Buying Is Now 33.1% Cheaper Than Renting In The US
The results of the latestRent vs. Buy ReportfromTruliashow that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
The updated numbers actually show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!
Other interesting findings in the report include:
Interest rates have remained low and, even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.
With rents & home values moving in tandem, shifts in the ‘rent vs. buy’ decision are largely driven by changes in mortgage interest rates.
Nationally, rates would have to reach 9.1%, a 128% increase over today’s average of 4.0%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according toFreddie Mac.
What to do when your smartphone falls into the water.
Kerplunk! That may be the most dreaded sound a smartphone user can ever hear. If your cell phone has ever dropped in the water, you know exactly what I mean. Here are some things you can do when your smartphone decides unexpectedly to take a bath.
Step 1. Get it out of the water – and fast! The faster you remove your smartphone from the water, the better, because the longer it’s in contact with water, the more likely it is to never recover.
Just be sure to stay safe while you do it – be mindful of where it fell and whether it is connected to any electric power supply.
Step 2. Turn it off. Power down your smartphone completely as quickly as you can. If you have an iPhone, hold down both the Lock Button and the Home Button for 5 seconds, and that will create a “Hard Shut Down.” The fastest solution for Android phone users is to simply remove the battery as quickly as possible. Keep it powered off and do not turn it back on.
Step 3. Pat it dry, but don’t shake or blow on it. Take off any case, remove any headphones remove the SIM card if one is installed, and for Android phones, remove the back and battery. What you want to prevent is further any corrosion, short circuit, or additional dmaage from taking place. Gently pat dry the components with an absorbing cloth, tap it gently against your hand with the Lightning connector facing down to drain the fluid, but don’t blow on it, as that could push water further inside, and don’t insert anything into the openings either. Clean off all water outside and gently drain any excess water inside your phone through any openings.
Something to keep in mind: if water got inside, your warranty is probably already voided. Here are a couple of sites that can aid you in checking the Liquid Damage Indicator of your phone: • Samsung • Apple Check the policy that your phone provider has on damaged phones, as it may guide your next steps. You can also visit an Apple Store or Authorized Service Center.
Step 4. Did it fall in dirty or salty water? Rinse it out. [Optional] If your phone was immersed in salt or dirty water, you’ll need to rinse it out to remove chemicals and impurities. Rinsing it with high concentration isopropyl alcohol will help remove the impurities while helping to dry it out. You can also try distilled water to clean out possible contaminants. Don’t use tap water, as it has minerals which can create further damage. And remember to keep the battery, SIM card and any other removable parts off if you do this.
Step 5. Dry it out – and wait! If you have an iPhone, opening it up and putting it back together is well beyond the skill level of most folks. Patience is really a key factor in drying out your phone.
Expert testing says that open air-drying your smartphone is the safest method. Leaving your phone in open air, where there is an open space with good circulation such as a countertop, will dry your phone out faster. Adding a small fan could help accelerate things, and some folks have found success leaving their phones on an air conditioner vent (but don’t leave it on a heater vent, as too much heat could damage your phone).
Step 6. Fully charge it and then power it on Once you have dried it out for 48 hours, it’s time to fully charge your smartphone and then try to power it on. If it works, congratulations, but keep an eye on it, as you may find that it may not perform 100% like it used to.
One common malady of a water accident with a smartphone: the battery is destroyed. So, if your phone does not work after you have dried it out for two days, you can take a gamble after and try to replace the battery (easier to do with Android phones) and see if that fixes the problem.
What not to do. A few things to keep in mind that you don’t want to do if your smartphone falls into water: • Don’t try to turn it on right away. • Don’t try pressing buttons or keys unless you are trying to power it off. • Don’t try to blow dry it and never put it in a microwave or oven. • Don’t shake, tap or bang your phone.
What to do The key is to react fast and get it out of the water source, then wipe it off gently to get the water out, not push it in, and have patience to let it dry fully. Contact your cell carrier quickly to have your calls forwarded so you won’t miss a beat!
By Kevin Hawkins, an award winning freelance writer on real estate and technology topics.
7 Reasons to Own A Home
Tax benefits. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, and some of the costs involved in buying a home.
Historically, real estate has had a long-term, stable growth in value. In fact, median single-family existing-home sale prices have increased on average 5.2 percent each year from 1972 through 2014, according to the National Association of REALTORS®. The recent housing crisis has caused some to question the long-term value of real estate, but even in the most recent 10 years, which included quite a few very bad years for housing, values are still up 7.0 percent on a cumulative basis. In addition, the number of U.S. households is expected to rise 10 to15 percent over the next decade, creating continued high demand for housing.
Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
Unlike rent, your fixed-rate mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will likely increase.
The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.
Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships within the community. It also offers children the benefit of educational and social continuity.
6 Home-Selling Myths You Need to Stop Believing Immediately
When you get ready to sell your home, you might very well have a false sense of security. After all, you got through the hard part of buying. Now all you have to do is call a Realtor, put your home on the market, and wait for the buyers to line up. Selling will be a breeze, right?
Of course not! Selling a home is as much a science as buying one is. And lots of people who’ve been there before will want to tell you how it’s done. Beware of these (well-meaning) storytellers, and don’t fall for some of the most common misconceptions about selling your home.
Myth No. 1: You can do it solo
We know—you’re cringing at the idea of paying those seller fees. But there’s more to this process than putting a sign in the front yard and an ad on Craigslist.
If you try to sell on your own, you have to do all the hustle—and there’s a lot of hustle to marketing a home. Plus, who’s going to weed out the creeps and the nonserious buyers? A Realtor® does the heavy lifting—to attract the right kind of buyer, sift out the ones you would never want to do business with, and negotiate the heck out of potential offers to get you the best possible deal.
“It’s about establishing relationships, trust, and facilitating communication to keep the deal alive until it closes,” says Deborah Stewart, a sales associate for Jan Scholtz Realty in Louisville, KY.
Myth No. 2: You know best what your home is really worth
Who understands what your home is worth better than you? After all, you know all the sweat and money you’ve poured into it over the years—plus a few tiny flaws here and there.
But stop right there. Home valuations are always better left to the pros.
Sellers “aren’t always the best judges of value,” Stewart says. “It’s an intensely personal thing to put your home on the market.”
In fact, sales by owners tend to be overpriced because of the emotional factor, she says—and that can make it harder to attract buyers. Your agent will know the neighborhood and has access to comps in order to suss out the best price for your home.
Myth No. 3: It’s fine to sell your home as is
We’re reiterating this one because we simply can’t emphasize it enough. You might think your home is in great shape (or at least adequate enough to sell), but you’re probably overlooking some necessary changes that could boost your profits. What are some of the home improvements that will get you the best ROI? Walls and floors, doors, and kitchens.
Myth No. 4: Upgrades should be drastic
But you don’t have to do a gut reno in order to get your home in selling condition. Maybe you need to freshen up the kitchen instead of getting a whole new one. Maybe you have to do a bit of front-yard landscaping to boost curb appeal. No matter what, sellers should be judicious about improvements, Stewart says.
“Simple things make a big difference. When I walk through, I advise sellers to remove most personal items,” she says. “When people come to look, if there’s a lot of memorabilia, they feel like they’re intruding, not shopping. Get pros to help clean it up.”
When you make too many improvements, you might be wasting money, because your taste and style might not appeal to prospective buyers. They might want to rip out your upgrades, or be turned off altogether.
Myth No. 5: Spring is the best time to sell a home
“In Louisville, spring used to be a strong time, but not anymore,” Stewart says. “I think houses sell pretty well all year long.”
Kristen Riffle, co-partner of the Schilling Group at Urban Nest Realty in Las Vegas, says the hot season to sell homes is when it’s, well, hot.
“Summer or school break is a busy time, and slow time is generally mid-November to early January, due to holidays and family,” she says. But she still sees plenty of buyers, even if there isn’t a lot of inventory.
“It’s a great time to get a good price if you list your home during the holidays,” she says.
Bottom line: Know what’s going on in your local housing market and don’t wait for the “best” time to list. With the services of a savvy Realtor, you’ll make out OK no matter when you decide to make a move.
Myth No. 6: You can rely entirely on online home value estimates
Although online home value estimates (like the ones on realtor.com®!)are a good starting point, they’re no substitute for the expertise of a Realtor.
“There are all kinds of variables. You can’t plug in a standard formula and expect it to give you accurate results,” Stewart says. “There’s no substitute for a real person.”
Riffle agrees. “Most professionals have no problem giving someone a comparative marketing analysis,” she says. “If a neighborhood is all over the place as far as prices go, not only do I run a CMA, I [also] go through last sales, what the photos look like, and everything listed in the area to compare. I also go to the home to see upgrades to add value.”
What Is a Bedroom? Make Sure You Know the Legal Requirements
Chase Jarvis/Getty Images
Does anyone who is not from the other side of the galaxy really need to ask, “What is a bedroom?” Actually, yes. Welcome to the nuances of real estate speak, where not everything is as it seems.
There are, in fact, a number of details that make a room a “bedroom”—and both home buyers and sellers had best know them to avoid misunderstandings.
“Since a home and/or bedroom can go through many incarnations over its life, sellers should be familiar with what makes a bedroom a legal bedroom prior to listing their home, to ensure there are no issues holding up the sale when a buyer has been secured,” says Carl Ekroth of Douglas Elliman in New York City.
Bedrooms are one of the most important selling features of a home, notes Mark Abdel, a real estate professional with Re/Max Advantage Plus in Minneapolis–St. Paul. So it’s no surprise that homeowners want to slap that label on as many rooms as possible.
“Sellers can usually set and get a higher price the more bedrooms a home has,” Abdel says.
Six features that define a bedroom
The laws vary by state, but here are six ways you can tell if your room is a bedroom rather than just a “room”:
Minimum square footage:This is the top issue, says Shaun Andersof Douglas Elliman. Although this can vary from state to state, 70 to 80 square feet is generally the acceptable minimum. “Sellers in urban markets such as New York City and Chicago would love 5-by-7[-foot] rooms to qualify as a bedroom, but no go,” says Anders.
Minimum horizontal footage:The minimum square footage doesn’t tell the whole tale. A bedroom must also measure at least 7 feet in any horizontal direction. That is why you can’t call a hallway a bedroom!
Two means of egress:There have to be two ways out of a bedroom. Traditionally, these would be a door and a window. Ekroth adds that in most markets, a skylight would also qualify as that means of egress.
Minimum ceiling height:At least half of the bedroom ceiling has to be at least 7 feet tall.
Minimum window size:The window opening must be a minimum size, usually 5.7 square feet.
A heating and cooling element: We’re talking a heater (a space heater won’t qualify) as well as a way to cool it down, whether that’s by opening a window or good old AC.
Does a bedroom need a closet?
Contrary to popular belief, a bedroom does not have to have a closet to be considered official. (Your significant other might disagree, but legally, at least in most states, it does not.) Closets are expected in newer homes, but older ones might require a more creative approach to stowing your clothes.
So what can you call a room that doesn’t hit these requirements? Based on your state, you could get away with calling it an “office,” “nursery,” or the ultimate catch-all, “bonus room.” Because bedroom or not, just about any indication of extra space will make most buyers’ eyes light up.
NAR Reports Show Now Is a Great Time to Sell!
We all realize that the best time to sell anything is when demand is high and the supply of that item is limited. The last two major reports issued by the National Association of Realtors (NAR) revealed information that suggests that now continues to be a great time to sell your house.
The report announced that pending home sales (homes going into contract) are up 2.4% over last year, and have increased year-over-year now for 22 of the last 25 consecutive months.
Lawrence Yun, NAR’s Chief Economist, had this to say:
"The one major predicament in the housing market is without a doubt the painfully low levels of housing inventory in much of the country. It's leading to home prices outpacing wages, properties selling a lot quicker than a year ago and the home search for many prospective buyers being highly competitive and drawn out because of a shortage of listings at affordable prices."
Takeaway: Demand for housing will continue throughout the end of 2016 and into 2017. The seasonal slowdown often felt in the winter months did not occur last winter and shows no signs of returning this year.
THE EXISTING HOME SALES REPORT
The most important data point revealed in the report was not sales, but was instead the inventory of homes for sale (supply). The report explained:
Total housing inventory rose 1.5% to 2.04 million homes available for sale
That represents a 4.5-month supply at the current sales pace
Unsold inventory is 6.8% lower than a year ago, marking the 16th consecutive month with year-over-year declines
There were two more interesting comments made by Yun in the report:
"Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in. Unfortunately, there won't be much relief from new home construction, which continues to be grossly inadequate in relation to demand."
In real estate, there is a guideline that often applies; when there is less than a 6-month supply of inventory available, we are in a seller’s market and we will see appreciation. Between 6-7 months is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyer’s market and should expect depreciation in home values. As Yun notes, we are, and will remain, in a seller’s market with prices still increasing unless more listings come to the market.
"There's hope the leap in sales to first-time buyers can stick through the rest of the year and into next spring. The market fundamentals — primarily consistent job gains and affordable mortgage rates — are there for the steady rise in first-timers needed to finally reverse the decline in the homeownership rate."
Takeaway: Inventory of homes for sale is still well below the 6-month supply needed for a normal market. Prices will continue to rise if a ‘sizable’ supply does not enter the market.
If you are going to sell, now may be the time to take advantage of the ready, willing, and able buyers that are still out looking for your house. Give me a call and I can help.
Taking the Fear out of the Mortgage Process
A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainty about the buying process. A specific cause for concern tends to be mortgage qualification.
For many, the mortgage process can be scary, but it doesn’t have to be!
In order to qualify in today’s market, you’ll need to have saved for a down payment (the average down payment on all loans was 11% last month, with many buyers putting down 3% or less), a stable income and good credit history.
Throughout the entire home buying process, you will interact with many different professionals, all of which perform necessary roles. These professionals are also valuable resources for you.
Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests to follow:
Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score of all closed loans in September was 731, according to Ellie Mae.
Start gathering all of your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
Contact a professional – your real estate agent will be able to recommend a loan officer that can help you develop a spending plan, as well as determine how much home you can afford.
Consult with your lender – he or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
Talk to your lender about pre-approval – a pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change), and demonstrates to home sellers that you are serious about buying!
Do your research, reach out to professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner. And remember, shopping rate is not the most important thing when looking for a lender, ask you agent who they would suggest, after all, they will know the best people to work with.
Want to know how old the roof is on a house, or whether it uses gas or electrical heat? Your trusty real estate agent can tell you pretty much anything you need to know about a home you’re hoping to buy (or at least find answers for you). Yet if you ask your agent certain questions, you might be puzzled to hear nothing but an awkward silence. Why?
It’s not that real estate agents don’t know the answer; they probably do. It’s just that they’re correctly staying on the right side of the Fair Housing Act, which prohibits housing discrimination based on race, religion, sex, or family/economic status.
So that silence is actually a good thing—it means that your agent is conscientiously steering clear of the tinderbox issues hidden within your innocent questions.
Here are the top ones that leave them feeling tongue-tied—plus where you can actually find the answers you seek.
Question No. 1: Is this a good place to raise a family?
This question is often “a lose/lose/lose for the Realtor®,” says David Reiss, a professor at Brooklyn Law School who specializes in real estate. If an agent admits a certain area is not all that family-friendly, “it could imply that families with kids aren’t welcome.” Or, on the flip side, “if the agent says that the neighborhood is a good place for kids, that could be interpreted as saying households without kids aren’t welcome, which is another form of discrimination.”
Housing professionals who try to either encourage or discourage home buyers based on the kid question can, and do, face consequences in court.
Bottom line: Rather than get burned, a cautious agent refrains from presuming where you and your brood will thrive. So if you want to know this info, you’ll have to do your own research (more on how to do that below).
Question No. 2: What’s the neighborhood like?
Ask a close friend this question, and you may hear a candid answer along the lines of “Mostly Irish Catholic with a small Chinatown and a sprinkling of hipster transplants fleeing the city.” Awesome!
Your agent, however, will almost certainly not go there, particularly when it comes to race, because such discussions come uncomfortably close to “redlining”—a form of discrimination in which home buyers are steered toward or away from neighborhoods based on the color of their skin.
Still, if you want to get a sense of an area’s ethnic makeup, the U.S. Census website has all the info you need (and those sources will certainly be more accurate than any one person’s opinion). You can also find out about a neighborhood at realtor.com®/local, which has a message board where you can query people living in the area.
Question No. 3: Is this area safe?
Let’s say that there used to be gang violence on a nearby block that’s getting better. You might appreciate knowing this, but such comments could be construed as racist or classist by steering you toward or away from a particular neighborhood, which is why prudent agents keep their lips zipped.
Luckily, though, such info is readily available in the form of crime statistics. Type in an address at My Local Crime to access any recent local crimes, from vandalism to shootings. A map will point you to the exact spot where they happened so you know exactly which blocks are sketchier than others.
Question No. 4: How are the schools here?
Because the racial divide can also run deep in U.S. schools, “a Realtor has to be careful not to let their answer be construed as a coded message about race,” Reiss says. Rather than risk a potentially offensive miscommunication, Realtors may very well introduce you to one of many websites that rank schools—such as Great Schools and School Digger.
4 Reasons to Buy This Fall
It’s that time of year; the seasons are changing and with them come thoughts of the upcoming holidays, family get-togethers, and planning for a new year. Those who are on the fence about whether or not now is the right time to buy don’t have to look much further to find four great reasons to consider buying a home now, instead of waiting.
Prices Will Continue to Rise
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.5% a year for the next 5 years.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
Mortgage Interest Rates Remain at Historic Lows
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained at or below 3.5% for 13 consecutive weeks. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by this time next year.
Any increase in rates will impact YOUR monthly mortgage payment. A year from now, the percentage of your income that you spend on housing will increase substantially if you choose to wait.
Either Way You Are Paying a Mortgage
Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage - either your mortgage or your landlord’s. As a paper from the Joint Center for Housing Studies at Harvard University explains:
“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
It’s Time to Move on with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.
If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings
7 Reasons to Work with a REALTOR
REALTORS® aren’t just agents. They’re professional members of the National Association of REALTORS® and subscribe to its strict code of ethics. This is the REALTOR® difference for home buyers:
Ethical treatment. Every REALTOR® must adhere to a strict code of ethics, which is based on professionalism and protection of the public. As a REALTOR®’s client, you can expect honest and ethical treatment in all transaction-related matters. The first obligation is to you, the client.
An expert guide. Buying a home usually requires dozens of forms, reports, disclosures, and other technical documents. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes. Also, there’s a lot of jargon involved, so you want to work with a professional who can speak the language.
Objective information and opinions. REALTORS® can provide local information on utilities, zoning, schools, and more. They also have objective information about each property. REALTORs® can use that data to help you determine if the property has what you need. By understanding both your needs and search area, they can also point out neighborhoods you don’t know much about but that might suit your needs better than you’d thought.
Expanded search power. Sometimes properties are available but not actively advertised. A REALTOR® can help you find opportunities not listed on home search sites and can help you avoid out-of-date listings that might be showing up as available online but are no longer on the market.
Negotiation knowledge. There are many factors up for discussion in a deal. A REALTOR® will look at every angle from your perspective, including crafting a purchase agreement that allows enough time for you to complete inspections and investigations of the property before you are bound to complete the purchase.
Up-to-date experience. Most people buy only a few homes in their lifetime, usually with quite a few years in between each purchase. Even if you’ve done it before, laws and regulations change. REALTORS® handle hundreds of transactions over the course of their career.
Your rock during emotional moments. A home is so much more than four walls and a roof. And for most people, property represents the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on the issues most important to you.