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First-Time Homebuyers Lead the Way in May

by Cory Dudley

First-Time Homebuyers Lead the Way in May

The National Association of Realtors’ (NAR) latest Existing Home Sales Report revealed that first time homebuyers made up 32% of all sales in the month of May; marking the highest share since September 2012 and up from 27% the same time last year.

NAR’s Chief Economist, Lawrence Yun, cited “strong job gains among young adults, less expensive mortgage insurance and lenders offering low down payment programs,” as contributing factors to the increase in first-time buyers.

Existing-home sales rose 5.1% to a seasonally adjusted rate of 5.35 million. Total housing inventory for sale remains under the 6.0 months needed for a historically normal market at a 5.1 month supply.

Homes sold quickly in May, as 45% of homes sold in less than a month. May also marked the 39th consecutive month of year-over-year price gains as the median existing home price rose 7.9% above May 2014 to $228,700.

Below is a chart showing the breakdown of price increases by region:

Yun went on to say,

"Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers."

“However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent."

Bottom Line

“More first-time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise."

If you are a homeowner considering a move this year, meet with a local real estate agent who can show you the opportunities available right now! Don’t miss out on the influx of new buyers entering the market every day.

217,726 Reasons to Buy a Home Now!

by Cory Dudley

217,726 Reasons to Buy a Home Now!

 

217,726 Reasons to Buy a Home Now! | Keeping Current Matters

The inaugural Opportunity Cost Report was released recently by realtor.com. The report explained that “with interest rates and home prices expected to climb in the next year, the financial penalties of delaying or forgoing a home purchase in today's market have become very steep”.

The report estimates that, based on today's dollars, the average purchaser would accumulate $217,726 in increased wealth over a 30-year period.

(You can get the projected wealth increase for almost 100 metros here.)

What could this mean to someone sitting on the fence waiting to buy?

Experts believe that both home prices and mortgage interest rates will increase over the next twelve months. Obviously, if this does happen, the monthly cost of a home a year from now will be dramatically higher than it is today. The Opportunity Cost Report breaks down exactly how much a purchaser could lose over increments of one year and three years. Here are the results based on an average purchaser in the U.S. delaying their purchase:

The Cost of Waiting to Buy | Keeping Current Matters

Bottom Line

If you are ready, willing and able to buy a home, waiting doesn't make sense.


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

2 Out of 3 Renters Want to Own. What’s Stopping Them?

by Cory Dudley

2 Out of 3 Renters Want to Own. What’s Stopping Them?

2 Out of 3 Renters Want to Own. What’s Stopping Them? | Keeping Current Matters

The Federal Reserve Bank of New York recently released the 2015 SCE Housing Survey. The survey revealed that most current renters would prefer owning and that 61.9% of them plan to buy a home within the next five years.

68.3% stated they would prefer owning (with 45.6% saying they ‘strongly’ prefer owning). When asked at what point in the future do they think they will own a primary residence:

  • 8.2% said within a year
  • 15.3% said in 1 to 2 years
  • 38.4% said between 3 to 5 years

What’s Holding Them Back?

Of the 68.3% who would prefer to own, 2 out of 3 cited difficulty in getting a mortgage for the reason they do not own. However, many believe that the reason so many think that it would be difficult to get a mortgage is not fully based on current market realities.

For example, studies have shown that there is confusion over the amount of money needed for a down payment. Research has shown that 40 to 50% of Americans believe that between 15-20% is the minimum required for a down payment. In reality, there are many programs available at 5% and even 3%. There are even some programs that don’t require any down payment (ex. VA loans).

Others fear they need a perfect credit score or believe that the overall mortgaging process has become almost impossible. Actually, the Mortgage Credit Availability Index, a report from the Mortgage Bankers Association, has shown that, over the last seven months, access to mortgages has gotten much more available.

And the NY Fed study suggests that some renters are waiting for interest mortgage rates to fall even further. Fifty percent of the renters surveyed believe mortgage interest rates will fall over the next year and almost 10% believe that they will fall by more than 1%. However, the reality of the situation is that Freddie Mac, the Mortgage Bankers Association and the National Association of Realtors are all projecting that rates will be significantly higher at this time next year. They are all predicting mortgage rates will be almost 1% higher!

Bottom Line

Many renters want to own their own home. Some are not moving forward based on misunderstandings regarding the mortgage process. If you are currently a renter who desires the benefits of home ownership, sit down with a local real estate professional to determine what your options actually are.


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

There’s No Place Like Home

by Cory Dudley

There’s No Place Like Home

 

There’s No Place Like Home | Keeping Current Matters

 

Last time, we spoke to the financial reasons purchasing a home in today’s market makes sense. The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.

The top 4 reasons to own a home cited by respondents were not financial.

1. It means having a good place to raise children & provide them with a good education

From the best neighborhoods to the best school districts, even those without children at the time of purchasing their home, may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.

2. You have a physical structure where you & your family feel safe

It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.

3. It allows you to have more space for your family

Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.

4. It gives you control over what you do with your living space, like renovations and updates

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?

The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:

5. Owning a home is a good way to build up wealth that can be passed along to my family

Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?

Bottom Line

Whether you are a first time home buyer or a move-up buyer who wants to start a new chapter in their life, now is a great time to reflect on the intangible factors that make a house a home.


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

T-lock Shingles: The Not So Good, The Bad & The Ugly

by Cory Dudley

The Not So Good, The Bad & The Ugly of the T-Lock Shingle

Living in colorful Colorado is wonderful, and we are blessed with an array of beautiful landscapes and outdoor activities to enjoy – but one thing that always puts a damper on these is the WIND.  Because of the strong winds that can prevail around here, some homes installed a T-lock shingle roof.  This style of roofing was popular during the 1930s to the 1980s in this area as well as in Wyoming and New Mexico.  In the beginning, these shingles had a high asphalt content which prevented them from blowing off easily.  Unfortunately, companies producing the T-lock shingles began to cut back on the asphalt and the quality of the product really suffered, resulting in unstable shingles that blew off more easily.

If your T-lock roof is damaged?

These shingles are no longer manufactured because of the problems that arose from their weight.  If you own a home with these shingles, or are looking at purchasing such a home, please beware of the problems they have.  Repairs are impossible and if damage occurs, the entire roof will have to be replaced.  Also, many insurance companies will not even insure a home with T-lock shingles.  Regardless of the condition of the roof currently, insurance underwriters may report these shingles as a major insurance hazard

Steps to protect yourself

  1.  If you are looking at purchasing a home, always find out what kind of roof has been installed before you make an offer.  You Old Town Real Estate agent can help you find out this information so you will be able to make an informed decision.
  2. Ask your insurance agent if they will insure the home if it does have a T-lock roof.  Many insurance companies will not, and that would make replacing the roof a must.
  3. If you decide to go ahead and make an offer on a home with a T-lock roof, you could ask the seller to replace the roof as a contingency of the contract.  Or, you could lower your offer amount accordingly.  If you are selling your home that has this kind of roof, you will increase interest greatly if you replace the roof first.  If a seller cannot afford to replace the roof, you could get a credit at closing to cover the cost.
  4. No matter the type of roof on a home, it is always prudent to have it inspected by a professional.  We can refer you to a qualified inspector that will help you make an educated decision when purchasing a new home.

At Old Town Real Estate we help keep you informed to avoid costly mistakes.It is our job to look out for your best interest and help you find the house of your dreams.We are here for you.If you have any questions at all, please give us a call


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

5 Reasons You Shouldn’t For Sale By Owner

by Cory Dudley

5 Reasons You Shouldn’t For Sale By Owner

In today's market, with homes selling quickly and prices rising some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

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

2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

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

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

4. FSBOing has Become More and More Difficult

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

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $208,000 while the typical house sold by an agent sells for $235,000. This doesn’t mean that an agent can get $27,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

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


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

I Hate the Open-Plan Kitchen—and Amazingly, I’m No Longer the Only One

A few years ago, my husband and I moved into a gorgeous Craftsman-style house in the Pacific Northwest. It was chockablock with original details like dark wood paneling, stained-glass transom windows … and a 100-square-foot, totally enclosed kitchen in a faux country style—think yellow oak cabinets paired with linoleum countertops. And though we found most of the historical elements quite charming, the kitchen needed a complete overhaul.

So we hired an architect who hatched a plan to steal some space from the nearby office area. But he didn’t want to stop there. He also wanted to knock down the wall between the kitchen and the formal dining room, to give us the open-concept kitchen that it seems just about everybody else has these days.

We balked. Lose the cool, old-fashioned swinging door? And the opportunity to leave my kitchen a mess during dinner parties?

Heck no. Because after having grown up in a New York City apartment where public and private spaces were blurred—both bathrooms were en suite, so guests had to traipse through our bedrooms to use the loo—I loved the idea of an older house’s separate rooms. (Remember Julia Child’s famous quip: If you drop something, “you can always pick it up if you’re alone in the kitchen. Who is going to see?”) To me, they aren’t isolated and inconvenient, but rather refined and gracious. Though open kitchens may be all the rage, let me dare to say right here: I’m anti-open kitchen.

For much of domesticated human history—until mid-past century—I wasn’t alone in the enclosed-kitchen camp. Walk into an American home built before the 1950s, and you’ll most likely find the kitchen tucked away in a far-off corner of the main floor. Rarely visited by guests and not a place where the family spent much time, the kitchen was separate and functional, not designed for hanging out.

“The equipment was usually along the periphery,” explains Virginia McAlester, author of “A Field Guide to American Houses,” “meaning that anyone who entered the kitchen was most likely greeted by the cook’s back.” Or they wouldn’t see the cook at all—how often does Lord Crawley visit Mrs. Patmore on “Downton Abbey”?

Only that wasn’t thought of as hugely rude or anything, because most social interaction occurred either in front parlors (for welcoming guests) or in dens (primarily just for family). Not having to touch a hot pan was a sign of status.

These days, the kitchen is the place to entertain, thanks in part to mid-20th-century technology that made appliances fit into the cabinetry, not stand freely and hoard all the free space.

“The kitchen was becoming quieter, cleaner, better organized and easier to work in,” writes Porch.com. “In essence, the kitchen was becoming a source of pride.” These days, you flip on HGTV or pick up a flier for an open house in your neighborhood and chances are they’re heralding an open-concept kitchen. They’re great for wooing guests while cooking, or so goes the current real estate lore.

“Food preparation is central to how we entertain and socialize,” says Erin Gallagher, chief of insights for the Research Institute for Cooking & Kitchen Intelligence. “It’s how we live today.” Nine out of 10 kitchen designers, she says, report that their clients want their living, dining, and cooking spaces to flow together.

There’s a practical reason for their popularity, too. In an age when houses are getting smaller for the first time since 2007 (the median size of a new U.S. home in 2010 was 2,169 square feet, up from 1,525 square feet in 1973 but down from the 2007 peak of 2,277 square feet) and house prices are rising like never before, open kitchens maximize space and minimize cost. In a closed-plan house, there are more doors and walls, more trim and details needed to delineate various rooms. And to build all that requires more tradespeople, like electricians and carpenters. Consequently, open-plan kitchens have become the new normal. There’s more natural daylight in an open kitchen, too.

And here’s another bitter pill for the fan of the closed-off kitchen to swallow: Open-concept kitchens might help boost a home’s resale value.

“The most common conversation I overhear when showing a property to potential buyers is ‘Is this wall load-bearing? Can we knock it down to open things up?’” says Arthur Jeppe, a principal Realtor® with Read & Jeppe in Newport Beach, CA. “So no matter how gorgeous a home is, it will most likely sell for less if the kitchen is separate.”

OK, so those are compelling reasons, but I remain unconvinced. In part it’s because I find it beyond challenging to turn out culinary masterpieces (or even just a nice meal) while guests are chatting around me in the kitchen, and also because I just don’t believe it’s a good time to “entertain” anyone while I’m wielding a knife and managing fire. Plus, I’m happier when my whole world—especially my living room furniture—doesn’t smell of bacon grease.

 

A cozier, rustic kitchen

Astronaut Images/Getty Images

A cozier, rustic kitchen

As it turns out, others might be starting to see things my way. Hilarious and blasphemous blog posts detailing the difficulties of actually living with open floor plans have started to dot the Internet. (“‘Oh my gosh I dropped the chicken!’ In a perfect world, no one would know. Open floor plan?  Well, it’ll be tweeted in minutes.”)

Some architects are seeing an uptick in clients asking for separate kitchens.

“Many of the requests are from older clients, because that’s what they’re used to,” says Timo Lindman, a New York–based residential architect.

But interest is also stemming from sophisticated younger clients rediscovering the value—emotional, if not financial—in drawing a line between public and private space.

“Many properties are designed for a mass market, and in order to appeal to as many people as possible, they include trends like an open-concept kitchen,” says Lindman. “But there’s also a market for interesting, well-thought-out separate spaces. It’s just that they appeal to a group with a more curated aesthetic.”

Tyler Merson, owner of Codfish Park Design in Chatham, NJ, and a former professional chef, is also with me regarding separate kitchens.

“People think they should love open-plan kitchens because they’ve been told to love them,” says Merson, who thinks galley-style kitchens are underrated. “They can be fine for low-impact prep like chopping, but real cooking is messy work and requires a great deal of concentration.” (Man, it feels good to be validated by a professional!)

So could it be a backlash against open-concept kitchens is emerging? Or maybe this is now just one of those things that you have to be either totally for or dead set against. Either way, I’m glad we bucked the trend and kept our separate kitchen. And if you ever come to my house for dinner and experience just how often we set the smoke alarm off, you’ll be glad we did, too.

———

So which kitchen is right for you? Here are a few concepts to consider as you decide:

What kind of cook you are

If you tend to do takeout or don’t mind your mess being visible, then an open-concept kitchen could work for you. But if you’re into preparing elaborate meals and prefer to concentrate while cooking, then consider a space that’s separate from your home’s main living areas.

Think things through

In most states, changing walls requires building permits—and structural modifications can affect your home’s resale value. So before making plans to knock down an existing wall or rough in another, figure out if your long-term plan includes staying put or needing to appeal to other homebuyers in the future.

Be realistic

It’s easy to be dazzled by professional photos of dream kitchens, but what works well in one space might not in another. Consider your own home’s ceiling height, amount of wall space, windows, and views when creating a plan to fit your kitchen and living space.

Work with someone who sees beyond trends

Some architects value separate kitchen spaces while others think they’re outdated. So if you’re considering closing off your cooking space or shopping for a house that features a closed kitchen, consider working with a builder or Realtor who has an eye for creative elements that make separate spaces feel airy (think a bank of windows, skylights, or glass doors).

 

shared by Realtor.com

Audrey D. Brashich writes regularly about trending pop culture issues for The Washington Post, Yahoo Parenting and other national news outlets. She is also the author of All Made Up: A Girl’s Guide to Seeing Through Celebrity Hype and Celebrating Real Beauty.


The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

Where Will Mortgage Rates Be in 12 Months?

by Cory Dudley

Dear College Grads: Start Saving for Your Dream House Now (and Other Unsolicited Advice for Your Future)

Congratulations, new grads: You’re free! After four long years at college, it’s time to move on to the next stage of your life: adulthood.

That means you get to start thinking about exciting things like your first job, a 401(k), and—sexiest of all—homeownership. And while you might still be sleeping off those Jell-O shots from last night, it’s time to wake up, chug some water, and start preparing yourself financially—if buying a house happens to be one of your long-term goals.

Start preparing now, and buying a house won’t be a struggle. “If you make good money, you have a clean credit rating, and you’ve got enough money set aside for the down payment, buying a house is not really a big hassle,” says Stewart Koesten, the chief executive and executive chairman of KHC Wealth Management in Overland Park, KS.

Sounds easy, right? Make money, save money, have good credit. Ta-da, a house! Not so much: Getting your finances in order for homeownership can be a challenge, even if your goal isn’t a luxury mansion. Here are seven ways to start achieving those goals right now.

1. Get your credit score in order

Sure, your mailbox may be overflowing with credit card offers and the idea of “paying the bills” still seems a bit confusing, but now’s the time to start getting your credit score in shape. One simple way to start building a history: Get your first credit card, because the credit bureaus consider the average age of your accounts when evaluating your score—and you’ll want a great score when it’s time to buy a house.

But if you have a history of overspending, this may not be the right solution for you. A long credit history with a high balance and poor on-time payment record will do more damage. One option might be a secured credit card, which is backed by a cash deposit that’s usually equivalent to your limit. That way, you can never spend more than what you have available.

“There’s not too much difference between a good and a great credit score, in terms of buying a home,” Koesten says. The maximum score is 850, but once you get above 700, the only major advantage a better score will get you is a few points difference on your interest rate. “A bad credit score will hurt you. If you have a credit card or debts you didn’t honor, and you messed up your credit in the process, it will be detrimental to the whole process,” he says.

If you have student loans, a credit card may not be necessary. They also contribute to your score, so focus on paying them down regularly (and on time) to improve your rating.

2. Consider jobs with homeownership in mind

It might be a little too late to change your major, and we’d never suggest passing up your dream job just for money. But if you’re still evaluating your career path (i.e., you really have no idea what you want to or can do for the rest of your life) and homeownership is your dream, make sure to keep finances in mind when you’re searching.

It’s not just about the salary: Does the company match your 401(k) contributions? That will save you tens of thousands of dollars down the line. Are there career opportunities in the cities where you’d like to eventually purchase a home? Everyone should do what they love—but first, make sure that the career you crave is aligned with the lifestyle you dream of.

The easiest way to start saving is to smart small: Put away $10 a week, or use an app like Digit or Acorns to invest your small change.

3. Pay off that debt

If you’re like most young Americans, you’ll be coming out of college with a mound of debt. (The national average for a 2015 grad is $35,000!) It’s easy to ignore it, but balancing a mortgage and your student debt payments is a big burden, even with a generous salary.

Make paying off your debt your No. 1 priority, even if it means sacrificing other goals in the short term. For instance, if you have the opportunity to live at home while working for a few years, do it! (Seriously, we’re not judging—just know what you’re getting yourself into.) Or give up smaller pleasures, like Starbucks and gym membership, until you’ve paid down your debt. Short-term independence is a worthy sacrifice for long-term freedom. Plus, making regular payments will help improve your credit score.

If you’ve graduated college with credit card debt, make that the priority: The super-high-interest rates that come with most student credit cards can make them a crippling financial burden for years to come.

4. Decide what kind of home you want

You’re young—it’s OK if you don’t know a ranch home from a Colonial. (Unless you were an architecture or urban planning major, in which case, uh, maybe brush up on Design 101 before graduation.) But you should start thinking about where you want to live and how you want your future lifestyle to look. Would you feel lost without a yard? Or are you more of a city person, dreaming of a pristine rowhouse?

Even if you’re just looking to buy a starter home or studio apartment and save the dream home for your future, it’s important to keep in mind how you’d like to live.

First, make sure your financial future matches up with your ideal location.

“If you have a modest income in an area that requires higher incomes to live well, you have to adjust your expectations and live where you can afford,” Koesten says. “Don’t try to be too aggressive with your finances.”

Don’t worry if you haven’t mapped out all of the specifics yet. Even a general idea of your goals can help you develop a financial plan that meets your future needs.

5. Start saving your money

No one’s surprised that homes are expensive—you can see the price right there on the listing! Your dream home might cost more than four years’ tuition, but you just need to save up for the down payment, right?

Not so fast. What can be surprising is how much is due upfront: In addition to your down payment, you’ll have to pay for a home inspector, any relevant taxes, and a bevy of closing costs. Together, they can add up to 5% (or more) of the home’s price.

“Make sure you have sufficient reserves, so when you do eventually buy a home you’re not tapping all your resources,” Koesten says. “You want enough money left over after you buy the home to give yourself a little cushion.”

Sure, it seems like a lot of money—it is a lot of money!—but the sooner you start socking money away, the sooner you’ll be able to start looking for your dream home.

6. Don’t play games with your savings

Don’t treat the housing market like a casino and gamble with your future home.

As tempting as it might be, dumping your home savings into the stock market willy-nilly could lead to major trouble if there’s an upset right before you’re looking to buy. Either hire a financial adviser or stick to high-interest savings accounts and CDs.

“You want to make sure that in 10 years, the money you’ve saved has a high probability of being there,” Koesten says.

7. Don’t fall for lifestyle inflation

It’s fun to make money: More nights on the town! A bigger apartment! You can finally get a dog!

Rein in your impulses, and never change your lifestyle because of your salary. A big jump in income is a huge temptation to spend more on eating out or entertainment or weekly happy hours, especially if you’ve been living on a college student budget.

Our advice? Ignore the impulse. The No. 1 way to throw off your financial goals is to fall prey to lifestyle inflation. Raises and bonuses serve you best tucked away in your savings—even if that’s not as much fun.

8. Start small

Your first home doesn’t have to be your forever home. You may love the idea of a white picket fence and multiacre lawn—but it’s OK to start saving with a smaller home or apartment in mind. If you’re planning on staying in one place, purchasing a modest house or studio apartment can be an excellent beginner home. Don’t feel bad if you can’t afford your dream home off the bat: You’ve got many years left to save.

So, are you ready to get out there and start saving for a house now? We sure hope so. After all, you’re not getting any younger.

 

Great advice from Realtor.com.  If you are thinking of buying your first home, or know someone who is, we would love to hear from you. 

 

Successful Strategies + Proven Methods = Predictable Results!

 

The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
Email: cory@justlistedcolo.com  Connect:  Twitter | Facebook | LinkedIn

Challenging a Home Appraisal Value

by Cory Dudley

Challenging a Home Appraisal Value

A home appraisal is one of the most important steps to closing a real estate transaction. In order for the buyer’s loan to be approved, the appraised value of a home needs to match or be higher than the price on the sale contract. No matter how well the rest of the deal is going, a low appraisal can jeopardize a home sale. Moreover, a home sale is not the only instance when an appraisal is crucial. It’s also a significant part of home refinancing. The appraisal affects the terms of the loan and an under-valued home will decrease the size of the loan; this could invariably kill the deal.

If you’re a loan borrower who disagrees with your appraisal, you have the right to challenge the initial assessment and ask that the home’s value be reconsidered.

Appraisers Can Make Mistakes

While it’s not effortless to appeal an appraisal, it is certainly doable and worth trying. Remember that appraisers are capable of making mistakes and their evaluations are not always objective, thorough, or accurate. If the appraiser is not locally based, then unfamiliarity with the neighborhood may be to blame for his or her mis-evaluation. It is also possible that the appraiser made an error during the onsite assessment, which caused him or her to undervalue the home. It’s crucial that you, your realtor, and your loan officer read the appraisal report carefully to find where the appraiser miscalculated.

Home Value Discrepancies

When there’s a significant dispute between the appraised value of a home and its sale price, the entire transaction is threatened. Since a low appraisal will block you from getting your home loan, whether you’re refinancing or purchasing, it’s important to find out why the discrepancy exists. As you review the appraisal report, check over all the home features listed to see if everything is correct. Verify all the facts, including square footage and number of bedrooms and bathrooms, as well as any major features or upgrades like a fireplace, garage, pool, or guesthouse. If any of these items are missing or noted incorrectly, then you have a strong case for an appeal.

After you’ve cross-checked all the facts, you’ll need to look over the selection of comparable sales (comps) on the appraisal report, because the value of comparable homes in the neighborhood has a great effect on the appraiser’s estimates. By definition, comps need to resemble the property in subject; appropriate homes for comparison are close in proximity, about the same size, and in similar condition to the home being appraised. Your realtor can supply you with a list of accurate comps, which should include current listings and recently sold properties from the MLS and public records.

Appealing the Appraisal

Once you’re certain that the appraised value is significantly off, then you can move forward with a formal appeal. Borrowers and lenders are permitted from contacting appraisal companies directly, so your bank or mortgage company will do it for you. The request to correct or amend an appraisal is called a Reconsideration of Value (ROV). On the ROV form your lender will explain the reason for the request and include all supporting documents, such as a list of suitable comps or records of the property’s features.

While it can be stressful to deal with a low appraisal value, it’s good to know that you can appeal it. With the help of your lender and realtor, you can get an appraisal reconsidered in order to secure your home loan (whether you’re purchasing or refinancing) and save your transaction.


About the Author: Michaela Phillips entered the mortgage lending industry in 1994. Throughout her 20 years in the business she’s been one of the top producers for every company she’s worked for. As of late 2013, she’s the VP of Mortgage Lending for Guaranteed Rate, Inc., the 8th largest retail mortgage company in the country. Being a VP at Guaranteed Rate offers many advantages to her and her clients, unparalleled customer service, efficiency, and most importantly, competitive rates.

She enjoys teaching her clients the pros and cons of being a Real Estate Investor, and more so, watching them build their Real Estate “Empires,” large or small, but all successful. For questions or comments, please contact her at michaela@michaelaphillips.com. NMLS: 312874

 

The Winning Team Real Estate Group at Old Town Real Estate Co.
522 Kimbark Street • Longmont, Colorado 80501 | o:303.776.4004 • c:303.641.8597 • f:303.776.4661
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