Category Archives: Real Estate

Are You Ready To Sell?

ready to sell

The reasons for selling are not the same for every homeowner. What is the same are the issues and decisions facing sellers when they decide to put their house on the market or not.

Making a decision if you are ready to sell will depend on how you can answer some leading questions, such as: “Is now a good time to sell? If I sell my primary dwelling, where will I live? Do I know what my property is worth? Where do I begin?”

Your answers to these questions will be unique to your situation, your goals, the current market, and your property, but the following insights into each of the five questions reveal what your answers might involve:

#1. Why now? What is driving you to feel you “must” sell now, not in a few months or next year? What problems or inconveniences could arise if you don’t sell now?
Is there one main reason you are considering a sale now? Need the money? Is it the benefits of selling in a hot sellers’ market to lock-in the profit? Is it a new job or relationship that drives the selling decision? Or, have you lost your job or do you face a divorce? Are other circumstances, like escalating costs, including taxes, or the necessity for major repairs making the property too expensive to keep?
As your real estate professional, I will be able to help you arrive at an accurate market value determination. Real estate professionals can offer practical suggestions and alternatives. Weigh expert input in view of your priorities to resolve issues and identify ideal alternatives. Add to this analysis a brutally-honest assessment of what you love about your current real estate and what you do not truly care for.

#2. What is next? Where will you move to? Do you have the next step figured out – smaller residence, larger home, cross-town shift, cross-state move, cross-country leap, switch to condominium lifestyle, or cash out and move to a rental property? Are you aiming for a mortgage-free lifestyle?

Who is directly involved in the move? Decisions should be made by those who will use the property and shoulder costs. For instance, parents may decide to sell the family home and downsize when their grown children leave ‘the nest’, but this is no longer an automatic logical step for everyone. What if children return home after college to enroll in graduate school in hometown? Also, parents may choose to grow old in their home instead of moving into an institution.

#3. What would a “successful sale” include? How much do you need to net from the sale of your real estate? It’s not unusual for owners to have inflated views of the value of their home that are tied to the pride of ownership. If you are planning to purchase real estate with the proceeds of this sale, do you know how much you will need to sell for to buy that next property? Will you need to sell your current property first to be sure exactly how much you have for the next step? Or, can you accept the risk of temporarily owning two properties or needing outside funding to purchase the next property before you sell the current one?

What do you need to achieve through the sale of your real estate? Beyond financial concerns, what other factors will make this a successful sale? For instance, is there a moving date that holds value for you because an earlier closing and moving date would represent additional expenses? Do you want to sell all furniture and appliances or take them with you?

#4. Who will help you achieve this success? As your real estate professional, I have the expert knowledge and skills necessary to successfully list your property, attract ideal buyers, complete the transaction with your best interest in mind, and finalize the sale as quickly as possible and with little or no hassle. I am trained to provide real market data that will put your expectations in the context of current market conditions and buyer alternatives. xxx

Fall Housing Market Predictions

fall housing

We are fully engulfed in pumpkin spice, football, and everything that makes fall nice. But what does the fall season bring to the real estate market as we run up to the end of the year?

INTEREST RATES: It is anticipated that interest rates will remain steady but increase slowly throughout the rest of the year.

INVENTORY: In most of the country inventory is holding steady, but is lower than ideal. November is the end of the second busiest inventory season of the year: if a move is in your future, it is time to put your moving plan into action now.

DAYS ON MARKET: When inventory is low, it typically leads to a correspondingly low number of days on market. That happens because buyers are waiting and watching for properties in good condition that are priced well. The more repairs the home requires or higher the price point, the days on market can creep up.

Typically, if homes do not sell within the first 10 days on the market, it can take 45 days to grab the attention of an interested buyer. It is critical to price your home appropriately from the start. You want to avoid having your property sit on the market over the holidays when buyer traffic slows considerably.

The fall market is a great time to make a move and this year it may be a particularly good time for both buyers and sellers.

House hunting and credit: What you need to know

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(BPT) – By now it is something of a cliche to call homeownership the American dream. But even if sitting on your own deck, looking over your picket fence and sipping lemonade doesn’t move you, homeownership is still one of the best ways to build wealth.

For many, owning a home is cheaper than renting and, in the long run, the biggest investment they will ever make. It is also a practical financial move thanks to the fact that you’re likely building equity while getting a mortgage interest tax break.

So although it is perfectly fine to dream about backyard barbecues and the smell of fresh-cut grass, the path to owning your own home should also involve taking the time to do some financial sightseeing.

As a leader in creating credit scoring models, VantageScore Solutions has made it a priority to educate consumers on the important role a good credit history plays in buying a home.

Whether you’re about to set out to buy your first home or if you are getting ready to sell and buy another home, here are the basics of how credit impacts the home-buying process.

Basics

If you are like most people, you will probably need to take out a loan. If you are able to pay cash for your home instead, count yourself among the lucky few!

A huge part of taking out a loan involves your credit history and credit score. Basically, you must prove to lenders that you can be a responsible borrower and can be trusted with a mortgage of many thousands of dollars. A strong credit score may provide proof of this trustworthiness.

Different types of loans have different credit requirements. Some loans require you to have a credit score of at least 620, although it is possible (with some difficulty) to be approved for a loan with a credit score as low as 580. But getting loan approval is only part of the story.

Better credit, better rate

Home loans come in all shapes and sizes. Some are fixed interest mortgages, some have adjustable rates or longer terms and the list of variables goes on. Just like anything else, some loans are better for you than others. To get the loan that has the lowest interest rate, which right now is around 4 percent, usually requires a higher credit score. Rates can be considerably higher when you have a lower credit score, and the result is paying significantly more monthly over the life of the loan.

The reason is that a higher credit score demonstrates that you are skilled at managing debt and have a history of responsibly paying back many types of loans. Therefore, the lender is taking on less risk when lending you money. The less risk for them, the better the interest rate for you.

While there are, of course, more nuances to the process, your credit score plays an instrumental role in determining the type of loan you may qualify for. Therefore, before you go to your first open house, check your credit score to better understand the factors that typically impact your scores. Many websites provide free access to your VantageScore, which is a perfectly fine barometer to use to directionally gauge your creditworthiness. Mortgage lenders use FICO scores in their underwriting.

You can stay on top of things by subscribing to the monthly credit scoring newsletter, The Score. In The Score, you can find information on VantageScore 4.0, the fourth-generation scoring model that will be available to consumers in early 2018.

Knowing your credit history and understanding the factors that could impact your credit score will help you plan, budget and come up with a realistic wish list for your house.

How to use your home’s equity to your advantage

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Your most valuable asset is around you all the time. It is above you, it is below you and in many cases you do not realize how much it can do for you.

According to the Urban Institute in Washington, D.C., “Americans have a staggering amount of untapped equity in their homes.” How much? Altogether, $11,030,000,000,000. That is 11 trillion, 30 billion dollars.

Yet despite this huge wealth possessed by homeowners, using it is not as simple as writing a check. You have to capitalize on your home’s equity.

What Is Home Equity?
Your home’s equity represents the difference between its current market value and the money that you owe on it.

Let us say, for example, your home has a market value of $200,000, you made a down payment of $40,000 and you took out a $160,000 mortgage. At that point your equity is $40,000. You can always calculate this number by taking your home’s initial price and subtracting the amount you still owe.

Now, let us say 10 years later you have paid off $60,000 of your $160,000 mortgage. At this point you still owe $100,000 on your home’s initial price of $200,000 so your equity is $100,000, assuming the home’s value has remained the same.

A little at a time
Each month when you make a mortgage payment, some of your money goes toward interest, some goes toward real estate taxes and homeowner’s insurance (if the lender is collecting for these and making the payments on your behalf), and some goes toward paying off the mortgage itself. This last portion grows your equity because it subtracts from the amount you still owe.

Your home equity can also grow if your home increases in value because the amount you still owe has not changed. A rise in value may be due to increased home prices in your area and/or improvements you make to the home.

Market home prices may rise and fall from one year to the next but given enough time, most real estate tends to increase in value. For example, current economic forecasts from CoreLogic project a 4.8 percent increase in home prices year over year in 2017.

Gaining access to your equity
Now that you understand what equity is and how much equity you have, your next question may be “How do I use it?”

Your first step is to contact a knowledgeable mortgage professional. They will be able to answer your questions as well as show you loans that use your home as collateral. You will want to do your research to determine which type of loan is best for you. You should also take the time to compare interest rates, offers, and loan features.

And if you are age 62 or older, you are also eligible for additional home equity options such as a Home Equity Conversion Mortgage (HECM), which is an FHA-insured Reverse Mortgage loan. This loan may be taken as a lump sum, a line of credit, through fixed monthly payments or a combination and the loan can never be frozen or reduced.

The equity in your home empowers you with several financing options and the specifics of each loan may vary from lender to lender, so ask questions and do your own research. Once you understand all your options you will be able to determine which loan offering allows you to make the most of your most valuable asset.

To learn about HECM Reverse Mortgage loans and other special home-equity options available to homeowners 62 and older, visit www.reversemortgage.org/HomeEquity. v

Down Payment Strategy

Down payment Strategy

The minimum down payment on an FHA loan is 3.5 percent, which makes it a popular choice among those who do not have the funds for a large down payment (also those who do not meet the higher credit score requirements for other types of loans). And that is not even the lowest you can go. Some loans require only three percent down, and if you are a veteran or are buying a home in a rural area, you may be able to buy a home for nothing down. But should you go that low just because you can, or are you better off making a larger down payment? Here is break-down:

The case for a 20 percent down payment – There are several advantages to putting down 20 percent when buying a home, like:

Since the bank will generally consider you a lower risk because of your large down payment, you may be able to get a lower interest rate than you would with other types of loans—as long as you have the credit score to support it.

You will have built-in equity as soon as you move in.
You can avoid paying private mortgage insurance (PMI).
It is that last part that drives many people to strive for that 20 percent down payment since PMI can add several hundred dollars to a new homeowner’s monthly payment, and it can be hard to get rid of it.

But is that a smart move? – The less you put down, the higher the mortgage insurance will be. Yep, there is that pesky PMI again, which, for many first-time buyers, pushes their monthly payment to a level they are not comfortable with. Another issue with PMI: if you need to pay PMI, the loan amount you can get will be slightly smaller, to allow for the bigger payment which will determine the house you can afford.

You may also have trouble qualifying for a loan even if you have a high enough credit score because you would not have enough cash reserves after the down payment. If you are using all your savings for the down payment and the lender questions where the funds for your closing costs, taxes and insurance, and any needed repairs are coming from, you could have a problem.

Even when you add the PMI and a higher interest rate, the equation comes out in favor of the lower down payment. With three percent down and making adjustments for rate and PMI, the rate of return on a low-down-payment loan is still be as high as 106 percent – much higher than if you made a large down payment. The less you put down, then the larger your potential return on investment could be.
The case for somewhere in between – Finding that balance between down payment and savings is a challenge for many homebuyers and the sweet spot will be different for everyone depending on their unique circumstances and financial situation. Most financial experts will say that saving and scrounging to get together 20 percent at the risk of depleted savings and zero emergency funds is a shaky strategy.
If putting 20 percent down means that you would use all of your savings, then do not do it! Especially, when you consider all the added costs you may be facing once you buy: yard work, home repairs and maintenance, renovation costs, property taxes, insurance, association fees, etc. It is important to consider all of the costs and not just compare the monthly mortgage payment to your current rent amount or mortgage payment on your old house.

Another thing to consider when evaluating how much you should put down is what would happen if you had an emergency. It is easy to lose sight of real-life issues that can arise when you are so driven to buy a home and focused on saving the money to get there. v

Is Selling in the Fall a Good Idea?

_FALL-570It is no secret that homes sell throughout the year and in all twelve months. It is also no secret that the largest percentage of homes sell in the Spring. In fact, for many years you could look at a line that went from January through December on a line graph and it would look like the back of a double hump camel.

The first hump would occur in May each year. More homes sell in that month than any other month of the year. Then there would be a bit of a pullback in July as people took vacations and enjoyed the summer. Then the second (smaller) hump would occur in August and September where there would be a bit of a resurgence in sales and then things would tail off into the holidays.

About 7 years ago however, a new trend started to take place in the twin cities and it has not changed over that period of time. Now, what we see is that the early Spring market is even more robust than in past decades. May is still the top month of the year for home sales. However, there is no trough in July or second hump in August and September any longer. Instead, once May sales are complete there is just a slow descent into the holidays over the rest of the year.

Now, please understand that we still sell MANY homes after May. However, it is apparent that the buying habits of consumers, at least here in the twin cities, has caused a “front loading” of sales early in the year. In fact, by the end of June almost 2/3 of all sales for the year have taken place.

So, what does this mean for home sellers in the Fall? There are two variables to pay attention to. The first is the level of inventory that is available. It is widely known that over the last few years the demand for housing has far outpaced the available inventory. This has been especially true in the first tier move up buyer range of $250-400,000. In the Spring when the largest number of buyers are in the marketplace, there are multiple offers competing for the same property. You’ve seen the news stories which are becoming a yearly ritual. Generally speaking the most activity for multiple offers has been in the first time buyer range up to $250,000. And, there are always some neighborhoods that enjoy heavy demand regardless of time of year like Linden Hills, Wayzata, Kenwood, Crocus Hill Highland Park, and Mounds Park to name a few.

The second variable is that in the Fall, the market is still active but, there are fewer buyers, so sellers have to be priced more competitively than in the Spring. You can still make record profits as a seller this time of year. You just have to know how to position your home correctly in the marketplace.

Lastly, the Fall is the best time of year to contact me if you are also thinking of taking advantage of the hot Spring market. The reason is I can give you great advice on what to do over the winter to prepare your home for the coming Spring. You won’t have to rush to get things done and you will be in great shape come Spring when you open your doors to all of the interested buyers who will be looking for that perfect home. Yours.

article contributed by:
Mike Vanderheyden
RE/MAX Specialists
8400 Adair Avenue N 
Brooklyn Park, MN 55443

http://www.mike.remax-northcentral.com/

6 Tips for Buying in a Seller’s Market

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Buying a home in a seller’s market doesn’t necessarily have to mean paying too much, giving in to seller demands, or difficult negotiations. Even when sellers have the advantage, they may still need to work with a buyer to sell their home.

Some homes will often get plenty of attention while other homes may sit because they are priced too high or because of any number of factors that are undesirable to buyers in their market. With this in mind, it’s possible to make buying easier, even when the market favors the seller.

1) Be Firm but Fair in Negotiations

No matter what the seller may be asking for their home, the home still has a fair market value. While the amount the seller may be asking for a home could be a little bit higher in a seller’s market, that doesn’t mean a buyer can’t negotiate the price. Remain firm in negotiating, but also be fair based on the market conditions. A real estate agent can be your best resource to help you determine what your options are when it comes to making an offer.

2) Take a Look at Homes on the Market For a Long Time

Even in a seller’s market, there will be homes that just aren’t as popular as others. These homes will stay on the market longer, and finding out why this is the case, might be the beginnings of a great deal. If a home has a characteristic that isn’t popular with many buyers in the area, but it doesn’t bother you, it may be possible to buy a home in a seller’s market for less than you might expect.

3) Remember, There’s More Than one Location

Location is very important, but there’s generally more than one specific street or area where a buyer might want to live. By looking in several different places you might find the home that’s right for your needs without being completely tied to a location where the sellers may be less willing to negotiate and the prices might be above budget.

4) Find the Motivated Sellers

There will always be some sellers that are more motivated than others. No matter the reason for their motivation, the opportunity exists for buyers to get a good deal on a home they love. It may not always be easy to find sellers that are highly-motivated, but an agent can often help locate sellers who are looking to move their properties faster, and for a lower price.

5) Be Prepared and Ready to Negotiate

One of the ways to get ahead as a buyer in a seller’s market is to make sure your finances are ready. By having a mortgage pre-approval letter and a strong down payment, it’s possible to get ahead of other buyers who may not be as prepared. Sellers want to work with buyers who are serious and have a high probability of completing the transaction without delays.

Not being ready before making offers could mean missing out on a home that would be just right.

6) Don’t Underestimate the Power of Cash

Buyers who pay in cash and don’t need a mortgage to purchase a home often have a better chance being ahead of other buyers in a sellers market. Cash can be very attractive to some buyers, because when it comes to buying a home, it shows a seller that they don’t have to worry as much about a deal falling through because of mortgage finance issues.

When buyers don’t need mortgages, the transaction may be completed a lot faster, too, making it easier for everyone to moving on to the next phase of their lives. Speak to a financial professional to see if this would be a prudent move for your long-term financial health.

While a seller’s market can be a bit tricky to navigate, home buyers should know that with enough preparation and effort, they can find and purchase their dream home without adding additional stress to the process.

By our guest blogger,_KrisLindahl_481224369

Kris Lindahl REALTOR® CRS CLHMS
The Kris Lindahl Team at RE/MAX Results
2407 109th Ave NE Suite 110
Blaine, MN 55449

www.krislindahl.com
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