Real Estate Survival Guide with Terry Story

May 13, 2020 During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams, about how the real estate industry is adjusting to innovatively conduct business during the coronavirus pandemic. Realtors Getting Innovative Steve first asked Terry to talk about one big change in the real estate industry—big conference calls between agents all across the country. “We have giant conference calls each week. We try to find out what each agent is hearing and seeing. A lot of agents have started doing webinars to show first-time buyers what their options are or straight-out buyers that we can still get them into the home they want, pandemic or no pandemic.” Terry shared. The most important thing about this innovative approach is that the essential information still gets to the potential client while practicing social distancing. Terry, herself, decided to get ahead of the game by carefully tracking home sales in Palm Beach County. “As realtors, we’re foot soldiers,” she said. “We know what’s going on in the industry before any reports reflect it. With this information, I can spot a trend before it’s reported as a trend.” How Buyers Can Help Themselves Getting innovative during this pandemic is something you can and should do, too, if you’re a prospective home buyer. Terry explained, “You’re going to have an area in mind. You can get a real sense of the neighborhoods in that area without ever leaving your car. Drive around. Use Google maps to find spots of interest such as restaurants, shops, and schools. Pay attention to things like traffic patterns. Remember that once you move, traffic is going to get heavier once everyone can be out and about freely. And use online databases for neighborhood data and statistics.” Steve added that using Google maps to actually see what a neighborhood looks like can be a big help to someone looking for a new home. Getting proactive now will help you get a sense of what it would be like to live in different areas. This will help you narrow down what homes are actually of interest to you. Then, once you’ve settled on a neighborhood that meets your needs, call a realtor to get professional advice. They’ll be able to help you find homes that will work for you and set up virtual tours. To learn more about buying or selling a home, visit https://teamterrystory.com/ or call Terry at 561-945-4348.  

May 6, 2020 During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams in Boca Raton, about what the process of buying and closing on a home sale looks like in the coronavirus environment. How Home Buying All right, so we start with a listed property. Terry explains, “I would have already made videos of the home and taken my buyers on a virtual tour. Then, if they’re seriously interested, I arrange for them to do an actual real-world tour of the property, complete with mask, gloves, and even protective booties for their feet.” Neither the buyer’s agent nor the seller or their agent can be inside the property when the buyer is doing an in-person tour. Social distancing, right? This is far different from the way it’s traditionally done, and it requires some trust. Terry noted that “We’re letting strangers into someone’s home, unsupervised, and the buyer and seller are being exposed to each other—possibly being exposed to the virus.” Terry pointed out that the positive thing about all of this is that the seller can pretty well safely assume that the buyer is a very serious, motivated buyer. Otherwise, they wouldn’t be willing to go through all these obstacles—the mask, the gloves, etc. Terry continued explaining the procedure. “Let’s assume the seller’s agent knows the buyer by now and that the buyer has been qualified—really qualified, not just a pre-qualify. We’re talking about having proof of funds. That means that if the buyer is paying cash, then they’ve got the money in their bank account right now. If they’re financing buying the home, then they’ve been approved for the financing. It’s solid. They have a mortgage loan that’s been approved. The seller’s agent is going to, like, hold the buyer’s driver’s license while the buyer goes into the home, by themselves, for their do-it-yourself tour of the home.” Steve added that getting that mortgage loan approval is noticeably more difficult than it was before the coronavirus hit. For example, because people’s employment situations are more uncertain, the bank is going to check on their income and employment situation not just when they apply for the loan but all the way up to right before closing, right before everybody signs everything and the bank hands over that big check. Mortgage lenders are really just doing their due diligence. It’s just that things have changed, and the reality is that the buyer might have had a job when he first applied for financing, but he might have been laid off before we got to the closing. The lender is going to look at more than just the buyer’s assets or salary; they’re going to dig deeper and find out, for instance, if the buyer is considered to be an essential worker. Terry summed things up by saying that the bottom line is this: it’s an agent’s job to act as a transaction broker. She said, “It’s my job as a listing agent to make sure that I’m bringing people to meet with the seller who is qualified and highly motivated to buy, especially right now.” Getting To The Closing Steve asked Terry to continue describing the step-by-step process of closing the sale. Once a qualified and motivated buyer is brought together with an eager seller, the next step is to come to an agreement on price. At that point, the process pretty much continues like it always has. As Terry explained, “It’s time for an inspection period. But one change is that inspection periods aren’t taking as long as they used to. They’re now typically a week or less, instead of ten days because inspectors just aren’t as busy these days.” The lending process, from the agent’s point of view, is still basically the same, “Except,” Terry said, “that we’re checking on it every few days, calling the lender to make sure the money will be lent in a timely fashion. That could be a potential area of concern when you consider the strain that the coronavirus pandemic is putting on everyone.” Terry explained that, in general, the name of the game is really just staying on top of everything, staying in touch with each party involved in the process to be sure that everyone is still on board. “We need to make sure that everyone still wants to be in on the deal, that everyone is still motivated and working toward the same goal of getting to the closing table. Frankly, we’re communicating more than we ever have before with the other realtor, just to make sure that we’re all still on the same page and that everything’s getting done properly.” Sealing The Deal Staying on top of each stage of the process is critical in preventing the sale of the home from falling through. As the process moves along, the final stage is the closing itself. This is another part of the process that’s changed as a result of the coronavirus. Terry informed listeners that, “Closings can basically be done remotely now. Certain lenders have approval to close on a home completely remotely. The biggest issue is that some documents have to be notarized. But as we deal with more closings in this way, we’re learning how to get things done as smoothly as possible. The title companies are moving toward going completely digital, but if need be, someone from the title company will go out to the buyer to have documents signed. Agents are becoming couriers, doing whatever it takes to get all the necessary documents signed. We’re doing whatever it takes to get the job done and close on the home.” Typically, the agent gets the seller to sign all the documents first, and then they get the documents to the buyer. Some lenders are sending a lot of the documents to the buyers in advance so that at the closing table there are fewer documents to sign. Once payment clears, the agent might have to be a courier once again to make sure the keys to the home get to the buyer. If you’d like to learn more about buying or selling a home, visit https://teamterrystory.com/ or call Terry at 561-945-4348.

4/15/20 During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams, about the state of the real estate industry and how agents are being affected during a time when most states are under mandatory quarantine. The Rules Have Changed With the majority of the country in quarantine, the rules have changed for the real estate industry. Though agents are considered essential workers, they have to follow different guidelines when helping clients find a home. “We’re not allowed to be in the house with a client when showing it,” Terry said. “The seller can’t be in there either. We’re allowed to show up and let the client in. Only the buyer can be in the home.” But the majority of agents are taking even further precautions to help prevent potential spreading of the novel coronavirus and maintaining social distancing. “Most agents have created walking tours of homes ahead of time to offer clients. It’s only once they’ve expressed serious interest about the home that we invite them to tour in person. We also have sanitizer, gloves, booties, and other protective elements to help do our part to stop the coronavirus pandemic,” Terry said. The video walking tours are popular online features anyway. They let agents show potential buyers a home room-by-room without the agent or buyer having to be in a location at a specific time. These virtual tours are especially helpful now and can be made more personal for specific clients. Terry added, “Despite everything that’s going on, homes are still being looked at, bought, and sold. We just have to adapt and keep everyone as safe as possible.” Prices And Inventory As can probably be expected, prices and housing inventory are being affected by the coronavirus pandemic as well. Terry said, “Prices are coming down. But as I’ve said before, you tend to get more and more quality offers when you lower the price of a home. However, I have seen some lowball offers. I have a property on the market for $740,000 and there was a $350,000 offer. We know times are hard, however, this is a precedent that we’re not going to set.” “And no one’s at that level of desperation just yet,” Steve added. But there are a lot of questions. How long will the recession last? How long will people be out of work? What will the economy look like in a few months? Prices could continue to take some hits and inventory is affected also. Terry said, “Right now, we’ve been in a buyer’s market. We’re down to like three months of inventory, which is extremely low. A balanced healthy market is at six months.” Steve pointed out the additional fact that people who are quarantined in their homes aren’t going to be able to sell. It’s Terry’s hope, however, that potential sellers will take advantage of the opportunity available to them. “With inventory down, now is a great time to sell. There are more people competing for fewer houses, which means more offers. If more sellers think like this, we’ll be able to boost inventory levels.” Mortgages Despite what’s happening in the world, it’s still relatively easy to get a mortgage if you’re buying a home, provided you qualify. The only situation where this isn’t quite as true is with jumbo mortgages. “Jumbo mortgages, at least in my market, are mortgages over $510,000. Lenders end up putting deals together and then selling them on the secondary market,” Terry said. Steve offered some additional info on jumbo mortgages: “A mortgage broker told me that banks, hedge funds, and even some private investors typically buy these mortgages. But many don’t want to get stuck with such long-term mortgages at the low -interest rates being offered with so much uncertainty.” All of this means that you really need to consider what type of home you want and need and whether you can afford the home without a jumbo loan. If you’re going to need significant financing, it might be better to wait. If you’d like to learn more about buying or selling a home, check out Keller Williams!

During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams, about how overwhelming buying a home can feel for millennials. The two discussed some of the things that millennials need to know before buying a home. Buying A Home As A Millennial With the current state of the real estate marketplace being somewhat tricky to navigate, it’s even more difficult for millennials, some of the youngest homebuyers in the game. Terry said, “The biggest reason millennials feel so overwhelmed by the prospect of buying a house is simply the fact that they haven’t had the proper education.” The thing millennials need to understand is that it doesn’t have to be that complicated. Get yourself connected to a good realtor. They will be able to put you in touch with a good lender. Or vice versa. If you start with a lender, you can see what financial resources you qualify for. Then the realtor can help you find a home in your price range. One additional factor to keep in mind is the fact that 70% of millennials surveyed were familiar with the housing market crisis of 2008  and about half actually knew someone who lost their home. Steve commented, “That kind of leaves an indelible stamp on your brain. It takes a while to have new experiences to kind of remove those old feelings.” Terry added, “It’s important for millennials to understand that we’re not in the midst of the same type of crisis and that interest rates are incredibly low right now.” That means that it really is a good time to buy, provided you educate yourself and stay within your means. Realtors are also seeing that millennials are getting a good amount of parental support when it comes to buying their first home. Sometimes it’s in the form of house hunting, but more and more, parents are helping their kids out financially. Understanding Costs The other major aspect of buying a house (especially versus renting) is what the house will actually cost. Remember, interest rates are low right now. “It’s cheaper to buy a home at a higher price with a lower interest rate; a 1% difference in interest rate equals a 10% difference in affordable home price,” Terry said. People tend to fixate on the dollar amount attached to a home price. But, for example, if you could afford a home that’s $400,000 and interest rates drop by 1%, you could ultimately buy a home valued at $440,000 for the same cost. Terry emphasized the point that “You have to look at the total cost to purchase, not just the price.” “As interest rates come down, a sort of antigravity field is created around asset prices and prices go up. As interest rates rise, gravity is increased on asset prices and prices will come down,” Steve said. What does this mean? You need to think about the price of a home in terms of how long you’re going to live there. If the price of the home you buy comes down, will you have enough equity or will you be in the home long enough to wait out a cycle? Terry noted, “I typically tell people not to purchase a home unless they plan on living there at least five years.” If you’d like to learn more about buying or selling a home, check out Keller Williams!

During this week’s Real Estate Roundup, Steve spoke with Terry Story, the 31-year veteran at Keller Williams, about a fundamental change happening in the real estate industry. Steve and Terry also talked about some key real estate myths that home sellers need to be aware of. How Homebuyers Are Categorized As Steve pointed out early in their conversation, “There’s a fundamental change in how homebuyers were historically categorized and how they’re being categorized today. Now, there are basically three tiers of homebuyers: upper, middle, and lower.” The uppermost tier are the people who are willing to pay higher premiums for move-in ready homes with all the requisite amenities. Terry confirmed that she sees this type of buyer quite a bit. But she also sees a lot of buyers in the middle tier: people who want homes in their original condition. The goal with this type of homebuyer is to boost the home’s value through “sweat equity”—home improvements. Finally, there’s the lower tier of buyers. This segment is primarily comprised of flippers or contractors, looking to pick up a home on the cheap, ideally paying no more than 60-70% of its retail value. Speaking of value, Steve and Terry together noted that, “Land appreciates, houses depreciate.” Even if you’re not a renovator, if you stay in a home for several years, then you’re likely to spend a significant amount of money fixing it up, re-doing it, or maintaining it. Many people, when estimating how much value they have in their home, fail to take into account all the money they’ve put into it over the years, like replacing hot water heaters or heat/air systems. The Middle Tier Is Falling Away Steve mentioned that a recent article highlights how the middle tier buyer is falling away. “The reason is that current buyers are more comfortable with technology than they are with construction. Buyers are looking for homes they can move into quickly, homes that already have everything they want.” There are simply more deterrents for middle-tier buyers, Terry chimed in. “If you’re buying a home that needs renovations, you have to have the money upfront to not only buy the home but then also to hire contractors,” she said. So, more people are in the top tier of those looking to buy a home that’s already the way they want it. Five Real Estate Seller Myths Steve and Terry then moved on to discuss some common real estate myths that are important for sellers to keep in mind. The first is that you don’t need a listing agent until your home is ready to go on the market. “I disagree with this,” Terry said. “I think it’s better to bring in the realtor before you put your home on the market. That way, they can help you determine what does and doesn’t need to be done to get your home ready to sell.” Steve presented a second myth: “I do not need to upgrade the property for sale.” But according to Terry, it all depends on what the house needs and what type of upgrades are on the table. Her advice: “If you think a buyer’s going to come in and think it needs $10,000 worth of painting, it’s worth spending $1,000 in painting before putting your house on the market.” The third myth—that you need to have an open house before you can sell your home—isn’t necessarily true either, according to Terry. “Open houses are a great way to get additional exposure, but the reality is that people are using technology such as real estate websites to decide what they want to look at, and then they’ll make an appointment to look at a home they’re interested in.” And virtual open houses are becoming increasingly more common. Steve stated, “Number four, I need many open house signs at multiple key intersections.” He started to express skepticism about that one, but Terry chimed in and said that in her experience as an agent, that one isn’t a myth, it’s a good idea. One final myth: A buyer that’s truly interested in a home will pay more than market value. “That’s a simple, flat out ‘no’,” said Terry. People are smarter and more well-informed as buyers these days. And Steve pointed out an adage that applies well beyond the real estate market: “Buyers only buy what they perceive has good value, period.” Terry added that if you over-price your home, potential homebuyers, even if they like the house, may not make an offer because they don’t think the seller has a realistic view of their home’s value and, therefore, won’t be easy to negotiate with.                                                                                                                  If you’d like to learn more about buying or selling a home or to connect with Terry Story, check out Keller Williams!

During this week’s Real Estate Roundup, Steve spoke with Terry Story, 31-year veteran at Keller Williams, about the future of the real estate industry. Last week, Steve and Terry spoke about predictions realtors had made for the industry a decade ago. This week, they talked about the predictions realtors are making for the upcoming decade. Condos And Townhomes On The Rise One of the first predictions the realtors made for the next ten years is that “condos and townhomes will become more desirable than single-family homes, primarily because they’re less time-consuming in terms of upkeep and maintenance,” as Steve relayed. This prediction is related to millennial buyers, who are looking for homes that are move-in ready and easy to take care of. They’re not interested in doing major renovations. Boomers—those who are in their 60s and up—are largely aging at home. They’re not downsizing, selling their homes in order to move into retirement communities. This means housing inventory is down, but, as Steve and Terry have discussed in recent weeks, new construction is on the rise. According to the experts, condos and townhomes is the wave of the future. Increasing Use Of Technology Technology is already in every part of our lives, and realtors predict that technology will play an increasingly bigger role in the housing industry. The rise of online home-selling apps is particularly heralded, along with the increased use of social media to help sell homes. Technology is also predicted to have a more significant presence within homes themselves. Smart homes, ones completely connected to and controlled by technology, are growing in popularity, particularly among younger homebuyers. Along with wanting move-in ready homes with low maintenance, millennials also want the convenience of being able to talk to their homes and use technology to make their daily lives easier. Terry’s not so sure about being on board with all that. She said, “I don’t care for talking to a device that’s going to turn on my lights. I like to get up and turn on my own lights. Plus, I’m a little freaked out about who’s listening.” Sustainability, Access, And Amenities The real estate industry is predicted to move in the direction of more sustainable homes with “socially conscious business practices being a much more important part of the real estate equation,” Steve noted. This has already started with the smallest of things: people are switching to LED lightbulbs, which are far more economical and use much less electricity (up to 75% less) and last much longer than traditional incandescent bulbs. People more and more want to live in areas that offer easy access to certain amenities and conveniences. For that reason, mass transit, like the Brightline rail system in Florida, which is rapidly expanding its service areas, is predicted to be increasingly important. Having access to good mass transportation means people can still choose to live in Boca Raton but be able to easily zip down to Miami. Terry commented that she’s hearing more people saying things like, “Listen, I don’t have to go to Miami that often, but when I do, I now know I can just hop on the Brightline.” (Boca Raton is being fast-tracked as a new Brightline station.) Steve is apparently one of the converts to using mass transit. He said, “Well, previously I never would have taken a train down to Miami, but now we’re considering doing that because the train’s nice, it seems like fun, and the connections are pretty good from what I understand.” People want what they want and what homebuyers are predicted to want more of in the future is the convenience of having all their desired amenities at their fingertips. Steve rattled off a partial list: “They want dog runs, they want roof decks, they want work-friendly spaces.” Terry said that she’s seeing more people who are willing to live farther out from major cities and commute if they can get into a housing community that gives them what they’re looking for in the way of amenities. And builders and developers are taking notice. The Silver Tsunami There’s also a prediction for a wave of sales being referred to as the “Silver Tsunami.” This is when some 77 million baby boomers will finally start selling their homes, either to downsize or to move into retirement facilities. Zillow researchers report that “Nine million of these baby boomer homes will hit the market between 2017 and 2027.” Steve and Terry both noted that that should solve the low housing market inventory problem. And with boomers both buying and selling, Steve mentioned reading that, “By roughly 2037, 21 million homes will have been sold as a result of the baby boomers.” The End Of Paper Sales Finally, one of the most likely predictions involves “the transition of the real estate industry from a manual, paper-laden process to an end-to-end digital experience within the next ten years,” which Steve quoted from the real estate predictions report. Eventually, the entire process of buying and selling a home will be paperless. Wrapping up the Roundup, Steve quipped, “I think eventually renters will be able to lease an apartment in a matter of minutes just by filling out a few questions and snapping a selfie that will enable an algorithm to quickly build and vet their application in real-time.” To learn more about buying or selling a home, or connect with Terry, go to Keller Williams!

In this week’s Real Estate Roundup, Steve spoke with Terry Story, 31-year veteran with Keller Williams, about the excellent state of the country’s economy, with housing inventory and employment levels on the rise. Steve and Terry also looked at some predictions that realtors made ten years ago. Things Are Looking Up In Real Estate There are a lot of positive changes happening. The real estate industry is hot. New home sales jumped 17% in December. Construction of new homes has increased significantly. In fact, Terry says, “if you look at new construction by region, the Northeast is up 25%. In the Midwest, construction is up 37%. And the West is up about 20%.” The South is a bit of a different story. It’s only up 9%. Why? Steve suggested that perhaps the South already has enough new construction or that there’s just not enough land left to build on. But the good news continues. The economy is thriving. The employment level is rising. The stock markets are at record highs. And, while home prices have risen, they’re only about 3% to 5% higher. And the employment and investment numbers mean that more people have more money, money they can spend on a new home. Past Prediction One: Streamlining Home Sales In 2010, a group of respected realtors was asked to offer predictions about things that might happen over the next ten years. This was a project called 2020 Re-envision. The realtors’ first prediction was that real estate agent commissions would go to a flat fee. Basically, the realtors were talking about companies popping up that wanted to control every aspect of selling a house. They would then simply employ agents to open doors, and agents would then receive a flat fee. This prediction only came true for a few companies in a very small market. Terry never really bought into this idea of cutting out the real estate agent. She explained, “People like working with other people. And the truth of the matter is that selling real estate and buying real estate, it’s a very emotional experience.” Prediction Two: Technological Changes The second prediction the realtors made in 2010 was that technological advances would be used by realtors. This prediction has indeed come true. Terry and her colleagues use 3-D imaging when showing homes, even doing a 3-D tour of a home. In addition, they also use a type of augmented reality or “virtual staging”. She reported, “We can take a home that’s empty and, with a computer, place furniture in it. A lot of people can’t visualize what a home could look like otherwise.” Past Prediction Three: Less Office Work, More Service The realtors also predicted that there would be a decline of commercial offices in favor of co-working and flexible office space. In terms of commercial sales, Terry isn’t sure if this prediction came to fruition. But she did note that for residential sales, a lot of realty companies’ brick and mortar stores are closing or consolidating. “If you really think about it, most realtors aren’t working out of an office. They’re out in the field, showing homes, talking with builders, etc. So, real estate agencies don’t need huge office buildings anyway.” If you’d like to learn more about buying or selling a home, check out Keller Williams.

In this week’s Real Estate Roundup with Terry Story, the 31-year veteran with Keller Williams Realty in Boca Raton, Steve asked Terry to field some real estate questions he got from an article written by Gary Singer for the Sun Sentinel. Steve and Terry also discussed the age-old question of renting versus buying a home. Dealing With Contractors Steve’s first question to Terry was about dealing with contractors. Here’s the question:” In the middle of a major renovation, my contractor disappeared, leaving the work half done. I already paid her for most of the work. What should I do?” Terry’s answer was, “It’s not about what you should do—‘cause, oh, boy, you’re in trouble now—it’s about what you should have done before you signed a contract. There’s not a whole lot you can do now except sue, if you can find them. What you should do first is some research, check them out with the Better Business Bureau. Make sure they’re licensed.” Steve brought up an important point from Gary’s article, one that a lot of people may not be aware of. “If the contractor hasn’t paid the subcontractors, the subcontractors are going to come after you. And according to this article, you have to pay them, even though you’ve already paid the general contractor.” Terry gave listeners some good advice on how to avoid that situation. She said, “It’s really important before you pay the contractor the final sum, talk to the subcontractors, ask them ‘Hey, have you been paid? Are you being paid?’” Issues With Emotional Support Animals Steve’s next question had to do with people who have emotional support animals. Question:” I live in a condominium. Recently a disabled friend was coming to visit with her emotional support animal. The front desk would not let her up, stating that because she was not a resident, they did not have to allow her in with her dog. Is that legal?” Terry’s answer was a resounding, “No”, that’s not legal. You have the legal right to have your emotional support animal with you even if you’re not a resident. She explained that this issue is covered under the Fair Housing Act, which protects not only residents but disabled people associated with the residents. Steve brought up the fact that you might be having to deal with someone at the desk who doesn’t really know the law, and he advised listeners who may run into this kind of problem to go to the condo board or homeowners’ association and make sure that they make it clear to all employees. Terry added that it’s a good idea to keep handy a note from your doctor authorizing you to have your support animal with you. A Question About Fences Here’s a question about an issue that often causes problems between neighbors, fences:” My neighbor attached bolts into my fence to secure some items in his yard. I’m concerned that this will damage my fence, especially if there’s a storm. I asked him to remove the bolts, but he blew me off. What can I do?” Terry and Steve agreed that the important thing is to document everything, everything that’s done and everything that you do. That way you avoid having things devolve into just, “He said, she said”. Terry said, “You’ve already spoken to him, so the next step would be to send a polite and professional certified letter telling him to please remove them.” She advised listeners to be very careful about what steps they take when dealing with fences. “For example, say you’re dealing with some vines that your neighbor is growing on his side of the fence. You can cut the part of the vines that’s hanging over on your side of the fence, but you can’t cut them to the point where it kills the plant.” That’s why you have to be careful because the law can be kind of tricky. Before they moved on, Terry made sure to point out that the first thing to do with any fence-related issue is to have a surveyor come out and make sure that the fence is yours. Don’t just take the previous homeowner’s word for it. What counts is what a surveyor says. Renting Versus Buying A Home Steve’s final question to Terry was about the debate over renting versus buying a home. He said, “A lot of people are still renting. Maybe they’ve been renting for years, and maybe they want to buy a house, but they don’t really think that they can afford it, or that their credit is good enough—all the kinds of things that keep people, through sheer inertia, continuing to rent instead of buying a house. What would you tell those people to consider to help them decide whether they could—and whether they should—make the move from renting to buying a home?” Terry gave listeners a good, solid checklist of questions to ask yourself to help with making the renting versus buying a home decision. Number 1: How much is your rent versus what kind of mortgage payment you’d have if you bought a house? Even with property taxes and homeowners’ insurance, you might be able to get into a house that’s bigger and nicer than your apartment and be paying less per month for it. Number 2: Has your credit score improved? Your credit score is the key factor in (A) whether you can get a mortgage loan, and (B) what kind of interest rate you can get. Steve added that along with checking your credit score, you also want to check to see if lenders have loosened some of the FICO requirements, so maybe you qualify for a loan now when you didn’t before. Number 3: Other things to think about are how much money you’re going to need upfront to cover the down payment and closing costs and about how much money you need to set aside to take care of the inevitable maintenance and repair costs that will come up from time to time when you own your home. Number 4: And one last very important question to ask yourself is simply, “Have I gotten to the point in my life where I know what I want, such as a condo on the beach and where I’m ready to settle down?” In other words, are you mentally ready to buy a house?” Steve and Terry wrapped up their conversation by repeating some questions Steve asks Terry all the time. “What’s the best time to buy a house?” As always, Terry’s answer was, “Now. It’s always now, Steve.” And what’s the best time to sell your home? “Always now.” Terry also made a point about selling your home right now that some people might not have considered. She said, “It’s wintertime, right? And some people think they shouldn’t put their home up for sale in the winter because there’s not as many buyers out looking during the winter, right? But think of it this way: less supply because fewer people are trying to sell their home right now means stronger demand and that means you might be able to get a higher price.” Terry smiled and repeated one more time, “It’s always a good time to sell your house.” If you’re thinking about either buying or selling a home, get in touch with Terry Story at Keller Williams.

How To Successfully Flip A Home Steve starts the first segment of Real Estate Round-Up for 2018 with Terry Story’s tips on the requirements to be a successful home flipper. Do Your Research For starters, Terry says, effective home flippers know how to find a great deal and purchase homes at about 44% below market.  Finding homes at steep discounts isn’t easy though.  Expert flippers spend time looking for below-market properties online and by digging through courthouse records for bargains.  They often purchase properties sight unseen because they really know the neighborhood and what comparable properties sell for. Steve likens successful home flippers to stock investors who recognize the real value of beaten-down stocks and are willing to take deep positions in them. Know Your Market Further, home flippers know the end game all along, the full market value and final sales price of the home they buy, and the right target audience.  To make a profit, they know exactly how much to invest in the house, and what to price it at for a quick sale. Buyer Beware Steve warns buyers of flipped homes to beware of shoddy, cosmetically focused workmanship and recommends inspecting the home thoroughly to make sure renovations were up to the mark. 60% Return Terry adds that home flippers typically sell in the $100,000 to $200,000 price range, with average gross returns of about 60%, and with a flip typically completed in about 128 days from purchase to renovation to sale, which is incredibly quick.  To do so, flippers have a whole system in place, with clear renovation plans, workers at the ready, and funds on hand to make it all go smoothly. Steve compares this to evaluating a company’s inventory turns. Inventory ties up capital and warehouse space, so the sooner it’s cleared it out, the better.  Similarly, if you sit on a home that you’ve renovated, you cannot free up capital to deploy it elsewhere, and your profits will be lower. How To Spot Markets Ripe For A Flip To spot markets that are ripe for flipping, successful home flippers look for telltale signs in markets across the country.  For instance, they look at future development plans or applications for building permits to get a sense of whether a developer, a major business, or a retailer plans to move in and make the neighborhood more attractive and drive up housing. When Does Home Remodeling Make Sense? Next, Steve wants to know if people should remodel homes to sell them for more.  Terry’s answer is a firm “no” because you only get back about 60% of what you put into the remodel.  So remodeling only makes sense if you plan to enjoy the upgrades for yourself or if the house is falling apart and needs major repairs. Moreover, buyers may not have the same taste as yours, so there’s added risk if you remodel just to get a higher price for your home.  Instead, save your money for necessary infrastructure improvements such as a new roof or a new air conditioning system. Older Citizens Selling Homes In closing, Terry notes that she’s seeing a new trend of older, cash-strapped citizens looking to sell their homes, something she hasn’t come across before.  Steve sees a similar trend in his investment advisory practice where people have a lot of money tied up in their homes.  If money is an issue, he believes one should release that equity, thereby turning an illiquid asset into a liquid asset, invest some of it, and carefully spend the remaining principal to improve one’s quality of life in retirement, without the added headache of worrying about maintaining a property.

Steve spoke with Terry Story, a 30-year veteran at Keller Williams. In this installment of the weekly Real Estate Roundup, Steve and Terry talked about some of the most popular places to invest in real estate, who’s investing, and why. The Hottest Places To Invest Right Now A lot of real estate is being scooped up in places that might make you scratch your head. On the list? Orlando, Las Vegas, and throughout Arizona. But why? These markets grew fast and were severely overbuilt which means they started to perform poorly- too much supply for the demand. Initially, people were getting mortgages right and left, namely people who didn’t really deserve the deals they got. As demand for inventory dropped, the markets in these areas crashed. Now, though, there’s plenty of inventory up for grabs and demand is climbing. Homes are actually affordable. These are also warm areas, which tend to be ideal spots for people who are retired and trying to downsize. The Midwest Two more areas in great demand? Places in the Midwest. The entire state of Colorado is seeing a massive influx of people putting down money on homes. Technically, Colorado falls just outside of the traditional Midwest region, but because it borders traditional midwestern states like Nebraska and Kansas, it can easily be considered part of the region. One reason for this influx? There is temptation to believe that it’s because marijuana is legal there. But the reality is that Colorado has so many diverse and temperate cities, there’s a lot to love about living there. Perhaps the most shocking “hot” place to live right now is Ohio, Cleveland specifically. A lot of money is being poured into areas like Cleveland, and with bedrooms communities around a fairly clean and livable major city, Cleveland is almost a dark horse in terms of real estate. The South Texas also being on the list of hottest places to invest in real estate shouldn’t be that surprising. Despite the serious weather issues Texas typically faces – hurricanes, flooding, and extreme heat – the state has constantly been a magnet for home buyers. Why? Housing prices are notoriously good there. You can get a lot of bang for your buck, in terms of property size and square footage. The Cyclical Nature Of Real Estate As always, keep in mind that the real estate market is cyclical. An important take away here: watch out for procrastinating. A lot of people sit around and wait for the next recession to start making moves. This is a little backward thinking because you really miss out on the averages. The truth is that most returns come when the market starts to expand again. Recessions, today, are much shorter than they used to be. If you wait for these, the cost of missing out on bigger opportunities during the wait might prove very frustrating. If you’d like to learn more about buying or selling a home, or to learn more about Terry, check out Keller Williams!  

In this week’s Real Estate Roundup, Steve and Terry Story, who’s now got 31 years of experience with Keller Williams Realty in Boca Raton, had a conversation about selling your house quickly for cash. They also talked about the effects of aging baby boomers on the housing market. Sell Your House For Cash Today You’ve seen the signs on billboards or posters that read, “We Buy Ugly Houses”, or just, “Cash for Your House”. Steve asked Terry to explain the nature of that part of the real estate business. She calls the people in that business “wholesalers” because that basically describes how they make their money. They look to buy houses at “wholesale” prices and sell them at “retail” prices. Terry explained how it works. “They buy houses, sometimes fix them up and then flip them, or they just buy them and flip them the same day. Say you want to sell your house right now. You call one of these numbers you see in an ad, and they write a contract to buy your house. A lot of times they assign it to a real buyer they already have lined up. As a seller, what’s really important to understand is that you’re selling your home at a severe discount.” How The “Cash Right Now” Business Works A successful real estate wholesaler makes their money by buying houses at a large discount and then quickly reselling them for a hefty profit. They can get a low price because they’re offering cash, and they’re offering to do the deal right now. If you’re a strongly motivated seller, for whatever reason, the offer of cash-in-hand right now may make you willing to sell your house for a lot less than it’s actually worth. Steve offered an example to clarify things for listeners. “Say I’m in this business, and I have a buyer already lined up, willing to pay, let’s say, $140,000 for this house that’s worth $150,000. I go to the house. Maybe it’s owned by an elderly person who’s owned the house free and clear for years. I tell them, ‘I can give you cash today, no hassles, no long real estate closing time. I’ll give you 30 days to move out or whatever and I’ll give you $90,000 for your house.’ And they may think, ‘That’s good cash. That’s more cash than I’ve ever seen before.’ If the homeowner takes the deal, then I’ve already got a $50,000 profit locked in, since I have a buyer waiting with $140,000.” The huge discount from the home’s value may make this kind of transaction look bad, like the buyer is maybe taking advantage of an elderly person, but there’s nothing illegal about it. Terry stressed the point that what homeowners need to know is that even if they’re desperate to sell their house quickly, they should still take the time to consult a professional real estate agent and get an appraisal. That way, she said, “If you still decide to sell it, at least you’re informed.” Steve agreed, urging sellers to at least do some minimal research on what their home is worth. He said, “I mean, at least go on online and pull up Zillow or something.” That specific bit of advice prompted Terry to note to listeners that sites like Zillow don’t really provide accurate home values. The numbers you see on a site like that should be ignored as valid appraisals and only taken as very rough numbers. Those numbers are neighborhood averages. Zillow hasn’t really seen your actual house. For instance, they don’t know if you’ve completely remodeled the kitchen or the bathrooms. You might have a house right on the beach, but Zillow is averaging prices in the neighborhood that includes homes that are four or five blocks off the beach. The Effect Of Baby Boomers On The Housing Market Steve next turned the subject to the impact of aging baby boomers on the housing market. He started things off by quoting some recent statistics, saying, “Basically, boomers own one-third of all US properties, single-family homes and the like. And 27% of them will sell their home sometime within the next 20 years.” Terry contributed some more information: that between 2007 and 2017, roughly 730,000 homes were offered for sale by seniors, those over 60. She added that this is a trend that’s projected to keep growing for the next couple of decades. According to Terry, “From 2017 to 2027, they anticipate that number rising to 920,000 homes. And then from 2027 to 2037, we’re looking at 1.17 million homes for sale by boomers – and that’s per year for that whole decade.” She then made the point that this could lead to a really nice buyer’s market, since adding that many homes to the “for sale” inventory should put downward pressure on prices. Terry wrapped up their conversation by joking with Steve, saying, “So, call me now to sell your house while prices are still up. Don’t wait 20 years.” To learn more about buying or selling your home, you can connect with Terry at Keller Williams Realty.

During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams about the rise in popularity of Airbnb, a company that allows people to open their homes like a hotel or bed and breakfast. The two discussed where in the country the most Airbnbs exist and the rules regulating them. They then talked about the mortgage industry and the true story behind The Big Short. Airbnbs—As Always, Florida Is In The Mix Regardless of the category—and specifically when it comes to real estate—Florida is always at the top of the list. True to this, Florida has the most Airbnbs of any state. Miami Beach, despite fairly strict rules regarding Airbnbs, has among the most of any city. Also on the list: Orlando (which makes sense because of Disney World), Kissimmee, and Sarasota. The cities are measured and listed based on an Airbnb-to-resident ratio. Terry clarified some points for homeowners about offering their home on Airbnb, such as the fact that they can prohibit guests from doing things such as smoking in the house. The Big Short In the early 2000s, a group of hedge fund guys viewed the real estate market as becoming a little crazy. They decided they could take advantage of the situation by betting against mortgages by selling short. (This was immortalized in the book-turned-movie, The Big Short). Basically, they delivered borrowed mortgages which they would eventually have to return to the market to buy equivalent mortgages in order to close out their short-sell transaction. The theory behind their selling short was that they would be able to buy back the borrowed mortgages sold when mortgage prices were much lower. When you sell short, you make money when the asset price goes down. These guys took an incredible amount of risk,  especially during the early 2000s when the market was in a bubble. Many people believed housing prices would continue to go up and that selling short was a terrible idea. Although they were wrong for a long time and had to weather severe financial distress to maintain their short position in the mortgage market, ultimately, they were proven right. The housing market crashed, mortgages prices tanked, and those guys made a fortune. Something of notable concern now is that one of the “big short” investors is betting against mortgages again. Previously, the reason for the short sell was the fact that people were getting mortgages that never should have been given one in the first place; the market was bound to crash. Today, his reason for short selling is his belief in climate change. More specifically, this short-seller thinks that there are a lot of homes susceptible to flood damage that may occur as a result of climate change. Many of those homes are in Florida, as well as in California and Texas. His belief is that the mortgages on many of the homes are simply too big relative to the risk of losing the home to flooding. Only time will tell whether he’s right again. If you’d like to learn more about Terry or buying or selling a home, head over to the Keller Williams website.

During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams, about why it’s so important for real estate agents to look at the big picture to understand how the market is moving. They discussed how each realtor needs to examine their own inventory and how it’s selling in order to get a better understanding of the current state of the housing market. Doing this also helps real estate agents teach sellers how to price their homes. Pricing Your Home To Sell Is Counterintuitive To understand how to price a home, you really have to know what the market is doing. Agents have to look at what’s happening with their own home inventories. Are homes selling? How long are they staying on the market? If a home is sitting on the market, not selling, then you have to figure out what it will take to move it. The economy as a whole has to be considered, of course. But, this is an important point for home sellers to keep in mind,  in both good and bad markets, there is always a buyer. The thing that really makes the difference, that decides whether your home sells, is the price. Terry talked about meeting with sellers when they want to know what price tag to put on their home. She paints them a picture. Imagine there’s a boat and three men are fishing. The first man’s line is just below the surface of the water; the second man’s line is halfway between the surface and the ocean floor; the third man’s line is near the reef at the bottom of the ocean, where the majority of the fish are. The moral of this story is that the lower line (the lower price) is going to have a better chance to catch a fish (buyer). The less a seller asks for, the more they’ll end up getting. Home pricing is counterintuitive in this way. People who price their homes in the upper and middle tiers aren’t going to attract as many buyers because the price is just too high. The National Association of Realtors says that if your home hasn’t been shown in the past two weeks, you’ve been knocked out of the market. The only real way to combat this is to lower the price. A lower price will attract more buyers, period. And more buyers equal more competition, more bidders, and, thus, realizing a higher sale price for your home. Counterintuitive pricing! You Have To Go Where The Buyers Are In order to sell your home, you have to meet buyers where they are. And most of them are in the low-to-mid-range when it comes to prices. The mid-range homes are tricky. Homes priced at the lower end of that might have quite a few showings, maybe eight or ten in a week. But, going back to the fish analogy for a minute, the fishing line halfway between the top and the bottom is kind of housing market purgatory. In fact, homes priced in the middle range sometimes help sellers in the lower range sell their homes faster and more easily. People may look at homes in the middle-price bracket, but if they can find something similar in a lower-price range, that’s what they’re going to snap up. You can also think about it in the sense of animals in the desert. If a predator wants to get a good meal, it has to go where the water is. This is where more animals are going to gather, which offers the predator its best chance of getting a meal. You have to price your home in a way that gives you the greatest access to the biggest pool of buyers. Factors Real Estate Agents Should Be Looking At There are really three prongs to pricing that real estate agents should be looking at: current market prices, the price of homes sold in the past, and the trends that are happening that predict future prices. In order to spot future trends, you have to look at “days on the market.” This is the average amount of time a house spends on the market, from the day it goes up for sale to the day that it closes. Right now, in Boca Raton, we’re seeing about 97 days on the market. Knowing how long homes are on the market, how quickly they’re selling, helps you predict future trends. Of course, we’re talking about looking at days on the market for hundreds of thousands of homes. Then you have to break it down a little further, into price points. The lower the price of a home, the more activity there’s going to be. As the price point goes up, activity slows. The big stressor for most sellers—and the agents they work with—is that, naturally, they want to get the most money they can for their property. It’s important to be at the market, not over and not under, unless it’s critical to get the property sold in a very short period of time. Agents need to help sellers price their home in the sweet spot. This attracts the most buyers and, in the end, helps sellers get the most money for their home. How do you know if you’re in the sweet spot?  If you’re getting eight to ten showings a week, then you’re there. If your house hasn’t been shown at all for two weeks, you’re not and you need to adjust the price. If you’d like to learn more about buying or selling a home or to learn more about Terry, check out Keller Williams.

During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams about the cyclical nature of the housing market. Just like the stock market, the real estate industry is cyclical, with housing prices oscillating back and forth between periods of rising prices and falling prices. Terry and Steve talked about how the real estate industry is often a good economic indicator, revealing how the economy is doing and what direction it might be headed. Watching The Trends When you’re trying to gauge how pretty much anything is doing, you watch out for trends or patterns. This is especially true when you’re trading in the stock market or thinking about buying a house. A lot of people are asking when the next recession is going to come. Right now, the stock market is at all-time highs. But the prolonged, substantial bull market has some people starting to worry. “Have prices topped out? Do I need to sell now?” We all know that the stock market is viewed as an economic indicator. The real estate industry is similar in that way because overall economic conditions affect the real estate industry just as they do the stock market. That means that housing prices are also an economic indicator, as they reflect how the overall economy is doing. Housing prices never stay flat for long; they’re always either going up or going down. Real estate agents look at the trends: units, pricing, everything. Are they going up (higher home prices, fewer days on the market, more sales) or down (lower home prices, sitting on the market longer, lagging sales)? What The Real Estate Market Is Telling Us Right Now There are always unknowns, variables that affect trends in the housing market. But what we can see right now is that the market is really strong. Low-unemployment levels coupled with super low-interest rates and homes in an affordable price range are key factors in the current market. Homes are starting to get priced higher, something that would normally lock out more buyers. But that’s not happening at the moment because interest rates are at an all-time low. They’ve dropped a full percentage point over the last year. For homebuyers, a simple interest rate drop of 1% means they can afford a 10% higher home price. It’s a big deal. If you look at the stock market, as interest rates go down, we see asset prices rise. This is what’s happening in the real estate market, too. People can borrow money cheaply, meaning they can borrow more and buy bigger and better homes. But this is a bubble that will pop eventually. What we’re going to start seeing is a mismatch between median annual income and median home prices. But because interest rates are so low, the median-home price isn’t being adjusted in line with income. Eventually, if median income doesn’t start to rise, the median home price will have to adjust downward. The market will start to reverse itself. Or if interest rates start rising, that will change the trajectory of the market, too. Steve noted that the good news for the moment for homebuyers is that the super-low interest rates mean that even though home prices are rising, homes are more affordable. And the good news for sellers is that home prices are up. They can ask top dollar for their homes and probably get it. If you’d like to learn more about buying or selling a home or to learn more from Terry, check out Keller Williams!

During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams about some important and interesting terms in the real estate industry. These terms are often simplified into acronyms to make them easier to remember. Understanding what these terms mean is important for you if you’re buying or thinking about buying a home. They also briefly discussed some signs to look for to determine if the housing market is rebounding or not. APR And FRM APR stands for the annual percentage rate. It’s what you pay annually for borrowing money. This is based on the amount of the loan, the interest rate on the loan, and certain fees that are attached to the loan. So, for example, if you go to buy a car and take out a loan with a loan rate of 3.5%, the APR might be 3.75%. The APR is different because it takes into account not only the interest rate you pay but also any annual fees that may be attached to the loan. The same happens with a mortgage. You borrow a certain amount of money and have interest and fees attached to the loan. The APR tells you the amount, as a percentage of the loan, that you’ll actually be paying yearly. This is important to know because it helps you get a better sense of exactly what your expenditure is going to be. FRM stands for fixed-mortgage rate. This term is pretty simple and is typically sought after by a lot of mortgage seekers because it means the interest rate attached to your loan doesn’t change. From one year or one payment period to the next, the rate stays the same. DTI – Debt To Income DTI refers to the debt to income ratio. This is a financial metric that reflects the percentage of your monthly income that goes toward paying your debts. If you’re buying a home, lenders prefer limiting a home loan to no more than about 36% of your income. There are variables when it comes to the true percentage that lenders will recommend that you spend. These variables include things such as other significant debts and your credit rating. Why wouldn’t lenders want you to spend more? This is pretty simple: they don’t want you to go broke. This is bad for you and bad for them because it means you’re less likely to be able to pay off the entirety of the loan. If it’s a loan that requires collateral, they get something back, meaning they can foreclose on your home, but they may not get back the entirety of the money they lent you, and they have to go through the hassle of trying to then sell your home. PMI – Private Mortgage Insurance PMI stands for private mortgage insurance. Principal and interest are portions of your monthly mortgage payment that go toward paying off the money you borrowed in order to buy your home. If you put less than 20% down on a home, that’s really when you should get PMI. The lender needs to know that you have enough money to cover them and insure the loan. Once you’ve started to pay down the full cost of the loan—when your loan to asset ratio is better—you can stop paying for PMI. But this isn’t a decision you get to make on your own. You have to bring this to the attention of the lender. They’ll more often than not send your information to an appraiser to determine the value of your assets and determine if your rate can be calculated differently. But you have to be proactive. If you think you’re close to the 20% mark, check with your lender. It may even be worth talking to a realtor first. They can give you a good idea of the value of your home/assets and if the amount you’ve paid will qualify you for a better rate. Signs Of A Rebounding Housing Market Part of buying a home is knowing the terms. But part of it is also knowing whether the housing market is rebounding or not. One trend to look for is consecutive months of growth with existing home sales numbers. The market is cyclical and has a lot of ups and downs. You really want to watch for at least three months of home sales numbers increasing. The next trend to watch for involves pending home sales. These are contracts that are in the works but haven’t been closed yet. What you want to look for there is a growing number of pending home sales in each of the four major regions of the country. Increasing numbers of pending sales means that there is potential for growth in the future, that inventory is growing, and it’s probably a good time to buy or think about buying. The final thing to watch for is buyer traffic. Pay attention to the number of people realistically shopping for homes versus the same time during the previous year and for the first time in 12 to 13 months. If traffic is up, it’s a good sign that the housing market is rebounding. All of these statistics can easily be Googled to help you get a good sense of where the housing market is and where it’s going. This is something you can do for yourself before you start shopping for a home. If you’d like to learn more about buying or selling a home, check out Keller Williams!

In this week’s Real Estate Roundup, Steve and Terry Story, a 31-year veteran at Keller Williams, looked closely at what types of repairs homes often need when they go up for sale. It’s important for you, as a home buyer, to understand what is reasonable to ask the seller to fix and which repairs might be easier and less expensive to fix on your own. Under $500?  Just Fix It Yourself Terry’s rule of thumb on needed repairs when you’re buying a home—and there are always a few things that need to be fixed—is anything less than $500 to $1,000, just handle it yourself. It’s just easier all around that way. You should look at that cost in relation to the total purchase price of the house. The seller’s not going to want to renegotiate over a couple of hundred dollars. Terry tells home buyers to look for big-ticket items, things like needed roof repairs or the heating/cooling system not working right. Those are the issues you really need to work out with the seller before closing the deal. When buying a home, you’re often agreeing to buy “as is, with the right to inspect”. You negotiate in good faith that nothing major is wrong. If a home inspector does a walkthrough and you’re not happy with the results, you can still pull out of the deal. You also have the right to renegotiate, and that’s the best way to handle significant repair issues. Negotiating For Home Repairs The easiest way to handle repair issues is to negotiate a credit toward the purchase price with the seller. For example, if there’s a total of around $1,500 worth of repairs needed, you might ask the seller to knock $1,000 off the price. You can easily negotiate down a bit from whatever number the home inspector gives because those numbers are usually highly inflated. They might peg a toilet repair at $250 that you can do yourself with a $25 part from Home Depot. Negotiating a credit is probably a smarter way to go than having the seller agree to handle the repairs. Why?  Well, what can happen is that the seller pays for the repairs, but then when you do a new walkthrough, you might not be satisfied with the work that’s been done, but the seller doesn’t feel as though they should have to spend more money after having paid someone once for the work. The smart way is to get a credit from the seller and then handle getting the repair work done yourself, assured that things are fixed to your satisfaction. Don’t Be Afraid To Point Out The Need fFr Repairs When you’re negotiating the price of a home, sellers assume you’re seeing things that obviously need to be repaired, such as cracks in the ceiling or the floor or plumbing issues. There may be some repairs that the seller isn’t aware of, however. Sometimes issues with air conditioning and heating or even a leaky roof might not be apparent. Make sure you bring all repair issues to the seller’s attention early on, not at the last minute just before closing. You aren’t always going to be able to notice needed repairs yourself, so make sure to bring a home inspector with you when doing a walkthrough. And if there are specific and major issues, such as electrical wiring, then go the extra mile and bring in an electrician to assess the situation. It’s worth spending the money on a professional upfront, rather than finding out after you’ve bought the home that there are significant repairs needed. It’s too late then to renegotiate with the seller. If you’d like to learn more about buying or selling a home, see Terry at Keller Williams!

In this week’s Real Estate Roundup, Steve spoke with Terry Story, 31-year veteran at Keller Williams Realty, about how low-interest rates are significantly shrinking the already dwindling home inventory, creating upward pressure on home prices. Steve and Terry talked about what this all means for home buyers and how to avoid unnecessary problems that can occur by asking the home seller to handle minor repair issues. Lower Inventory Means Rising Prices Inventory in the housing market is getting tighter and tighter. The “canary in the coal mine” in this scenario is the historically low mortgage interest rates. These low rates are producing more prospective home buyers. This increased demand for houses is choking the market, leaving less and less inventory, especially in the low to mid-price range (around $200,000 to $700,000). At the moment, the basic supply and demand equation is creating demand but not much supply. Terry and Steve have recently talked about the trend among baby boomers to hold on to their existing homes rather than doing the traditional downsizing around retirement time. The net result is that home prices are starting to creep up. Why Interest Rate Can Be More Important Than Price Interest rates had increased to around 5% in the fourth quarter of 2018, but mortgage rates are now under 4%. Many people say they’re going to wait to buy a home because prices have gotten too high. But you need to remember how important your mortgage interest rate is in respect to the actual price of the home. When you finance your home, you should consider affordability rather than just the absolute price, since the mortgage interest rate determines affordability. With a 7% interest rate, for example, you might be able to only afford a $250,000 house, but with rates just above 3%, you could possibly afford a $500,000 house because those significantly lower rates bring down that monthly mortgage payment. Even though home prices are getting pushed up by the low home inventory, these really low mortgage rates mean that you may be able to get a good deal now. Waiting for lower prices to come about might not be your best option. It can be cheaper to buy a higher-priced home with a low-interest rate than buying a lower-priced home with a high-interest rate. Don’t forget that a huge money-saver can be a 15-year mortgage instead of a 30-year mortgage if you can handle the higher payments. A $250,000 house with a 4.5% rate on a 15-year mortgage can save you over $100,000 in total interest payments, as compared to a 30-year mortgage. If you already have a 30-year mortgage, you could make one extra payment to principal every year, thereby reducing your mortgage payoff time down to about 18 years.  In addition, this can save you tens of thousands in interest payments. Handling Minor Repair Issues When Buying A Home Just a quick note about home inspectors and the repair issues. An inspector who comes out to check out your home will likely discover some necessary repairs. A good rule of thumb is if it’s less than $100, let it go. Instead of insisting that the seller pays for the repairs, take care of it yourself. It’s not worth creating roadblocks to closing the deal over minor issues. The only things you need to make an issue of are genuine structural problems. To get more of the benefits of Terry’s expertise, whether you’re a home buyer or a home seller, check out Keller Williams today!

Steve spoke with Terry Story, a 30-year veteran at Keller Williams. During this week’s Real Estate Roundup, Terry and Steve talked about permits that homeowners have, what open and expired permits are, and why they can cause problems for homeowners looking to sell their home and for realtors assisting them. Open Permits Can Sneak Up On Homeowners When homeowners go to sell their homes, multiple searches are run on the home to see if money is still owed. This includes a tax lien, a city search, and a search for permits. There could be permits on just about anything. The guy putting in the air conditioning may have opened a permit. The same could be true for the guy installing electricity. There are could be five or 10 permits open that the homeowner and their realtor is unaware of. There is a fee simply to run the permits. This can become a major headache. In order to close any open permits, the realtor must jump through an incredible number of hoops. They literally have to chase down the individuals or companies who opened the permits, which may have been sitting around for years, even decades. The permit may have expired. It is then the homeowner’s/realtor’s responsibility to find the party who originally opened the permit. The permit must be reopened so that the fees and the permit can be paid off and closed permanently. So, basically, you’re talking a lot of extra work and extra expense for someone trying to sell their home. The Letter Of The Law Recent legislative victories, fortunately, have changed the scope and hassle of permits. Starting October 1, 2019, local governments will be allowed to close out permits six years after they’re issued, as long as there aren’t any clear safety issues. For example, say there was a permit to repair a sinkhole, but repairs weren’t completed. The government would not be able to close out the permit without making sure that the sinkhole is dealt with or that it doesn’t pose a threat. The true difficulty with permits—and why the new legislation is so helpful—is that just about everything, any kind of repair or maintenance work in a home, needs a permit. It can be incredibly difficult to keep track of all the permits attached to a home and to know if they are open, closed, or expired. The permit problem can be a real obstacle because permits are the kind of thing that doesn’t get checked until you’re maybe a week or 10 days from closing. You may have to do some really fast work to get things squared away in time for the closing. Permits are such a problem that there are businesses that specialize in clearing them for you—for a fee, of course. Deposits/Fees Changing gears slightly here, let’s talk a little bit about deposits and fees. There seems to be confusion among individuals about putting down a deposit, specifically a non-refundable deposit. This is basically money that you put down, usually to help the owner of the property protect against damages. For example, if you’re renting and have a pet, the property owner may ask for a non-refundable deposit to protect himself against any damage the pet may do to the property. Once you leave, the owner can use that money to pay for repairs if necessary. There is a difference between a refundable deposit and a fee, but there’s really no difference between a fee and a non-refundable deposit. The term “non-refundable deposit” is kind of an oxymoron. If it’s non-refundable, then it’s effectively a fee. To learn more about buying a home, selling your home, or about real estate in general, visit Terry Story at www.//terrystory.com/ or Keller Williams at  https://www.kw.com/kw/.

Terry Story, 30-year Keller Williams veteran and all-around fun person to talk to, had some thoughts on recouping a remodeling investment. Remodel Now Or Later?  When considering a remodel, Terry advised thinking ahead. Will a remodel allow the current owners to sell the house to new owners? Not if the remodelers go nuts. Remodeling for resale also has to take time as a factor. Enhancing the kitchen now and putting the home up for sale? Good idea. Enhancing the kitchen now and putting the home up for sale in ten years? Maybe not so much. Garage doors tend to be a go-to home enhancement, which led to a discussion on the importance of curb appeal, as well as the ability to display and/or hide a vehicle to better attract buyers.  9/25/19 Terry offered estimations on manufactured stone veneer, minor kitchen remodels, deck additions (not really a thing in South Florida), pool additions (that’s more like it!), siding, doors, and vinyl windows (Terry got carried away on a Three Little Pigs analogy; that’s why we like her). The Impact Of Impact Windows To A House Steve asked about impact windows, and Terry gave the example of a seller of a $1.4 million home considering the installation of impact windows at $100,000. The question: can the seller recoup the $100,000 investment? The answer: try lowering the price first. Terry answered that when a seller gets told a house needs this or that before it will sell, the prospective buyers are actually saying they can’t see the value of the house for the listed price. In other words, the house has been priced too high. Terry added that since impact windows won’t withstand the force of  flying objects during a hurricane, the better choice might be to buy good insurance Do Not Proceed With Two Brokers Finally, Steve and Terry considered a seller/broker fight concerning a cancellation fee over a listing agreement. Terry stressed that any new broker working with the seller needs to know about the listing agreement between the seller and the first broker and that both parties have agreed to the release. Not doing so leaves the listing and both parties in limbo until the listing expires, at which point the seller should reach out to the broker and come to an agreement.

In this week’s real estate roundup, Steve spoke with Terry Story, 30-year veteran at Keller Williams, about the importance of real estate agents building relationships with builders and construction companies and what these relationships mean for homebuyers. Having Someone On Your Side There are a ton of builders and major companies constructing entire communities full of beautiful homes. These companies want people to find out about their homes and buy them. That’s why they start building relationships with realtors and agents. Realtors and agents act as a sort of middleman, finding and bringing buyers to the doors of the homes. But how exactly does this work? Let’s say you as a prospective homebuyer want to go to ABC construction site. The realtor brings you out. For connecting them with a potential buyer, the builder compensates the realtor/real estate agent. It doesn’t cost the homebuyer anything. Understanding Home Pricing It’s important to understand how builders price things. They have already factored in the real estate agent’s commission. So, it wouldn’t really be right for prospective homebuyers to say, “Well, I didn’t come with a realtor, so I’m keeping X amount of dollars.” It just doesn’t work that way. Time changes things for builders. As things get closer to build out, things become more expensive – like certain lot locations. But the base price of the house remains the same. The agent is on the side of the homebuyer. They can sometimes negotiate different aspects that go in the home to help bring the price down, things like flooring and tile. Since it doesn’t cost the homebuyer anything extra, it’s really to their advantage to have a realtor’s assistance. Buying A Home In A New Development Let’s say there’s a new development that’s announced. A plot of land is cleared, and a little mobile home office is there. But no homes are built yet. There may be some plots that are outlined, but no actual houses have been built. It’s in the pre-construction phase. Homebuyers can definitely save money by buying at that early stage, but they’re also taking a risk. What if the development doesn’t take off and sell well? Still, buyers definitely pay more by waiting. The building company tends to give better prices to people who buy before the homes are even built. The other advantage of buying early is that, of course, you have the best choice of lots. With buying a home in a new development, the truth is, as always, “buyer beware”. Builders hire professional decorators to stage the model homes and there are a lot of tricks they can use to make the spaces look as big as possible and the lot locations the most attractive. If you’d like to learn more about buying or selling a home, or, to learn more about Terry, check out Keller Williams.

Steve talked with Terry Story, a 30-year veteran at Keller Williams, about the current state of the larger (macro) real estate market. They discussed prices and how prices affect the market and vice versa. Terry also noted the key factors that help to explain whether the real estate market favors home buyers, home sellers, or both. Home Sales Are On The Rise Home sale numbers are on the rise. Month over month, we’re looking at about a 2.5% increase. This figure is based on calculations made by the National Association of Realtors. In the thirty days between June and July, 2019 alone, home sales increased by 2.5%. Essentially, it’s shaking out to about 0.6% year over year. This is an increase in home sales alone; prices aren’t necessarily climbing with it. Part of this is due to the extremely low-interest rates these days. Last year, December of 2018, there was a marked climb in interest rates. It was a big deal at the time, something that spooked people, and the market saw a huge selloff. In the eight months between then and now, home mortgage rates have come down and are staying down. The Fed has even begun to lower the rates on short term loans, leaving the prevailing interest rates sitting at 3.5% to 4%. These are some of the lowest rates the market has seen in decades. The Issue Of Home Inventory So, the other big issue in the macro real estate market is that of house prices. And inventory has a lot to do with it. Real estate is being scooped up because of better rates, and in a lot of places, this is putting home inventory at nearly record-breaking lows, specifically when it comes to homes in the affordable price range. Home prices have been rising, about 4.5% year over year. It’s been doing this for 89 consecutive months which is definitely a trend—that doesn’t seem to be weakening. Economically speaking, when it comes to the idea of real estate, in particular, things are looking very healthy. But it’s important to keep in mind that the real estate market is a local thing. What’s happening in California won’t necessarily affect what’s happening to the market in Florida. In identifying market trends, we have to look at what the trends seem to be over time and be paying attention to national trends, regional trends, and local trends. Rental Properties And Leases There definitely seems to be a surplus of rental properties. While many investors are swooping in to scoop these properties up and turning them into condos, many others are choosing to leave them as rental spaces for the monthly income they can generate. If you are a renter, it’s important to pay close attention to your lease agreement. If the property you live in is sold to a new owner or landlord, they don’t have the right to ask for a new security deposit. The new landlord should inquire of the previous owner as to each tenant’s security deposit, as outlined in the lease agreement. They should ask the previous owner for a signed statement (estoppel) or a copy of the existing lease which spells out what tenants are paying/have paid. When they buy the property, they buy the existing leases. Still, you should do your part as well, by making sure the new owner/landlord knows you’ve paid the deposit amount. Know that you aren’t required to pay the security fee again. Less than honest landlords may try to recollect such payments or make additions to your lease that essentially let them stick their hands back into your pocket. How The Real Estate Market Is Defined There are constant references made to whether the current real estate market is a buyer’s market or a seller’s market. But, what does this actually mean? A market is really defined by how much inventory there is. Realtors use the absorption rate. How many months’ worth of home inventory is there? If there are more than six months of inventory to be sold (usually looking at close to seven months), there’s a high supply, making it a buyer’s market. Less inventory, let’s just say five months or less to be sold, it’s a lower supply, which means it’s a seller’s market. The definition of the market is based on inventory—supply and demand. But it might be a buyer’s market in one price segment and a seller’s market in another. This is because the inventory of houses, as touched on above, in given price ranges can be (and usually is!) dramatically different. Currently? In the $1 million and up range, it’s very much a buyer’s market. From $500,000 to $1 million, it’s balanced because there’s right around six months’ worth of houses to sell. But it’s a true seller’s market for homes priced below $500,000. And that’s our weekly Real Estate Roundup. If you’d like to learn more about buying a home or selling your home, head on over to Keller Williams! 8/19

Steve spoke with Terry Story, a 30-year veteran at Keller Williams. In this installment of the weekly Real Estate Roundup, Steve and Terry talked about why now is a great time to buy a home. The big takeaway is there are several future advantages to buying your dream home now. Fixed Mortgage Rates One of the biggest advantages to buying your home now is the ability to secure a fixed mortgage rate, which is basically a stable housing payment. If you can afford it now and your income leaves enough room that you’re not worried about making payments, you benefit from buying your home. You pay a fixed rate of interest on your mortgage. This is in contrast to, say, renting a place with no rent control. With inflation, your monthly mortgage payments could climb and cause your finances to spiral. Buying your home now – as long as you can comfortably afford the payments – means you’ll consistently pay the same amount until your mortgage is paid off. You’re essentially protecting yourself from the adverse effects of inflation. Low-Interest Rates In today’s market, interest rates are at an all-time low. This is the second most important reason to scoop up your dream home now and a major part of the reason why it’s a buyer’s market. Could these rates stay low for many years? Sure. But the truth is that the housing market is cyclical and the chances of them climbing are pretty good. Locking in your home loan now means you get a low-interest rate on your mortgage and consistent payments until the loan has been repaid. Many people look at the prices of homes only. While it’s important to be able to afford the outright price of the home, keep in mind that when housing prices rise, interest rates drop. Are homes perhaps a little more expensive today? Yes. But this is largely a response to the fact that – as discussed before – inventory supplies are dwindling, which means homes are being listed at higher prices since the need to earn more off each home is greater. Also, due to the dwindling supply of available homes, people are willing to pay more to secure a home. Home Trends Popular home trends and styles vary over the years and are dependent upon geographical location. But the truth is that some home styles are consistently in demand. The ranch style home has been at the top of the list for decades. This is a one-level home, with three or four bedrooms. Why is it so popular? It’s a decent home to age in; having one level means everything is easily accessible. And a three-bedroom ranch is perfect for almost any size household since it leaves rooms open for guests and the ability to create a home office or den. The Tudor (which references the English Tudor dynasty) is another popular home style. It’s an English-style home with enough class to impress but enough flexibility to allow for a modern feel. Also on the list of popular home styles: craftsman, Mediterranean (which is incredibly popular is beachy places like Florida), and modern. If you’d like to learn more about buying or selling a home or to learn more about Terry, check out Keller Williams!   August 13, 2019

Terry Story joined us once more for our weekly round-up of everything related to the real estate market. The section began with a talk about rising water levels and how these have been impacting on real estate prices in some parts of the country. Terry noted that the biggest falls have been Ocean City, New Jersey, followed by Miami Beach. She commented that it’s not a massive problem, but nonetheless, one that has impacted on the housing market. Rules and Regulations A listener sent in an interesting question regarding dogs, having seemingly agreed to all regulations regarding his pet dog, but then later having been told that it wasn’t allowed due to its size. Terry observed that this is a frequent problem, with new legislation and documents being drawn up all of the time in the housing industry. Both Steve and Terry agreed that this is where a good realtor can come in handy, and also emphasized that buyers should try to get hold of all documents related to a property and make this a priority. (0403)

Millennials Are Dominating The Market Today, more first-time buyers are millennials than ever before. Millennials are now essentially dominating the market, playing a very important role in real estate sales. The biggest reason for this? The majority of them are of the age where they are beginning to form households, getting married, and having children. This is the group who are in their late 20s to late 30s. Jobs And Attitude Another reason millennials are taking over the market is that the economy is stronger and better jobs are available for them. And because they’ve formed households, they often have two incomes coming in, which means that they can buy bigger first homes than their parents did. Millennials have watched some of the financial mistakes their parents have made, therefore, they have a different attitude about things. They’re more conservative financially. They watched the housing market crash when, instead of spending the traditional 30% of income on housing, people were spending 60% or more on housing. Millennials aren’t making the mistake of being fooled into thinking that housing prices will increase exponentially and indefinitely. Space And Location Millennials today, particularly those with children, are looking for more space and better locations. Of course, the definition of a great location depends entirely on the millennial or the millennial couple. Some could be looking for a country club setting. Others may want a beach-front property. Others are looking to be in the middle of the woods or the middle of downtown. Millennials tend to be more adventurous and individualistic as far as wanting to explore different locations. One of the main focuses for millennials with children is a location near good schools and activities that their children will be able to get involved in. One final point on locations: millennials have started job-hopping a lot. This could be blamed on their adventurous spirit. But what it means for the real estate market is that they end up buying more homes and often in many different places. Switching Gears To The Older Generation Now, it’s time to talk about the older generation. A general rule of thumb goes that the older generation—once the kids have left the nest—are usually looking to downsize. They may own a four- or five-bedroom house with space that they don’t really need. Typically, a sizable amount of equity has built up in the home. It’s appealing to think about capturing the equity and reducing the cost of living by getting a smaller place. But a new trend called “aging in place” appeals to about 83% of older homeowners who are deciding they want to stay in the home they have. There is a consistency with that that’s comforting to a lot of people. However, the home they currently live in might not be senior-citizen friendly; it may have lots of stairs or bathrooms that don’t accommodate their needs, which could lead them in the trap of spending more money to renovate their home. Aging in place also means that seniors don’t have access to the amenities that are available in a retirement community. Nonetheless, that’s the choice many seniors are making. If you’d like to learn more about buying a home or selling your home, connect with Terry at Keller Williams!

Emotional Support Animals The discussion then moved on to emotional support animals These supportive pets are an extremely important part of many disabled person’s lives, but Terry believes that many people are abusing the system and disturbing other homeowners with an animal that isn’t really justified. Steve and Terry had a good laugh about the possibility of a cat as an emotional support pet. Home Ownership Figures Finally, the discussion centered on the fact that home ownership in the United States has reached its highest point since 2014. This clearly indicates that the market has some momentum and also that more and more people are finding it feasible to get on the housing ladder. Terry noted that this is excellent news for the economy in general, since the housing market is a growth engine for economic activity, such as carpentry, painting, roofing, etc. Strong homeownership numbers also tend to help create healthy and stable communities, which can only be a good thing. (0327)

A Softening Of The Market The share of homes sold at or above listed price dropped to 31% in March, from a peak that was around 40%. Many agents were pricing a little lower in order to get multiple offers. The market has continued to retract, to soften, since March which is a sign of the shift to more of a buyers’ market. However, less than being about a buyers’ market or sellers’ market, it depends on the price range you’re looking at. Price Range And Inventory In South Florida, where Terry works, one million and over is the luxury market for home prices, a market that has seen a definite softening. Depending on exactly where in town the home is, for homes priced under $500,000 it’s still looking like a sellers’ market. Under $300,000? That is decidedly a sellers’ market, as it has seen the lowest amount of softening, due in large part to it being the more affordable price range. One characteristic of the current housing market is low inventory. People just aren’t putting their homes up for sale. This is particularly the case in the under $500,000 price range, where it seems many people aren’t willing to give up their homes. This means it’s more difficult to find a good buy in this price range, which ultimately hands the power to the seller. (0410)

We were delighted to welcome Terry Story on to the show again to discuss the latest news in the world of real estate. And there were some positive signs in the market once again this week with real evidence that housing prices continue to experience an upturn. Nationwide Upturn A recent article noted that prices of homes have increased by nearly $50,000 across all 50 states since the recession died down. This is obviously good news for those who already have a home, but Terry noted that it doesn’t apply across the board. Hartford, Connecticut; Chicago, Illinois; Virginia Beach, Virginia; and Baltimore, Maryland to name but a few are examples of areas that have experienced some price depreciation since 2009.   (0320)

Lowball Offer On House Today’s talk with Boca Raton real estate agent Terry Story begins with a question from Steve about the wisdom of making a lowball offer on a home you’re interested in buying.  Terry states unequivocally that lowball offers are a bad idea all the way around, particularly in today’s seller’s market when a majority of listed properties receive multiple bids.  Not only are these offers almost always rejected when sellers have the upper hand, as they do now, but offended sellers generally won’t bother to make a counter offer.  If the rejected buyer wants to submit a new, higher bid, his negotiating power is far less than it would have been without the lowball bid.  (0227)

Remodel Now Or Later?  When considering a remodel, Terry advised thinking ahead. Will a remodel allow the current owners to sell the house to new owners? Not if the remodelers go nuts. Remodeling for resale also has to take time as a factor. Enhancing the kitchen now and putting the home up for sale? Good idea. Enhancing the kitchen now and putting the home up for sale in ten years? Maybe not so much. Garage doors tend to be a go-to home enhancement, which led to a discussion on the importance of curb appeal, as well as the ability to display and/or hide a vehicle to better attract buyers. Terry offered estimations on manufactured stone veneer, minor kitchen remodels, deck additions (not really a thing in South Florida), pool additions (that’s more like it!), siding, doors, and vinyl windows (Terry got carried away on a Three Little Pigs analogy; that’s why we like her).  (0213)

What Can You Do About Difficult Neighbors Speaking of condos, Terry stated that an association had the ability to stop an owner’s plans for home renovations while a neighbor did not. If a neighbor one story above a condo wanted to replace carpet floors with laminate tiles, for example, an association could halt their plans while the annoyed neighbor living beneath them could not. When in doubt, consult the association; you never know what their rules will allow. (026)

The Price Is… Right? Terry then considered the fine art of ideally pricing a home. Since 60 percent of homes sell for less than the asking price, Terry argued that the right listing can lead to interested buyers paying above that asking price. The trick rests with finding that right amount; ask too much and people will wonder why a house has been on the market for so long; ask too little and you get lots of offers which doesn’t help the seller. Terry added most overpricing dilemmas come from a combination of envy (the neighbor’s house sold for more, so why shouldn’t mine?) and emotional attachment to their own property (mine is better, so why aren’t the offers rolling in?). (0130)

When The Final Offer Really Is Final A new rule states that a buyer making an offer can request confirmation from the seller’s broker that the seller has actually seen the offer. Terry confirmed that that can be done only if the offer was done in writing and if it has, the listing agent must then provide written documentation to the cooperating broker stating that the offer has indeed been submitted to the seller. This rule allows a buyer to know where they stand on the offer and to prepare for the consequences. (0116)

First Offer Is Usually The Best In closing, Terry says the first offer is usually the best offer.  If the home is priced right, especially in this softening housing market, motivated buyers will pay fair price, barring the few who come in with ridiculous low-ball offers. (019)

#1 Interest Rates And The Economy In its last meeting of the year, the Federal Reserve bumped up interest rates and projected two more rate hikes in 2019.  Slightly higher interest rates and talk of a slowing economy could make mortgages less affordable and increase the financial burden on those who qualify. (012)

Home Affordability Math Steve notes that for the 2018 housing market, mortgage rates were near historic lows.  In the early 2000s, mortgage rates were close to 8%.  Now they are under 5%.  While lower rates help, higher home prices bite into affordability. (1226)

Luxury Homeowners Are Downsizing Changing gears, Steve refers to a Business Insider article about a Palm Beach real estate agent who is surprised by her multimillionaire clients’ requests to downsize their homes. (1219)

Shutdown And The For Sale Sign Terry considered some of the ongoing partial government shutdown’s effects on real estate, noting that while flood insurance presented no concern, loans with the Federal Housing Administration (FHA) would be affected due to employee furloughs at the Department of Housing and Urban Development (HUD). HUD contingency plans would allow for the endorsement of new FHA loans, but slowdowns should be expected so extensions may be needed. (0123)

2019 Housing Forecast As 2018 draws to a close, Real Estate Round-Up looks at the 2019 housing forecast, the outlook for mortgage rates, and millennial home buying, and answers a listener’s question on what to do with a real estate inheritance. (1212)

Fixer-Uppers To keep mortgage expenses down, consider buying a fixer-upper home.  But don’t do so blindly. First, figure out what the home needs to be habitable, safe, and comfortable.  Examine the home’s structural needs.  For instance, does it need new plumbing, a new roof, or other must-haves?  In addition, look at cosmetic changes such as a new paint job, new appliances, a new kitchen, etc.  207

Rise In Sales Of Million-Dollar Homes While home sales are flattening, Terry notes that sales of homes priced at or above $1 million have risen by 400,000 across the U.S., to a total of about three million nationally.  This represents close to 4% of the overall market. (1121)

Why Homeowners Think Their Homes Are Worth More Than The Market Price It amuses Terry no end that homeowners believe their homes are worth more than recent comps.  So she always makes it a point to ask them what they think their home is worth and why.  Inevitably, they cite the research they’ve done at various websites and how much they’ve spent on minor upgrades. (1114)

Mortgage Rates Still Low By Historical Standards Steve kicks off Real Estate Round-Up with a focus on mortgage rates. He notes, with significant satisfaction, that he bought a house five years ago with a 3.75% rate on a 30-y mortgage.  Terry adds that mortgage rates are currently in the 4.5% range, so they are still low by historical standards. That said, if your finances are tight, a 0.75% increase can be sizable. Potential buyers could opt for a lower rate of about 4% with a 15-year mortgage. However, because the loan needs to be paid back sooner, monthly mortgage payments are a lot higher. (103)

Rising Sea Levels Wallop Property Prices Where once beachfront property was considered prime real estate, rising sea levels are changing things dramatically.  Homes in eight U.S. states have lost $14.1 billion in market value due to rising sea levels, rising river levels, floods, etc. Florida leads the pack in almost every category.  The other states include Georgia, North Carolina, South Carolina, Virginia; and in the tristate area of New Jersey, New York, and Connecticut,  pricey homes lost $7 billion in value.  Homes in Ocean City, New Jersey lost $530 million versus $337 million lost in the Miami Beach area. Steve adds that insurance premiums should go up for homes in high-risk areas. (1010)

Non-Bank Mortgage Lenders In the past, if you wanted a mortgage, you’d go to a bank. But today, non-banking financial institutions have entered the mortgage-lending business. As a result, it’s much easier to get a mortgage loan today. In her own experience, Terry Story finds that getting loans from non-bank mortgage lenders is far easier, quicker, and more convenient. Non-bank lender, Quicken Loans, for instance, is the third largest mortgage originator after Wells Fargo and JP Morgan Chase. Steve attributes this to fewer regulations on non-bank mortgage lenders than on banks, which were chastened for the 2007 mortgage crisis. (926)

Home Buyers Want Property Photos Removed Some home buyers are concerned that pictures of their homes and properties continue to stay on real estate websites long after the sale has closed.  They cite privacy and security issues.  Often, homeowners’ requests for removal go unheeded. (919)

Single-Family Homes We are familiar with the term, single-family homes.  Yet, only a few know what that means. Terry defines single family homes as ones that: share no walls with neighboring homes have their own dedicated kitchen, not shared with any other home own the land that they sit on have private direct access to a street or a thoroughfare have dedicated utilities servicing the house are built as residences for single families, persons, or households, with undivided interest in that property. The one big benefit of buying single-family homes is that you can do whatever you want with them, provided your city permits it. Townhomes, on the flip side, have shared walls and strong limits on property modifications.   (912)

Mortgage Fraud Up 12.4% A recent report from CoreLogic shows a 12.4 percent year-over-year increase in mortgage fraud risk for the second quarter of 2018.  The report notes that the fraud risk index has steadily climbed over the past seven quarters and that those states with heavy outside investment are at risk for significantly higher mortgage fraud. New York, New Jersey, and Florida topped the list of fraudulent applications.  Risk increased at each of the top 10 riskiest states, with the greatest increases in New Mexico, Mississippi, Illinois, Oklahoma, and Texas. CoreLogic’s analysis showed that about one in 109 mortgage applications contained some type of fraud, up from one in 122 a year ago.  Mortgage applicants incorrectly reported data on identity, income falsification, undisclosed real estate liabilities, credit repair issues, and questionable down-payment sources. Terry notes that the recent upsurge in home prices has led to a situation where bona fide home buyers are “lying a little” on their mortgage applications to get approved for loans.  (1017)

A recent CoreLogic report on April 2018 home prices, highlights 12 markets with the largest annual increases. This distinction could mean there is a danger of a housing bubble. CoreLogic defines an overvalued market as one where home prices are at least 10% above long-term sustainable levels.  Conversely, an undervalued market is one where home prices are at least 10% below sustainable levels. (618)

Here’s how you can protect yourself.  Before you go to see a property for sale or rent, do an online search on its owner.  If you meet someone at the house, ask the person you’re meeting for a copy of their driver’s license.  If they claim to be an agent, ask them for the owner’s name and number.  This way, you’ll know if you’re dealing with the owner or a scammer. (718)

Recent tariffs on lumber imports from Canada will increase construction costs by $9,000 per home.  Additionally, tariffs on steel, aluminum, and other raw materials, will add to cost. Overall, Trump’s tariffs could increase construction costs by about $10,000 per home, on average. (718)

It’s called white-boxing, ever heard of it? White-boxing is when sellers on the luxury market strip out furnishings, rip out well-appointed bathrooms and kitchens and get the home down to its bare-bones structure.  This creates a clean slate.  It also caters to luxury buyers’ desires to uber-customize the homes they buy.  White-boxing is also popular with older, outdated homes in upscale neighborhoods, where buyers will likely gut the house to build the home of their dreams. (518)