Home Buying Power: Where Are We Currently?

Sometimes it’s in the buyer’s hands, and sometimes it’s in the seller’s hands – but where is the real estate market now?

With low mortgage rates – buying power has increased by 6%. This helped boost contract signings by 1.5% in September, with contract signings up overall 3.9% year over year.

Experts aren’t expecting interest rates to make any sizeable changes, so they believe the median price of homes will have to be the key to changing housing affordability in the future. The median price of homes is also greatly affected by the shortage of homes available.

Lawrence Yun, the National Association of REALTORS® Chief Economist, believes that other ideas will need to be pushed to help increase inventory – such as “a greater use of modular, factory-constructed homes, converting old shopping malls or vacant office space into condos, and permitting more accessory dwelling units.”

Check out the NAR’s Infographic on home sales below:

From the National Association of REALTORS®

For more real estate news, check out the rest of Alliance Title’s blog.

Homeowner and Landlord: Set Up Your Rental Property

Interested in becoming a landlord?

There are many reasons homeowners decide to rent out their home rather than sell it – maybe you’d like to keep the home for future generations, maybe you are temporarily moving for work, or maybe you’d like to wait for the market to turn in your favor – whatever your decision, it can be a profitable experience for you!

Here are some of the ways you need to prepare your home for future renters:

Move-In Ready

You’ll need to check that all appliances are safe and in working order, the key or lock pad to enter your home is secure and accessible, and the house is clean.

Rental Price

Your rent needs to be comparable to what is in the market. Check out Redfin’s Rental Estimate Calculator for a good idea of what your home can go for.

You’ll need to consider covering the costs of your:

  • Mortgage
  • Property Taxes
  • Insurance
  • Utilities
  • Funds for maintenance (since you’re the landlord, you’ll be the one to fix anything!)

Lease

You’ll want to create a lease agreement for your future tenants to sign and abide by. Have your lease include:

  • Length of the lease
  • Security deposit amount
  • Rental due date and financial consequences for late or missed payments
  • List of names for all tenants
  • Policies about any pets, painting, noise levels, smoking, etc.
  • Eviction terms
  • Consequences for damaging the property
  • Etc.

Be a Fair Landlord

Overall, renters will want to sign with someone who they believe is fair and reasonable. It’s important that you have open and good communication with your future renters, as well as quick response times (especially if there is a maintenance emergency!).

Be sure to check out the rest of Alliance Title’s Blog for more real estate tips and tricks.

Real Estate Tip of the Week: Get to Networking

We get it – socializing can be scary! But when it comes to generating referrals, networking is key.

So give yourself a pep talk, get out from behind your desk, and get to prospecting! Here are some quick tips to help you stay focused, and hopefully, a little more confident.

Don’t Get Straight to Business

It’s important that potential clients or business partners don’t feel like you’re talking to them just because you need their business. When you’re out, make sure you are actually having real conversations with people! If there is something you can bond over, then you have the potential to make a genuine connection – people are more inclined to give business if they like you – so don’t immediately hand over your business card.

Change Your View of Success

The idea of networking can seem intimidating, especially when you picture a successful night as one where you’ve left with a million referrals in your back pocket. This isn’t the case! Change your point of view of what a victorious night really means – i.e., one or two people that you were truly making a connection with. If you set yourself up with unrealistic expectations, you won’t feel confident when stepping into the room.

You Can Network Anywhere

Don’t wait for that marketing or business event to start networking (although, those don’t hurt either!). Think about joining a local club that interests you, or volunteering for a local charity. People will get to know who you are first, then if they need help with real estate in the future – they know exactly who to call!

Yes, networking isn’t all fast paced – instead, like these tips, it’s all about nurturing and keeping contacts. People are more likely to hire and work with someone they know and trust – so think about making friends instead of just landing clients!

If you’re looking for more real estate tips and tricks, head on over to Alliance Title’s Blog.

Assessed vs. Market Value – Homebuyers Guide

Becoming a homeowner is thrilling and intimidating all at once – but we’re here to guide you through it.

One of the more intimidating moments in becoming a homeowner, is learning real estate vocabulary. If you’re in the initial stages of purchasing a home, you’ve probably heard two prices discussed – assessed value versus market value.

What are the differences?

These two prices aren’t the same, so it’s important that you understand the variation between the two. And of course, knowledge is power – especially when you’re a first-time homebuyer.

Market Value

Essentially, market value is the price a buyer is willing to pay for a home that a seller is willing to accept.

How is this value decided? Real estate agents look at some of these factors:

  • Exterior: Curb appeal, condition of the home, lot size, home style, and availability of public utilities
  • Interior: Size and number of rooms, energy efficiency, heating systems, and quality and condition of appliances and construction.
  • Compare: They’ll take a look at similar homes in the same area that have recently been sold
  • Supply and Demand: They’ll consider the number of buyers and the number of sellers in your area
  • Location: What school district is your home in? How new is the neighborhood?

With a market value, no price is “right” or “wrong.” Bot listing and buyer agents can negotiate which price each party is willing to work with.

Assessed Value

Usually, counties will employ an assessor to place a value on the home – this helps to levy property taxes on it.

The assessor will look at:

  • Similar properties and what they’re selling for
  • The value of any recent improvements
  • Any income you may be making from – i.e., renting out a room
  • The replacement cost of the property if something were to happen, like a fire or a flood

After the assessor takes notes on your property, they will deduct any tax exemptions you might qualify for. Then, that number is multiplied by an assessment rate – which is a uniform percentage that each tax jurisdiction sets (typically 80% to 90%) to arrive at the taxable value of your property.

For example, if the market value of your home is $300,000 and your local assessment tax rate is 80%, then the taxable value of your home is $240,000. $240,000 is then used by your local government to calculate your property tax bill.

Each town, county, and state is different – for more information, check this public records website.

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

The Latest Project to Help the Low Housing Inventory Dilemma

With low housing inventory affecting much of the real estate communities in America, it’s safe to say that new ideas are worth considering.

That’s where accessory dwelling units – or ADUs – come in.

Many communities nationwide are discussing lifting zoning requirements to allow more ADUs in neighborhoods in efforts to help battle low housing inventory.

Spaces like an empty free-standing garage, a backyard cottage, or an in-law apartment / granny flat could be added onto an existing home.

California is one of the many states seriously considering this option. One project underway, United Dwelling, will work with a homeowner to pay for a garage conversion – once it has been completed, they’ll manage the rental of the apartment to a tenant and split the rent with the homeowner.

These extra units not only provide extra income for homeowners, but it also helps supply extra housing.

Want more real estate news? Check out Alliance Title’s Blog here.

Student Debt & Home Buying Power

Boo – no shocker here, student debt causes many future homeowners to take a moment’s pause. When they think about the thousands of dollars in student debt they have, is homeownership the first goal on their minds?

According to a new study by realtor.com, total student debt in the U.S. has reached $1.5 trillion, a new all-time high. When broken down, the average student loan borrower owes about $34,500.

That’s $8,500 more than the typical down payment of $26,000.

To put it not so lightly – $1.5 trillion is enough to buy every single home on the market in the U.S. – twice.

Realtor.com’s Senior Economist, George Ratiu, explains, “The important implication of rising debt is that young generations are delaying major life decisions. Student debt is already impacting borrowers’ ability to buy a home and education debt is expected to hamper consumers’ financial decisions for many years down the road.”

The Federal Reserve believes that the increased student loan debts since 2005 have created a 20% decline in homeownership amount young adults.

For more real estate news, check out the rest of Alliance Title’s Blog here.

Home Buyer Checklist

Daydreaming about buying a home is one thing – preparing to purchase, however, is another.

Before you jump the gun and reach out to an agent, it’s important to know where you stand in terms of finances and what features of a house matter more to you than others.

Know Your Credit Score

It might be good to consider knowing your credit score before you start your home and loan search. You can request a free copy of your credit score from Annual Credit Score or Credit Karma.

But remember, keep inquires to a minimum, or talk to your lender beforehand.

Know Your Numbers

How much home can you afford? Before you make an offer, consider the cost of your mortgage payment as well as homeowners’ association dues, taxes, and insurance.

These user friendly calculators from Bankrate and Alliance Title will help you run the numbers and stay informed while you make important decisions about your home purchase.

You’ll want to be preapproved by a lender first, before you talk to an agent. This will help you and your agent know where you stand in terms of finances. Check out our mortgage shopping how-to article here.

If you want more real estate news, be sure to check out Alliance Title’s Blog!

Real Estate Tip of the Week: Safety for Agents

As a real estate agent, you need to be diligent and attentive when it comes to safety in your line of work.

So, what are some safety tips you can apply to your daily routine? Check out our tips below.

Open Schedule

We don’t necessarily mean being available at all times of the day – rather, we suggest letting your coworkers and teammates know where you will be and who you will be with during the day. Let someone in your office know if you’re meeting a client at a coffee shop, or if you’re preparing for a showing. Think about sharing your calendar with your colleagues.

Set Boundaries

Make sure that when you set times for clients, you are taking into account of when you want to meet. If you feel uneasy meeting out after dark, be upfront and list your hours clearly in any marketing materials you have.

Meet in the Office First

If it’s possible, meet your clients in your office first. This way, you can make a copy of your client’s driver’s license and have them fill out a Prospect Identification Form. This little extra step of filing a name into the system might stop a potential criminal from committing to a form of action.

When they do meet you in the office, make sure you introduce them to someone. The more eyes on them, the less likely they are to make an attack.

Let Clients Lead

This works for a showing – let the clients direct themselves through a home. You can say things like, “the bonus room is to your right.” This allows you to keep an eye on them.

Be Prepared

Take your phone with you to all meetings and make sure it is fully charged. Think about installing a security app that allows you to easily call for help in a secretive manner.

These are just a few of the many safety tips available for real estate agents. The National Association of Realtors has an entire page dedicated to protecting agent’s safety.

Looking for more real estate tips and news? Check out the rest of Alliance Title’s Blog for more!

Psst…Homeowners and HOA Fines

Homeowners and HOA associations have quite the love-hate relationship.

HOAs are incredibly prominent – if you don’t live an apartment complex or neighborhood with an HOA, chances are you know someone who does. Those living with the association have grown over the last 50 years from 10,000 communities in the 70s, to more than 300,000 as of 2016.

And while HOAs can be beneficial, there are some rules and regulations homeowners would rather do without.

The biggest fines HOAs seem to hand out to homeowners usually fall within improper landscaping and trash being taken out too late or too early.

52% of homeowners say that have not paid an HOA fine and 29% say they have knowingly broken an HOA rule.

Even though a majority of homeowners don’t agree with many of the association’s rules, 57% of HOA residents said they would want their next home to still be in an HOA community. Reasons like increased safety, preserving their home’s property value, and recreational amenities might be what keeps homeowners coming back.

Check out The Porch’s Infographic concerning HOA’s here:

Where Are Home Mortgage Rates Headed?

Oh where oh where could mortgage rates go?

Potential homeowners hold their breath each time a new mortgage rate report has been released – what about this one?

Next year, according to Fannie Mae, rates could drop as low as 3.4%!

Forecasters also foresee home price growth to moderate. Fannie Mae, Freddie Mac, and the MBA are all predicting the same – that home price growth will slow to 2.2% appreciation by 2021.

A spokesperson from Fannie Mae explains, “Rates fell for most of this year, and lower rates have translated into a stronger housing market. Both home sales and housing construction are firming. We expect a significant increase in mortgage refinance originations in the coming quarters.”

Last week, the 30-year fixed mortgage rate averaged 3.56%, down 1.06 percentage points from a year ago.