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.

3 REASONS TO SELL YOUR HOME THIS SPRING

 
3 REASONS TO SELL YOUR HOME THIS SPRING

Many sellers are still hesitant about putting their house up for sale. Where are prices headed? Where are interest rates headed? These are all valid questions. However, there are several reasons to sell your home sooner rather than later. Here are three of those reasons.

1. DEMAND IS ABOUT TO SKYROCKET
Most people realize that the housing market is hottest from April through June. The most serious buyers are well aware of this and, for that reason, come out in early spring in order to beat the heavy competition. We also have a pent-up demand as many buyers pushed off their home search this winter because of extreme weather. These buyers are ready, willing and able to buy…and are in the market right now!

2. THERE IS LESS COMPETITION - FOR NOW
Housing supply always grows from the spring through the early summer. Also, there has been a growing desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners have seen a return to positive equity as prices increased over the last eighteen months. Many of these homes will be coming to the market in the near future.

The choices buyers have will continue to increase over the next few months. Don’t wait until all the other potential sellers in your market put their homes up for sale.

3. 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 approximately 4% this year and 8% by the end of 2015. 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 at about 4.5% right now. Freddie Mac projects rates to be 5.1% by this time next year and 5.7% by the fourth quarter of 2015.

Moving up to a new home will be less expensive this spring than later this year or next year.

 

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Christiefarris@gmail.com

New homes in Baton Rouge means the economy is improving

BATON ROUGE, LA (WAFB) -
Homeowners are seeing their homes sell quickly in Baton Rouge.  Realtors say there are only a certain amount of homes on the market, now developers are cashing in by building new options.
One of those new neighborhoods, Magnolia Lakes, off Burbank Drive is where workers are hammering, sawing and framing homes.

"You're probably looking close to $225,000 to $250,000 for a newer house," even at that amount, you may only be looking at a little square footage. Buyers are likely to find more space in older, updated homes.  But there are some who prefer new builds.  In general, homes are on the market for about five months. That means what's available is dwindling.

"So somewhere we've got to get more inventory.  That's where new construction comes in.  That's where you're seeing so much new construction." With a stronger economy, there are now more people working and they are in a position to buy.  That has developers looking for land to clear, to build on.  For example, there are 80 acres off the Millerville exit where trees have been cleared for apartments and office space.

The Baton Rouge Area Chamber has predicted more jobs for the parish this year.  That job growth, is what real estate agents say builders are banking on, to move their product.  As far as how the new stock will affect market pricing, Wattam says Baton Rouge is experiencing what's called a level market. "Buyers are going to get a good value.  Sellers are going to get what they want for their house.  Those days of coming in $60,000 under, those days are gone." Agents say they are hearing interest rates are going up later this year.

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5 Reasons you Shouldn't For Sale By Owner

Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). We think there are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

 

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO.

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies which work for the buyer and will almost always find some problems with the house
• The appraiser if there is a question of value
• Your bank in the case of a short sale                                                        

 

2. Exposure to Perspective Purchasers

Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

 

3.  Results Come from the Internet

Where do buyers find the home they actually purchased?

• 43% on the internet
• 9% from a yard sign
• 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

 

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

 

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000.   This doesn’t mean that an agent can get $46,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

 

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.