First-Time Homebuyers Looking to Buy

What do you get when you mix low mortgage rates and first-time homebuyers? – Home sales.

According to REALTOR® Magazine, 32% of sales in January came from first-time homebuyers, which is up from 29% last year. First-time homeowners younger than 35 increased from 35.4% in early 2019 to 37.6% in late 2019, and existing home-sales are at 5.46 million for 2020.

Lawrence Yun, Chief Economist for the National Association of REALTORS®, explains, “The rise in the homeownership rate among younger adults under 35 and minority households means an increasing number of Americans can build wealth by owning real estate. Still, in order to further expand opportunities, significantly more inventory and home construction are needed at the affordable price points.”

While it has only been two months into 2020, real estate analysts are looking to builders to increase inventory to help first-time buyers and repeat buyers alike.

For more real estate news, stop by Alliance Title’s Blog.

Real Estate Tip of the Week: Stand Out from Other Agents

In 2019, membership in the National Association of Realtors (NAR) reached an all-time high of 1.4 million. So – how do you set yourself apart? 

To be a successful agent, you have to think about what your clients are looking for. While going the extra mile to impress a client never hurts, a potential homebuyer or seller is ultimately looking for a few key elements in an agent.

Market Materials

Your buyer or seller has probably done prior research of the market before finding you, but that doesn’t mean they ultimately know every little aspect of what’s taking place, especially with targeted neighborhoods.

Before parting ways with a potential client, compile materials that you can send home with them to review for themselves. That way, they don’t feel pressure, and they have more education of the process under their belts.

Alliance Title has a few marketing materials you can use – our Client Resource Guide, our Buyer-Seller Guide, and our Buyer Checklist all provide great information that your client can use to better understand the process of a real estate transaction. Key words, calendars, and calculating closing fees are all included.

Remember Their Checklist

Usually, a buyer and seller already has an idea in mind in how they want their transaction to take place. They have a price point, they have a checklist of the size, location, and added features they’d like, and they know their time tables. While sometimes a client’s needs can’t always be met (especially if their checklist is unrealistic in the current market), it’s important that you stick close with their desires.

Communicate

Before you’ve been officially hired as an agent, a buyer or seller might be curious as to how you can steer them in the direction they’d like to take. Know whether to pursue or leave a lead – and how to not bother a potential client. Remember, everyone is busy with work and life in general! Sending an email or a text is completely acceptable (if they’ve agreed to giving you contact information), but be respectful with time frames.

Once you have been officially hired, don’t leave your client in the dark. Keep them updated with the process (has their offer been reviewed? Has a home they’ve been keeping an eye on just popped up on the market? Did the appraisal come in?) and let them know they can come to you with any questions or concerns.

Overall, being an agent that is knowledgeable, patient, understanding, and approachable is essentially what any buyer or seller wants. Set yourself apart from the 1.4 million today!

Check out Alliance Title’s Blog for more real estate tips and guides.

Real Estate Guide: How to Find Your Listing Agent

Are you in the process of wanting to sell your home? One of the first things you’ll need to do is find your listing agent.

Your listing agent will help you get the most out of your transaction – so, how can you find the right agent for you?

It’s all about asking key questions – follow our tips below when you meet up with a potential listing agent for the first time:

What Are Your Credentials?

You’ll want an agent that has a stat license and belongs to a local real estate trade association – which means they have access to the multiple listing service (MLS), to list and get more eyes on your home.

Are You Familiar With This Neighborhood?

Working with a local agent is a huge advantage for sellers. Agents who specialize in certain areas are aware of any upcoming developments in the area – which can affect the value of your property. They also are more likely to know how quickly your home will sell, and the price you’re likely to get.

Do You Know the Local Market?

Nothing is worse than a home that is priced too high, or too low – so knowing how your agent arrived at the listing price is important. The listing agent should be knowledgeable about the local market and what other similar homes have recently sold for.

How Do We Communicate?

This should (hopefully) be something the listing agent asks you, as the seller, but be prepared to list off ways of communicating that works best for you. If you prefer texting, calling, or emailing – let your listing agent know the best way to reach you. Be sure to also explain how often you’d like to be reached in each step of the home selling process.

Can I look at Your Listing Agreement?

The listing agreement will have fees and costs displayed, so know how to properly plan for the end of the transaction. You should discuss possible payments like commission and closing fees.

Go with your gut – your listing agent should be knowledgeable and approachable. They should be able to openly communicate with you on the process, as well as help you feel at ease with the transaction.

Want more real estate guides? Stop by Alliance’s Blog here.

Real Estate News: Homeowners Save When Comparing Mortgages

While this may not be news to current homeowners – soon-to-be homeowners might not know that shopping around for a mortgage can save you quite the cash in the end.

According to LendingTree, purchasers could save an average of $125 a month, or about $1,500 a year, by shopping around – that could equal up to $44,500 saved over the life of the loan!

Interest rates are constantly changing, and with all the various loan options, it benefits the potential homeowner to shop around and see which opportunity best suits them and their future.

Not sure how to shop for a mortgage? Check out our mortgage shopping 101 guide!

LendingTree’s findings also broke down which cities borrowers were saving the most money:

  • San Francisco
  • Fresno
  • Los Angeles
  • Portland
  • Washington, D.C.
  • Las Vegas
  • Seattle
  • Boston
  • Minneapolis
  • Phoenix

Check out their infographic, here.

For more real estate news and guides, stop by Alliance Title’s Blog.

Love Is in the Air – and in Moving Boxes?

Ah, love. What wouldn’t you do for it?

Looks like one in five people would move for love – even move 500 miles or more for a relationship!

A survey from Bellhops, a professional moving company, analyzed nearly 2 million online conversations from June 2018 to March 2019 to find common themes in moving.

The top four reasons to move:

  • Location
  • Money
  • Love
  • Community

With Valentine’s Day in the air, we can’t help but be curious on the relationships that moved for love. Bellhops’ data shows that 60% of the people who moved for love or now either married or in a long-term relationship!

Looks like moving for love can be quite rewarding.

Take a look at Bellhops’ infographic below for more survey results on moving for love:

*Infographic provided by Bellhop

For more real estate news on love, finances, and tips, check out Alliance Title’s Blog.

What Can a Minor Change in Interest Rates Mean for Home Buyers?

The housing market has seen a significant drop in mortgage rates – which can be great help for soon-to-be buyers.

While low mortgage rates are fantastic, it’s important to understand how even the slightest change can alter someone’s ability to purchase.

The National Association of Home Builders recently offered various scenarios of the price differences in affordability with interest rates. Currently, the median new-home price is $345,908. The buyer would receive a standard mortgage interest rate of around 3.75% (as of the beginning of February 2020) – if this rate moves up even just a quarter of a percentage point, it prices about 1.3 million U.S. homes out of the market. This was also factored in with a 10% down payment.

The NAHB also showed this process in reverse – with the recent change in lower mortgage rates, 44 million households can afford the median-priced new home.

Check out The NAHB’s chart below to view differences that interest rate fluctuations can make:

For more real estate news, check out Alliance Title’s Blog.

Real Estate Tip of the Week: What is Private Mortgage Insurance?

Purchasing a home is an accomplishment – but it also means prepping yourself before you sign on the dotted line. There are a lot of things you need to learn and check off before being handed the keys, but that shouldn’t weigh you down in your homeownership future.

One of the real estate terms you might hear flying around: mortgage insurance. Not only that, but private mortgage insurance.

Home loans will require a down payment in order to qualify for a loan – the more you’re able to put down, the more money you’ll save in interest over the life of the loan.

To avoid paying for private mortgage insurance (PMI), you’ll need to put down 20% of the purchase price of a home. However, that isn’t always possible – and a 20% down purchase isn’t required to buy a home.

FHA loans require the smallest amount down – around 3.5%. Instead of paying $40,000 on a down payment for a $200,000 home, 3.5% down is a $7,000 down payment.

Quite the difference.

This does mean, however, that you’ll need to pay PMI. This helps protect the lender in case you were to default on your loan.

PMI premiums vary from loan to loan – a FHA loan, VA loan, Conventional loan, and a USDA loan will all have different premiums and an annual fee you’ll have to pay if you put less than 20% down.

Check out LendingTree’s full analysis of the comparison of loans here.

And for more real estate tips, stop by Alliance’s Blog.

How to Choose the Best Real Estate Agent for You

Homeownership means having to make decisions – and one of the first ones you’ll have to make is finding a real estate agent that will help you throughout your home-purchasing journey!

How do you find an agent?

Referrals are all a part of the process – ask friends and family members if they can recommend an agent (if they’ve had a great experience with them, of course).

You can also easily Google “real estate agent [city] to find other reviews from Yelp, Zillow, and Realtor.com.

How do you choose?

After you’ve found the one you might want to work with, start going through their online presence – do they have a website, or any social media accounts? Are there any reviews online?

It’s important to choose an agent you feel comfortable working with – one who is competent and prepared to be with you throughout each step of the home-buying process.

Keep in mind:

  • Differences between a Realtor® and a Real Estate Agent: All Realtors® and Real Estate Agents are required to be licensed by the state to represent buyers and sellers in property transfers. However, a Realtor® is a real estate agent who is a member of the National Association of Realtors® – which means that he or she must uphold the standards of the association and its code of ethics.
  • Find an agent who is familiar with the community you want to live in. Here are some questions to ask your potential real estate agent:
    • Do you deal mostly with home buyers or with home sellers?
    • Do you stay in touch via text, phone call, email, etc.?
    • Are you a member of the local Multiple Listing Service (MLS)?
    • Are you able to provide local real estate market trends, values, and statistics?

For more real estate guides, check out Alliance Title’s Blog and the Buyer and Seller information on our website.

Real Estate Tip of the Week: Avoiding Wire Fraud

In real estate, you’ve probably heard of the alarming act of wire fraud. While it is a very real thing – there are important steps that you can take to prevent this from happening to you and your transaction.

First: What is Wire Fraud?

One of the final stages of a home purchase includes the homebuyer wiring money for their closing – the homebuyer would receive a legitimate email from their attorney, title company, or mortgage company with details on how and where to wire the money.

Unfortunately, wire fraud involves a cybercriminal hacking into the email system with fraudulent wire-transfer instructions. Usually, it is only after the wire transfer has been completed, that anyone fully realizes that a crime has taken place.

According to the National Association of Realtors®, wire fraud is one of the fastest growing cybercrimes in the U.S – about 11,300 people were victims of wire fraud in real estate transactions in 2018, with losses over $150 million.

Second: What Can You Do?

Be wary of last-minute changes – homebuyers and sellers are eager to finalize the transaction, and the cybercriminal knows that. If you receive a notification just before closing the initiates a change in wire instructions, do not panic and send money. Here’s what to do instead:

  • Do not rely on an email, a text, or a letter – even if it looks legitimate. Confirm wire instructions verbally, or in person. This might mean calling up your attorney, title company, or real estate agent.
  • When calling to confirm, be sure to use the numbers you received and verified at the beginning of the loan process. Do not try and call the number listed on this new email, text, or letter with an updated wire instruction change.
  • Do not click on any link within the email that you find suspicious.
  • Ask your bank to confirm the name on the receiving account before sending a wire.
  • After confirming your wire instructions are legitimate, verify with your title company that they’ve received your wire 4 hours after the transfer

For more information on how you can prevent wire fraud, check out the NAR’s tips here.

Alliance Title & Escrow believes in preventing wire fraud – call your local office to find out more on what we’re doing to combat wire fraud.

As always – for more real estate tips, be sure to check out Alliance’s Blog.

Overwhelmed Buying a Home? You’re Not Alone

When you’re in the middle of a big decision – whether that’s switching jobs, having kids, or moving to a new state – being overwhelmed can be a huge factor in delaying.

According to TD Bank’s First-Time Homebuyer Pulse survey, three in four (75%) of first-time homebuyers admit feeling overwhelmed by the process, and thus, possibly postponing the purchase.

These first-time homebuyers surveyed (aged 23-38) do, however, believe now is a good time to buy a home – but are feeling priced out of the market. 22% said higher prices in the neighborhood where they want to live have stopped them from purchasing. 70% of responders also agreed that their expectations for their first home are higher because of the amenities they have where they currently live.

Other notable things first-time homebuyers are worried about:

  • Job stability (51%)
  • Relationship stability with their significant other (35%)

Although potential homeowners are feeling the stress when it comes to home buying, most are taking at least a minor step towards homeownership.

*Infographic provided by TD Bank

Check out Aliance’s Blog for more real estate news.