Millennials, Who? Gen Z Enters the Housing Market

Millennials, while still a very prominent group in home buying, are starting to see competition from Gen Z.

Gen Z – in this survey, those born after 1995 – are taking out more credit and are more actively pursuing homeownership than previous generations.

More than half of Gen Zers aged between 18 to 23 claim to already be saving for a home, with 59% planning to buy a home within the next five years. For those of you doing the math, that’s a goal of homeownership before reaching the age of 30.

One major difference between Gen Z and Millennials – their reasons for wanting to purchase a home. 59% of Gen Zers want a home to start a family, but only 41% of Millennials felt the same. The biggest reason Millennials purchase homes was to help build wealth over time.

Image courtesy of Bank of America

Gen Zers also feel more willing to ask family members for assistance in their journey to purchase a home. 21% of those in Generation Z plan to ask for their parents help, while only 14% of Millennials planned to do so.

While it’s still early for this generational group to jump into the housing market, it looks like they’ll make a big splash once they eventually start buying.

Remember to check out the rest of Alliance’s Blog to stay up-to-date with all things real estate.

Real Estate Tip of the Week: What’s the Difference Between a Real Estate Agent and a Broker?

Buying or selling a home generally means needing help at some point in your journey. But who does what?

Sometimes, consumers use job titles like real estate agent and real estate broker interchangeably. However, there are important differences between the two.

Here’s a quick rundown of real estate job titles:

Real Estate Agent vs. REALTOR®

A real estate agent has a professional license to help people buy, sell, or rent housing in the real estate market.

To become an agent, states require pre-licensing training and training hours that vary from state to state. Once the training is complete, aspiring agents will need to take the written licensing exam.

A REALTOR® is a license agent who is a member of the National Association of Realtors®. As a member, agents subscribe to the standards of the association and its code of ethics and have access to real estate market data and transaction management services, among other benefits.

Real Estate Broker

A real estate broker is a real estate agent who has gone further in education as required by state laws and passed a broker’s license exam.

Brokers continue their education on ethics, contracts, taxes, insurance, legal issues, how the law applies to operating a brokerage, real estate investments, construction, and property management. Usually, to obtain a broker’s license, they must have three years as a licensed real estate agent needs to occur prior.

There are three types of real estate brokers:

  • Principal Broker: also called a designated broker – each real estate office will have someone with this title. This person oversees all real estate agents in the firm to ensure agents are operating in compliance with state and national real estate law.
  • Managing Broker: This person works within the day-to-day mechanics of the office and usually hires and trains new agents, as well as manages administrative staff.
  • Associate Broker: Sometimes called a broker associate, broker-salesperson, or affiliate broker, works under a managing broker.

The titles of brokers vary from state to state and how they are accomplished. Brokers, essentially, are not looked at as novices in the industry, but as having a little more knowledge and experience than an agent.

If you’re looking for more information on who is best to serve you through the journey of buying or selling your home, check out Alliance’s Buyer-Seller Guide for more information.

And as always, Alliance’s Blog will further provide you with current events and happenings in all things real estate.

Voice Assistants and Open Houses – Would You Use?

Hello, Alexa – it’s me, a prospective buyer.

It looks like brokerages are testing out the Amazon Alexa and Google Assistants of the world in the real estate market.

A Real Estate brokerage in Atlanta, Engel & Völkers, started implementing Amazon Alexa throughout a model condo unit for clients to use when touring the space. The idea is that they can ask Alexa questions to learn more about the home and neighborhood features.

The brokerage printed out and framed questions around the home with prompts of what to ask Alexa during your tour. For example, visitors can ask: “Alexa, tell me about the kitchen.”

Christa Huffstickler, Founder and CEO of Engel & Völkers Atlanta, explains, “What we are employing is reflective of a greater trend towards a larger tech presence in the home. We aim to modify our sales approach to apply to the generations and audiences we are trying to appeal to, and the Alexa-enabled model home is representative of their new tech-focused approach to life.”

If you’re a real estate agent, would you use Alexa or Google Assistant to help with your open house? Seems like these folks are!

Remember to check out the rest of Alliance’s Blog to stay current in all things real estate.

What Are the Components of a Home Mortgage Payment?

When you become a homeowner, it’s likely you’ll have to pay for a monthly mortgage – but do you know exactly what you’re paying for?

It’s important that you understand your outstanding balance as well as interest rate that you currently owe. A mortgage payment has four parts: principal, interest, taxes, and insurance. Here’s a quick rundown of each!

Principal

Essentially, the principal is the repayment of your loan amount. This is the portion of the payment that is used to reduce the balance you owe – your principal repayment will be the same throughout the life of your loan if you chose a fixed interest rate option. Usually, lenders will want to earn their interest back first before reducing principal – so payments will mostly go towards the interest of the loan in the beginning.

Interest

Interest is the profit that goes to the lender. This rate is expressed as a percentage of your total loan balance, and these rates are constantly changing. It’s best to choose a mortgage with a fixed interest rate, if you want a number locked in. A 5% mortgage rate means you will pay 5% of your total loan balance in interest each year. If you took a fixed rate, this percentage will never change during the life of your loan.

Taxes

While this is the area that might be the most overlooked on a loan, it’s one of the more important figures in your payment plan. Most lenders will require you to include an escrow account that will take care of your property taxes – if you have an escrow, your lender usually saves up those monthly payments into this separate account. At the end of the year, the escrow company will take the money from your account and pay your property taxes.

Insurance

Insurance usually falls within escrow as well. Lenders do this to ensure that you are always covered in the event of an emergency.

Don’t forget to shop around for your mortgage! We wrote about shopping for a mortgage here – check it out!

Real Estate Tip of the Week: What is a Tax Lien on a Home?

Legal jargon is intimidating – and for the average homeowner, some of the vocab goes in one ear and out the other.

With knowledge comes confidence (and power), so why not brush up on some of the legal homeowner jargon that might affect you?

In this case, we’ll be talking about tax liens.

The name itself sounds confusing – what is a tax lien? Here, we’ll break it down for you.

Essentially, if for whatever reason you can no longer (or haven’t been) paying your property taxes, the local government can place a tax lien on your home. This is a legal claim that ensures you won’t be able to refinance or sell your home without first paying off the lien.

If you’re a potential homebuyer, the title and escrow company working with you to close would find the lien on the property you’re trying to purchase.

How to Avoid a Property Tax Lien

A good idea might be placing your property taxes in escrow. This isn’t required in most cases, but it can still be an option to save yourself from stress in the future. By doing so, you’ll be paying your property tax bill every month, and your lender handles the actual payment.

You can also apply for a homestead exemption – if you qualify, it can help cut down on your annual property tax bill.

The National Tax Lien Association (NTLA) also lists government and nonprofit resources to help homeowners through tax-related issues.

To stay up-to-date with all things real estate, check out the rest of Alliance Title’s Blog!

Guilt over Vacation Homes – Do You Feel the Same?

Ever make a purchase and immediately regret it?

Well, it turns out that 1 in 2 vacation homeowners – about 49% – feel guilty about not using their vacation home enough.

According to a new report from LendingTree, vacation homeowners are riding the guilt trip after not using their second home as much as they planned they would. 26% of survey respondents personally use their home more than five times each year, while 37% only use their vacation home once a year or less.

Why did homeowners buy a second home, if they weren’t planning on using it?

Well, 56% of these vacation homeowners planned to rent it out when they weren’t personally using it, but nearly 6 in 10 have never rented out the property. Just under a third of those rent their property year-round.

Those who felt guilty enough to sell their property, did so because they didn’t use it often (31%), needed income from selling (29%), believed it was too expensive (14%), wanted to buy another home elsewhere (8%), or no longer enjoyed visiting the area where their home was located (6%).

How many times do you think these vacation homeowners would need to attend their home before feeling satisfied with their purchase?

Check out Alliance’s Blog to stay up-to-date with current housing trends and guides.

Hate Grocery Shopping? Your Home’s Value Sure Doesn’t.

Location, location, location.

When it comes to what establishments are in proximity to your neighborhood, it looks like grocery store chains top the list for being the best at helping your home appreciate.

According to a new study from ATTOM Data Solutions, grocery chains like Trader Joes, Whole Foods, and ALDI were found to make home prices rise!

If a Trader Joe’s is nearby, expect an average ROI of 51%. Home flipping near these chains is just as lucrative – near a Trader Joe’s, an average gross flipping profit comes to 31% and offers a 5-year home price appreciation of 33%.

Based on the survey of 1,859 ZIP codes across the nation, the average appreciation with these grocery stores is 38%.

Image courtesy of ATTOM Data Solutions

Real Estate Tip of the Week: What Do Clients Want from an Agent?

As an agent, you’re always thinking of ways to stand out and get the clients – with all the competition out there, it can be daunting. But with some simple tips, you’ll be able to showcase just how great of a real estate agent you  are.

Be Relatable

Buyers and sellers want to work with someone who relates to them– someone genuine and easy to talk to. Your bio should portray just that!

Think about what you post on social media as well – don’t solely post about real estate! Make sure to include posts about you and your life. Maybe a photo of you and your dog, or a photo of you and your coworkers grabbing a bite to eat. It’s important to show clients the “other side” to you.

Have the Knowledge

This is a no-brainer – clients want someone who is knowledgeable and is an expert in their area. Be sure you’re staying up-to-date on any new business developments around the area, as well as current housing market trends.

Reviews & Recommendations

Feedback matters – and buyers and sellers will be looking at reviews on your skills and experience. Make sure you have a presence online and encourage past clients to leave reviews for you on platforms like Facebook and Google, as well as your own personal website.

Make sure it’s easy for people to find you and your business.

Keep Clients Updated

When you have successfully landed a lead, it’s important that you don’t keep them in the dark. Clients want to be included in the process of buying or selling a home. In the beginning, create a plan to outline the relationship. This should incorporate their input on how much they want to know and be involved as well as expectations regarding how they’d like to be reached (i.e., phone call, text message, email, etc.)

What other features do you think are important for agents to showcase?

Move Aside Bustling Cities – These New Markets Are Where Homeowners Want to Live

It’s been known that cities like New York, San Francisco, and Los Angeles are the areas that prospective homeowners love to flock to. However, most homebuyers are jumping ship and moving inland.

A realtor.com survey found the top five ZIP codes in up-and-coming neighborhoods – and they’re mostly in suburban areas.

These areas sell on an average of 17 days, and the residences in the area are viewed online three times more often than the homes in the rest of the country. The number of households in the list are expected to grow 4.3% this year, which is faster than the national rate of 1.1%.

These neighborhoods offer lower priced homes and booming job markets close to city centers. For millennials, this is gold – proximity to downtown and access to affordable homes are just some of the main features that this consumer base is wanting.

Here are the top five hottest ZIP codes:

  1. 49505 – Grand Rapids, Michigan
  2. 68144 – Omaha, Nebraska
  3. 83704 – Boise, Idaho
  4. 66203 – Shawnee, Kansas
  5. 14609 – Rochester, New York

Be a Smart Shopper: What to Look for When Purchasing a Home

Before you head out on a blind date, you’ve already created a list of “red flags” in your mind that you know to walk away from – why not do that for house shopping?

When you’re in the market to shop for a home, it’s important to have a list of features you need to keep an eye on. This way, you’ll be forced to take the love blinders off and focus on exactly what the home has to offer – and what needs to be fixed.

Purchasing a home is a big financial commitment – you’ll want to make sure to make the best decision for your investment – and avoiding major problems that need costly repairs will help.

Before making any decisions, talk with your agent about your financial situation and what repairs you’d be willing to make before signing on a home.

Here’s what to look for:

Foundation

Search for signs of cracking near the foundation and pay attention to the grade of the floors for signs of unevenness. These could be signs of a sinking foundation – something you definitely don’t want to be stuck with.

Roof Condition

Before inspecting the inside of the home, make sure to look at what’s happening up top. The condition of the roof could end up costing you $8,000 or more if in need of a desperate repair. Ask about its age and when it was last repaired.  

Mold and Water Damage

When you’ve entered the kitchen and bathrooms, take a peek inside the cabinets for signs of mold around the pipes. This could indicate a leaky plumbing system or previous flooding and improper ventilation. Musty odors or peeling paint are other signs of water damage.

Energy Efficiency

How are the AC and Heater units doing? Have new windows been added to the home? Ask about the condition of the insulation of the home, and when the furnace or air conditioning was last serviced. All of these items can help lower your utility costs.

Complete a Home Inspection

Although you’ve looked at things first-hand and have your own checklist, it’s recommended that you have a home inspection performed. A professional can help you ensure the foundation is solid and everything is up to code. Home inspectors can also check for things that might be harder to spot – like whether there is lead paint or any foundational pests.