The Home Buyer's Guide to Getting Mortgage Ready
Don’t wait until you’re ready to move to start preparing financially to buy a home.
If you’re like the vast majority of home buyers, you will choose to finance your purchase with a mortgage loan. By preparing in advance, you can avoid the common delays and roadblocks many buyers face when applying for a mortgage.
The requirements to secure a mortgage may seem overwhelming, especially if you’re a first-time buyer. But we’ve outlined three simple steps to get you started on your path to homeownership.
Even if you’re a current homeowner, it’s a good idea to prepare in advance so you don’t encounter any surprises along the way. Lending requirements have become more rigorous in recent years, and changes to your credit history, debt levels, job type and other factors could impact your chances of approval.
It’s never too early to start preparing to buy a home. Follow these three steps to begin laying the foundation for your future home purchase today!
STEP 1: CHECK YOUR CREDIT SCORE
Your credit score is one of the first things a lender will check to see if you qualify for a loan. It’s a good idea to review your credit report and score yourself before you’re ready to apply for a mortgage. If you have a low score, you will need time to raise it. And sometimes fraudulent activity or erroneous information will appear on your report, which can take months to correct.
The credit score most lenders use is your FICO score, a weighted score developed by the Fair Isaac Corporation that takes into account your payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%).1
Base FICO scores range from 300 to 850. A higher FICO score will help you qualify for a lower mortgage interest rate, which will save you money.2
By federal law, you are entitled to one free copy of your credit report every 12 months from each of the three major credit bureaus (Equifax, Experian and Transunion). Request your free credit report at https://www.annualcreditreport.com.
Minimum Score Requirements
To qualify for the lowest interest rates available, you will usually need a FICO score of 760 or higher. Most lenders require a score of at least 620 to qualify for a conventional mortgage.3
If your FICO score is less than 620, you may be able to qualify for a non-conventional mortgage. However, you should expect to pay higher interest rates and fees. For example, you may be able to secure an FHA loan (one issued by a private lender but insured by the Federal Housing Administration) with a credit score as low as 580 if you can make a 3.5 percent down payment. And FHA loans are available to applicants with credit scores as low as 500 with a 10 percent down payment.4
Increase Your Credit Score
There’s no quick fix for a low credit score, but the following steps will help you increase it over time.5
1. Make Payments on Time
At 35 percent, your payment history accounts for the largest portion of your credit score. Therefore, it’s crucial to get caught up on any late payments and make all of your future payments on time.
If you have trouble remembering to pay your bills on time, set up payment reminders through your online banking platform, a free money management tool like Mint, or an app like BillMinder.
2. Avoid Applying for New Credit You Don’t Need
New accounts will lower your average account age, which could negatively impact your length of credit history. Also, each time you apply for credit, it can result in a small decrease in your credit score.
The exception to this rule? If you don’t have any credit cards—or any credit accounts at all—you should open an account to establish a credit history. Just be sure to use it responsibly and pay it off in full each month.
If you need to shop for a new credit account, for example, a car loan, be sure to complete your loan applications within a short period of time. FICO attempts to distinguish between a search for a single loan and applications to open several new lines of credit by the window of time during which inquiries occur.
3. Pay Down Credit Cards
When you pay off your credit cards and other revolving credit, you lower your amounts owed, or credit utilization ratio (ratio of account balances to credit limits). Some experts recommend starting with your highest-interest debt and paying it off first. Others suggest paying off your lowest balance first and then rolling that payment into your next-lowest balance to create momentum.
Whichever method you choose, the first step is to make a list of all of your credit card balances and then start tackling them one by one. Make the minimum payments on all of your cards except one. Pay as much as possible on that card until it’s paid in full, then cross it off your list and move on to the next card.
Credit Card 1 |
Credit Card 2 |
Credit Card 3
4. Avoid Closing Old Accounts
Closing an old account will not remove it from your credit report. In fact, it can hurt your score, as it can raise your credit utilization ratio—since you’ll have less available credit—and decrease your average length of credit history.
Similarly, paying off a collection account will not remove it from your report. It remains on your credit report for seven years, however, the negative impact on your score will decrease over time.
5. Correct Errors on Your Report
Mistakes or fraudulent activity can negatively impact your credit score. That’s why it’s a good idea to check your credit report at least once per year. The Federal Trade Commission has instructions on their website for disputing errors on your report.
While it may seem like a lot of effort to raise your credit score, your hard work will pay off in the long run. Not only will it help you qualify for a mortgage, a high credit score can help you secure a lower interest rate on car loans and credit cards, as well. You may even qualify for lower rates on insurance premiums.6
STEP 2: SAVE UP FOR A DOWN PAYMENT AND CLOSING COSTS
The next step in preparing for your home purchase is to save up for a down payment and closing costs.
When you purchase a home, you typically pay for a portion of it in cash (down payment) and take out a loan to cover the remaining balance (mortgage).
Many first-time buyers wonder: How much do I need to save for a down payment? The answer is … it depends.
Generally speaking, the higher your down payment, the more money you will save on interest and fees. For example, you will qualify for a lower interest rate and avoid paying for mortgage insurance if your down payment is at least 20 percent of the property’s purchase price. But what if you can’t afford to put down 20 percent?
On a conventional loan, you will be required to purchase private mortgage insurance (PMI) if your down payment is less than 20 percent. PMI is insurance that compensates your lender if you default on your loan.7
PMI will cost you between 0.3 to 1.5 percent of the overall mortgage amount each year.8 So, on a $100,000 loan, you can expect to pay between $300 and $1500 per year for PMI until your mortgage balance falls below 80 percent of the appraised value.9 For a conventional mortgage with PMI, most lenders will accept a minimum down payment of five percent of the purchase price.7
If a five-percent down payment is still too high, an FHA-insured loan may be an option for you. Because they are guaranteed by the Federal Housing Administration, FHA loans only require a 3.5 percent down payment if your credit score is 580 or higher.7
The downside of getting an FHA loan? You’ll be required to pay an upfront mortgage insurance premium (MIP) of 1.75 percent of the total loan amount, as well as an annual MIP of between 0.80 and 1.05 percent of your loan balance on a 30-year note. There are also certain limitations on the types of loans and properties that qualify.10
There are a variety of other government-sponsored programs created to assist home buyers, as well. For example, veterans and current members of the Armed Forces may qualify for a VA-backed loan requiring a $0 down payment.7 Consult a mortgage lender about what options are available to you.
Qualify for the best rates and no mortgage insurance required
Must purchase private mortgage insurance costing 0.3 - 1.5% of mortgage annually
Upfront mortgage insurance premium of 1.75% of loan amount and annual fee of 0.8 - 1.05%
If you’re a current homeowner, you may have equity in your home that you can use toward your down payment on a new home. We can help you estimate your expected return after you sell your current home and pay back your existing mortgage. Contact us for a free evaluation!
Closing costs should also be factored into your savings plan. These may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys and other fees associated with the purchase of your home. Closing costs vary but typically range between two to five percent of the purchase price.11
If you don’t have the funds to pay these outright at closing, you can often add them to your mortgage balance and pay them over time. However, this means you’ll have a higher monthly payment and pay more over the long term because you’ll pay interest on the fees.
STEP 3: ESTIMATE YOUR HOME PURCHASING POWER
Once you have the required credit score, savings for a down payment and a list of all your outstanding debt obligations via your credit report, you can assess whether you are ready and able to purchase a home.
It’s important to have a sense of how much you can reasonably afford—and how much you’ll be able to borrow—to see if homeownership is within reach.
Your debt-to-income (DTI) ratio is one of the main factors mortgage companies use to determine how much they are willing to lend you, and it can help you gauge whether or not your home purchasing goals are realistic given your current financial situation.
Your DTI ratio is essentially a comparison of your housing expenses and other debt versus your income. There are two different DTI ratios that lenders consider:
Also called the housing ratio, this is the percentage of your income that would go toward housing expenses each month, including your mortgage payment, private mortgage insurance, property taxes, homeowner’s insurance and association dues.12
To calculate your front-end DTI ratio, a lender will add up your expected housing expenses and divide it by your gross monthly income (income before taxes). The maximum front-end DTI ratio for most mortgages is 28 percent. For an FHA-backed loan, this ratio must not exceed 31 percent.13
The back-end ratio takes into account all of your monthly debt obligations: your expected housing expenses PLUS credit card bills, car payments, child support or alimony, student loans and any other debt that shows up on your credit report.12
To calculate your back-end ratio, a lender will tabulate your expected housing expenses and other monthly debt payments and divide it by your gross monthly income (income before taxes). The maximum back-end DTI ratio for most mortgages is 36 percent. For an FHA-backed loan, this ratio must not exceed 41 percent.13
Home Affordability Calculator
To get a sense of how much home you can afford, visit the National Association of Realtors’ free Home Affordability Calculator at https://www.realtor.com/mortgage/tools/affordability-calculator.
This handy tool will help you determine your home purchasing power depending on your location, annual income, monthly debt and down payment. It also offers a monthly mortgage breakdown that projects what you would pay each month in principal and interest, property taxes, and home insurance.
The Home Affordability Calculator defaults to a back-end DTI ratio of 36 percent. If the monthly cost estimate at that ratio is significantly higher than what you’re currently paying for housing, you need to consider whether or not you can make up the difference each month in your budget.
If not, you may want to lower your target purchase price to a more conservative DTI ratio. The tool enables you to scroll through higher and lower price points to see the impact on your monthly payments so you can identify your ideal price point.
(Note: This tool only provides an estimate of your purchasing power. You will need to secure pre-approval from a mortgage lender to know your true mortgage approval amount and monthly payment projections.)
Can I Afford to Buy My Dream Home?
Once you have a sense of your purchasing power, it’s time to find out which neighborhoods and types of homes you can afford. The best way to determine this is to contact a licensed real estate agent. We help homeowners like you every day and can send you a comprehensive list of homes within your budget that meet your specific needs.
If there are homes within your price range and target neighborhoods that meet your criteria—congratulations! It’s time to begin your home search.
If not, you may need to continue saving up for a larger down payment … or adjust your search parameters to find homes that do fit within your budget. We can help you determine the right course for you.
START LAYING YOUR FOUNDATION TODAY
It’s never too early to start preparing financially for a home purchase. These three steps will set you on the path toward homeownership … and a secure financial future!
And if you are ready to buy now but don’t have a perfect credit score or a big down payment, don’t get discouraged. There are resources and options available that might make it possible for you to buy a home sooner than you think. We can help.
Want to find out if you’re ready to buy a house? Give us a call! We’ll help you review your options, connect you with one of our trusted mortgage lenders, and help you determine the ideal time to begin your new home search.
The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.
1. Quicken Loans Blog –
2. myFICO –
3. Bankrate –
4. Bankrate –
5. myFICO –
6. The Balance –
7. Bankrate –
8. Bankrate –
9. Bankrate –
10. The Balance –
11. Investopedia –
12. Bankrate –
13. The Lenders Network –
Sept. 1, 2019
The U.S. unemployment rate is at a 50-year low, and consumer confidence remains high. In fact, the University of Michigan’s latest Surveys of Consumers found that Americans have their most positive personal finance outlook since 2003.1
However, if you follow national news, you’ve probably heard speculation that we could be headed toward a recession. Global trade tensions and a slow down in the GDP growth rate has sparked volatility in the stock market, leading to economic uncertainty.
Given these differing signals, you may be wondering: How has the U.S. housing market been impacted? Where is it headed? And more importantly … what does it mean for me?
MORTGAGE RATES ARE NEAR HISTORIC LOWS
In August, Freddie Mac reported that the average 30-year fixed mortgage rate hit its lowest level since November 2016, falling to 3.6%, down a full percentage point from a year earlier.2 Variable mortgage rates also fell when the Federal Reserve cut interest rates at the end of July for the first time since 2008.3
This was welcome news for many in the real estate industry. Freddie Mac predicts that low interest rates and a robust job market will help the housing market remain strong despite the threat of recession.
“There is a tug of war in the financial markets between weaker business sentiment and consumer sentiment,” said Sam Khater, Freddie Mac’s chief economist. “Business sentiment is declining on negative trade and manufacturing headlines, but consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall.”2
What does it mean for you?
If you’re looking to buy a home, now is a great time to lock in a low mortgage rate. It will shrink your monthly payment and could save you a bundle over the long term. Or if you plan to stay in your current home for a while, consider whether it makes sense to refinance your mortgage at today’s lower rates.
PRICES CONTINUE TO RISE AT A MODEST PACE
According to the S&P CoreLogic Case-Shiller Indices, housing prices continue to rise. But the rate at which prices are rising is slowing down. For May 2019, the National Home Price Index rose by 3.4%, down from 3.5% the previous month.4
Of course, national averages often don’t present the whole picture. Some markets have seen modest declines, while other areas are witnessing double-digit increases. The key differentiating factor in most cases? Housing affordability.5
Since 2012, home prices have increased at about three times the pace of wages, according to National Association of Realtors chief economist Lawrence Yun.6
“Housing unaffordability will hinder sales irrespective of the local job market conditions,” said Yun. “This is evident in the very expensive markets as home prices are either topping off or slightly falling.”5
But what about all this talk of a recession? Will we see housing values plummet like they did in 2008? Economists say no.
If we look at history, the real estate crash experienced during the Great Recession isn’t typical.
The recent Housing and Mortgage Market Review report from Arch Mortgage Insurance provides data to support this. “What we found is that the next recession is likely to be far less severe on the housing market than the last one. It’s not that this time is different; it’s that last time was really different from historic norms.”6
“A large decline in national home prices is unlikely in the next recession,” Arch economists write. “A persistent housing shortage should help cushion home price declines.”6
What does it mean for you?
If you have the ability and desire to buy a home now, don’t let the threat of a recession hold you in limbo. The market is cyclical, and it will experience ups and downs. But over the long term, real estate has consistently proven to be a good investment.
STARTER INVENTORY REMAINS TIGHT WHILE LUXURY MARKET SOFTENS
As we’ve seen in the past, it’s become a tale of two sectors.
The low-end of the market remains highly competitive as buyers compete for affordable housing. A lack of new construction during the last recession led to an undersupply of starter homes. This trend continues—despite growing demand—due to a lack of skilled workers, rising land and material costs, and a slow permitting process in many areas.7
The result? There’s a shortage of homes for sale that Americans can actually afford to buy.
The luxury market, on the other hand, has softened. Economic uncertainty, changes to tax laws, and rising prices have slowed demand. Plus, to recoup their higher costs, builders flocked to this segment—causing an overabundance of supply in some areas.
“If you're selling an entry level home, you're probably still looking at a pretty competitive market in most places,” according to Danielle Hale, chief economist at Realtor.com. “But if you're selling a more expensive home you probably have to adjust your expectations.”8
What does it mean for you?
Move-up buyers, you’re in luck! If you’re ready to trade in your starter home for something more luxurious, you may get the best of both sectors. We’re still witnessing strong demand for entry-level homes, giving sellers the upper hand. At the same time, buyers of high-end homes are finding a greater selection (and more negotiating power) than they’ve had in years.
INVESTORS ARE BUYING HOMES AT RECORD LEVELS
There’s one group that hasn’t been slowed down by lack of affordability or economic uncertainty: investors.
According to CoreLogic, investors are purchasing homes at a record pace. In 2018, the share of U.S. homes bought by investors reached 11.3%—the highest level since the company began tracking nearly 20 years ago.9
Notably, this increased activity wasn’t led by institutional investors, but instead by small and individual investors focused on the starter-home segment.7 Declining interest rates and an uncertain stock market has led investors to flock to real estate as they seek out greater stability and higher returns.
“With declining mortgage rates … they’re searching for a better return for their money,” said NAR chief economist Lawrence Yun.10
What does it mean for you?
If you’re looking for a way to “recession proof” your money, you might want to consider investing in real estate. People will always need a place to live, and (unlike the stock market) a rental property can provide a steady source of cash flow during uncertain economic times.
WE’RE HERE TO GUIDE YOU
While national real estate numbers can provide a “big picture” outlook, real estate is local. As local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and home values in your particular neighborhood.
If you have specific questions or would like more information about how market changes could affect you, contact us at 727.330.3333 to schedule a free consultation. We’re here to help you navigate this shifting real estate landscape.
- University of Michigan Surveys of Consumers - http://www.sca.isr.umich.edu/
- Freddie Mac - https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-drop-significantly?_ga=2.29332539.689041222.1565464527-928629548.1565464527
- CNN - https://www.cnn.com/2019/07/31/business/fed-rate-cut-july-meeting/index.html
- S&P Dow Jones Indices - https://us.spindices.com/documents/indexnews/announcements/20190730-965771/965771_cshomeprice-release-0730.pdf?force_download=true
- National Association of Realtors - https://www.nar.realtor/newsroom/metro-home-prices-increase-in-91-of-metro-areas-in-second-quarter-of-2019
- Forbes - https://www.forbes.com/sites/alyyale/2019/04/18/with-a-recession-looming-is-now-the-time-to-sell-your-home/#7d3a21665bce
- CNN - https://www.cnn.com/2019/08/09/economy/mortgages-home-buyers/index.html
- Forbes - https://www.forbes.com/sites/carolinefeeney/2019/07/01/halfway-into-2019-how-is-the-housing-market-holding-up/#7e656e3ec5d8
- CoreLogic - https://www.corelogic.com/blog/2019/06/special-report-investor-home-buying.aspx
- Fox Business - https://www.foxbusiness.com/economy/investors-snapping-up-homes-at-record-levels
Aug. 15, 2019
In our “bigger is better” culture, there’s an expectation that each home should be larger and grander than the last. But life changes like divorce, kids leaving for college, or even the simple act of growing older can prompt us to find a smaller home that better suits our shifting needs and lifestyle.
In fact, the advantages of downsizing are being increasingly recognized. A “tiny house movement” has gained passionate advocates who appreciate the benefits of living simply at any age and stage of life. Not only does a smaller home typically cost less, it also takes less time and effort to maintain.1
Whatever your reasons are for downsizing, the process can seem overwhelming. That’s why we’ve outlined five steps to guide you on your journey. And in the end, we hope you’ll find that less is more … more comfort, more security, and more time and energy to spend on the activities and the people that you love.
5 STEPS TO DOWNSIZING SUCCESS
1. Determine Your Goals and Limitations
The first step is to figure out your goals for your new living environment. Do you want to live closer to family? Are you hoping to cut down on home maintenance? Are you looking for a community with certain amenities?
You should also consider any limitations that will impact the home you choose. For example, are stairs an issue? Do you need access to medical care? In the case of divorce, are there child-custody issues you need to take into account.
Estimate how long you plan to stay in your new home. Do you expect your needs to change during that time?
Make a “wish list” of features and prioritize them from most to least important. If you’d like any assistance with this process, give us a call! We’d be happy to sit down with you for a free consultation. We can also help you assess the value of your current home so you can set a realistic budget for your new one.
2. Find the Perfect New Home
Once you’ve established your “wish list,” we can begin the search for your new home. As local market experts, we know the ins and outs of all the top communities in our area. We can help you determine the neighborhood and type of home that will best fit your wants and needs.
From family neighborhoods to retirement communities, we serve clients in all stages of life. If you or a loved one are in need of extended support, we can also share our knowledge of the assisted living facilities in town and help you identify those that offer the optimal level of care.
Are you planning to relocate out of town? We can refer you to a trusted real estate professional in your target area who can help you with your search.
3. Sell Your Current Home
If you’re ready to sell your current home, we’ll begin the process of preparing to list it as we search for your new one.
We have a special interest in helping homeowners who are facing major life transitions, and we offer a full-service real estate experience that aims to remove as much of the stress and hassle of selling your home as possible. We also understand that many of our clients choose to downsize for financial reasons, so we employ tactics and strategies to maximize the potential sales revenue of your home.
We do this by employing our proven three-part approach, which focuses on optimum preparation, pricing, and promotion. As part of that plan, we invest in an aggressive marketing strategy that utilizes online and social media platforms to connect with consumers and offline channels to connect with local real estate agents. This ensures your property gets maximum exposure to prospective buyers.
4. Sort and Pack Your Belongings
Even before you find your new home, you can begin preparing for your move. A smaller home means less space for your furniture and other possessions, so you will need to decide what to keep and what to sell or donate. Sorting through an entire house full of belongings will take time, so begin as early as possible.
Parting with personal possessions can be an extremely emotional process. Start with a small, unemotional space like a laundry or powder room and work your way up to larger rooms. Focus on eliminating duplicates and anything you don’t regularly use. If you have sentimental pieces, family heirlooms, or just useful items you no longer need, think about who in your life would benefit from having them. For large collections, consider keeping one or two favorite pieces and photographing the rest to put in an album.2
Make sure the items you keep help you achieve the goals you outlined in Step 1. For example, if you want a home that’s easier to clean, cut down on knickknacks that require frequent dusting. If you’re moving to be closer to your grandchildren, choose the shatterproof plates over the antique china.
Allow yourself time to take breaks if you start to feel overwhelmed. If you’re helping a loved one with a move, try to be a patient listener if they want to stop and share stories about particular items or memories throughout the process.3 This can be therapeutic for them and an opportunity for you to learn family history that may otherwise have been forgotten.
5. Get Help When You Need It
Moving is stressful in any situation. But if you’re downsizing due to health issues or a major life change, it can be an especially tough transition. Don’t be afraid to ask for help.
Seek out friends and family members who can assist with packing and decluttering. If that’s not an option, or if you need additional help, consider hiring a home organizer, full-service moving company, or even a senior move manager, which is a professional who assists older adults and their families with the physical and emotional aspects of relocation.4 You can find one accredited by the National Association of Senior Move Managers at https://www.nasmm.org/find/index.cfm.
If financial constraints are holding back, let us know. We can help you explore the possibility of tapping into the equity in your current home now. That way you can afford to get the assistance you need to make your transition as smooth as possible.
ARE YOU LIVING YOUR BEST LIFE?
If your current home no longer suits your needs, maybe it’s time to consider a change. We would love to help you explore your options. Contact us today by calling 727.330.3333 to schedule a free, no-obligation consultation.
1. The Tiny Life -
2. My Move -
3. Daily Caring -
4. National Association of Senior Move Managers -
July 15, 2019
Most new homeowners have something about their property that they want to change. And as family needs and design trends shift over time, many will eventually choose to remodel. Some homeowners make updates to their property before listing it to maximize their potential sales revenue.
Whatever your reasons are for taking on a home improvement project, it’s wise to consider how the money you invest will impact your home’s value.
We’ve taken a look at six popular home renovations and identified those that—on average—have the best and worst returns on investment. So before you lift a hammer or hire a contractor, take a look at this list and see if your remodeling efforts will reward you when it comes time to sell.
RENOVATIONS THAT PAY OFF
These three common home improvement projects not only add function and style to your home, but they also offer a strong return on investment. Making strategic upgrades to your property will help you increase its value over time.
Minor Kitchen Remodel
The kitchen is often referred to as the “heart of the home,” and for good reason. Traditionally used for preparing food, it has morphed into so much more. Many of us now eat our family meals in the kitchen, it serves as a favorite spot for homework and kids’ art projects, and it’s the place guests tend to gather when we host events.
Because we spend so much time in our kitchens, it’s natural that we will eventually want to make updates and upgrades to better suit our needs and changing style preferences.
Luckily, a minor kitchen remodel is one of the best investments you can make in your home. According to Remodeling Magazine’s annual Cost vs. Value Report, it has an average 80.5% return on investment.1
The key to making a kitchen remodel pay off is to keep it modest in scale. Spend too much on custom or high-end selections, and you are less likely to recoup your investment. Instead, make an effort to keep your existing layout if it works for you and your family. Paint or reface cabinets instead of replacing them. Update countertops with low-maintenance quartz and swap out old light fixtures with modern alternatives. Replace outdated appliances with energy-efficient models. The average cost for a minor kitchen remodel is $22,500, and it’s likely to recoup more than $18,000 at resale.1
Wood Deck Addition
A deck addition is a popular way to extend and enhance the use of your outdoor space. It’s the perfect spot for grilling, dining alfresco, and entertaining. In fact, 81% of surveyed homeowners said they have a greater desire to be home since completing a deck addition.2
For a 16 x 20-foot wood deck, you can expect to spend around $13,000. Fortunately, the money you invest offers an average return of 76%.1
Decks made of composite material are a popular alternative these days, as they don’t require the regular sanding and staining that wood decks need. However, at an average cost of $19,000 for a 16 x 20-foot composite deck, they are significantly more expensive. Plus, the expected return on investment is only 69%.1 Still, if you plan to hire someone to provide regular maintenance to a wood deck, then a composite deck may offer cost savings over time.
Everyone knows good curb appeal is important when selling your home. And while it may not be the most exciting way to spend your remodeling budget, new siding can make a big impression on buyers … and your selling price.
Your home’s exterior is one of the first things buyers see when they view your home. It sets the tone for what they are going to see inside. It also gives an impression of how well the property has been maintained. Worn, peeling, or rotted siding can be a major red flag for buyers.
Replacing 1,250 square feet of siding costs around $16,000 and will net you an average of 76% at resale.1
For an even greater impact, consider replacing a portion of your siding with manufactured stone veneer. It can have a dramatic effect on the visual appeal of your home. A 300 square foot area will run you around $8,900, but you can expect to see a nearly 95% return when it comes time to sell.1
RENOVATIONS WITH WEAK RETURNS
These three popular remodeling projects are homeowner favorites. However, don’t expect to see a high rate of return at resale. Instead, consider them an investment in your current quality of life. Just make sure you’ll be living in the home long enough to make them worthwhile.
Major Kitchen Remodel
If there’s one room the majority of homeowners dream about making over, it’s their kitchen. From custom cabinetry to high-end appliances, the possibilities are endless. But those dreams can come at a cost.
An upscale kitchen remodel with high-end cabinetry and countertops, commercial-grade appliances, and designer features can cost upwards of $130,000. And unfortunately, you’ll only get back around 60% at resale. Even a mid-range kitchen remodel that includes new semi-custom wood cabinets, laminate countertops, and energy-efficient appliances could run you around $66,000 and net you a mere 62% at resale.1
Of course, an outdated or non-functional kitchen could turn buyers off from your home completely … and keep you from enjoying it yourself! So if your kitchen needs a major remodel, you shouldn’t necessarily scrap your plans. Just go in with the realization that you may only get back a fraction of what you invest. Then you can decide which upgrades are worth the splurge.
Few additions deliver more entertainment or enjoyment than an in-ground pool. It brings families and friends together, provides a break from the summer heat, and offers a fun and convenient way to stay fit. Plus, you’ll be the envy of your neighbors! But before you dive into a pool addition, consider whether the benefits outweigh the (substantial) costs.
The average expense to install a standard 18 x 36-foot in-ground pool is $57,500. And the estimated return at resale is only or 43%.2 In addition to the installation cost, plan to spend money each year on maintenance, repairs, and additional insurance.
However, 92% of surveyed homeowners said they “have a greater desire to be home” since installing a pool, and 83% have “an increased sense of enjoyment when they are at home.” For you and your family, the perks of a pool may be priceless.2
Master Suite Addition
If you own a house built before the 1980s, there’s a good chance it lacks a master suite, which is a feature that has become commonplace in most newly constructed homes.3
Master bedrooms have evolved from a simple place to sleep into a homeowner’s retreat—often featuring a sitting area, his-and-hers walk-in closets, and an attached bathroom with double vanities, a soaking tub, and a walk-in shower.
And master suite additions have become increasingly popular—both in homes that lack one as well as those with aging owners who can no longer accommodate stairs to an upper-level bedroom.
But what’s the typical return at resale? Unfortunately, a master suite addition offers one of the lowest returns of any remodeling project. With a median cost of $125,000, most sellers will only recoup around 52% of their investment. Nevertheless, in a survey of homeowners, the majority were satisfied with their decision to add a master suite, giving it a “Joy Score” of 10 out of 10.4
WEIGHING COST VS. BENEFIT
It’s always wise to enter into a remodeling project with knowledge of how it will impact your home’s value. In most cases, upscale or highly-customized upgrades are less likely to offer a high rate of return. That said, home renovations that improve your quality of life and enhance your enjoyment may be worthwhile no matter the cost.
GET A CUSTOMIZED ANALYSIS OF YOUR PROJECT
We’ve been talking averages. But the truth is, the actual return you can expect on a home improvement project will vary depending on your particular home and neighborhood. If you have plans to remodel, call 727.330.3333 or send us the details to Ray@raycook.net. We’d be happy to conduct a free analysis to determine how the renovations will impact the value of your home!
1. 2019 Cost vs. Value Report -
2. NAR’ Remodeling Impact Report - https://www.nar.realtor/sites/default/files/documents/2018-05-remodeling-impact-outdoor-features-05-23-2018.pdf
3. Zillow -
House Logic -
June 24, 2019
We all want to be good neighbors. But when it comes to selling your home, it’s not just about “keeping up with the Joneses.” It’s about outshining them at every opportunity!
If you’re looking to sell your home fast and for the most money possible, you’ll need a strategy to set it apart from all the other listings competing for buyers in your area. That’s why we’ve outlined our proven, five-step plan for serious sellers.
Use these five tactics to help your listing get noticed, win over buyers, and net a higher sales price than your neighbors!
STEP 1: Stage Your Home to Show Its Full Potential
The average seller will do the minimum to prepare their home for market: clean and declutter, fix anything that’s broken, mow the lawn. And while those tasks are essential, today’s buyers want more than just a clean house and tidy yard. When they dream of buying a new home, they envision a designer house with modern finishes. Help them see your property’s full potential by staging it.
Home staging is one of the hottest trends in real estate—because it works! According to the Real Estate Staging Association, homes that are professionally staged spend 73% less time on the market.1
So what exactly is staging? In a broad sense, staging is the act of preparing your home for market. The goal is to highlight your home’s strengths, minimize any deficiencies, and help buyers envision themselves living in the space. When staging a home, you might rearrange the furniture to make a room feel larger or remove heavy curtains to make it appear brighter.
Some sellers choose to hire a professional home stager, who has specialized training and experience, to maximize the appeal of their home to the largest number of potential buyers. Others may opt to do it themselves, using guidance from their agent.
We can help you determine the appropriate budget and effort required to push your home ahead of the competition in your neighborhood. The good news is, an investment in staging pays off. A 2018 survey found that 85% of staged homes sold for 6-25% more than their unstaged neighbors homes.2
STEP 2: Draw Buyers in with High-Quality Listing Photos
You only have one chance to make a first impression with potential buyers. And many buyers will view photos of a listing before they decide whether or not to visit it in person. In fact, 87% of buyers find photos “very useful” in their home search.3 Poor-quality or amateur-looking listing photos could keep buyers from ever stepping through your door.
Since good photography plays such an important role in getting your property noticed, we only work with the top local professionals to photograph our listings. But we don’t just rely on their photography skills when it comes to showcasing your home.
We go the extra mile to ensure your listing photos showcase the true essence of your home. We’re always on site during the photo shoot to help the photographer capture the best angles and lighting, and to let them know about unique or compelling selling features that they should photograph. The extra effort pays off in the end. In fact, listings with high-quality photography sell 32% faster than the competition … and often for more money!4
STEP 3: Price It Properly From the Start
Even in a strong real estate market, there are homes that will sit unsold for months on end. This can be the “kiss of death” in real estate, as buyers tend to imagine that there must be something wrong with the property, even if it’s not the case.
But why are those houses still on the market in the first place? It’s because they are often priced too high.
Every buyer has a budget. And most will be viewing listings within a particular price range. If your property is overpriced, it can’t properly compete with the other houses they’re viewing that are priced correctly. Which means it’ll sit on the market until you’re eventually forced to drop the price.
Alternatively, if you price your home aggressively, it can be among the nicest homes that buyers have seen within their budget. This can lead to emotionally-attached buyers, who are often willing to pay a premium or settle for fewer seller concessions. And in certain markets, it can lead to a multiple-offer situation, or bidding war. The end result? More money in your pocket.
We can help you determine the ideal listing price for your home in the current market. Pricing it properly in the beginning is the best way to ensure a fast and profitable sale.
STEP 4: Put on a Good Show at Each Showing
Once buyers are interested enough to schedule a visit, it’s crucial that you put on a good show at each showing.
The first step is to make your home readily available—and often on short notice—for buyers to see it. A missed showing is a missed opportunity to sell your home. If you set too many restrictions on when it’s available to view, busy buyers will simply skip over your listing and move on to the next one.
Part of making your home available means keeping it relatively show-ready as long as it’s on the market. Most of us don’t live picture-perfect lives, and our homes reflect the day-to-day reality of our busy (and sometimes messy) families. But a little extra effort spent keeping your home clean, fresh-smelling, and ready for buyers will help it sell faster … which means you can get back to your regular routine as quickly as possible!
STEP 5: Use a Proven Promotion Plan
Most agents are still marketing their listings like they did 20 years ago… put a sign in the yard, put the listing in the MLS, and pray that it sells. Yet, we know that 93% of buyers search for real estate listings online.3
That’s why we invest in the latest training and technology—to ensure your listing appears in the places where buyers are most likely to look. Our dual-level promotion strategy includes both pre-launch activities designed to seed the marketplace and post-listing activities to ensure your home stays top-of-mind with potential buyers.
By utilizing online and social marketing platforms to connect with consumers and offline channels to connect with local real estate agents, your property gets maximum exposure to prospective buyers.
LET’S GET MOVING
Are you thinking about listing your home? Get a head start on your competition! Contact us today for a copy of our Home Seller’s Guide, which offers a complete guide to the home selling process. Or call us at 727-330-3333 to schedule a free no-commitment consultation. We’d love to put together a custom plan to maximize the sales potential of your property!
1. Real Estate Staging Association - https://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548
2. Home Staging Resources -
3. National Association of Realtors -
4. RIS Media -
May 24, 2019
Thanks to Marie Kondo and her hit Netflix series “Tidying Up,” home organization is a hot topic right now. Marie encourages her viewers to minimize their possessions and keep only those items that “spark joy.”
With spring in full bloom, now is the perfect time to do some spring cleaning and add organizational systems to your own home. Not only will you clear out clutter, your efforts can actually increase the value of your home.
Ready to give it a try? Here are six home organization ideas that will “spark joy” for you and your property value!
Boost Bathroom Storage Capacity
When was the last time you cleaned out your bathroom cupboards? If it’s been awhile, remove everything and take a look at each item. Toss any old or expired products—keep only what you actually use.
If your vanity has drawers, add drawer organizers, so you have a dedicated space for smaller items, like makeup and jewelry. For deep cabinets, install roll-out shelves or baskets to maximize the use of space.
And don’t forget about the walls! Mount open shelves to store towels. If you’re short on storage space, a cabinet over the toilet can offer additional room for supplies. These inexpensive additions can make your morning routine a little easier while giving your bathroom a more custom feel. And on average, minor bathroom remodeling projects like these see a 102% return at resale.
Upgrade Your Laundry Room
Sort through the items in your laundry room and throw away or donate anything you no longer need or use. If you’ve been holding onto a collection of old washcloths and single socks, it’s time to say goodbye. Then give your laundry room an upgrade with some customized organizational features.
A mix of open cubbies and cabinets with doors will give you plenty of options for storing detergents and supplies. If you have space, a divided hamper or set of laundry baskets can provide a place to sort your clothes before washing. Install a hanging rod or drying rack for delicates and a flat work surface for ironing and folding clothes. With a few simple tweaks, you can turn this chore into a score!
Fully Utilize Your Basement or Attic
Basements and attics can easily become a dumping ground for clutter. If that’s the case in your home, you know what to do!
Once you’ve conducted a thorough clean out, think about how you can better utilize the space to meet your family’s needs. Install cabinets and a table so you can use the area as a craft room. Or you could turn it into a game room with a media center and ping-pong table. Investing in your basement will not only add function for your family, but also the average basement remodel can see up to a 70% return on investment when it’s time to sell.2
If you have an attic, consider adding a cedar closet to store your off-season clothing. The cedar lining will keep your clothes free from moths and smelling fresh year round.3 Turning your attic into a more usable space will pay off down the road, too. A finished attic sees an estimated 60% return on investment.2
Customize Your Closets
Cleaning out the closet is a chore most of us dread, but by now, you’re a pro! Get rid the clothes and shoes that don’t fit you, are uncomfortable to wear, or that no longer “spark joy.”
Then it’s organizing time. So where do you start? You’ll want to create a designated space for each type of clothing: high hanging rods for dresses and long jackets, lower rods for skirts and shirts, and shelves for folded items like jeans. And accessories need a place to go, too. Add racks for your shoes, drawers for jewelry, hooks for hats, and shelves or racks for handbags.
A well-equipped closet can be a major draw for buyers—the average return on a closet remodel is 57%.4 But more importantly, it’ll improve your day-to-day life. Surveyed homeowners gave their closet remodel a “Joy Score” of 10 out of 10, higher than kitchen or bath upgrades.5
Install Built-in Bookcases and Cabinets
Built-in furniture adds functionality and storage to a room while giving your home a high-end look. Built-in bookcases can turn an empty room into an office. Custom cabinets can be used in a living room to display media equipment while providing hidden storage for DVDs, board games, and family albums.
When designing any built-in feature, remember not to go too custom. A design that only fits your tastes or belongings could turn off future buyers. Instead, select standard sizes and classic finishes to appeal to a broad range of buyers when it comes time to sell.
Equip Your Garage
If you can no longer fit your car in your garage, it may be time for a clean out. Similar to an attic or basement, the garage can quickly become overrun with clutter. A thorough cleaning will help you assess which items are worth keeping.
When adding organizational systems your garage, start with a small rack to store yard tools and larger racks for bikes and sports equipment. Overhead racks are a great place to put seasonal items and bulky luggage. A workbench against a wall lined with pegboard and hooks creates a dedicated space to use and store tools. If you have children or pets, add a cabinet with a lock. This will give you a place to securely store harsh chemicals and sharp tools. With a little effort, you’ll be pulling in your car (and buyers) in no time!
SPRING INTO ACTION
If you’re searching for service providers to help with your spring cleaning or home organization efforts, let us know! We can connect you with our trusted network of local home improvement professionals. We can also help you determine which organizational upgrades will add the most value to your home. Call us today 727.330.3333, and let us know how we can help!
1. HGTV -
2. Nationwide -
3. HGTV -
4. The Closet Doctor - https://www.closet-doctor.com/news/what-is-the-return-on-investment-on-closet-organizers
5. NAR Remodeling Impact Survey -
April 16, 2019
If you’re thinking about buying a home, you’ve probably received your share of advice from family and friends. Add to that the constant stream of TV shows, news segments, and social media posts that over-simplify the home buying process for easy entertainment.
With so much information to sift through, it can be tough to distinguish fact from fiction. That’s why we’re revealing the truth behind some of the most common home buyer myths and misconceptions.
Buying a home is a big decision, but it doesn’t have to be a scary one. If you arm yourself with knowledge and a qualified team of support professionals, you’ll be well equipped to make the right choices for your family and financial future.
DON’T FALL FOR THESE COMMON HOME BUYER MYTHS
Myth #1: You need a 20% down payment.
Plenty of buyers are purchasing homes with down payments that are much less than 20% of the total cost of the property. Today, you can buy a home with as little as 3-5% down.
There are multiple programs out there that allow you to have a lower down payment, and a lender or mortgage broker can talk you through which option is the best for you. Since you’re putting less money down, you’re a riskier borrower to your lender than people who put down a full 20%. Because of this, you will most likely need to pay mortgage insurance as part of your monthly payment.
Myth #2: Real estate agents are expensive.
Your agent is with you every step of the way throughout your home buying journey, and he or she spends countless hours working on your behalf. It sounds like having an agent is expensive, right? Well, not for you. Buyers usually don’t pay a real estate agent’s commission. Your agent’s fee is paid for at closing by the seller of the home you’re buying.1 The seller knows to factor this cost into the property’s total purchase price.
Myth #3: Don’t call a real estate agent until you're ready to buy.
The earlier you bring in an agent to help with the purchasing process, the better. Even if you’re in the very early stages of casually browsing Zillow, a real estate professional can be a huge help.
They can create a search for you in the Multiple Listing Service (MLS), so you get notifications for every house that meets your criteria as soon as it hits the market. The MLS is typically more up-to-date than popular home search sites like Zillow and Trulia. Setting up a search a few months before you’re considering buying gives you a good idea of what’s out there in your town that’s in your budget. Reviewing the MLS and speaking with an agent as soon as possible can help you set realistic expectations for when you actually start the house hunting process.
Myth #4: Fixer-uppers are more budget friendly.
We’ve all watched the shows on HGTV that encourage people to go after fixer-uppers because they’re more affordable and allow buyers to eventually renovate the home to include everything on their wishlist. But, this isn’t always the case.
Sometimes, homes that need a lot of work also require a lot of money. Big renovations, like add-ons, a total kitchen remodel, or installing a pool, take a lot longer than it looks on TV. If you’re really interested in a fixer-upper, ask your agent to show you a mix of newer homes and older homes. If you fall in love with an older home that needs a lot of work, get some quotes from contractors before you buy so you know the real cost of the renovations and see if you can work them into your budget.
Myth #5: Your only upfront cost is your down payment.
Your down payment is big, but it isn’t the only money you’ll spend during the home buying process. At closing, you’ll pay your down payment, but you’ll also bring closing costs to the table. Closing costs are typically anywhere from 2-4% of the total purchase price of the home.2 This amount includes the cost for items like home owners insurance, title fees, and more.
You’ll also need to pay for an inspection before closing, which usually costs a few hundred dollars. This price will be higher or lower based on the size of your new property. Your lender will also require an appraisal. An appraiser will come in and inspect the home to determine how much it’s worth. Depending on your lender, you may have to pay this when the appraisal is conducted or it might be rolled into your closing costs.
Myth #6: You need a high credit score to buy a house.
You don’t need perfect credit to buy the perfect home. There are loans out there that buyers with lower credit scores can qualify for. These are good options for people who have had credit issues in the past, but some of them come with additional fees you will need to pay. Speak to a few local lenders or mortgage brokers to talk through which options might be best for you.
Myth #7: You can't qualify for a mortgage if you're still paying off student loans.
While some buyers may feel more comfortable paying off their existing debts before taking the leap into homeownership, it’s not a requirement. When you’re applying for a mortgage, the lender takes a close look at your debt-to-income ratio.3 If you want to calculate this on your own, add up all of your monthly debt payments and divide those by your monthly income. When you’re lender does this, they’re trying to make sure that you will be able to afford your monthly mortgage payments along with your other existing payments. If your income is high enough to allow you to make all of these payments each month, having a student loan will most likely not stop you from getting a mortgage.
Myth #8: You should base your budget on what your lender approves.
How much house you qualify for and how much you can afford are two totally different numbers. When you prequalify for a mortgage, your lender will look at your income, debt, assets, credit score, and financial history to determine how much money you might qualify for.4 For some people, this number might be much higher than you thought because lenders tend to approve for the highest amount they think you can afford. But that doesn’t mean that’s how much you should borrow.
Instead, figure out how much house you can actually afford. An online mortgage calculator can be a good first step in determining this number. We recommend thinking about what you want your monthly payment to be as a starting point. And remember to include your principal, interest, taxes, and, insurance. You should also think about ownership expenses that aren’t part of your monthly payment, like HOA dues and maintenance.
Myth #9: It's all about location.
You’ve heard the phrase. Location, location, location is basically the real estate industry’s motto, but we’ll let you in on a little known secret: It’s not always true. Yes, location is great to consider when it comes to school districts and commute times, but you also need to think about how the home will function for you and/or your family’s lifestyle. If a family of five is choosing between a one bedroom condo in the bustling city center and a 4-bedroom home out in the suburbs, the latter is probably the best, most functional choice for them. Also, by buying in a less sought after neighborhood, your property taxes will most likely be much lower!
Obviously, you might still want to choose an area with great resale potential, and this is something that your agent can speak to you about. They’re an expert in your city and are constantly monitoring buying and selling trends.
Myth #10: If you look hard enough, you'll find a home that checks every box on your wishlist.
You’ve seen that famous house hunting show. And while we have our suspicions about how real it is, the one thing they get right is that almost every buyer needs to compromise on something. Yes, the perfect house that meets every item on your wishlist is probably out there, but it’s also probably double or triple your budget.
A long wishlist can be a great starting point for figuring out what you want and don’t want, but we recommend narrowing that wishlist down to the top five things that are important to you in order of priority. We also recommend noting on your wishlist what your absolute deal breakers are, like “must have a yard for our dog,” and noting what you can live without, like “heated bathroom floors.”
This is a great list to discuss when you first start talking to an agent. A good real estate agent will be able to look at your list and find properties that might work for you. By coming to that first meeting with realistic expectations and knowledge about home buying rather than a bunch of myths heard here and there, you’ll be able to start the process off on the right foot and be in your new house in no time.
WE’RE HERE TO HELP
Whether you’re a first-time buyer or a seasoned homeowner, there’s no reason to go through the home buying process without an advocate on your side. We’re here to answer your questions and do the hard work for you, so you can spend your time dreaming about your new home. Call us today to schedule a free, no-obligation consultation.
Heather M. Reynolds 727.422.1981
Virginia Fatigati 727.415.9619
Kristi Baxter 727.743.4728
Ray Cook 727.330.3333
Get a FREE copy of our Home Buyer’s Guide to Getting Mortgage Ready
Now that we’ve cleared up these common homebuyer myths, find out if you know the steps you should take to prepare financially before you apply for a mortgage. Contact us to request a complimentary copy of our “Home Buyer’s Guide to Getting Mortgage Ready.”
1. Realtor.com -
2. The Balance -
3. StudentLoanHero -
4. Zillow -
March 8, 2019
Discover What Buyers Will Pay in Today’s Market
It’s easy to look up how much money you have in your savings account or the real-time value of your stock investments. But determining the dollar value of a home is trickier.
As a seller, knowing your home’s worth helps you price it correctly when you put it up for sale. If you price it too high, it may sit on the market. But price it too low and you may be losing out on a good chunk of money (nobody wants that!).
For buyers, it’s important to know a home’s worth before you make an offer. You want your offer to be competitive, but you don’t want to overpay for the property.
Even if you’re not a buyer or seller right now, as a current homeowner you might just be curious about the value of your home. Keeping track of your home’s worth year over year helps you understand the trends in your market. So when you are ready to sell, you can take advantage of a good window of opportunity by calling us at 727-330-3333.
The good news is, one of our trained real estate agents—who understands the nuances of your particular neighborhood—can determine the true market value of your property … and at no cost to you!
THE THREE TYPES OF HOME VALUES
When you start the process of buying or selling a home, you’ll frequently hear the words appraised value, assessed value, and true market value. It’s important to know the difference between each one so you can make better, informed decisions.
A professional appraiser is in charge of determining the appraised value of a home. These appraisals are typically required by a lender when a buyer is financing the property. And while the lender is the one requiring this information, the appraiser does not work for the lender.1 Your appraiser should be an objective, licensed professional who doesn’t have allegiance to the buyer, seller, or lender—no matter who is paying their fee.
The number the appraiser comes up with (the appraised value) assures the lender that the buyer is not overpaying for the property. For example, imagine a seller lists a home for $400,000. They reach a deal with the buyer to sell the home for $375,000. However, if an appraiser evaluates the property and determines that the appraised value is actually $325,000, then the lender will not lend for an amount higher than that appraised value of $325,000.2
When figuring out this number, an appraiser will compare the property to similar homes in your neighborhood, and they’ll evaluate factors such as location, square footage, appliances, upgrades, improvements, and the interior and exterior of the home.
The assessed value of a home is determined by your local municipal property assessor. This value matters when your county calculates property taxes each year. The lower your assessed value, the less property tax you’ll pay.3
To come up with this value, your assessor will evaluate what comparable homes in the neighborhood have sold for, the size of your home, age, overall condition, and any improvements or upgrades that have been made. However, most assessors don’t have full access to your home, so their information is limited.
Assessments are done annually to determine how much property tax you owe. Many counties use a multiplier (typically between 60%-80%) to calculate the final assessed value. So, if the assessor determines that the value of the home is $300,000, but the county uses a 70% multiplier, the assessed value of the home would be $210,000 for tax purposes.4
If your assessed value isn’t as high as you envisioned, don’t sweat it. Many homeowners appeal their assessment in favor of a lower valuation so that they can save money on property taxes. If you’re interested in appealing your property tax assessment, let us know. We offer complimentary assistance and would be happy to help you build your case.
True Market Value
True market value is established by your real estate agent. It basically refers to the value that a buyer is willing to pay for the property. A good real estate agent is an expert in determining true market value because they have hands-on experience buying and selling properties. They understand the mindsets of buyers in your market and know what they’ll pay for a desirable house, townhouse, or condo.
As a seller, knowing your true market value is important because it helps you choose how much to list your property for. It can also help you decide if you want to make any improvements to your home before putting it on the market. Your agent can help you figure out which updates and upgrades will have the biggest impact on your true market value.
WHAT’S THE DEAL WITH ONLINE CALCULATORS?
When figuring out your home’s value, you might be tempted to see what popular real estate sites like Zillow, Redfin, and Trulia have to say. When you use an online calculator to determine your home’s value on these sites, it is just an estimate. It’s not an actual appraisal or the “true market value.” These sites all have their own algorithms for coming up with their estimates. For example, Zillow comes up with their “Zestimates” by calculating “public and user-submitted data, taking into account special features, location, and market conditions.” 5
These online estimates can be a great starting point for opening up the conversation with your real estate agent about your home’s worth. But even Zillow recommends that you use a real estate agent for coming up with the actual market value of your home. The site says that once you get your “Zestimate,” you should still get “a comparative market analysis from a real estate agent.”
Having one of our Realtors® involved in this process is essential because they understand the market better than a computer ever could. They’re showing property in your city every single day, and they know the particular preferences of buyers and sellers in the area. Young professionals, large families, empty nesters, and other groups are all looking for different things in a home. Our agents have most likely worked with all of them, so they understand what every segment in your market is specifically looking for.
HOW DOES RAY COOK REALTY AGENTS FIND YOUR HOME’S TRUE MARKET VALUE?
So, how does an actual real estate agent determine true market value? They’ll start by doing a comparative market analysis (CMA). This means they’ll compare your home’s features to similar properties in your area. For the CMA, the agent looks at the below factors to influence their assessment of your home’s worth:6
● Neighborhood sales - Your agent will look at similar, recently sold homes in your neighborhood to see what they sold for and what they have in common with your house.
● The exterior - What does your home look like from the outside? Your agent will factor in curb appeal, the style of the house, the front and backyard, and anything else that impacts how the house looks to everyone walking and driving by.
● The interior - This is everything inside the walls of the house. Square footage, number of bedrooms and bathrooms, appliances, and more all influence the overall market value.
● Age of the home - Whether you have a newer or older home affects the number your agent comes up with as part of their assessment.
● Style of the home - The style of your home is important because buyers in different markets have different tastes. If buyers prefer ranch-style homes and you have one, then your home may sell for a premium (aka more money!).
● Market trends - Because a local agent has so much experience in your market, they have their finger on the pulse of your area’s trends and know what buyers are willing to pay for a property like yours.
● Location, location, location - This one’s probably the most obvious. Your agent will think about how popular the area is, how safe it is, and what schools are like.
A computer algorithm simply can’t take all of these factors into account when calculating the value of your home. The reality is, nothing beats the accuracy of a real estate agent or professional appraiser when it comes to determining a home’s true market value.
YOUR AGENT IS THERE EVERY STEP OF THE WAY
Determining a home’s true market value is a real estate agent’s forte. If you’re a seller, your agent will help you find your home’s market value so you can list it at the right price.
For buyers, your agent will help you determine the value so you can come up with a fair offer. Your agent can also set up a personalized home search on the Multiple Listing Service (MLS) for you so you’ll receive emails of listings that meet your criteria. This will help you see what’s out there in your city and how properties are being priced.
Get a Complimentary Report With Your Home’s True Market Value
Curious about your home’s true market value? Call 727-330-3333 NOW to request a free, no-obligation Comparative Market Analysis to find out exactly how much your home is worth!
1. Chicago Tribune -
2. SFGATE -
3. ValuePenguin -
4. Movoto -
5. Zillow -
6. Realtor.com -
Feb. 25, 2019
If you’re a current homeowner, or in the market to buy, you’re probably curious about the latest trends in home design.
Sellers who make strategic updates before listing a property can generate increased interest from buyers and, in some cases, a premium selling price. And buyers should consider which features of a home will need updating immediately (or in the near future) so they can factor renovation costs into their overall budget.
Even if you have no immediate plans to buy or sell, we advise our clients to be thoughtful about the colors, materials, and finishes they select when planning a remodel. Making over-personalized or unpopular design choices could hurt a home’s value when it does come time to sell. And selecting out-of-style or overly-trendy elements could cause your renovation to feel dated quickly.
To help, we’ve rounded up eight of the hottest home design trends for 2019. Keep in mind, not all trends will work well in every house. If you plan to buy, list, or renovate a property, consult a professional who can help you realize your vision and maximize the impact of your investment.
1. WARMER PAINT COLORS
White and grey aren’t going anywhere, but expect to see warmer tones and more earthy neutrals popping up in 2019. Cold whites are being replaced by warmer, softer whites. And warmer tones of grey have become a popular alternative to the cooler grays we were seeing earlier in the decade. Dove grey—with a lilac undertone—is a particular favorite with designers this year.
Sherwin Williams chose Cavern Clay, a warm terracotta, as its 2019 color of the year, while Behr selected Blueprint, a mid-tone blue. Benjamin Moore’s selection is Metropolitan, a sophisticated grey.
If you’re preparing to sell your home, consider a light, neutral paint color. Neutral colors provide a blank canvas upon which a buyer can envision placing their belongings, and lighter colors make a room appear larger and brighter.
2. MIXED METALS
Don’t feel limited to using one metallic finish throughout your home—or even throughout a single room. Designers are mixing metals in 2019, and their favorites include copper, brass, pewter, gunmetal, and matte black.
Experts suggest picking one metal hue to dominate your color palette and a contrasting tone to complement it. If your room has a warm color palette, choose a warm-hued primary metal, such as brass or copper. For cool palettes, choose a cool-toned metal, like pewter or stainless steel. You can also experiment with mixing finishes, such as polished and hammered copper.
From faucets to cabinet pulls to accent pieces, swapping out your old or dated fixtures is an easy—and relatively inexpensive—way to modernize your decor. Mixing metals adds depth and gives your room a more curated look.
3. OUTDOOR ELEMENTS
Bringing outdoor elements into the home can help warm up a sterile space. And natural materials can soften a modern design esthetic.
Homeowners are increasingly looking for ways to incorporate these materials throughout their home. Especially popular right now: stone, copper, concrete, and wood. From concrete showers to agate stone tiles, designers are finding unexpected ways to bring the outside in.
One notable exception: granite countertops. Engineered quartz—a combination of ground quartz and resin—overtook natural granite stone as the most popular countertop material in 2018. This durable, low-maintenance, highly-customizable product has won over homeowners and designers alike.
Stainless steel has been the industry standard for years, but the market is trending toward variety and fresh alternatives. Homeowners have more options available than ever to personalize their kitchens with vibrant colors, black stainless, or modern white appliances. Another favorite? Integrated appliances that blend seamlessly into cabinetry. Built-in column refrigerators, which allow you to customize the design and size of your freezer and refrigerator, are becoming a “must-have” in high-end homes.
Advancements in technology have also brought a new wave of appliances to the market. Induction cooktops are replacing commercial gas ranges as a gourmet favorite. And french door ovens and steam ovens are also gaining in popularity—especially ones with smart features you can control from an app on your smartphone.
5. COLORFUL KITCHENS
White will always be a classic choice, but color is finally coming back to kitchens. More homeowners are choosing cabinets in alternative neutrals like black, cream, and grey, along with colorful options like green and blue. Also popular? Wood cabinets in stains like warm chestnut and fruitwood.
Two-tone kitchen cabinets remain a homeowner favorite, as well. To incorporate this trend, try pairing darker lower cabinets with lighter upper cabinets or a colorful kitchen island with neutral-colored perimeter cabinets
6. OPEN SHELVING
Swapping upper kitchen cabinets for open shelves continues to be a popular choice in 2019. It’s a cost-effective update that can make a kitchen feel larger and brighter. However, it’s not a practical option for everyone. Before you commit, test it out by removing your cabinet doors for a few weeks. See how it feels to have your glasses and dishware on display.
Not ready to give up all your upper cabinet storage space? Replace just one or two upper cabinets with open shelves for a lower-commitment but still-updated look.
7. STATEMENT TILE
The ubiquitous white subway tile is finally fading in popularity. In 2019, homeowners are gravitating toward more colorful choices, creative textures and finishes, and alternative shapes. Especially hot right now: hexagons, arabesques, diamonds, and Moroccan fish scales.
Natural stone remains a favorite, including marble, quartzite and river rock. But advancements in porcelain tile that mimics stone, and even concrete, has made it an attractive, affordable, and low-maintenance alternative.
8. SHOWCASE CEILINGS
Once an afterthought, ceilings are taking center stage. While 2018 was all about statement walls, statement ceilings are shaping up to be the darling of 2019. Designers are using bold paint colors, wallpaper, intricate moldings, fabric, and other materials to transform a ceiling into something truly special.
Want to incorporate this trend without going too bold? Choose a classic design, like coffered or wooden beams. Or stick with wood paneling or tin tiles for a more timeless look. Even something as simple as painting a ceiling the same color as the walls can make your space feel more modern.
DESIGNED TO SELL
Are you contemplating a remodel? Want to find out how upgrades could impact the value of your home? Give us a call for a free consultation!
Buyer preferences can vary greatly by neighborhood and price range. We can share the insights we’ve gathered from working with buyers in this market … and offer tips on how to maximize the return on your remodeling investment. And if you’re in the market to sell, we can run a Comparative Market Analysis on your home to find out how it compares to others in the area.
Want to learn more about how to stage your home to sell? Contact us at 727-330-3333 to request a free copy of our report: 10 Staging Secrets From the Pros for a Quick Sale at Top Dollar!
Jan. 15, 2019
As we begin another year, everyone wants to know: “Where is the housing market headed in 2019?”
It’s not only buyers, sellers, and homeowners who are impacted. The real estate market plays an integral role in the overall U.S. economy. Fortunately, key indicators point toward a stable housing market in 2019 with signs of modest growth. However, shifting conditions could impact you if you plan to buy, sell, or refinance this year.
HOME VALUES WILL INCREASE
The value of real estate will continue to rise. Freddie Mac predicts housing prices will increase by 4.3 percent in 2019.1 While the rapid price appreciation we witnessed earlier in the decade has slowed, the combination of a strong economy, low unemployment, and a lack of inventory in many market segments continues to push prices higher.
"Ninety percent of markets are experiencing price gains while very few are experiencing consistent price declines," according to National Association of Realtors (NAR) Chief Economist Lawrence Yun.2
Yun predicts that the national median existing-home price will increase to around $266,800 in 2019 and $274,000 in 2020. "Home price appreciation will slow down—the days of easy price gains are coming to an end—but prices will continue to rise."
What does it mean for you? If you’re in the market to buy a home, act fast. Prices will continue to go up, so you’ll pay more the longer you wait. If you’re a current homeowner, real estate has proven once again to be a solid investment over the long term. In fact, the equity level of American homeowners reached an all-time high in 2018, topping $6 trillion.3
SALES LEVELS WILL STABILIZE
In 2018, we saw a decline in sales, primarily driven by rising mortgage rates and a lack of affordable inventory. However, Yun isn’t alarmed. "2017 was the best year for home sales in ten years, and 2018 is only down 1.5 percent year to date. Statistically, it is a mild twinge in the data and a very mild adjustment compared to the long-term growth we've been experiencing over the past few years."2
Yun and other economists expect home sales to remain relatively flat over the next couple of years. Freddie Mac forecasts homes sales will increase 1 percent to 6.08 million in 2019 and 2 percent to 6.20 million in 2020.1
“The medium and long-term prospects for housing are good because demographics are going to continue to support demand,” explains Tendayi Kapfidze, chief economist for LendingTree. “With a slower price appreciation, incomes have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize. A slowdown in 2019 creates a healthier housing market going forward.”4
What does it mean for you? If you’ve been scared off by reports of a market slowdown, it’s important to keep things in perspective. A cooldown can prevent a hot market from becoming overheated. A gradual and sustainable pace of growth is preferable for long-term economic stability.
MORTGAGE RATES WILL RISE
The Mortgage Bankers Association predicts the Federal Reserve will raise interest rates three times this year, resulting in a rise in mortgage rates.5 While no one can predict future mortgage rates with certainty, Realtor.com Chief Economist Danielle Hale estimates that the rate for a 30-year mortgage will reach 5.5 percent by the end of 2019, up from around 4.62 percent at the end of 2018.6
While mortgage rates above 5 percent may seem high to today’s buyers, it’s not out of line with historical standards. According to Hale, “The average mortgage rate in the 1990s was 8.1 percent, and rates didn’t fall below 5 percent until 2009. So for buyers who can make the math work, buying a home is likely still an investment worth making.”7
What does it mean for you? If you’re in the market to buy a house or refinance an existing mortgage, you may want to act quickly before mortgage rates rise. To qualify for the lowest rate available, take steps to improve your credit score, pay down existing debt, and save up for a larger down payment.
AFFORDABILITY ISSUES WILL PERSIST
Although the desire to own a home remains strong, the combination of higher home prices and rising mortgage rates will make it increasingly difficult for many first-time buyers to afford one.
“Buyers who are able to stay in the market will find less competition as more buyers are priced out but feel an increased sense of urgency to close before it gets even more expensive,” according to Hale. “Although the number of homes for sale is increasing, which is an improvement for buyers, the majority of new inventory is focused in the mid-to-higher-end price tier, not entry-level.”6
What does it mean for you? Unfortunately, market factors make it difficult for many first-time buyers to afford a home. However, as move-up buyers take advantage of new high-end inventory, we could see an increase in starter homes hitting the market.
MILLENNIALS WILL MAKE UP LARGEST SEGMENT OF BUYERS
“The housing market in 2019 will be characterized by continued rising mortgage rates and surging millennial demand,” according to Odeta Kushi, senior economist for First American. "Rising rates, by making housing less affordable, will likely deter certain potential homebuyers from the market. On the other hand, the largest cohort of millennials will be turning 29 next year, entering peak household formation and home-buying age, and contributing to the increase in first-time buyer demand.”4
Danielle Hale, chief economist for Realtor.com, predicts the trend will continue. “Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time.”6
What does it mean for you? If you’re in the market for a starter home, prepare to compete for the best listings. And if you plan to sell a home in 2019, be sure to work with an agent who knows how to reach millennial buyers by utilizing the latest online marketing techniques.
WE’RE HERE TO GUIDE YOU
While national real estate numbers and predictions can provide a “big picture” outlook for the year, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood.
If you’re considering buying or selling a home in 2019, contact us now 727-330-3333 to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.
START PREPARING TODAY
If you plan to BUY this year:
- Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide an advantage over other buyers in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly.
- Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What’s most important to you in a home? We can set up a customized search that meets your criteria to help you find the perfect home for you.
- Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget, all at no cost to you. Give us a call to schedule an appointment today!
If you plan to SELL this year:
- Call us for a FREE Comparative Market Analysis. A CMA not only gives you the current market value of your home, it will also show how your home compares to others in the area. This will help us determine which repairs and upgrades may be required to get top dollar for your property, and it will help us price your home correctly once you’re ready to list.
- Prep your home for the market. Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. We can help you determine which ones are worth the time and expense to deliver maximum results.
- Start decluttering. Help your buyers see themselves in your home by packing up personal items and things you don’t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage ... and get you one step closer to moving when the time comes!
1. Freddie Mac Economic & Housing Research Forecast –
2. National Association of Realtors 2019 Forecast –
3. Bankrate 2018 Year in Review –
4. Forbes 2019 Real Estate Forecast –
5. Mortgage Bankers Association Forecast –
6. Realtors.com 2019 National Housing Forecast –
7. FOX Business –
Dec. 1, 2018
The holiday season is upon us, and many of us have already begun to celebrate. From trimming trees to lighting candles, it’s the time of year to fill your homes (and hearts) with holiday joy.
But there’s no need to stop at your front door. Let the spirit of the season radiate outward from your house into your community. Some homeowners hang outdoor lights and decorations to help make the neighborhood “merry and bright.” But that’s not the only way to share the magic of the holidays with others.
Not sure where to start? Check out these 9 inspirational ideas for spreading cheer far and near!
THERE’S NO PLACE LIKE HOME
You probably don’t have to look far to find someone who could benefit from a gift or kind gesture this time of year. Try one (or all) of these ideas for sharing the season with those closest to home.
1. Host a Holiday Party
Hosting a neighborhood holiday party is a great way to reconnect with old friends and welcome new families to the community. And it doesn’t necessarily require a huge investment of time or money. Plan a potluck dinner and ask your guests to bring a dish or drink to share. Or host a holiday cookie exchange and ask everyone to bring a couple dozen of their favorite cookie to swap with other guests. Hot cocoa and caroling is another great way to bring neighbors together to celebrate the season.
If you have a neighbor who you’ve been at odds with in the past, consider extending them an invitation, as well. It could be the perfect opportunity to make peace in the new year.
2. Help a Neighbor in Need
The holiday season is the perfect time to offer help to a neighbor in need. Next time you head out to rake your leaves, take care of an elderly neighbor’s, as well. Or drop off dinner for a friend who is recovering from surgery.
If you know of someone in your community with a larger need, consider setting up a Care Calendar through a site like CareCalendar.org. Then share the link with other neighbors who may be interested in helping, too. Users can sign up to run errands, cook a meal, babysit, wash laundry, clean the house, mow the lawn, or complete other household tasks depending on the individual’s needs. Even a small gesture of kindness can make someone’s holiday extra jolly.
3. Treat Your Mail and Package Carriers
Extend comfort and joy from your own front porch during your postal and package carriers’ busiest time of year.1 While many of us love the convenience of shopping online for holiday gifts, the boom in e-commerce has exponentially increased the workload for our postal and package carriers, some of whom work up to 70 hours a week during the holiday season.2
You can help brighten their day by leaving a goody and note of gratitude in your mailbox or a basket of water and snacks by your front door. Attach a sign that says: “Thank you for working hard to deliver our holiday packages. Please take a treat to enjoy on your route!”
DON’T STOP AT YOUR STREET … BRING HOLIDAY CHEER TO EVERYONE YOU MEET
Surprise and delight those you encounter with a small act of kindness or a generous gesture. ‘Tis the season of giving, but the reaction you get in return may be the best gift of all!
Don’t be a Grinch when it comes to tipping at the holidays. Your waiter, your Uber driver, and your hair stylist(s) will all appreciate an extra-generous tip this time of year.
International etiquette expert Sharon Schweitzer recommends that you start by setting a budget for holiday tips and prioritizing those you most want to thank.3 Place those who help you most frequently at the top of your list—such as your trusted housekeeper, nanny, or daycare provider. For those you regularly tip at the time service, consider frequency and length of the relationship to determine an appropriate amount.
Everyone could use a little extra cash around the holidays. If you can afford it, share a bit of your abundance with others.
5. Thank Those Who Don’t Get a Holiday
Emergency workers, hospital staff, airline employees, toll booth attendants, movie theater staff, and many others will be working to make your holiday safe and bright.
Say “Thank You” by bringing breakfast to the firehouse or police station on Christmas morning or by dropping off a tray of goodies for the hard-working hospital staff on New Year’s Eve. Keep a stash of treats or coffee-shop gift cards on hand to pass out to those you encounter working over the holidays. And, if appropriate, a generous tip is always appreciated!
6. Fill Stockings for the Homeless
Not everyone gets to go “home for the holidays.” You can bring a little cheer and comfort to a homeless person this year with a holiday care kit.
Pick up some inexpensive Christmas stockings from a craft store and fill them with a variety of useful items, such as:
● Applesauce cup (and plastic spoon)
● Baby wipes
● Bottled water
● Beef jerky
● Cereal or granola bar
● Cheese or peanut butter crackers
● Lip balm
● Nail clippers
● Toothbrush and toothpaste
● Tuna and crackers
● Trail mix
As an added touch, include a sweet treat and a handwritten note wishing them a happy holiday. Hand the stockings out at a shelter or keep a stash in your car so you can offer one when you encounter someone in need.
SEND JOY TO THE WORLD BY BECOMING A SECRET GIVER
Reach beyond your sphere by sending some holiday blessings out into the community. Surprise a stranger with an anonymous gift that’s sure to make their holiday shine.
7. Offer Warmth on a Cold Day
As temperatures drop, some members of our community will be left out in the cold. Our local homeless population is especially vulnerable this time of year, but so are many families living in poverty. Health experts warn that a two-degree drop in body temperature can result in reduced heart rate, lack of coordination, and confusion, making it difficult for adults to work and children to learn.4
You can help by bringing your old but gently-used coats to a collection site. Leave a note in the pocket wishing the recipient a warm and happy holiday. Or tie a scarf around a tree and attach a sign that says: “I am not lost. If you need this to stay warm, please take it!”
Check with local homeless shelters to find out if they accept donations of old blankets. Well-worn blankets and towels can often be donated to an animal shelter to help keep four-legged friends warm this winter, as well.
8. Pay Off a Stranger’s Layaway
Some large retailers offer layaway options during the holidays so that shoppers can pay for their purchases a little at a time. Media stories often surface this time of year about anonymous donors who pay off a stranger’s layaway account to the surprise and delight of the recipient.
This is a great way to help a family that may not qualify for charitable assistance but is on a limited budget for holiday gifts. If you have a particular interest in helping children, you can ask to pay off an account that consists primarily of children’s items.
You don’t have to drop a bundle to become a family’s “Secret Giver.” Ask the layaway attendant to search for accounts with balances that fit within your budget. To make a bigger impact, ask friends and family members if they want to pitch in to help, too.
9. Donate Toys to a Tot
One of the most popular ways to give back during the holidays is to participate in a toy drive. There are a number of great charities that collect toys for children of low-income families.
Before you shop, find out if the organization has a wish list of preferred items or guidelines for wrapping and labeling the gift. And check the drop-off deadline to ensure your gift will reach its intended recipient in time.
If you have children, involve them in the process of selecting and purchasing the gift so they can experience the joy of giving to those less fortunate, too.
One more easy way to support the community this year? Shop local! From locally-owned stores to service providers, please consider spending your holiday dollars here at home. We have an extensive network of local businesses and would love to recommend some of our favorites. Give us a call and let us know how we can help!
Ray Cook (727) 330-3333
Heather M. Reynolds (727) 422-1981
Kristie Baxter (727) 743-4728
Virginia Fatigati (727) 415-9619
1. NASDAQ -
2. The Kansas City Star -
3. Huffington Post -
4. One Warm Coat -