The Importance of Using a Professional When Selling Your Home

When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. For the past two years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ 2014 Profile of Home Buyers & Sellers.

However, the report also revealed that for the second year in a row 96% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.

Buyers search for a home online but then depend on an agent to find the actual home they will buy (53%) or negotiate the terms of the sale & price (31%) or understand the process (63%).

Stephen Phillips, the Chief Operating Officer for HSF Affiliates LLC, put it best:

“Home buyers are more informed than ever with their Internet searches and ongoing research; however, there’s a critical need to transform that information into analysis and advice that helps consumers make the best home-buying and selling decisions.”

The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001. 

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Happy Veteran's Day

4 Myths about Buying a Home

A recent study by the Joint Center for Housing Studies at Harvard University revealed when renters were asked why they do no plan to own in the future, financial constraints were a more common response than the perceived lifestyle benefits they may receive from renting. Today, we want to go over those financial challenges and see if we can put some fears to rest and also clear up some misconceptions. Here are the top four financial hurdles that cause renters not to buy:

1. You Cannot Afford a Home

Well over 50% of renters consider this as a financial barrier to homeownership. However, study after study has shown us that there are major misunderstandings about what is required to purchase a home. The biggest misconception is the amount of a down payment required. A recent survey revealed that 44% of respondents believed that a 20% down payment was required. In actuality, mortgages are available with as little as 5% down (and even 3% in certain situations). The same survey showed that 30% of respondents believe that only individuals with ‘high incomes’ can obtain a mortgage. In actuality, there are several programs intentionally created to help moderate income families buy a home of their own (look at the FHA program for example).

2. You Do Not Have Good Enough Credit to Get a Mortgage

The survey mentioned above showed that 64% of respondents believe they must have a “very good” credit score to buy a home. Most people don’t realize that the average credit score for closed loans has actually dropped 24 points in the last two years. For more information on credit scores click here.

3. It’s Not a Good Time to Buy a Home

Determining when is the right time to buy a home from a pure financial calculation can be difficult. There are two elements of the cost of a home: the price of the house and the mortgage interest rate. When considering a purchase, you want to have at least an indication where prices and mortgage rates are headed. According to over 100 experts, house values are expected to increase by almost 20% between now and 2018. And Freddie Mac recently projected that mortgage rates would be as much as one full point higher by this time next year. With both prices and interest rates projected to increase, now is the perfect time to buy a home.

4. It’s Cheaper to Rent than Buy

This is a myth that doesn’t want to die. However, Trulia recently reported that, in fact, buying is actually dramatically cheaper than renting. Here is what they said:

“Homeownership remains cheaper than renting nationally and in all of the 100 largest metro areas. In fact, buying is 38% cheaper than renting now, compared with 35% cheaper than renting one year ago.”

Bottom Line

If you are even thinking about buying, get the facts from a trained Real Estate professional like myself. You may be pleasantly surprised at what you find!

Hire a Pro to Sell Your House

Do you really need an agent to sell your house in today’s market? Here’s what Fannie Maesuggests to sellers on the Know Your Options section of their website:

“Select how you'll market and list the home (e.g., with a real estate agent or for sale by owner). There are pros and cons to each, but unless you are experienced at selling homes, it usually makes financial sense to get professional help—homes sold by agents typically sell at a higher price and spend less time on the market. An agent will also help you determine the best pricing for the house, they'll market the home, and they'll be your advocate throughout the process.”

Let’s go over the points they made:

• Homes sold by agents typically sell at a higher price
• Homes sold by agents typically spend less time on the market
• An agent will help you determine the best pricing for the house
• An agent will market the home
• An agent will be your advocate throughout the process

Call or Text 225-315-9003

 Christiefarris@gmail.com

www.brandyfarris.com

A Homeowner’s Net Worth is 36x Greater Than A Renter!

Over the last six years, homeownership has lost some of its allure as a financial investment. As homeowners suffered through the housing bust, more and more began to question whether owning a home was truly a good way to build wealth.

The Federal Reserve conducts a Survey of Consumer Finances, every three years, and just released their latest edition this past week.

Some of the findings revealed in their report:

• The average American family has a net worth of $81,200
• Of that net worth, 61.4% ($49,856) of it is in home equity
• A homeowner’s net worth is over 36 times greater than that of a renter
• The average homeowner has a net worth of $194,500 while the average net worth of a renter is $5,400

Bottom Line

The Fed study found that homeownership is still a great way for a family to build wealth in America.

Choosing a Realtor

When it's time to move, you need someone who will advertise your home, show to 

prospective buyers, negotiate the purchase contract, arrange financing, oversee the 

inspections, handle all necessary paperwork and supervise the closing. I can take care of 

everything you need, from start to close.

Christiefarris@gmail.com

www.christiefarris.com

You need a Professional when Buying a Home

Many people wonder whether they should hire a real estate professional to assist them in buying their dream home or if they should first try to go it on their own. In today’s market: you need an experienced professional!

You Need an Expert Guide if you are Traveling a Dangerous Path

The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and ready for you to move in to can be tricky. An agent listens to your wants and needs, and can sift out the homes that do not fit within the parameters of your “dream home”.

A great agent will also have relationships with mortgage professionals and other experts that you will need in securing your dream home.

You Need a Skilled Negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

____________________________________________________________________

5 Reasons to Sell your Home Before Winter Hits

People across the country are beginning to think about what their life will look like next year. It happens every Fall. We ponder whether we should relocate to a different part of the country to find better year round weather or perhaps move across the state for better job opportunities. Homeowners in this situation must consider whether they should sell their house now or wait. If you are one of these potential sellers, here are five important reasons to do it now versus the dead of winter.

1. Demand is Strong

Foot traffic refers to the number of people out actually physically looking at home right now. The latest foot traffic numbers show that there are more prospective purchasers currently looking at homes than at any other time in the last twelve months which includes the latest spring buyers’ market. These buyers are ready, willing and able to buy…and are in the market right now! As we get later into the year, many people have other things (weather, holidays, etc.) that distract them from searching for a home. Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing supply is still under the historical number of 6 months’ supply. This means that, in many markets, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.

There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future.

Also, new construction of single-family homes is again beginning to increase. A recent study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference).

The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.

3. The Process Will Be Quicker

One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate in the low 4’s right now. Rates are projected to be over 5% by this time next year.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should? Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

Call or text Christie Farris at 225-315-9003 for a free market analysis to find out what your home is worth. Visit www.brandyfarris.com.

Baton Rouge area home sales post gain in July

BATON ROUGE, La. -- Home sales in metro Baton Rouge increased by 2 percent in July, thanks to increased sales in East Baton Rouge and Livingston parishes.

There were 856 home sales that closed in July in the nine-parish area. That's according to figures released Monday by the Greater Baton Rouge Association of Realtors to The Advocate (http://bit.ly/1tPYa28).

That compares with 839 closed sales in July 2013. The biggest monthly gainer was Livingston Parish, where sales were up 11.7 percent from 137 to 153.

East Baton Rouge, the largest market for sales, was up by 3 percent, from 465 to 479.

But Ascension Parish had a 4.1 percent sales drop from 171 sales in 2013 to 164.

The median sales price for the metro area was up 3.5 percent from $176,650 to $182,900 last month.

The average number of days a home was on the market was up from 76 in July 2013 to 82.

But the number of homes for sale fell 9.8 percent to 4,003. The supply in months was 5.3, compared with 6.5 in 2013.

Read more here: http://www.miamiherald.com/2014/08/26/4309714/baton-rouge-area-home-sales-post.html#storylink=cpy

Where are Mortgage Rates Headed?

The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate the greater the payment will be. That is why it is important to look at where rates are headed when deciding to buy now or wait until next year.

According to a recent article in Kiplinger, 30 year mortgage rates are about to increase:
“Now around 4.1%, rates will edge slowly toward 4.4% by the end of this year. Then they’ll follow the Treasury bond rate’s upward move in early 2015. Thirty-year home loans should end 2015 at around 5.1%, still low by historical standards.”

Still a Great Time to Buy a Home...but HURRY!

Kevin Kelly, Chairman of the National Association of Home Builders (NAHB), recently explained that:

“With interest rates near historically low levels and strengthening job growth, now continues to be a great opportunity to buy a home.”

We couldn’t agree more. However, we must realize that, with prices and interest rates both projected to increase, waiting could cost us.

There are two organizations that look at the affordability of purchasing and actually measure it over time. The National Association of Home Builders has their Housing Opportunity Index (HOI) and the National Association of Realtors’ has the Housing Affordability Index . 

Both indexes are reporting the same thing. The cost of buying a home is beginning to increase leading the affordability indexes to dip.

Both indexes say we passed the bottom of the housing market

According to NAHB’s HOI housing affordability dipped slightly in the second quarter of 2014. NAHB’s Chief Economist David Crowe explains:

“The second quarter HOI reflects the slow but steady march toward the historic levels of price appreciation and interest rates that result in affordability levels we experienced before the mid-2000s boom.”

According to NAR in a recent Economists’ Outlook post, home affordability is down from both one month ago and one year ago in all regions.
Michael Hyman, Research Assistant at NAR said:

“At the national level, housing affordability is down for the month of June due to higher prices and qualifying income levels despite the lowest mortgage rates of the year.”

In a recent article, the Wall Street Journal also revealed that the cost of home ownership is higher than any time in over five years:

“Housing affordability hit its lowest level in nearly six years in June as home prices continued to climb."

Bottom Line

If you were waiting for the bottom of the market, you missed it. Yet, with prices below values of seven years ago in most parts of the country and interest rates near historic lows, it is still a great time to buy a home…but hurry! 

Mortgage Rates Roll Back to Yearly Low

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 14:

• 30-year fixed-rate mortgages: averaged 4.12 percent, with an average 0.6 point, dropping from last week’s 4.14 percent average. Last year at this time, 30-year rates averaged 4.40 percent.  

• 15-year fixed-rate mortgages: averaged 3.24 percent, with an average 0.6 point, falling from last week’s 3.27 percent average. A year ago, 15-year rates averaged 3.44 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 2.97 percent, with an average 0.5 point, falling from last week’s 2.98 percent average. Last year at this time, 5-year ARMs averaged 3.23 percent. 

• 1-year ARMs: averaged 2.36 percent, with an average 0.5 point, rising from last week’s 2.35 percent average. A year ago, 1-year ARMs averaged 2.67 percent. 

Homeownership's Impact on Net Worth

Over the last six years, homeownership has lost some of its allure as a financial investment. As homeowners suffered through the housing bust, more and more began to question whether owning a home was truly a good way to build wealth. A study by the Federal Reserve formally answered this question. 

Some of the findings revealed in their report:

• The average American family has a net worth of $77,300
• Of that net worth, 61.4% ($47,500) of it is in home equity
• A homeowner’s net worth is over thirty times greater than that of a renter
• The average homeowner has a net worth of $174,500 while the average net worth of a renter is $5,100

Bottom Line

The Fed study found that homeownership is still a great way for a family to build wealth in America. 

Home Prices - Where are they headed?

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number. 

The results of their latest survey

• Home values will appreciate by 4.6% in 2014.
• The cumulative appreciation will be 19.5% by 2018.
• That means the average annual appreciation will be 3.6% over the next 5 years.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 11.2% by 2018.

Individual opinions make headlines. I believe the survey is a fairer depiction of future values.

See my Newsletter here:
http://christiefarrisbatonrouge.housingtrendsenewsletter.com/default.cfm

The Importance of Using an Agent when Selling Your Home

When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s’ behavior during the home buying process. Today, 92% of all buyers use the internet in their home search according to the National Association of Realtors’ 2013 Profile of Home Buyers & Sellers.

However, the report also revealed that 96% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know. Buyers search for a home online but then depend on the agent to find the actual home they will buy (52%) or to help them handle the paperwork (24%) or understand the process (24%).

It is true that the percentage of buyers that are using the internet to search for homes and information on the home buying process has increased dramatically over the last decade. But the plethora of information now available has also resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

BOTTOM LINE

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Homeownership: The American Dream

Best Long Term Investment = Real Estate

Baton Rouge Housing Market Update

Research data was provided by the Commercial & Investment Division of the Greater Baton Rouge Association of Realtors presented at the Baton Rouge TRENDS seminar. For more information, visit batonrougetrends.net/residential.

After several years when buyers had the upper hand, the Capital Region's single-family housing market is tilting back toward sellers, according to data gathered and analyzed by the Greater Baton Rouge Association of Realtors. For the first time since the recession, the inventory of homes for sale dipped below six months' worth over the past year. Higher average sale prices and decreases in inventory were experienced in almost all sectors, which the Realtors say is indicative of a healthy market. Volume builders like DSLD, D.R. Horton and Rabalais Homes are doing much of the new construction, although local appraiser Tom Cook stresses that bulk building is not synonymous with low quality.

BY THE NUMBERS

Total sales volume: $1.77 billion
Sales volume percentage change over the previous year: +19.2%
Total sales: 8,870
Total sales percentage change over previous year: +15.3%
Months of inventory: 5.76
Average list price: $205,164
Average sale price: $199,343
Average sale price percentage change: +3.4%
Average days on market: 86
Average days on market percentage change: -30.1%

SOURCE: Trends, 2014, Commercial Investment Division, Greater Baton Rouge Association of Realtors. Data reflects March 2013 through February 2014

AT A GLANCE

• Sales volume increased by more than 19%, the second consecutive year of double-digit increases.

• Of the three parishes that constitute most of the region's housing market, Ascension had the highest average sale price of $212,038, with East Baton Rouge at $209,173 and Livingston at $164,225.

• New home sales volume for homes in Ascension priced between $300,000 and $400,000 more than doubled from the previous year, the largest increase of any sector evaluated by the Realtors' residential trends committee.

THREE THINGS TO WATCH

INVENTORY
Six months of inventory is widely considered the dividing line between a buyer's and seller's market. The Capital Region has dipped slightly below that level, and if that trend continues sellers will gain the upper hand for the first time since the year after Hurricane Katrina.

INTEREST RATES
Low interest rates have fueled the housing recovery, but rates can't stay this low forever.

GOVERNMENT
The East Baton Rouge Parish Department of Public works is woefully sluggish, sometimes slowing down housing development, Cook says. Will DPW figure out how to speed things up?

4 Reasons to Buy Your Home Now

Here are four great reasons to consider buying a home today, instead of waiting.

1. Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 30.8% (most optimistic) and 9.4% (most pessimistic). The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Increasing

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison; projecting that rates will be up almost a full percentage point by the end of next year.

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way, You are Paying a Mortgage

As a recent paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe it is time to buy. If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Louisiana Home Prices Hit New Highs in April

Louisiana home prices hit a new peak in April, according to new monthly figures released today by CoreLogic. Average single-family home prices in the state, including distressed sales, rose 1.4% between March and April, the report says, with the year-over-year increase at 3.7% through April. Excluding distressed sales—that is, properties under foreclosure or advertised for sale by a mortgagee—prices in Louisiana rose 0.9% on the month and are up 4% year-over-year. In both categories, Louisiana prices reached a new peak in April, the report says. All 50 states and the District of Columbia posted a year-over-year increase in average home prices during April, according to the report, and there are now 23 states at or within 10% of their peak average price. See the full report. 

While home prices across the U.S. rose by 10.5% in April, compared to the same month a year earlier, CoreLogic notes that was the slowest rate of appreciation in 14 months. As previously reported, average home sale prices in the eight-parish region tracked by the Greater Baton Rouge Association of Realtors were up 0.4% year to date through April. Access the complete GBRAR report. —Steve Sanoski

June is National Homeownership Month

National Homeownership Month actually started as a week-long celebration of homeownership during the Clinton administration in 1995. In 2002, President George W. Bush proclaimed June as the National Homeownership Month. Here is an excerpt from his proclamation:

“Homeownership is an important part of the American Dream…A home provides shelter and a safe place where families can prosper and children can thrive. For many Americans, their home is an important financial investment, and it can be a source of great personal pride and an important part of community stability.”

“Homeownership encourages personal responsibility and the values necessary for strong families. Where homeownership flourishes, neighborhoods are more stable, residents are more civic-minded, schools are better, and crime rates decline.”

“During National Homeownership Month, I encourage all Americans to learn more about financial management and to explore homeownership opportunities in their communities. By taking this important step, individuals and families help safeguard their financial futures and contribute to the strength of our Nation.”

 

Call Christie Farris, Realtor at 225-315-9003 or email: Christiefarris@gmail.com

Visit www.brandyfarris.com

Cost Across Decades - Interest Rate and Mortgage Payments

Create Wealth: Move Up Now

Many experts are currently discussing a variety of topics such as real estate as an investment, the movement on mortgage interest rates and reasons to buy now instead of waiting. It is important that we realize that this does not apply solely to the first time home buyer.
 
The opportunity that exists in real estate today is there for everyone.

However, the family that already owns a home might be thinking that, if they wait, their home could be worth more next year than it is now. And that may cause them to delay moving up to the home of their dreams thinking it makes good financial sense. Actually, the opposite is true. This is the best chance a family has to buy up into the home that makes sense for their family right now.

We must realize that whatever percentage of value we gain on our house will also be gained on our dream home.

Let’s assume your current home is worth $500,000. Your house will be worth $520,000 next year if prices rise by 4% over that time (a number projected by the Home Price Expectation Survey).

However, the $750,000 home you are hoping to move into will also appreciate by about that same 4%. That means next year it will be valued at $780,000. You wouldn’t make $20,000 by waiting. You would actually be losing $10,000 ($30,000 - $20,000).
And, you will pay a lower interest rate on the mortgage than you probably will next year.

Plug in the numbers that apply to your house and the home you are longing to buy and see what the bottom line turns out to be for you.

That is how wealth is built in this country - by purchasing real estate at the right time, at the right price and at the right terms.

Go out and find your family's dream house and buy it! Ten years from now, you will be glad you did!

4 Propery Flaws that will Block Offers on Your Home

 The most common things buyers hate about listings they see.

#1: Odors.

#2: Glaringly extreme overpricing.

#3: Dirt and messes.

#4: Lots of little malfunctions.

 

 

 

 

5 Financial Reasons to Buy a Home

Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. Last year he released a paper on homeownership - The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available. 
“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 
“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.
“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning. 
“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.
“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line 

We realize that homeownership makes sense for many Americans for many social and family reasons. It also makes sense financially.

Future House Prices

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.
The results of their latest survey

• Home values will appreciate by 4.4% in 2014.
• The cumulative appreciation will be 19.5% by 2018.
• That means the average annual appreciation will be 3.6% over the next 5 years.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 9.4% by 2018.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

5 Reasons You NEED a Real Estate Professional

Whether you are buying or selling a home, you need an experienced Real Estate Professional to lead you toward your ultimate goal. In this world of instant gratification and Internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but rather have been strengthened in recent months due to rising interest rates & home prices as the market recovers.

1. What do you do with all this paperwork?
Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?
According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

3. Are you a good negotiator?
So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?
Not only is it important for your home to be priced correctly from the start, to attract the right buyers and shorten the time that it’s on the market, but you also need someone who is not emotionally connected to your home, to give you the truth as to your home’s value.

According to the National Association of REALTORS, “the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.” Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?
There is so much information out there on the news and the Internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to, to tell you how to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.” – Dave Ramsey

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:
You wouldn’t hike up Kilimanjaro without a Sherpa, or replace the engine in your car without a trusted mechanic, why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

Think before you For Sale By Owner

 

www.brandyfarris.com 

For a Home Upgrade, Should You Move or Improve?

Is it smarter to move or improve? Here’s some advice to help you decide.

Selling Has Gotten Easier
Existing-home sales were at their highest levels since 2006, and the median home price hit $197,100 at the end of 2013.

Right now, it’s taking just over two months, on average, for homes to sell. If you’ve been holding back on selling, waiting for the real estate market to recover, you may find it’s recovered in your area.

As you prepare your home for sale, consider what homebuyers want right now. Hint: energy efficiency. Demonstrating that your home is weather-sealed is a great selling point. Also, if you’re only up for a minimum amount of work, focus on curb appeal, your kitchen (even tweaks can make a big difference), and pricing your home right. The offers will come.

More Tips

• Take a look at homes for sale in your market to get an idea of what you can get for your money today.

• Check your credit report to make sure it’s accurate and up-to-date.

• Fix mistakes you find in your credit report.

• Get prequalified for a mortgage so you know how much you can spend.

• Ask your REALTOR® to send you current listings from your target neighborhood.

Improving Has Gotten Pricier
During the economic slump, home improvement spending slowed, so contractors were willing to cut deals to stay busy. Today, they’re less willing to bargain on price and too busy to accept low-profit jobs. In addition, the cost of construction materials may be going up. In a recent National Association of Home Builders survey:

• 81% of contractors were concerned about rising materials prices
• 65% were concerned about rising labor costs

As a general rule, improving your home costs less than trading up. But it depends on what kind of improvements you want to do.

Figure paying somewhere between $100 and $200 a square foot for new construction or a major remodel, depending on the scope of the project and labor costs in your area. For instance, a two-story addition with a family room, bedroom, and bathroom costs a national average of $155,365, according to “Remodeling” magazine’s “2014 Cost vs. Value Report.”

Now more than ever you need to make sure that you invest your money wisely. In other words, will your $75,000 kitchen remodel increase your home value by $75,000—or by anything close? Not likely. But at resale you may be able to recoup some of your remodeling costs. For guidelines, check out the Cost vs. Value Report, which gives the national average annual cost and payback figures for 35 popular remodeling projects.

To assess what’s right for your particular house, let your neighborhood be your guide. If there’s any chance you’ll move within the next 10 years, keep your improvements in line with those of other houses on your block, or risk losing the money when you sell. Of course, don’t discount your enjoyment factor. If it’ll make you happy to install an in-ground pool in a neighborhood without pools, go for it.

Critical Considerations
Your house isn’t just your largest investment, of course, it’s also the place where your family lives. Financial considerations aside, the question of whether to move or improve should be decided by the things you can’t change about your current home:

• School district
• The amount of traffic on your street
• Size and layout of your yard
• Commute time
• Access to markets and malls
• Neighborhood quality of life

If you love the spot, improving makes sense. But if a different location would be an improvement in its own right, then trading up could be the way to go.

Real Estate - Best Long Term Investment

The Gallup organization just released their April Economy and Personal Finances Poll which asked Americans to choose the best option for long term investment. It was no surprise to us that real estate returned to the top position over other investment categories (gold, stocks/mutual funds, savings accounts/CDs and bonds).

Back in 2011, gold was the most popular long-term investment among Americans. However, with the housing market improving across the U.S. and home prices rising, more Americans now consider real estate the best option for long-term investments.

Visit www.brandyfarris.com for thousands of homes in your area!
 

True Cost of Waiting to Buy a Home

Let’s say your 30 and your dream house costs $250,000 today, at 4.41% your monthly Mortgage Payment with Interest would be $1,253.38.

But you’re busy, you like your apartment, moving is such a hassle...You decide to wait till the end of next year to buy and all of a sudden, you’re 31, that same house is $270,000, at 5.7%. Your new payment per month is $1,567.08.

The difference in payment is $313.70 PER MONTH!

That’s like taking a $10 bill and tossing it out the window EVERY DAY!
Or you could look at it this way:

• That’s your morning coffee everyday on the way to work (Average $2) with $12 left for lunch!
• There goes Friday Sushi Night! ($80 x 4)
• Stressed Out? How about 3 deep tissue massages with tip!
• Need a new car? You could get a brand new $22,000 car for $313.00 per month.

Let’s look at that number annually! Over the course of your new mortgage at 5.7%, your annual additional cost would be $3,764.40!

Had your eye on a vacation in the Caribbean? How about a 2-week trip through Europe? Or maybe your new house could really use a deck for entertaining.  We could come up with 100’s of ways to spend $3,764, and we’re sure you could too!

Over the course of your 30 year loan, now at age 61, hopefully you are ready to retire soon, you would have spent an additional $112,932, all because when you were 30 you thought moving in 2014 was such a hassle or loved your apartment too much to leave yet.

Or maybe there wasn’t an agent out there who educated you on the true cost of waiting a year. Maybe they thought you wouldn’t be ready, but if they showed you that you could save $112,932, you’d at least listen to what they had to say.

They say hindsight is 20/20, we’d like to think that 30 years from now when you are 60, looking back, you would say to buy now…

Either Way, You're Still Paying a Mortgage

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with our parents rent free, you are paying a mortgage - either your mortgage or your landlord’s.

As a recent paper from the Joint Center for Housing Studies at Harvard University explains:
“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Also, if you purchase with a 30-year fixed rate mortgage, your ‘housing expense’ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that your rent will increase over that same thirty year time period.

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since prices and interest rates are still at bargain prices.