots of socializing and parties.”

Whether you happen to live in New York City or elsewhere, securing your new home for the holidays can be an amazing gift to yourself and your family. Host a gathering or simply enjoy the comfort of knowing you have your own oasis to come home to amid the chaos of the season.

Enjoy Tax Benefits

Buying a home at the end of the year offers a huge tax advantage, said Ron Wysocarski, a real estate broker and CEO of the Wyse Home Team Realty in Florida.

“The benefit is the ability to save tax from property taxes or by deducting the mortgage interest,” he said. “The seller benefits from minimizing deductions and is therefore always open to discussion.”

He said even accepting a loss that will balance their income can be acceptable to a seller. “The transfer of ownership results in significant tax advantages for both the seller and the buyer during this [time of] year,” he said.

Cash In on an Income Property

If you’re thinking of purchasing an income property before the end of the year, Ryan Pineda, CEO of Tykes, said this can be a lucrative idea.

“For many investment properties, you have the opportunity to do a cost segregation and get a huge write-off for bonus depreciation,” he said. “Tax write-off is a huge advantage before the end of the year.”

See the Property at an Off-Peak Season

In many parts of the country, the end of the year brings less-than-ideal weather. This gives you a unique advantage, according to Michael McGivern, a real estate agent with Keller Williams Integrity Lakes, because it’s a lot easier to make a home look pristine in the summer months.

“When homes are on the market in quarter four, suddenly, you realize how daunting raking the front and back yard is, there are a couple of rough patches in desperate need of fresh sod and there is a lot of moisture in those windows in need of replacement,” he said. “Ownership comes with home maintenance, and people who buy in the summer often realize their home isn’t faultless in the fall.”

If you find a place that looks great at the end of the year, he said you can probably feel confident it will look even more amazing next summer.

Get All the Help You Need Without a Wait

Moving is hard work, but during peak homebuying months, it can be hard to find professionals with availability to take on new projects.

“Due to the lower demand for movers and contractors in the colder months of the year, you should have no problem getting help,” said Cameron Berens, a real estate agent with B&B Home Advisors in Kentucky. “Whether it’s hiring movers, or getting that kitchen remodel started right away, the wait time should be less this time of year.”

 

By Jennifer Taylor

November 15, 2022

 

Uncategorized • November 16, 2022

Mortgage rates are soaring. Is it still OK to refinance your home?

by Suzanne Volkman

Mortgage rates, over 7% or so, are at their highest levels in 20 years and loan applications are down. So, it should follow, that homeowners looking to refinance loans would also be headed to the sidelines in droves.

But according to experts, it might still make sense for homeowners to refinance. Why? Rates, even at current levels, can still be a decent deal compared to alternatives.

“People would still be refinancing if they need the cash, so they are withdrawing equity, even at much higher rates. ​This is (still) cheaper than other forms of credit,” Richard de Chazal, macro analyst at William Blair & Company, said in a statement.

According to Freddie Mac the current mortgage rate on a 30-year fixed mortgage surpassed 7% last week. With climbing rates, applications for mortgages fell 1.7% for the week ending October 21, but only because they were so low to begin with — down 86% from a year ago, according to Mortgage Bankers Association.

Not great news for those in the business of refinancing mortgage loans. But many homeowners still need the money and refinancing may still be a good way to raise cash.

According to Black Knight, there are currently about 133,000 U.S. homeowners who can save about $325 off their monthly payments by lowering their rate to 7.08%, the smallest population since 2000, when the analytics company started tracking this metric. (This population of homeowners got their mortgage from 2008 or earlier.)

To be sure, many homeowners sit with a mortgage lower than today’s average causing refinancing to be less attractive. There are, though, a few circumstances when refinancing can be helpful.

The first is for someone struggling with their finances.

“It’s people that are consolidating and using their mortgages to lower overall debt costs but that’s not going to make sense for the average person that’s holding a 2.75% mortgage now from well over a year ago,” Tim Pagliara, Chief Investment Officer at CapWealth, told Yahoo Finance in a phone interview.

The homeowner, who is willing to take a higher mortgage rate, believes “it’s still cheaper to borrow against your home than it is to have an 8% car loan,” Pagliara added.

Following two years of stratospheric home price appreciation, some borrowers may be willing to eat a higher mortgage rate when using a cash-out refinance option, this is a type of mortgage refinance where you replace your existing mortgage with a larger mortgage and your lender gives you the difference in cash.

“You could borrow up to 80% of the value of the house on a traditional conventional or FHA loan on a cash or refinance. You’re just borrowing on a certain percent of equity on the value of the property,” Tina Pecoraro, producing branch manager at Nationwide Mortgage Bankers Inc, told Yahoo Finance.

Another potential borrower, who would also consider refinancing, has a mortgage that’s about to end.

“Homeowners with shorter duration mortgages could be refinancing for longer duration to pay less, so again​, it frees up some cash without perhaps removing equity” Chazal said. For example: extend a traditional 30-year mortgage that has only 10 more years to go.

“We have seen volume drop on the refinance side,” Pecoraro said. But “we are seeing refinancing where people are looking to pay off high interest credit card debt or do home improvements instead of taking out a home improvement loan because those rates are still higher than where rates are today.”

Pecoraro, though, is optimistic that the refi business will claw its way back as the industry faces more layoffs.

“It depends where the rates turn back around,” he said. “Rates will one day go down and again, of course that’s just how the market is. I’ve been doing this for about 18 years, rates will go back down again.”

Dani Romero

Market Trends • Real Estate • November 8, 2022

Will Homeownership Soon Be A Thing Of The Past? The Strategy Millennials Are Using To Enter Real Estate Market

by Suzanne Volkman

As the economy teeters on the brink of a recession, potential home buyers wrestling with high-interest rates, low affordability, and overpriced homes are asking themselves how to build the wealth they need to purchase their first primary residence.

According to a consumer insights report issued by tech-enabled real estate company Mynd, millennials have found the answer.

A growing number of young adults are prioritizing “rentvesting” over homeownership.

What is Rentvesting?

Mynd says 43% of adults under the age of 40 are considering becoming “rentvestors” — the act of prioritizing buying an investment property (while renting a home) before a primary residence, in order to shore up the funds needed to purchase their dream homes.

The strategy refers to investing in, or buying and renting out an investment property in an affordable, up-and-coming area, while continuing to pay rent for your primary residence in your preferred location.

Naturally, the idea of owning investment homes to complement the primary residence has been around for a long time, but millennials are making an effort to control the expanding industry with a variety of instruments, like micro-investing, at their disposal.

How do I Rentvest?

It’s easy. And, Benzinga has the tools — check out how you can invest in a rental property for as little as $100 (or more, depending on your appetite). Really, it’s that easy.

The trend, which first gained popularity in Australia’s main cities, reflects how young people are unwilling to lower their standards of life in order to participate in the real estate market.

The goal of rentvesting is to safeguard your financial future without compromising your way of life. If done correctly, rentvesting’s diversification strategy enables you to live where you want, rather than relocating to a neighborhood where you can afford to buy a house.

 

AJ Fabino
Buying • Market Trends • November 8, 2022

Buyers Embrace Adjustable Mortgages as Rates Surpass 7%

by Suzanne Volkman

Rising interest rates have increased the average monthly loan payment by a whopping $1,000 year over year.

With the rate for a 30-year mortgage rising to 7.08% this week—the highest average since April 2002, according to Freddie Mac—the average monthly loan payment is now $1,000 more than a year ago, Nadia Evangelou, senior economist and director of forecasting for the National Association of REALTORS®, writes on the Economists’ Outlook blog.

That’s prompting a sharp pullback in the housing market as home buyers digest the higher rates. Mortgage applications for home purchases—a gauge of homebuying activity—are nearly half of what it was a year ago, the Mortgage Bankers Association reported this week.

Trying to snag a lower rate, more home buyers are reaching for an adjustable-rate mortgage, which tend to have lower introductory rates for a set period of time before resetting. Though ARMs are viewed as a riskier loan product, home buyers are being tempted: This week’s rate for a 5-year ARM is 5.96%. The share of home buyers applying for an ARM has more than quadrupled since the start of the year, MBA reports.

Higher mortgage rates are creating a “greater stagnation in the housing market,” says Sam Khater, Freddie Mac’s chief economist. “As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month. In fact, many potential home buyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward.”

S&P’s CoreLogic Case-Shiller Index shows home prices fell at a record pace in August, dropping 2.6% in monthly comparisons from a year ago. Existing-home sales also are sliding, down 24% year over year in September, according to NAR data. And problems continue to brew for the new-home market, which saw sales plunge nearly 18% in September compared to a year earlier, prompting home builders to press the brakes on future construction, the Commerce Department reports.

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 27:

  • 30-year fixed-rate mortgages: averaged 7.08% with an average 0.8 point, up from last week’s 6.94% average. Last year at this time, 30-year rates averaged 3.14%.
  • 15-year fixed-rate mortgages: averaged 6.36%, with an average 1.4 point, up from last week’s 6.23% average. A year ago, 15-year rates averaged 2.37%.
  • 5-year adjustable-rate mortgages: averaged 5.96%, with an average 0.3 point, increasing from last week’s 5.71% average. A year ago, 5-year ARMs averaged 2.56%.

Freddie Mac reports commitment rates along with average points to better reflect the upfront costs of obtaining the mortgage.

 

By: Melissa Dittmann Tracey

Coldwell Banker - Roseville West - GB

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