Elizabeth's Tips April 20, 2024

Is It Time to Update Your Bathroom?

Just like your bedroom, your bathroom should be a relaxing place. Whether you unwind in the shower or with a hot bath, making sure your bathroom is a place of comfort and not stress is key to making your home a happier place. Because it is a room you will definitely spend time in every single day, these signs might indicate that it is time for some changes and some tips to help you do so.

1. Poor Lighting
You can consider investing in brighter bulbs and updating your light fixtures.

2. No Storage Space
You may want to install a larger vanity or additional shelving about the toilet

3. Outdated Paint Color
Updating your wall color with something more neutral, light, and timeless can help bring your bathroom back to life.

4. That ‘Bathroom’ Scent
Checking for mold, fixing any leaks, or adding ventilation can help relieve any scent you can’t seem to get rid of.

5. Leaks
Calling a plumber to make repairs is usually necessary if you have brown water stains.

6. Time to Sell
If you’re getting ready to sell, updating whatever needs updating will increase your home value.

Elizabeth's Tips March 26, 2024

7 Signs You’re Ready To Buy

Living in an apartment or rental home does have its perks: You can test out different neighborhoods and locations, you have the flexibility to move, and you have access to great amenities like a gym or pool. But there’s a reason that owning a home, rather than renting one, is a highly desired achievement.

Maybe the thought of having your own place has crossed your mind only recently, or maybe you’re regularly saving a chunk of your paycheck for that future down payment. No matter where you are in the process of considering homeownership, here are the unmistakable signs that you’re ready to buy your first home.

1. You Want to Get to Know Your Neighbors

Because renters don’t tend to live in one apartment for very long, it can be difficult to meet people who live in your building. But when you buy a home and are more invested in your community, it’s easier to forge lasting friendships.

2. You Want to Customize Your Space

Many rental communities have limits on what you can customize in your unit. You may be able to paint your walls a different color, but you may not be able to replace the countertops or appliances that come standard in your apartment.

3. You Want More Space or Amenities

You daydream about having a home with a large kitchen, dining room, basement, garage, or maybe even a home office or bonus room for your hobbies.

4. You Regularly Drive by Your Favorite Neighborhoods

You have a list of at least three communities (or maybe even houses) that you would love to live in when you’re ready to buy a home. You might even attend an open house or two.

5. You’re Eager to Put Down Roots

A home is more than a financial investment. It’s your own space, a private retreat, and the start of a new chapter in your life. You’ll love being able to make lasting memories with your new neighbors and enjoying all the amenities near your home.

6. You’re Constantly Browsing Home Improvement Sites

Instead of scrolling through social media, you’re scrolling through home decor websites or binge-watching HGTV. You now have dozens of ideas for how you’re going to decorate everything from the bathrooms to the entryway.

7. You Have Money Saved Up for a Down Payment

A down payment is essential to buying the home of your dreams. But once you see your savings account grow, you know your new home is just within reach.

Elizabeth's Tips February 29, 2024

7 Ways to Compete in a Sellers Market

Buying a home is a team sport, and that’s especially true when buyers are facing the kinds of affordability challenges they are now. Volatile interest rates and tough competition for a limited supply of homes are posing unique issues for home shoppers. If you’ve been writing offer after offer — even competitive offers over asking price — and still not getting anywhere, then it could be time to change tactics.

Strategies tied to mortgage products and seller incentives can help buyers, even in situations involving cash buyers or shoppers offering above list price. These tactics won’t apply to every situation, but they offer buyers an idea about the kinds of adjustments to their offers or financing that can make the difference between getting the keys or attending yet another open house. It is important to note that every real estate market and buyer/seller transaction is unique and results may vary.

1. Offer a partial appraisal waiver
An appraisal establishes the current value of a home, and is used by lenders to determine how much they’re willing to lend buyers for a given home. Buyers who make an offer on a house usually include an appraisal contingency that lets them cancel the deal without a penalty if the house doesn’t appraise for the agreed-upon price.

Buyers in competitive markets can be tempted to waive appraisals, but doing so could require them to bring more money to the table at closing if there’s a gap between the price they offered on a home and what an expert appraiser thinks it’s worth. This is because a mortgage is tied to what the appraiser determines the home is worth.  Anything over that amount is the buyer’s upfront responsibility.

Instead of waiving an appraisal altogether, some clients agree to pay a specified amount over the negotiated sales price if there’s a gap between the asking price and the appraised value. That way, the buyer can still write a competitive offer, but not to the point of putting themselves at risk of having to come to the table with a big check — or losing their earnest money.

2. Show sellers you’re serious with a “time off market” fee
In a market where it’s common for buyers to lose a home to a competitor who is offering over asking price, there’s an option that could, in some cases, be just as attractive to sellers and potentially less expensive. It’s called a time off market fee.

When buyers make an offer on a home, they typically put up earnest money — a relatively small amount that can be refunded if certain conditions aren’t met.

With a “time off market” fee or TOM, however, the seller keeps the money regardless of whether the deal closes. It’s paid to them for accepting the buyers’ offer. It’s a bold strategy and it works really well. If the buyer doesn’t close, they still have to pay that money.

A TOM fee in place of earnest money, can be more attractive to a seller than an offer over the asking price, especially if the offer would result in an appraisal gap, where the sales price is more than what an appraiser determines a house is worth in the current market.

For instance, a real estate agent negotiated a deal where a competing offer was about $10,000 over the listing price. Rather than match that offer, they successfully made a case that the house was accurately priced based on the sale of comparable homes; an offer above that price would inevitably result in an appraisal gap that could jeopardize the deal.

This competitive offer strategy can be more attractive to the seller, and ultimately cheaper for the buyer, than making an offer $10,000 over asking.

The size of the TOM fee depends on the price of the house, but usually it has ranged from $500 to $5,000 plus. The buyer has to understand what a TOM fee is and be 100% comfortable with it and be committed to that house or willing to lose that TOM fee in the event they don’t close on it.

3. Pay a lender for a lower interest rate over the life of the loan
Buying “mortgage points,” also known as discount points or simply points, from a lender can help reduce the monthly payment on a home. Mortgage points are essentially prepaid interest that is paid at closing in exchange for a lower interest rate over the life of the loan. Each point typically costs 1% of the total loan amount. The more points you buy, the lower the interest rate.

One point generally reduces the interest rate by a specific percentage, often 0.25%. For example, if a buyer applies for a $300,000 mortgage and decides to buy one point, they would pay $3,000 (1% of $300,000) and receive a reduction of 0.25% on their interest rate.

Buyers considering this strategy should consider how long they plan to stay in the home, how much they’ll save by reducing the interest rate and how much money they’ll have to spend upfront. A loan officer or financial advisor can help determine whether buying points makes sense for you.

4. Pay a lender to temporarily lower your interest rate
Another way to lower a monthly mortgage payment is to cut the interest rate for the first one to three years of the loan. The most common mortgage product to do that is a 2/1 buydown. It allows a borrower to ‘buy’ a lower interest rate for the first two years of their mortgage by prepaying a portion of the interest on the loan. For example, a borrower who applies for a 30-year, fixed rate mortgage at 7% can lower the mortgage to 5% the first year and 6% the second year by pre-paying the interest they would have paid at the 7% rate for those two years. The mortgage then reverts to 7% in the third year.

It’s important to note that the buydown cost is separate from other closing costs, and can be paid for by the seller, builder or buyer. Buyers who adopt this strategy either plan on interest rates dropping so they can refinance or on their incomes increasing over the two years that the lower rate is in effect.

Loan officers can provide accurate and up-to-date information on the cost of a 2/1 buydown, and provide specific details based on different loan amounts, interest rates and loan terms.

5. Bump up the offer price in exchange for a lower, seller-subsidized mortgage rate
This tactic is most effective when negotiating with a seller whose house is not selling as quickly as expected or when the market favors buyers.

Example: Offering about $8,000 over list price and asking the seller to credit that money back so the buyer can purchase a lower mortgage interest rate from their lender at closing.

In effect, the buyer increased the loan amount so they didn’t have to pay out-of-pocket to get a lower rate. The result: a lower monthly payment and the ability to spread the cost of the buydown over the life of the loan.

There’s a risk if it doesn’t appraise at the higher amount, but if you can use that money for a 2/1 buydown, or just buy the rate down by a certain percentage point, you can lower the monthly payment.

The 2/1 buydown temporarily lowers the mortgage payment for two years while buying points lowers payments over the life of the loan.

In the mentioned example the client was able to buy down the mortgage rate by 1.5 percentage points, putting them in a better position on their mortgage payments than if they’d paid the listing price without the lower interest rate.

6. Ask for a lender credit to buy down the mortgage rate
This is where professional relationships are especially important. Agents who work closely with lender partners can help buyers make a better, more competitive offer in neck-in-neck situations, he says.

While some of these scenarios may seem complicated, an experienced agent and loan officer can talk through options. Buyers who want to explore different scenarios can do so with the many resources available.

7. Consider new construction
While buying new construction isn’t a competitive offer strategy, it provides one avenue for more affordable mortgage rates. The added bonus: in certain markets there is less competition, no bidding wars and clients get a brand new home. A lot of builders offer great incentives with in-house financing, such as a 4.99% interest on financing. The rate was about 2% lower than the rates on a 30-year mortgage.

While builders might hold firm on the asking price so as not to affect prices on homes in the rest of the development, they may be more willing to negotiate around concessions and financing.

Whether you’re in the hunt for a home or you’re still in the dreaming phase, it can help to familiarize yourself with strategies on making competitive offers in a sellers market, so that when the time is right, you know your options — be sure to talk to your agent to know for sure. Every tactic comes with some degree of risk, and it’s critical that buyers understand tradeoffs and consequences and how the tactics fit into the bigger picture.

Elizabeth's Tips January 28, 2024

Invest in Yourself by Owning a Home

Investing in yourself by owning a home can bring numerous benefits and opportunities. Here are some reasons why owning a home can be a wise investment:

  1. Building equity: When you own a home, you are building equity as you pay down your mortgage. Equity is the difference between the value of your home and the amount you owe on your mortgage. Over time, as your home’s value appreciates and you continue to make mortgage payments, your equity increases. This can provide financial stability and serve as a long-term asset.

  2. Potential for appreciation: Historically, real estate has shown a tendency to appreciate in value over time. While there are no guarantees, owning a home can offer the potential for your property to increase in value. This can result in significant returns on your investment if you decide to sell in the future.

  3. Tax advantages: Homeownership often comes with tax benefits. In many countries, homeowners can deduct mortgage interest, property taxes, and certain closing costs from their taxable income. These deductions can help reduce your overall tax liability and potentially save you money.

  4. Stability and control: Owning a home provides stability and a sense of control over your living situation. Unlike renting, where landlords can increase rent or decide not to renew your lease, owning a home gives you the freedom to create a living space that suits your needs. You have the power to make improvements, decorate, and personalize your home to your liking.

  5. Forced savings: Paying a mortgage is a form of forced savings. Each monthly payment goes toward building equity and paying off your loan balance. This can be an effective way to accumulate wealth over time, as opposed to renting where your monthly payments go solely towards your landlord’s income.

  6. Potential rental income: Homeownership can also present opportunities for generating rental income. If you have extra space or decide to move but want to hold onto your property, you can rent it out and earn passive income. This can be a valuable source of additional cash flow and a way to diversify your investment portfolio.

It’s important to note that homeownership also comes with responsibilities, including maintenance costs and potential market fluctuations. It’s crucial to carefully consider your financial situation, long-term goals, and the real estate market in your area before deciding to invest in a home. Consulting with a real estate professional or financial advisor can help you make an informed decision.

Elizabeth's Tips January 2, 2024

Should Baby Boomers Buy or Rent After Selling Their Houses?

The decision of whether Baby Boomers should buy or rent after selling their houses depends on various factors, including personal preferences, financial circumstances, and long-term goals. Here are a few considerations to help make an informed decision:

  • Financial Situation: Assess your financial position, including retirement savings, income, and expenses. Determine if buying another property aligns with your budget and retirement plans.

  • Lifestyle and Flexibility: Consider your desired lifestyle in retirement. Renting offers more flexibility, allowing you to downsize, relocate, or explore different communities without the responsibilities of homeownership.

  • Maintenance and Upkeep: Owning a home comes with maintenance and repair costs. Renting eliminates these responsibilities, making it an attractive option for those seeking a more carefree lifestyle.

  • Market Conditions: Evaluate the local real estate market. Determine if it’s a seller’s or buyer’s market, as this can impact the potential return on investment and affordability of purchasing a new property.

  • Equity and Cash Flow: Selling your house may provide a substantial amount of equity. Consider how this equity can be utilized to generate income or enhance your retirement savings.

  • Tax Implications: Consult with a financial advisor or tax professional to understand the tax implications of buying or renting in your specific situation.

Ultimately, the decision between buying or renting should be based on individual circumstances and preferences. It may be helpful to consult with a real estate agent and financial advisor to explore all available options and make an informed decision.

Elizabeth's Tips December 31, 2023

Your Home Equity Can Offset Affordability Challenges

It’s important to understand the various ways homeowners can leverage their home equity to overcome affordability challenges. Home equity refers to the portion of the property that you truly own, which is the difference between the property’s market value and the remaining mortgage balance. Here are a few ways homeowners can use their home equity to address affordability challenges:

  1. Refinance: Homeowners with a significant amount of equity can consider refinancing their mortgage to take advantage of lower interest rates. By refinancing, they can potentially lower their monthly mortgage payments and improve affordability.

  2. Home Equity Loan or Line of Credit: Another option is to take out a home equity loan or line of credit. This allows homeowners to borrow against their home equity and use the funds to cover unexpected expenses or make improvements that increase the property’s value. These funds can help alleviate affordability challenges by providing extra cash flow.

  3. Downsizing: Homeowners who are facing affordability challenges may consider downsizing to a smaller, more affordable property. By selling their current home and using the equity to purchase a less expensive property, they can reduce their monthly expenses and improve affordability.

  4. Renting Out a Portion of the Property: Homeowners with extra space can consider renting out a portion of their property, such as a basement or an accessory dwelling unit (ADU). This can help generate rental income that can be used to offset mortgage payments and improve affordability.

  5. Home Equity Sharing: There are also emerging options like home equity sharing programs. These programs allow homeowners to partner with investors who provide funds in exchange for a portion of the property’s future appreciation. This can help homeowners access cash without taking on additional debt and improve affordability.

It’s crucial to note that homeowners should carefully evaluate their financial situation and consult with a financial advisor or mortgage professional before making any decisions regarding their home equity. Every situation is unique, and it’s important to weigh the pros and cons of each option to ensure it aligns with their long-term goals.

A real estate professional can provide valuable insights by helping homeowners understand the potential benefits and risks associated with leveraging their home equity. By seeking guidance and expertise on these options, it can help clients navigate affordability challenges and make informed decisions about their real estate investments.

Elizabeth's Tips December 9, 2023

Today’s Housing Market Has Only Half the Usual Inventory

The current housing market is experiencing a significant shortage of inventory, with only about half the usual number of homes available for sale. This low inventory situation has several implications for both buyers and sellers:

  1. Increased Competition: With fewer homes on the market, there is increased competition among buyers. This can lead to bidding wars and higher sale prices, making it more challenging for buyers to find and secure a home.

  2. Faster Sales: Limited inventory often results in homes selling more quickly. Sellers may receive multiple offers and have the advantage of choosing the most favorable terms for their sale.

  3. Rising Home Prices: The imbalance between supply and demand contributes to rising home prices. As buyers compete for a limited number of homes, prices tend to increase.

  4. Seller’s Market: The low inventory situation creates a seller’s market, meaning sellers have the upper hand in negotiations. They may have more leverage to negotiate favorable terms and conditions, such as higher sale prices or shorter closing timelines.

  5. Limited Options for Buyers: With fewer homes to choose from, buyers may have to compromise on their preferences or expand their search areas. It’s essential for buyers to be flexible and prepared to act quickly when a suitable property becomes available.

  6. Potential for Higher Profits: Sellers who list their homes in a low inventory market may benefit from higher sale prices and a potentially faster sale. This can result in higher profits compared to selling in a market with more inventory.

It’s important to note that the low inventory situation can vary by location and market conditions. Working with a knowledgeable real estate agent who understands the local market can be invaluable in navigating this challenging environment. They can provide insights and strategies to help buyers and sellers achieve their goals in a competitive market.

Elizabeth's Tips November 16, 2023

Four Ways You Can Use Your Home Equity

Home equity refers to the value of your home that you own outright, minus any outstanding mortgage balance. It can be a valuable asset that can be utilized in various ways. Here are four ways you can use your home equity:

  1. Home renovations or improvements: Using your home equity to fund renovations or improvements can increase the value of your property. By investing in upgrades such as a kitchen remodel, bathroom renovation, or adding additional living space, you can potentially increase the resale value of your home.

  2. Debt consolidation: If you have high-interest debts, such as credit card debt or personal loans, you can use your home equity to consolidate those debts into a lower-interest home equity loan or line of credit. This can help you save money on interest payments and simplify your finances by having just one monthly payment.

  3. Education expenses: Home equity can be used to fund education expenses, such as college tuition or vocational training. By accessing your home equity, you can potentially secure a lower interest rate compared to student loans, making it a cost-effective option for financing education.

  4. Real estate investments: Home equity can be leveraged to invest in additional real estate properties. By using a home equity loan or line of credit as a down payment, you can purchase an investment property that has the potential to generate rental income or appreciate in value over time.

However, it’s important to consider the risks associated with using your home equity, as it involves borrowing against your property. If you’re unable to repay the loan, you could risk losing your home through foreclosure. It’s crucial to carefully evaluate your financial situation, consult with a financial advisor, and ensure that you can comfortably afford the additional debt before using your home equity for any purpose.

Elizabeth's Tips October 20, 2023

The Impact of Seasonality on the Real Estate Market

Seasonality has a significant impact on the real estate market, influencing both buyer and seller behavior. Here are some key points to consider when discussing the impact of seasonality:

  1. Demand and Inventory: The number of buyers and sellers in the market fluctuates throughout the year. Generally, the spring and summer months see increased activity, as families prefer to move during warmer weather and before the new school year begins. This results in higher demand and more inventory during these seasons.

  2. Pricing: Seasonality can also affect home prices. During the peak season, when there is higher demand, sellers may be able to command higher prices for their properties. Conversely, during the off-peak season, sellers may need to adjust their prices to attract buyers.

  3. Competition: The level of competition among buyers and sellers can vary based on the season. In a seller’s market, when demand exceeds supply, buyers may face more competition and multiple offer situations. On the other hand, in a buyer’s market, when there is an excess of inventory, sellers may need to be more competitive in pricing and marketing their properties.

  4. Market Trends: Real estate market trends can vary throughout the year. For example, in areas with vacation or second-home markets, there may be a surge of buyers during the holiday season or summer months. Additionally, areas with strong university or college presence may experience increased rental demand during the start of the academic year.

  5. Regional Differences: It’s important to note that the impact of seasonality can differ based on the region. For example, in colder climates, the winter months may experience a slowdown in real estate activity due to weather conditions. Conversely, in warmer climates, the winter months may be considered the peak season.

Understanding the impact of seasonality on the real estate market can help both buyers and sellers make informed decisions. Real estate professionals should be aware of these patterns and adjust their strategies accordingly to maximize their success in any given season.

Elizabeth's Tips September 18, 2023

Evaluating Your Wants and Needs as a Homebuyer

When entering the homebuying process, it’s important to evaluate and prioritize your wants and needs. This will help you focus your search, save time, and make informed decisions. Here are some key factors to consider:

  1. Budget: Determine your budget by assessing your finances, including your income, savings, and expenses. This will help you understand how much you can afford to spend on a home, including the down payment, mortgage payments, and ongoing homeownership costs.

  2. Location: Consider the location that best suits your lifestyle and needs. Think about proximity to work, schools, amenities, transportation, and any other factors that are important to you. Research the neighborhoods you’re interested in to ensure they align with your preferences and requirements.

  3. Size and Layout: Evaluate your space requirements, including the number of bedrooms, bathrooms, and overall square footage. Consider your current needs, as well as any future plans that may impact your space requirements, such as starting a family or working from home.

  4. Property Type: Determine the type of property that suits your lifestyle and preferences. Options include single-family homes, condominiums, townhouses, or multi-family properties. Each type has its own advantages and considerations, so weigh the pros and cons based on your needs.

  5. Features and Amenities: Make a list of the features and amenities that are essential to you. This could include a specific architectural style, a backyard, a garage, a swimming pool, or a specific layout. Differentiate between must-haves and nice-to-haves to help prioritize your search.

  6. Condition and Renovation Potential: Consider whether you prefer a move-in ready home or if you’re open to doing renovations or updates. Assess your comfort level with potential repairs or remodeling projects and factor that into your search.

  7. Resale Value: While it’s important to focus on your current needs, it’s also wise to consider the potential resale value of the property. Look for factors such as the neighborhood’s desirability, property appreciation trends, and any upcoming developments that may impact the value.

  8. Lifestyle Factors: Think about your lifestyle and how the home will support it. Consider factors such as outdoor space, proximity to parks or recreational areas, access to amenities like gyms or shopping centers, and any specific requirements related to your hobbies or interests.

By evaluating and prioritizing your wants and needs, you can streamline your home search and make informed decisions. It’s important to stay flexible and open to adjustments along the way, as your priorities may evolve during the process. Working with a knowledgeable real estate agent can also help you navigate your options and find a home that meets your criteria.