It is never easy for kids to move… at least it isn’t after about the time they start walking… but we don’t have to make it tougher.
Of course, as with many things in life, there are two distinct schools of thought…
Tag Archives: client protection
Best Time to Move With Kids
- Wednesday, 09 October 2013 10:10
- Written by Lane Bailey
- 0 Comments
Affordability… The Forgotten Aspect of Home Buying
- Wednesday, 24 July 2013 08:27
- Written by Lane Bailey
- 1 Comment
In early June, 2013, the interest rates for home purchases were hovering around 3.5%. In July, those rates were hanging out at 4.5%.
Historical U.S. Prime Rates (Photo credit: Wikipedia)
There are two ways to look at that…
- Mortgages jumped in expense drastically between those two points.
- Looking at rates from a historical perspective, 4.5% is a screaming deal.
But in fact, there is a third, often overlooked aspect that needs to be addressed.
- Rates are STILL expected to rise over the next few months and years.
As a home buyer in the market, assuming a housing payment budget of $1500/mo (for comparison, we’re just going to use PI… Principle and Interest… and not include Taxes and Insurance).
- With a 3.5% interest rate, the buyer could get a loan of about $334,000.
- With a 4.5% interest rate, it drops to about $296,000
- When the rate rises to 5.5% (and it eventually will…), that loan amount will drop to about $264,000.
Buying berries (Photo credit: Wikipedia)
Seeing the difference between 3.5% and 5.5% means a drop in purchasing power of almost $70,000 with the same payment, it becomes painfully obvious that interest rates are at least as important as price when it comes to affordability.
Yet, many buyers will delay on the purchase, trying to find the right price, while the interest rates pushes properties out of their grasp that they COULD have purchased previously. Let’s not mistake… price IS important… but it is only part of the picture.
Looking forward
Looking forward at the real estate market, from late July, 2013, there are a variety of thoughts and opinions.
We are expecting a slow-down in closings for July, compared to the pace we saw in May and June. Granted, those were pretty active months. I would think that the lion’s share of the slow-down may be attributable to increased interest rates and housing costs. There was a HUGE bump at the end of June… rates jumped almost ¾% over one weekend.
Moving into August and September, I expect to see sales rebound somewhat. Interest rates WILL have an impact, but I think that we will also be seeing the wave of initial buyers subside. There was a tremendous pent-up demand… and there is still a significant number of buyers on the edge of entering the market… that dived in at the first signs of recovery.
As more buyers are able to sell their homes without injecting huge amounts of cash, and more buyers feel more secure abut their employment, they will look to move up or purchase.
Is it too late?
No… but it does require a different thought process than a year or two ago. Then, deals were everywhere. Buyers didn’t have to be quick, and they didn’t have to make competitive offers on most properties. But now, buyers NEED to be ready to offer when they see a property. They also need to be ready to start with their best offer… they might not have a second chance to offer on that property. Sellers are not required to send out a call for “Highest and Best” after getting multiple offers. Many don’t.
But in 3-5 years, when buyers are looking back on the opportunities they had today, they WILL see that there were great deals to be had. They just required more of a fight than they did when there were fewer buyers in the market and more properties available.
Related articles
Phoning In Home Improvements…
- Wednesday, 19 June 2013 11:57
- Written by Lane Bailey
- 1 Comment
Interior design (Photo credit: Wikipedia)
I ran across an article recently with 5 apps for Android phones that can with your next DiY project… Here is the source article.
Houzz Interior Design Ideas
Looks kind of like a self-contained Pinterest for Home Improvement… They have almost 1,000,000 photos of various style home interior designs.
My Measures & Dimensions
Now this looks REALLY cool, especially for a free app. Shoot a “before” picture and then add measurements along with arrows and notes… It can really help get everything together to communicate a project’s goals to your vendor.
DIY Remodel Cost Calculator
This is my kind of calculator… first, it’s free and second, it can be used to get a good idea of the cost of a project.
There are a couple of others on the source article, but these are the ones I thought were the coolest. Also, below, there are a few links for other articles that might be of interest.
interior design oxford rogue designs (Photo credit: rogue-designs)
One thing to ALWAYS keep in mind, though, is that you shouldn’t undertake these improvements if the goal is resale value. It is VERY rare to find an improvement that actually adds to resale value. Some may actually hurt resale. The one exception to that would be painting… or replacing worn out things like carpeting.
And maintenance isn’t “improving”. Too many times people tell me that they replaced the roof and A/C when asked what improvements have been made. Unless they were dramatically upgraded during replacement, it likely wouldn’t qualify… although they can still add value (although, lack of proper maintenance really detracts from value more than proper maintenance add to it).
Related articles
It’s the Photos…
- Wednesday, 15 May 2013 08:19
- Written by Lane Bailey
- 1 Comment
One of the most important things you can do to make your home stand out, whether it is on the MLS, Zillow, Trulia, Craigslist or some other site, is to have exceptional pictures. Not just for bazillion dollar homes, either…
Vivienne galleria, in the 2nd arrondissement of Paris. This panorama is made from 6 portrait pictures taken at 10mm (16mm in 35mm equiv.), f/8.0 and ISO 100. 3 exposures were blended to extend dynamic range and keep details in heterogeneously lit areas. All work was done with Hugin, Enblend, Enfuse and Gimp. (Photo credit: Wikipedia)
There are some challenges, like vacant houses or those that really could use some freshening, but still, pictures are the first step in selling your house. Video is nice… and virtual tours can add to the pictures… but in the end, having 5-10 great pictures, along with 15-20 good or better pictures (our local MLSs only accept 25 pictures) can be what gets eyeballs INSIDE your house.
Where the problems start are that few real estate agents take the time to learn how to shoot good pictures, or worse yet, they think that grabbing a few pictures with their phone will be just fine. I know, phones have come a long way… but that doesn’t mean that they take pro-quality pictures.
Even better would be to hire a photographer to shoot the home. Again, most agents just don’t feel that “this listing warrants that type of expenditure”. Oddly, I have had agents tell me that when we were talking about $1M+ homes… If they aren’t willing to hire a pro for a “seven digit home”, when are they?
Image created using the redscale technique with Kodak MAX 400 film. (Photo credit: Wikipedia)
Luckily, I have a background in photography… and I still have hired in pros to shoot some of my listings. It is simply too important.
But there is another problem that I run into… although not as frequently… that is manipulated images. A little tweaking is fine, and some HDR shots might even be appropriate (HDR is High Dynamic Range, allowing both highlights and shadows to retain detail). But, I see large areas of homes being digitally enhanced. In fact, there is a service that digitally adds furniture to listing photos.
Of course, there actually IS a place for digital manipulation. I have used a service that allows prospective buyers to “digitally remodel” a house. They could go into key rooms and digitally alter details like wall and trim colors, floor surfaces and cabinetry and counters. The big difference is that THEY started with a true representation of the room, and THEY made the changes. They weren’t presented with an unrealistic portrayal of the area.
Some common things that get edited that might be ok would be trashcans by the street (seems easier to me to move them…) or a reflection of the photographer in a bathroom mirror. But some things that cross the line… at least in my mind… are editing out power lines in the backyard, getting rid of stains on the carpet, cracks in the driveway and other defects which are factually accurate.
One direction that we have as REALTORS® is that we HAVE to honestly represent the property. And as real estate licensees, we aren’t allowed to hide or lie about defects of which we have knowledge. Advertising a proeprty should put it in its BEST light, but it should be honest, as well.
Related articles
So, You Want To Be a Real Estate Investor…
- Monday, 13 May 2013 09:08
- Written by Lane Bailey
- 0 Comments
I had a call recently from a “would-be” real estate investor. He wanted me to find a few properties for him to flip. He’s been looking at the Atlanta market for a few years (his words) and decided that now was the time to jump in and flip some properties.
Atlanta (Photo credit: Lima Pix)
Specifically, he was looking for entry level homes that he could pick up needing a little work, maybe in the $50-75k range, needing $10-15k worth of renovation. His goal was then to sell them for $100-$125k. East peasy.
Except, it isn’t…
In fact, right now that would be ANYTHING except easy peasy. It would be quite difficult. And here’s why…
- A few Billion Dollars in “hedge fund money” floating around the Atlanta market
- A market turn that while not “complete”, is far from unnoticed.
- A limited inventory, especially on the entry level end.
- Lack of easily available financing.
Billion Dollar Car (Photo credit: soul_motor)
This was a guy without a load of cash, unable to offer quicker closes than “the next guy”, and unable to out-spend the competition. He was not only convinced that there was a glut of homes, but that he was completely in the driver’s seat on these types of deals.
That is NOT the case. In fact, small investors are regularly SHOCKED at what the hedge funds are paying for houses right now. They are bidding them up on the open market. They are bidding them up on the Courthouse steps. They are willing to pay top dollar whenever and where ever they find them.
They don’t care what they can sell them for right now. They are looking at 5 year turns… with rental income in the mean time. The “over-payment” will be erased by the rental income and the increase in values over the next few years.
If you want to compete right now, THAT is what you have to compete with. A few years ago, you might have been able to pick up a cheap property and flip it… not so much any more.
Related articles
