While nearly 40 percent of aspiring homeowners believe they need to put down 20 percent on a home purchase, the truth is the average down payment was just 11 percent in 2016, according to the National Association of REALTORS®. To help your clients understand the strength of their current financial profile when it comes to buying a home, mortgage industry blog MGIC Connects has created a Buy Now vs. Wait calculator that can show them whether they’re better off waiting and continuing to save for a bigger down payment or buying now with less money upfront.
The calculator factors in information such as the current rent your clients are paying, amount of their monthly savings, and creditworthiness. Users can submit other information such as desired home price, current amount of savings for a down payment, and an estimated interest rate. MGIC Connects offers the following example of how its calculator works:
A consumer has saved $10,000 of the $40,000 needed for a 20 percent down payment. She can add about $6,000 a year in savings to that. She wants to purchase a $200,000 home. The calculator allows her to see the cost of the home purchase if she did a 3 percent or 5 percent down payment. The calculator also shows that if homes prices appreciate, say, at 3 percent annually, the amount she’d need for a 20 percent down payment would be $48,552, and she would need more than 6 years of savings before she could buy.
During that time, she will have paid more than $80,000 in rent, while her home equity position would be more than $72,000 had she bought six years ago. None of this is meant to encourage prospective borrowers to buy a home before they are ready. It is in everyone’s best interest for borrowers to succeed, so borrowers need to be comfortable not only with the mortgage payment but also the other responsibilities that come with homeownership.
Source: “Waiting to Save for a 20% Down Payment Can Cost Homebuyers Money,” MGIC Connects (April 5, 2017)
Ah, springtime! As the daylight hours grow longer and buds and blossoms dot Hendersonville’s trees and gardens, even when a rainy day is in the forecast, the feeling of new life in the air can’t be denied!
Also undeniable is the all-too-apparent fact that Hendersonville’s bright April sunlight is now illuminating months’ worth of dirt on the windows. And now we can see more areas of the carpet that show the winter’s accumulation of … what is that?
For residents from one end of North Carolina to the other, the balmy weather definitely triggers a popular urge to put households in shape. But since there is a simultaneous contradictory urge to get outdoors to enjoy Hendersonville’s good weather, it seems like an apt moment to try to retrieve some of the many time-saving tips that are out there on the web.
In other words, it’s time for Google. To aid in in Hendersonville’s Googling efforts, here are some valuable spring cleaning search keywords. Enter any of these in combination with “spring cleaning” and Google will bombard you with scads of valuable insights and shortcuts:
• “White Vinegar.” It’s a universal disinfectant that’s carried in gallon jugs on Hendersonville grocery store shelves. Many of Hendersonville’s professional housekeepers know how effective and environmentally friendly diluted vinegar is—and how rapidly the residual odor disperses.
• “Sponges.” Cut down on paper towel consumption by collecting a variety of quality sponges and having them at the ready. If you wet and microwave them regularly, bacteria won’t accumulate (and they’ll smell fresh, too). Side benefit: when you nuke wet sponges, stuff on the inside of the microwave will come off easily!
• “Dusting mitt.” They’re useful for more than just Venetian blinds. You can also substitute with athletic socks (then just throw them in the washer).
• “Baseboards.” Vacuuming the floors doesn’t eliminate the edge problem—that’s where the most stubborn winter debris tends to shelter in place. If you use whatever attachment (soft brush or nozzle) that lets you vacuum the baseboard contour before starting on the floor, the problem disappears.
• “Baking soda.” The cure for smelly carpet areas: sprinkle, let stand overnight, vacuum.
• “Cola.” Clean toilets by pouring, waiting an hour, flushing. But when you google “cola” with “spring cleaning,” you’ll also find warnings about the deposits cola leaves behind. Solve that by following up with an undiluted cup of—you guessed it—vinegar.
• “Lemon.” Google this one along with “spring cleaning” and you’ll be able to choose which of the 2½ million hints to put into action!
For some Hendersonville homeowners, this spring will find them putting their homes up for sale. If that’s the case, give me a call for a professional Realtor’s® take on which spring cleaning efforts are likely to reap the greatest rewards!
The Rorschach (or inkblot) test is the one where a psychologist shows you a series of pictures that seem to be random black-and-white splatters. The shrink asks you what you think they look like. What you “see” in the inkblots tells something about who you are—how you look at things.
If someone were to create a pack of inkblots to test for who would be best suited for the tasks facing Hendersonville homebuyers, they’d be designed to pinpoint character traits that come in handy during a typical homebuyer’s quest. I don’t know how Dr. Rorschach came up with the shapes he chose (what was he thinking?)—but at least four characteristics to look for would be:
1. Low financial anxiety. One trait that’s common among those who are well prepared to go after their first Hendersonville home is command of their financial affairs. If that’s not present—if finances are amorphous or if creditworthiness is shaky—potential first-timers are almost certainly jumping the gun.
2. Patience. The probability of winding up with exactly the right Hendersonville home increases in tandem with the ability to resist hasty impulses. The first or second property visited might ultimately turn out to be the best one—but there is wisdom in verifying that through comparison with a range of other possibilities. Patience in house hunting makes for an informed homebuyer.
3. Flexibility. Having a firm list of requirements is helpful to get a house hunt off to a productive start, but if those requirements are set in concrete, some of what might turn out to be the best candidate properties can be missed entirely. I can’t tell you how many great finds have resulted when we took a little extra time to check out what had seemed to be an iffy prospect.
4. Openness. Homebuyers increase the likelihood of winding up with the most suitable Hendersonville home in their budget range when they aren’t shy about sharing their ideas and reactions with their agent. Being talkative is perfectly okay for engaged homebuyers—just as being closed-mouthed is something of a drawback. The more feedback that’s freely exchanged between the boss (you) and your Realtor® (me), the better!
For Hendersonville homebuyers of all stripes, another kind of “inkblot test” occurs when you walk through the front door of what ultimately becomes “the one.” That’s an experience it doesn’t take a shrink to interpret: it’s the feeling that you’ve found your home!
When the time is right to start looking, I hope you’ll give me a call at 828-747-8113
When it comes to the reality of pricing a home in Hendersonville, it’s natural that buyer’s and seller’s points of view reflect their different roles and objective. In a way, they are mirror images of each another.
From the seller’s point of view, pricing their Hendersonville home starts out from the reality check of the “comps”—the prices registered in recent comparable neighborhood sales. From there, the pricing decision revolves around the tradeoff between maximum asking price versus the desire for a speedy sale. Even if there is no time pressure at all, serious sellers will still set the asking price below a level that indicates disregard for current market realities. Rather than communicating “this place is worth more than what people are willing to pay,” overpricing only serves to needlessly put off buyers and their agents. If time pressure is an issue, experienced sellers will peg the asking price just enough below neighborhood comparables to make the value evident. Tagging “motivated buyer” on the listing can attract attention, but the right price cuts to the chase. That’s a tactic bound to draw timely offers—especially when a Hendersonville property is in A+ showing condition,
For most prospective Hendersonville buyers, it’s the mirror image. Rather than starting from the reality of neighborhood comps, the pricing of their future home begins as an abstraction: the “looking” range. The top of the range will be a figure that is derived from what is comfortably affordable rather than what that figure will command in the current market. Once the serious house hunt is underway and some area properties have been visited, that top-of-range number will almost always need some adjusting—usually (but not always) upward.
Thereafter, when some desirable Hendersonville properties have been located, pricing from the buyer’s perspective is apt to become largely an exercise in deconstruction. Even though a home is actually desirable, it’s hard to resist zeroing in on the property’s weak points, turning flaws into subtraction fodder for mental offer calculations.
In a successful transaction, the mirror images of buyers’ and sellers’ approaches to home pricing do ultimately wind up converging. That’s another area where having a knowledgeable Hendersonville Realtor® on your team is invaluable. When it comes to offers and counter-offers, whether you’re a buyer or seller, having your side of the negotiations handled by an experienced professional is a sure way to keep the other side tethered to reality. Arriving at a bottom line reflecting realistic and lasting Hendersonville real estate value is what most often winds up bringing both parties to a happy conclusion. The first step? You guessed it: call me at 828-747-8113.
Hendersonville house buyers and sellers were not surprised in the least at last week’s Federal Reserve decision to notch up the Fed Funds short-term rates. For once, anticipating the move had been easy. The surrounding factors—the economy, employment, and consumer confidence measures—were all in unison, pointing to a meaningful improvement now underway.
Already, a day before Wednesday’s announcement, Hendersonville readers could confirm what was coming: “Mortgage applications rise 3.1% as borrowers rush to lock in rates,” per CNBC on Tuesday; “Mortgage rates jump as economy revs up,” echoed MarketWatch.
The editors at CNNMoney, well aware that the “news” was not likely to gather much attention, wisely chose a more direct appeal by promising to explain “What a Fed rate hike means for you.” The listed major impacts:
• savings accounts will pay more (it would be hard to imagine their paying less)
• the “Trump market rally” is unlikely to be derailed
• Presidential plans for a major infrastructure renewal could complicate matters for Fed decision-makers in coming months
• Big ticket buyers could still count on relatively low rates
Since Hendersonville house buyers belong to that Big ticket group, the last point was relevant. Although it was pointed out that a rate hike “does NOT guarantee that mortgage rates are going up,” a number of outside factors pointed in that direction. So Hendersonville house hunters might or might not expect that the immediate future could bring higher home loan rates, but the current climate was still favorable—a caption read, “rates are rising but still low.”
So far, so good. But then, to illustrate, CNNMoney offered a cartoon sketch picturing a balance scale with coins in one pan and a house in the other. The drawing was shown under a headline exhorting, “Homebuyers: Decision-making time!”
That graphic was the only obtuse message in an otherwise straightforward commentary. The puzzling part was that the scale showed the cartoon coins weighing heavier than the cartoon house. The visual metaphor for decision-making time would seem to illustrate that the money was more important than the house, which seemed to mean that prudent Hendersonville house buyers should hold onto their coins. But the article argued for the opposite. The message for Big ticket buyers was right there in the “rates are rising but still low” headline.
I think it’s fair to guess that CNNMoney’s Art Department is at odds with the Financial Prognostication Department about “What a Fed rate hike means for you.” For Hendersonville house hunters, my takeaway would be to side more with the Finance Department. Certainly, if you are preparing to take advantage of the current crop of great real estate buys, the scales should be weighted toward nabbing the house.
For a head start—give me a call at 828-747-8113
Hendersonville house sales do usually respond in the seasonal pattern that is familiar in most other areas. Spring and summer lead the way for weather-related, financial, school scheduling and other family-related reasons. From now into well past July (and sometimes even August), house sales activity can be counted on to peak. Those are the normal expectations.
But when any segment of U.S. house sales numbers quadruple expectations even before spring bulbs see daylight, that’s worthy of special attention. That was the case last Thursday when the Commerce Department reported that in February, purchases of newly built homes rose by more than 6%. Since The Wall Street Journal’s panel of experts had forecast 1.4%, it drew headlines.
In fact, this was the second month in a row for sharp rises in U.S. new home sales—and what could be a bright sign for Hendersonville’s own prospects as the spring selling season begins. Press reports were, to put it mildly, enthusiastic:
• MartketWatch: “New-home sales roar to a 7-month high”
• Reuters: “…strength in housing should underpin economic growth”
• ABC News: “Americans…snapping up new homes at the fastest pace since July”
• Bloomberg: “U.S. New-Home Sales Climbed to a Seven-Month High”
• CNBC: “[Sales] were the highest since July of last year—and that was the best number since January of 2008”
Bloomberg’s Michelle Jamrisko deduced from the house sales rise that the impact from the recent rise in borrowing costs was, at most, “modest.” That sentiment was echoed by the Realtor, which quoted the National Association of Housing’s chief economist. “The uptick in mortgage interest rates,” he said, “is having a minimal effect.”
We’ll have to wait and see whether that is true vis-à-vis the impact of mortgage interest rates on Hendersonville’s own house sales. They might be either “modest” or “minimal”—or the prospect of continuing hikes might induce more Hendersonville prospects to get busy sooner rather than later. If “sooner” describes your own inclination, I hope you’ll decide to put thought into action by giving me a call!