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Hearthstone Group
at Kelly Right Real Estate

Marie Kamprath
Associate Broker
208.691.2007
Dori Schlader Realtor
208.661.5820
Don Schlader Realtor
208.451.4693

Serving Idaho & Washington

HearthstoneNW@gmail.com

Expect a quick response every day but Sunday.

 Marie Kamprath - Agent with Kelly Right Real Estate


 

Market News

“How’s the Market?” What’s Ahead for Real Estate

 

While no one can predict the future with certainty, most experts expect to see modest growth in the U.S. housing market for the remainder of this year and next. Inventory will remain tight, mortgage rates will continue to creep up, and affordability will remain a major issue in many parts of the country.

 

So what does that mean for home buyers and sellers? To answer that question, we take a closer look at some of the top indicators.

 

 

CONTINUED GROWTH IN HOUSING MARKET

 

There’s good news for homebuyers! In many markets across the country, prices have begun to stabilize after a period of rapid appreciation. Nationwide, home sales experienced a slight decline of 1.6 percent in the second quarter, primarily due to higher mortgage rates and housing prices combined with limited inventory. 

 

However, buyers who have been waiting on the sidelines in anticipation of a big price drop may be disappointed. Demand remains strong across the sector and prices continue to rise. The Case-Shiller U.S. National Home Price Index reported a 6.2 percent annual gain in June, a healthy but sustainable rate of appreciation.1 

In North Idaho, prices have gone up an average of 15% over last year.

 

In its latest Outlook Report, Freddie Mac forecasts continued growth in the housing market due to a strong economy and low unemployment rate, which dropped to 3.9 percent in July.2  

 

“The housing market hit some speed bumps this summer, with many prospective homebuyers slowed by not enough moderately-priced homes for sale and higher home prices and mortgage rates,” according to Sam Khater, Chief Economist at Freddie Mac. “The good news is, the economy and labor market are very healthy right now, and mortgage rates, after surging earlier this year, have stabilized in recent months. These factors should continue to create solid buyer demand, and ultimately an uptick in sales, in most parts of the country in the months ahead.”3

 

 

INVENTORY TO REMAIN TIGHT, NEW CONSTRUCTION MAY HELP

 

Experts predict that demand for housing will continue to outpace available supply, especially in the entry-level price range. 

 

“Today, even as mortgage rates begin to increase and home sales decline in some markets, the most significant challenges facing the housing market stem from insufficient inventory accompanying unsustainable home-price increase,” said National Association of Realtors (NAR) Chief Economist Lawrence Yun in a recent release. 

 

"The answer is to encourage builders to increase supply, and there is a good probability for solid home sales growth once the supply issue is addressed,” said Yun. Additional inventory will also help contain rapid home price growth and open up the market to prospective homebuyers who are consequently—and increasingly—being priced out. In the end, slower price growth is healthier price growth."4

 

With so much demand, why aren’t more builders bringing inventory to the market? According to the National Association of Home Builders, a crackdown on immigration and tariffs on imported lumber have made home construction more difficult and expensive. Those factors—combined with the rising cost of land and increased zoning requirements—have put a damper on the industry overall.5

 

Still, there’s evidence that a modest rise in the rate of new building projects may be on the way. Freddie Mac predicts new housing construction will increase slightly after a stall last quarter.2 And a recent report by Freedonia Focus Reports forecasts an annual increase in housing starts of 2.4 percent through 2022, led by an uptick in single-family homes.6 The boost in inventory should help drive sales growth and relieve some of the pent-up demand in tight markets.

 

While the current lack of inventory is generally preferred by sellers because it means less competition, a combination of high prices and rising interest rates has narrowed the pool of potential buyers who can afford to enter the market. Sellers should seek out real estate agents who utilize technologically-advanced marketing tactics to reach qualified buyers in their area. 

 

 

AFFORDABILITY REACHES LOWEST LEVEL IN A DECADE

 

According to a recent report by Morgan Stanley, Americans are paying the most in monthly mortgage payments relative to their incomes since 2008.7 And prices aren’t expected to come down any time soon.

 

"We believe that the current supply and demand environment will continue to push home prices higher, just at a decelerating pace," said John Egan, Morgan Stanley’s Co-Head of U.S. Housing Strategy.

 

Fortunately, economists aren’t concerned about affordability levels triggering another housing crisis, as lending standards are much higher today than they were during the run-up before the recession. According to credit reporting agency TransUnion, the share of homeowners who made mortgage payments more than 60-days past due fell in the second quarter to 1.7 percent, the lowest level since the market crash.7

 

NAR Chief Economist Lawrence Yun agreed with this assessment in a recent statement. “Over the past 10 years, prudent policy reforms and consumer protections have strengthened lending standards and eliminated loose credit, as evidenced by the higher than normal credit scores of those who are able to obtain a mortgage and near record-low defaults and foreclosures, which contributed to the last recession.”4

 

 

MORTGAGE RATES EXPECTED TO CONTINUE RISING

 

The Federal Reserve has taken measures to help keep the housing market—and the overall economy—from overheating. It has raised interest rates twice this year so far, causing mortgage rates to surge in the first half of the year.

 

Economists predict that the rise in mortgage rates will continue at a more gradual rate through this year and next. The U.S. weekly average mortgage rate rose from 3.99 percent in the first week of January to as high as 4.66 percent in May. Freddy Mac forecasts an average rate of 4.6 percent for 2018 and 5.1 percent in 2019.

 

The good news is, mortgage rates still remain near historic lows and a whopping 14 points below the recorded high of 18.63 percent in the early 1980s.8 Buyers who have been on the fence may want to act soon to lock in an affordable interest rate ... before rates climb higher.

 

"Some consumers may be thinking that because mortgage rates are higher than they were a year ago, maybe I should just wait until rates fall down again," said NAR’s Chief Economist Lawrence Yun in a recent speech. "Well, they will be waiting forever."9

 

WHAT DOES IT ALL MEAN FOR ME?

 

If you’ve been waiting to buy a home, you may want to act now. A shortage of available homes on the market means prices are likely to keep going up. And a lack of affordable rental inventory means rents are expected to rise, as well. 

 

If you buy now, you will benefit from appreciating property values while locking in an historically-low interest rate on your mortgage. Waiting to buy could mean paying more for your home as prices increase and paying higher interest on your mortgage as rates continue to rise.

 

And if you’re in the market to sell your home, there’s no need to wait any longer. Prices have begun to stabilize, and rising interest rates could decrease the number of available buyers for your home. Act now to take advantage of this strong seller’s market.

 

LET’S GET MOVING

 

While national real estate numbers and predictions can provide a “big picture” outlook, real estate is local. As local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and home values in your particular neighborhood. 

 

If you have specific questions or would like more information about where we see real estate headed in our area, let us know! We’re here to help you navigate this changing real estate landscape.

    Hearthstone Group at Kelly Right Real Estate

    Dori 208.661.5820

    Don 208.451.4693

    Marie 208.691.2007

 

Sources:

  1. S&P Dow Jones Indices Press Release -
    https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/766551_cshomeprice-release-0828.pdf?force_download=true
  2. Freddie Mac Outlook Report -
    http://www.freddiemac.com/research/forecast/20180827_strong_economic_growth.html
  3. DSNews -
    https://dsnews.com/daily-dose/08-28-2018/freddie-weighs-in-on-housing-market
  4. PR Newswire -
    https://www.prnewswire.com/news-releases/realtors-chief-economist-reflects-on-past-recession-whats-ahead-for-housing-300702632.html
  5. CNN Money -
    https://www.keyt.com/lifestyle/where-is-the-us-housing-market-headed-4-things-you-need-to-know/787471572
  6. PR Newswire -
    https://www.prnewswire.com/news-releases/us-housing-starts-to-rise-2-4-yearly-to-2022--300711989.html
  7. Business Insider -
    https://www.businessinsider.com/housing-affordability-slowing-market-sales-2018-8
  8. Value Penguin -
    https://www.valuepenguin.com/mortgages/historical-mortgage-rates
  9. Times Free Press -
    https://www.timesfreepress.com/news/business/aroundregion/story/2018/aug/14/despite-prospects-higher-mortgage-rateshousin/476979/

7 Steps to a Seamless Move

Real Estate Relocation Guide: 7 Steps to a Seamless Move

 

 

Whatever your reasons are for relocating to a new area, the process can feel overwhelming. 

Whether you’re moving across across town or across the country, you’ll be changing more than your address. Besides a new house, you may also be searching for new jobs, schools, doctors, restaurants, stores, service providers and more.

 

Of course you’ll need to pack, make moving arrangements, and possibly sell your old home. With so much to do, you may be wondering: Where do I start?

 

In this guide, we outline seven steps to help you get prepared, get organized, and get settled in your new community. Our hope is to alleviate the hassle of relocating—so you can focus on the exciting adventure ahead!

 

 

1. Gather Information

 

If you’re unfamiliar with your new area, start by doing some research.1 Look for data on average housing prices, demographics, school rankings and crime statistics. Search for maps that illustrate local geography, landmarks, public transportation routes and major interstates. If you’re moving across the country, research climate and seasonal weather patterns.

 

Check out local newspapers and blogs for information on political issues and developments that could impact your new community. You may also want to search for online forums and Facebook Groups relevant to your new area. These can be a great place to find information, ask questions and just observe local attitudes and outlooks.

 

If you’re relocating for a job, find out if your new employer offers any relocation assistance. Many large corporations have a designated human resources professional to assist employees with relocation efforts, while others may contract this service out to a third party. Some employers will also cover all or a portion of your relocation and moving costs.

 

By gathering this information up front, you’ll be better prepared to make informed decisions down the road.

 

 

 

 

2. Identify Your Ideal Neighborhoods

 

Once you’ve sufficiently researched your new area, you can start to identify your ideal neighborhoods.

 

The first step is to prioritize your “needs” and “wants.” Consider factors such as budget; commute time; quality of schools; crime rate; walkability; access to public transportation; proximity to restaurants, shopping, and place of worship; and neighborhood vibe. 

 

If possible, visit the area in person to get a feel for the community. If you’re comfortable, strike up conversations with local residents and ask about their experiences living in the area.

 

Still not sure which neighborhood is the best fit for you and your family? Contact a local real estate agent for expert assistance. It’s usually the most efficient and effective way to narrow down your options.

 

 

 

 

3. Find Your New Home (and Sell Your Old One)

 

Once you’ve narrowed down your list of preferred neighborhoods, it’s time to start looking for a home. If you haven’t already contacted a real estate agent, now is the time. They can search for current property listings that meet your needs, typically at no cost to you.

 

Create another list of “needs” and “wants,” but this time for your new home. Include your basic requirements for square footage, bedrooms and bathrooms, but also think about what other factors are important to you and your family. An updated kitchen? A large backyard? Double sinks in the master bathroom? 

 

Narrow your list down to your top 10 and prioritize them in order of importance.2 This will give you a good starting point to begin your home search. Unless you have an unlimited budget, don’t expect to find a home with everything on your list. But having a prioritized list can help you (and your agent) understand which home features are the most important, and which ones you may be willing to sacrifice.

 

If you already own a home, you’ll also need to start the process of selling it or renting it out. A real estate agent can help you evaluate your options based on current market conditions. He or she can also give you an idea of how much equity you have in your current home so you know how much you can afford to spend on your new one.

 

Your agent can also advise you on how to time your sale and purchase. While some buyers are able to qualify for and cover the costs of two concurrent mortgages, many are not. There are a number of options available, and a skilled agent can help you determine the best course given your circumstances.

 

 

 

 

4. Prepare for Your Departure

 

While everyone considers packing a fundamental part of moving, we often overlook the emotional preparation that needs to take place. If you have children, this can be especially important. Communicate the move in an age-appropriate way, and if possible take them on a tour of your new home and neighborhood. This can alleviate some of the mystery and apprehension around the move.4

 

Allow yourself plenty of time to pack up your belongings. Before you start, gather supplies, including boxes, tape, tissue paper and bubble wrap. Begin with non-essentials—such as off-season clothes or holiday decorations—and sort items into four categories: take, trash, sell and donate/give away.5

 

To make the unpacking process easier, be sure to label the top and sides of boxes with helpful information, including contents, room, and any special instructions. Keep a master inventory list so you can refer back to it if something goes missing.

 

If you will be using a moving company, start researching and pricing your options. To ensure an accurate estimate of your final cost, it’s best to have them conduct an in-person walkthrough. Make sure you’re working with a reputable company, and avoid paying a large deposit before your belongings are delivered.6

 

If you plan to drive to your new home, map out the route. And, if necessary, make arrangements for overnight accommodations along the way. If driving is not a good option, you may need to have your vehicles transported and make travel arrangements for you, your family and your pets.

 

Lastly, if you will be leaving friends or family behind, schedule final get-togethers before your departure. The last days before moving can be incredibly hectic, so make sure you block off some time in advance for proper goodbyes.

 

 

 

 

5. Prepare for Your Arrival

 

To make your transition go smoothly, prepare for your arrival well before moving day. Depending on how long your belongings will take to arrive, you may need to arrange for temporary hotel accommodations. If you plan to move in directly, pack an “essentials box” with everything you’ll need for the first couple of nights in your new home, such as toiletries, toilet paper, towels, linens, pajamas, cell phone chargers, snacks, pet food and a change of clothes.7 This will keep you from searching through boxes after an exhausting day of moving.

 

Arrange in advance for your utilities to be turned on, especially essentials like water, electricity and gas. (And while you’re at it, schedule a shut-off date for your current utilities.) Update your address on all accounts and subscriptions and arrange to have your mail forwarded through the postal service. If you have children, register them for their new school or daycare and arrange for the transfer of any necessary records.

 

You may want to have the house professionally cleaned before moving in. And if you plan to remodel, paint or install new flooring, it’s easier to have it done before you bring in all of your belongings.8 However, it’s not always feasible without someone you trust locally who can supervise. Another option is to keep a portion of your things in storage while you complete some of these projects.  

 

If there are no window treatments, you may need to install some (or at least put up temporary privacy film), especially in bedrooms and bathrooms. And if appliances are missing, consider purchasing them ahead of time and arranging for delivery and installation shortly after you arrive. Just be sure to check measurements and installation instructions carefully so you aren’t stuck with an appliance that doesn’t fit or that requires costly modifications to your new home.

 

If you own a car, check the requirements for a driver’s license and vehicle registration in your new area and contact your insurance company to update your policy.8 If you will rely on public transportation, research options and schedules.

 

 

 

 

6. Get Settled In Your New Home

 

While staring at an endless pile of boxes can feel daunting, you should take advantage of this opportunity to make a fresh start. By creating a plan ahead of time, you can ensure your new house is thoughtfully laid out and well organized.

 

If you followed our suggestion to pack an “essentials box” (see Step 5), you should have easy access to everything you’ll need to get you through the first couple of nights in your new home. This will allow you some breathing room to unpack your remaining items in a deliberate manner, instead of rushing through the process.7

 

If you have young children, consider unpacking their rooms first. Seeing their familiar items can help them establish a sense of comfort and normalcy during a confusing time. Then move on to any items you use on a daily basis.10

 

Pets can also get overwhelmed by a new, unfamiliar space. Let them adjust to a single room first, which should include their favorite toys, treats, food and water bowl, and a litter box for cats. Once they seem comfortable, you can gradually introduce them to other rooms in the home.11

 

As you unpack, make a list of items that need to be purchased so you’re not making multiple trips to the store. Also, start a list of needed repairs and installations. If you have a home warranty, find out what’s covered and the process for filing a service order.

 

Although you may be eager to get everything unpacked, it’s important to take occasional breaks. Have some fun, relax and explore your new hometown!

 

 

 

 

7. Get Involved In Your New Community

 

Studies show that moving can lead to feelings of loneliness and depression. People who have recently moved tend to be isolated socially, more stressed, and less likely to participate in exercise and hobbies. However, there are ways to combat these negative effects.12

 

First, get out and explore. In a 2016 study, recent movers were shown to spend less time on physical activities and more time on their computers, which has been proven to lead to feelings of depression and loneliness. Instead, get out of your house and investigate your new area. And if you travel by foot, you’ll gain the advantages of fresh air and exercise.12

 

Combat feelings of isolation by making an effort to meet people in your new community. Find a local interest group, take a class, join a place of worship or volunteer for a cause. Don’t wait for friends to come knocking on your door. Instead, go out and find them.

 

Finally, be a good neighbor. Make an effort to introduce yourself to your new neighbors, invite them over for coffee or dinner, and offer assistance when they need it. Once you’ve developed friendships and a support system within your new neighborhood, it will truly start to feel like home.

 

 

 

 

LET’S GET MOVING

 

While moving is never easy, these seven steps offer an action plan to get you started on your new adventure. To avoid getting overwhelmed, focus on one step at a time. And don’t hesitate to ask for help!

 

In a 2015 study, 61 percent of participants ranked moving at the top of their stress list, above divorce and starting a new job.13 But with a little preparation—and the right team of professionals to assist you—it is possible to have a positive relocation experience.

 

We specialize in assisting home buyers and sellers with a seamless and “less-stress” relocation. Along with our referral network of movers, handymen, housekeepers, decorators, contractors and other service providers, we can help take the hassle and headache out of your upcoming move. Give us a call or message us to schedule a free, no-obligation consultation!

 

Hearthstone Group at Kelly Right Real Estate

 

Dori 208.661.5820

Marie 208.691.2007

 

Sources:

  1. You Move Me -
    https://www.youmoveme.com/us/blog/105-tips-for-a-successful-relocation
  2. HouseLogic.com -
    https://www.houselogic.com/buy/house-hunting/must-have-items/
  3. Livestrong -
    https://www.livestrong.com/article/436651-the-effects-of-sunlight-fresh-air-on-the-body/
  4. Parents Magazine -
    https://www.parents.com/parenting/money/buy-a-house/make-moving-easier-on-you-and-your-kids/
  5. The Spruce -
    https://www.thespruce.com/starting-to-pack-for-your-move-2436470
  6. Moving.com -
    https://www.moving.com/tips/hiring-quality-movers/
  7. The Spruce -
    https://www.thespruce.com/unpack-your-entire-home-2435815
  8. HouseLogic.com -
    https://www.houselogic.com/buy/moving-in/before-you-move/
  9. HGTV -
    https://www.hgtv.com/design/real-estate/moving-checklist
  10. Moving.com -
    https://www.moving.com/tips/how-to-unpack-and-organize-your-house/
  11. ASPCA -
    https://www.aspca.org/pet-care/general-pet-care/moving-your-pet
  12. Psychology Today -
    https://www.psychologytoday.com/us/blog/is-where-you-belong/201607/why-youre-miserable-after-move
  13. The Daily Express -
    https://www.express.co.uk/news/uk/574171/Divorce-stressful-moving-home

10 Staging Secrets From the Pros for a Quick Home Sale at Top Dollar

10 Staging Secrets From the Pros for a Quick Home Sale at Top Dollar

According to the National Association of Realtors, staging a home prior to listing it can result in a faster and more profitable sale.1 In fact, the Real Estate Staging Association estimates that professionally staged properties spend 73 percent less time on the market, receive more foot traffic, and typically sell for more money.2

Source: National Association of Realtors

 

Following are 10 tips you can use to get your home “show ready” prior to hitting the market. These easy and cost-effective ideas will help your house look its best—and help buyers visualize themselves living there. Even if you’re not currently in the market to sell, you can use these tactics to breathe new life into your existing home decor.

To get a plan customized for your particular property, give us a call to schedule a free consultation. We’d be happy to share our insider knowledge of the buyer preferences in your neighborhood … so you’ll know where to focus your time, money and energy to maximize your results.

1. REMOVE CLUTTER

 

Decluttering is typically the first thing we tell clients to do to prepare their home for sale. And according to the National Association of Realtors, a whopping 93 percent of agents agree.1 Decluttering is the act of removing excess “stuff” from your home to make it appear clean and spacious. 

 

Overflowing closets and cluttered countertops can make your house feel small and cramped. In contrast, sparsely-filled closets and clear countertops will make your home appear larger and assure buyers that there will be plenty of room to store their belongings.

 

Don’t neglect drawers, cupboards and even your refrigerator in your decluttering efforts. Serious buyers will check out every nook and cranny of your home, so pack up anything you don’t use on a daily basis and store it off site. The same goes for jewelry, sensitive documents, prescription medication, firearms and other items of value. Store them in a locked safe or storage unit before opening your property to buyers.

 

Make sure any items that remain are clean, tidy and well organized. The good news is, when it comes time to move, a large portion of your packing will be done!

 

 

2. DEEP CLEAN AND DEODORIZE

 

From carpets to bathrooms to appliances, having a clean home is a MUST. If you’ve ever checked into a dirty hotel room, you can imagine how buyers can be turned off by a home that hasn’t been thoroughly cleaned.

 

If you have a large home, or are short on time, you may want to invest in a professional cleaning service. And if you have carpet, we generally recommend you rent a steam cleaner or hire a company to clean your carpets for you.

 

In addition to cleaning, it’s equally important to neutralize odors in your home that can be off-putting to buyers, especially pet smells and cigarette smoke. If the weather allows, open your windows and let in fresh air. Empty the trash frequently, and especially before a showing. Avoid cooking any strong-smelling food such as fish or heavy spices. You may need to clean (or remove) drapes and upholstery if odors are particularly strong.

 

Try to keep your home in clean, show-ready condition while it’s on the market. You never know when a potential buyer will want to drop by for a viewing.

 

 

3. DEPERSONALIZE

 

Your family photos and personal mementos are often your most treasured possessions. For many of us, they are what make a house a home. However, buyers will have a hard time envisioning themselves living in a place if it feels like YOUR home. 

 

Pack up any items that are personal to you and your family, such as photos, books, children’s artwork, travel souvenirs and religious items. Collectibles and excessive knickknacks can be distracting to buyers. Instead, keep your decor items minimal and generic to appeal to the largest number of buyers.

 

4. NEUTRALIZE YOUR COLOR PALETTE

 

Along those same lines, bold color choices may not appeal to all buyers. By incorporating a neutral color palette throughout your home, buyers can better visualize the addition of their own furniture and decor, which may contrast with your current color scheme.

 

But don’t limit yourself to white and beige. Incorporating earth tones and midtone neutrals—like mocha and “greige” (grey-beige)—can add a touch of modern sophistication to your decor.3 

 

 

 

One of the quickest and most cost-effective ways to neutralize your home’s decor is with paint. Walls painted in dark, bold or bright colors can turn off buyers. A fresh coat of paint in a neutral color like greige (try Benjamin Moore’s Revere Pewter) or warm white (such as Kelly-Moore’s Rotunda White) offers a clean palette upon which buyers can visualize adding their own personal touches.4

 

If your sofa is worn, stained or has a bold pattern, consider purchasing a neutral-colored slipcover. Dated or overly busy window coverings should be taken down or replaced. Instead, bring in tasteful pops of color with throw pillows and accessories. 

 

5. INCREASE YOUR CURB APPEAL

 

You only get one chance to make a first impression. According to a 2017 report by the National Association of Realtors, 44 percent of home buyers drove by a property after viewing it online but did NOT go inside for a walkthrough.5 That means if your curb appeal is lacking, buyers may never make it through the door.

 

Walk around your home and look for any neglected areas that might seem like “red flags” to buyers, such as missing roof shingles or rotted siding. Trim trees and shrubs if needed, and make sure your lawn and flower beds are well maintained. Add some colorful flowers to your front beds and/or flower boxes to brighten up your landscaping.

 

Make sure the exterior of your home is as clean as the interior. This can often be accomplished with a simple garden hose. But if your siding, walkway, or driveway are stained or dingy, you may want to rent a pressure washer.

 

Thoroughly wash windows and screens, and remove and store dark solar screens if you have them. Open shutters, curtains and blinds, which will not only make your house look more inviting from the outside, it will brighten the inside.

 

Consider a fresh coat of paint on your front door, trim and shutters. And small, cosmetic improvements like new house numbers, a colorful wreath and a clean front doormat can have a big impact.6

 

 

6. FRESHEN KITCHENS AND BATHS

 

Kitchens and bathrooms will show better and appear larger if all items are cleared from the countertops, except for one or two decorative pieces.7 You should have already packed up non-essentials during your decluttering process, and the remaining items should be neatly stored in pantries and cupboards.

 

If your cabinets are dingy or outdated, adding a fresh coat of paint and new hardware is an easy and inexpensive way to make them modern and bright. Consider purchasing new shower curtains, bath mats and towels for the bathrooms and new dish towels for the kitchen.

 

Before each showing, make sure kitchens and baths are spotless and trash cans are empty and out of sight. To add a comforting aroma, try baking cookies, or in the fall, simmer some cinnamon sticks and cloves in a pot of water before you leave the house. In the spring, try a vase of fresh cut lilacs.7

 

 

7. SET THE TABLE

 

Buyers often imagine hosting family gatherings in their new home, and the dining room plays a large role in that vision. If your dining room chairs are stained or outdated, you may want to recover them or use slipcovers. In most cases, an imperfect table can be camouflaged with a neutral and stylish tablecloth.

 

Be sure the table is centered underneath the chandelier and on the area rug if you’re using one. If your dining room is small, remove all other furniture and leave only four chairs.8

 

Dress up the table using nice tableware and cloth napkins or a table runner and centerpiece. For a long table, try lining up a series of small vessels down the middle.

 

 

 

 

 

8. REARRANGE FURNITURE

 

Start in your living room and think about what you want to emphasize (and de-emphasize) about the space. For example, do you have a beautiful fireplace or a stunning view? If so, arrange the furniture with that focal point in mind. Use a symmetrical seating arrangement to create a cozy conversation area adjacent to the focal point.

 

If the room is small, consider removing some of the furniture to make it feel larger, especially oversized pieces. That includes oversized television sets, unless it’s a designated media room. Pulling furniture away from the wall can make the room feel more spacious, and placing your largest furniture piece in the far-left corner (as opposed to near the entry) can create the illusion of a larger space.9

 

For small bedrooms, remove all the furniture except the bed, bedside tables and a dresser. If it’s a large room, add one or two chairs and a table to create a seating area. Place lamps on the bedside tables and seating area if you have one.10

 

Make sure each space in your home has a clearly defined purpose. For example, if you’ve been using an extra bedroom as a catch-all storage space, stage it as a guest room or office instead. Turn an awkward alcove into a workstation or a reading corner. Help buyers imagine how they could use the space themselves.3

 

 

9. LIGHTEN UP

 

Lighting can have a drastic impact on the look and feel of a home. Few buyers seek out a dark house; most prefer one that’s light and bright. Make sure windows are clean, and open curtains and blinds to let in the maximum amount of daylight.

 

Each room should have three types of lighting: ambient (general or overhead), task (such as a reading lamp or under-cabinet light), and accent (such as a floor or table lamp). Aim for a goal of 100 total watts per 50 square feet.11 If your mounted light fixtures are dated, replacing them with something more modern is an easy and inexpensive upgrade that can have a big impact.


Strategically placed landscape lighting can add a dramatic effect to your home’s exterior. Welcome evening visitors with a lighted walkway, or use a spotlight to accentuate trees or other landscaping features. Solar lights require no wiring; simply place them in a sunny spot and they will turn on automatically at dusk.

 

 

10. HIGHLIGHT YOUR BACKYARD’S BEST FEATURES

 

While your home’s interior often takes center stage, don’t forget about staging your home’s outdoor areas to help buyers imagine how they could utilize the space.

 

Even a small patio can become a selling feature with the addition of a cafe table and chairs. Add a tray of plates and coffee cups to help buyers envision a peaceful breakfast on the back porch. Place chairs and wine glasses around an outdoor firepit or hang a hammock with a book in your favorite shady spot.3 These small, simple additions can help buyers visualize the possibilities your backyard has to offer.

 

 

BEFORE YOU GET STARTED

 

If you’re in the market to sell your home, this list provides a great starting point for your preparations. But nothing beats the trained eye and expertise of a real estate agent. Before you do any work, we recommend consulting a professional for advice about your particular property. 

 

We offer free, no-commitment seller consultations and will walk through your home with you to help you assess which projects and upgrades are worth your time and money, and which ones you can skip. 

 

As local market experts, we are intimately familiar with buyer preferences in your area. We’ll run a comparative market analysis to find out how your home compares to others currently on the market, as well as those that have recently sold. Then we’ll tailor a custom plan to suit your particular property, budget and needs. 

 

Please call or email us today with questions or to schedule a free consultation!

 

 

 

Sources:

 

  1. National Association of Realtors –
    https://www.nar.realtor/sites/default/files/migration_files/reports/2017/2017-profile-of-home-staging-07-06-2017.pdf
  2. Real Estate Staging Association –
    http://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548
  3. Houzz –
    https://www.houzz.com/ideabooks/2661221/list/sell-your-home-fast-21-staging-tips
  4. HGTV –
    https://www.hgtv.com/design/outdoor-design/landscaping-and-hardscaping/10-curb-appeal-tips-from-the-pros-pictures
  5. National Association of Realtors –
    https://www.nar.realtor/sites/default/files/reports/2017/2017-home-buyer-and-seller-generational-trends-03-07-2017.pdf
  6. The Spruce –
    https://www.thespruce.com/must-try-neutral-paint-colors-797983
  7. HouseLogic –
    https://www.houselogic.com/sell/preparing-your-home-to-sell/home-staging-checklist/
  8. StageMyOwnHome.com –
    http://www.stagemyownhome.com/staging-the-dining-room.html
  9. Realtor.com –
    https://www.realtor.com/advice/sell/small-living-room-staging-tricks/
  10. SFGATE –
    http://homeguides.sfgate.com/stage-master-bedroom-34573.html
  11. HGTV –
    https://www.hgtv.com/shows/designed-to-sell/15-secrets-of-home-staging-pictures

Home Design Trends to Watch in 2018

We frequently get questions from clients who are taking on decorating and remodeling projects and want to ensure their dollars are invested wisely. 

 

Which looks will last for years to come, and which ones will feel dated quickly? What colors and styles are most popular among buyers in our area? How can I add the most value to my home?

 

So we’ve rounded up some of the hottest trends in home design to help guide you through the process. Whether you’ve planned a simple refresh or a full-scale renovation, making smart and informed design choices will help you maximize your return on investment … and minimize the chance of “remodeler’s remorse” down the road.

 

 

WHAT’S HOT NOW

 

While 2017 was all about millennial pink, brass fixtures and bright white kitchens, this year we expect to see a move toward warmer, cozier elements throughout the home.

 

1. Warm Colors

 

A cool color scheme has dominated home design in recent years, but this year warm neutrals like brown and tan are back, along with rich jewel tones. While the pastel craze of last year is still hanging on, expect to see alternative color palettes featuring deep, saturated shades of red, yellow, green and navy. Grey will remain popular, but in warmer tones, often referred to as “greige.”

 

Photo by Falcone Hybner Design, Inc. - Discover living room design inspiration

2. Cozy Elements

 

Along with warmer colors, we can expect to see a shift from stark, modern design to cozier looks. Velvet upholstery, woven textures and natural elements, like wood and stone, will heat things up this year.

 

3. Mixed Metals

 

It used to be considered gauche to mix finishes, however the look of mixed metals will be very big in 2018. Brass will continue to trend, along with matte black and classics like polished chrome and brushed nickel.

 

Photo by amorybrown.co.uk - Browse living room photos

 

4. Bold Patterns

 

Expect to see a lot of bright, bold patterns in the form of geometric shapes and graphic floral prints. These will be featured on everything from furniture to throw pillows to tile. 

 

5. Natural Elements

 

Look for the use of natural elements throughout the home, including wood, stone, plants, flowers and grass. Botanical patterns will also be seen in prints, wallpaper and upholstery. Concrete accents will complement these additions in an effort to bring the essence of the outdoors inside the home.

 

Photo by Your Design Envy - Look for bedroom pictures

8. Hardwood Floors

 

Hardwood floors will continue to dominate the market. The trend is toward either very dark stains paired with light-colored walls or light stains with darker walls. Greyish tones will remain popular, as will matte finishes, which are easier to maintain than high gloss. Expect to see frequent use of wider and longer wood planks, as well as distressed and wire-brushed finishes, which add texture and dimension.

 

9. Smart Homes

 

Everything is getting “smarter” in homes, from locks and lights to thermostats and appliances. And with devices like Google Home and Amazon Alexa, you can control many of these with voice activation from a central hub. We will see continued integration of and advancements in smart-home technology in 2018.

 

 

KITCHEN TRENDS

 

While white kitchens will remain popular in 2018, expect to see more color this year in everything from cabinets to tile to appliances.

 

1. Two-toned Cabinets 

 

Two-toned cabinets are quickly overtaking the white-on-white look that has dominated kitchen design for the past few years. While white remains a classic, grey and bleached-wood cabinet variations are surging in popularity, along with darker neutrals like navy and green.

 

Photo by Rebecca Hay Designs - Browse kitchen photos

 

2. Quartz Countertops

 

Granite reigned as the top countertop choice for many years, but quartz is now king. It’s highly durable, low-maintenance and comes in a wide variety of styles and colors. It’s also heat resistant, scratch resistant and non-porous (unlike granite and marble) so it doesn’t need to be sealed.

 

3. Bold Backsplashes

 

After years of dominating backsplash design, the white subway tile is officially on its way out. Expect to see it replaced with more elaborate shapes, patterns, colors and textures. Tile that mimics the appearance of wood, concrete and wallpaper is also gaining in popularity.

 

Photo by Smith & Vansant Architects PC - Look for kitchen pictures

4. Statement Sinks

 

While stainless steel and white porcelain are always safe bets, the trend is moving toward sinks that make more of a statement. Look for unexpected pops of color and materials like natural stone and copper. Touch-free faucets are expected to gain favor with homeowners this year, too.

 

5. Brass is (Still) Back

 

Brass fixtures came back in a big way over the past couple of years and will continue to be a popular choice in 2018 along with matte black, black nickel, polished chrome and brushed nickel. Missing from the list? Rose gold, which is decidedly “out” this year.

 

Photo by Showcase Kitchens and Baths - Browse kitchen ideas

6. Multi-purpose Islands

 

Kitchen islands have evolved from simple prep-stations into the “workhorse” of the kitchen. Many feature sinks, built-in appliances and under-counter storage while also serving as a casual dining area. They have become the focal point of the kitchen, and we expect to see more of them in 2018 and beyond.

 

7. Black Stainless Steel

 

Black stainless steel is the hot new finish option for appliances, and it’s hitting the market in a big way. It offers a cutting-edge look and is easier to keep clean than traditional stainless steel. However, it’s harder to match finishes amongst different brands, so it’s probably only feasible as part of a complete appliance package.

 

8. Appliance Garages

 

Appliance garages are counter-level compartments designed to house small appliances like blenders, toasters and stand mixers. They make it convenient to have these items readily accessible, without the look of a cluttered counter.

 

 

Photo by Santa Cruz Design + Build - More kitchen ideas

 

BATH TRENDS

 

Expect to see many of the same kitchen design preferences carry over into bathrooms this year, including two-tone cabinets, quartz countertops and brass fixtures.

 

1. Neutral Tones

 

Neutral shades will continue to dominate in the master bathroom as homeowners seek a soothing and relaxing retreat atmosphere. But expect to see more options than just white. Shades of brown, grey, blue, green and tan will help to warm things up.

 

Photo by Nina Williams Designs - Look for bathroom pictures

2. Natural Elements

 

Natural materials are particularly hot right now in bathroom design. This includes the use of wood and stone on walls, cabinets, counters and backsplashes, as well as the incorporation of botanical design elements.

 

3. Large Tiles

 

We expect to see a lot more large and slab-sized tiles in bathrooms, which have less grout so they are easier to clean and maintain. Wood-look porcelain tiles are also a favorite in wet areas, as they offer the warmth and rustic appeal of wood with the durability of tile.

 

Photo by Deep River Partners - Discover powder room design inspiration

4. Stone Sinks

 

Sinks will continue to be an area where homeowners like to exhibit creativity, and hand-carved stone sinks are especially fashionable right now. These may be more suited to powder rooms, where functionality isn’t as crucial. 

 

5. Freestanding Tubs

 

There’s been a tub resurgence in bathroom design after years of preference for stand-alone showers. Modern tastes are gravitating toward freestanding tubs that serve as a showpiece for the bathroom.

 

Photo by MAK Studio - More bathroom photos

6. Smart Features

 

Smart technology has entered the bathroom with the addition of features like wireless shower speakers and high-tech toilets, as well as digital shower controls that automatically adjust to your preferences in temperature and spray intensity.

 

 

OUR ADVICE

 

Style trends come and go, so don’t invest in the latest look unless you love it. That said, highly-personalized or outdated style choices can limit the appeal of your property for resale.

 

For major renovation projects, it’s always a good idea to stick to neutral colors and classic styles. It will give your remodel longevity and appeal to the greatest number of buyers when it comes time to sell. It will also give you flexibility to update your look in a few years without a total overhaul. Use non-permanent fixtures – like paint, furniture and accent pieces – to personalize the space and incorporate trendier choices.

 

If you’d like advice on a specific remodelling or design project, give us a call! We’re happy to offer our insights and suggestions on how to maximize your return on investment and recommend local shops and service providers who may be able to assist you.

Sources:

  1. Country Living –
    http://www.countryliving.com/home-design/decorating-ideas/g3988/kitchen-trends
  2. Elle Decor –
    http://www.elledecor.com/design-decorate/trends/g14486069/kitchen-trends-2018/
  3. Gates Interior Design  –
    https://gatesinteriordesign.com/hottest-interior-design-trends-for-2018/
    https://gatesinteriordesign.com/biggest-kitchen-bath-trends-for-2018/
  4. HGTV.com –
    http://www.hgtv.com/design/rooms/kitchens/17-top-kitchen-design-trends-pictures
  5. House Beautiful –
    http://www.housebeautiful.com/room-decorating/kitchens/g2664/kitchen-trends/
    http://www.housebeautiful.com/design-inspiration/g13938283/2018-decor-trends/
    http://www.housebeautiful.com/design-inspiration/g13820501/best-and-worst-decor-trends-from-2017/
  6. Houzz –
    https://www.houzz.com/ideabooks/93399913/list/interior-design-trends-expected-to-take-hold-in-2018
  7. Huffington Post – http://www.huffingtonpost.com.au/2017/09/25/the-kitchen-and-dining-trends-to-look-out-for-in-2018_a_23222693/
  8. Kitchen and Bath Design News –
    http://www.kitchenbathdesign.com/123995/year-end-look-and-new-trends-for-2018/
  9. MSN.com –
    https://www.msn.com/en-us/lifestyle/home-and-garden/12-flooring-trends-for-2018/ss-AAtp7QA
  10. Realtor.com  –
    https://www.realtor.com/advice/home-improvement/interior-design-trends-to-ditch-2018/
    https://www.realtor.com/advice/home-improvement/hottest-interior-design-decor-trends-2018/?is_wp_site=1
  11. Realty Times – http://realtytimes.com/advicefromagents/item/1007993-kitchen-design-trends-in-2018?rtmpage=MattLawler
  12. Sebring Design Build –
    https://sebringdesignbuild.com/top-trends-in-bathroom-design/
  13. The Flooring Girl –
    http://theflooringgirl.com/hardwood-flooring/hardwood-flooring-trends-2018/
  14. Vogue –
    https://www.vogue.com/article/interior-design-trends-according-to-expert-designers-decorators
  15.  

Real Estate 2018: What to Expect

Real Estate 2018: What to Expect

 

 

As we head into a new year, the most common question we receive is, “What’s the outlook for real estate in 2018?” 

 

It’s not just potential buyers and sellers who are curious; homeowners also want reassurance their home’s value is going up. The good news is that a strong U.S. economy, coupled with low unemployment rates, is expected to drive continued real estate growth in 2018. However, changes on the horizon could significantly impact you if you plan to buy, sell or refinance this year.

 

 

HOME VALUES WILL CONTINUE TO RISE

 

Get ready for another strong year! U.S. home values and sales volume will continue to rise in 2018. 

 

Experts agree that home prices will increase in 2018, but predict a slower rate of appreciation than 2017, which clocked in at nearly 7 percent nationwide. National Association of Realtors (NAR) Chief Economist Lawrence Yun predicts a growth rate this year of 5.5 percent,1 while Freddie Mac’s September Outlook Report forecasts a rate of 4.9 percent. Either way, all indicators point towards continued growth in 2018.2

 

What does it mean for you? If you’re a current homeowner, congratulations! Real estate proves once again to be a solid investment over the long term. And if you’re considering selling this year, there’s never been a better time. Contact us to request a free Comparative Market Analysis to find out how much you can expect your home to sell for under current market conditions.

 

If you’re in the market to buy this year, there’s good news for you, too. Although prices continue to rise, the rate of appreciation has slowed. Still, don’t wait any longer. Prices will continue to go up, so you’ll pay more six months from now than you would today. Call us to setup a free, no-obligation property search and get notified about listings that meet your criteria as soon as (or before) they hit the market.

 

 

NEW CONSTRUCTION WILL MAKE REAL ESTATE MORE ACCESSIBLE


Lack of inventory in the housing market has been a primary impediment to homeownership for many Americans. “Ten years ago, the problem in the housing market was lack of buyers,” says Yun. “Today, the problem is lack of sellers. Inventory levels are near historic lows.”3

 

Yun also notes, “The lack of inventory has pushed up home prices by 48 percent from the low point in 2011, while wage growth over the same period has been only 15 percent. Despite improving confidence [in 2017] from renters that now is a good time to buy a home, the inability for them to do so is causing them to miss out on the significant wealth gains that homeowners have benefitted from through rising home values.”1

 

The good news? Yun expects a 9.4 percentage point increase in single-family new home construction starts.4

 

Economists at Freddie Mac make a similar prediction. “Existing home sales are unlikely to increase much going forward. Limited inventory will remain a consistent problem … Growth in home sales will be primarily driven by new home sales, which should continue to grind higher with single-family construction.”2

 

Robert Dietz, chief economist at the National Association of Home Builders, agrees. "The markets that are going to grow are ones where builders can add that entry level product."5


What does it mean for you? If you’ve been frustrated by lack of inventory in the past, 2018 may bring new opportunities for you to find a budget-friendly home that suits your needs. Give us a call to discuss options for new construction in our area.

 

 

MILLENNIALS WILL MOVE TO THE SUBURBS 

 

The new entry-level construction will come with a catch though … it will be located in the suburbs, where the availability of land and fewer zoning requirements make it more cost-effective to build. Economists predict that’s where millennials and first-time buyers will flock for the greater variety of homes at affordable prices.6

 

Rising home prices, a sluggish job market, and an increase in student loan debt made homeownership largely unattainable for many millennials in past years. However, there’s significant evidence that this trend is turning around. For the fourth year a row, the National Association of Realtors' 2017 Home Buyer and Seller Generational Trends survey found that millennials were the largest group of homebuyers.7

 

As millennials age, they are settling down and having families, which has prompted an increasing demand for larger but affordable homes. Thus, many are flocking to the suburbs, with 57 percent of millennial buyers opting for a suburban location.

 

What does it mean for you? If you’re a millennial who has been priced out of urban living, or is looking for more space for your growing family, a number of suburbs in our area have a lot to offer. We can point you towards the communities that will best meet your needs.

 

And if you’re a suburban homeowner with plans to sell, give us a call. We know how to market your home to millennials … and can help you sell quickly for top dollar by appealing to this growing market segment!

 

 

BOOMERANG BUYERS WILL RETURN TO THE MARKET

 

“Boomerang buyers” comprise the nearly 10 million Americans who lost their homes to foreclosure or short sales during the housing recession of 2006 to 2014.

 

According to MyFico.com, a foreclosure remains on a credit report for seven years. It takes many boomerang buyers at least that long to raise their credit score and save up enough cash to qualify for a new mortgage.8

 

With this “seven-year window” in mind, RealtyTrac predicts that the largest wave of boomerang buyers – more than 1.3 million – will be eligible to re-enter the housing market in 2018.9

 

Markets likely to see the highest influx of boomerang buyers are those that had a high percentage of foreclosures AND have remained affordable. The majority of boomerang buyers are middle-class Gen Xers or Baby Boomers. Expect to see even more competition for entry-level homes in those markets.

 

What does it mean for you? If you’re a boomerang buyer, we understand your unique circumstances. We can help you navigate the real estate process and write competitive offers that will play to your strengths. Contact us to discuss your options.

 

 

NEW TAX LEGISLATION WILL IMPACT HOMEOWNER DEDUCTIONS

 

The “Tax Cuts and Jobs Act” passed at the end of 2017 nearly doubles the standard deduction, so far fewer Americans are expected to itemize this year. For those who do, however, it could mean less homeowner deductions are available than in the past.

 

Previously, homeowners could deduct interest paid on the first $1 million of mortgage debt, but that threshold has been lowered to $750,000 for new mortgages. (Existing mortgages will not be impacted.) 

 

Additionally, taxpayers will no longer be able to fully deduct state and local property taxes plus income or sales taxes. The new legislation restricts this deduction to $10,000. It also eliminates the deduction for moving expenses (except for members of the Armed Forces) and interest on home equity loans unless the proceeds are used to substantially improve the residence.10

 

It’s yet to be seen how the tax bill will impact the real estate market overall. While some economists predict a price reduction in certain markets, Republican lawmakers project the bill will increase take-home pay and stimulate the economy overall. According to Realtor.com Senior Economist Joseph Kirchner, “Some house hunters—particularly wealthy buyers—will see an increase in after-tax income, making an already tough housing market even more competitive. This increased demand could drive prices up even higher than they are already.”11

 

What does it mean for you? If you’re an existing homeowner, be sure to consult a tax professional if you’re concerned about the impact the new tax bill could have on you.

 

And if you’re planning to buy or sell this year, we can help you determine how the tax bill could affect demand in your current or target neighborhood and price range.

 

 

INTEREST RATES WILL RISE


No one knows exactly what will happen with mortgage rates this year, but the Mortgage Bankers Association anticipates the Federal Reserve will raise rates three times in 2018, with Freddie Mac’s 30-year fixed rate mortgage reaching 4.8 percent by the end of Q4, up from around 4 percent at the end of 2017.12

 

Kiplinger.com Economist David Payne also predicts interests rates will rise this year, with short-term rates outpacing long-term rates as the Fed aims to curb inflation in a tightening job market. He predicts the bank prime rate that home equity loans are based on will increase from 4.25 percent to 5 percent by the end of 2018. 13

 

What does it mean for you? If you’re in the market to buy, act now. Rising interest rates will decrease your purchasing power, so act quickly before interest rates go up. Give us a call today to get your home search started. 

 

And if you’re a current homeowner who is considering refinancing or a home equity loan, don’t wait. We can help you estimate your property’s fair market value so you’ll be prepared before contacting a lender.

 

 

WE’RE HERE TO HELP

 

While national real estate numbers and predictions can provide a “big-picture” outlook for the year, real estate is local. And as local market experts, we can guide you through the ins and outs of our market, and the local issues that are likely to drive home values in your particular neighborhood. If you have specific questions, or would like more information about where we see real estate headed in our area, please give us a call! We’d love to discuss how issues here at home are likely to impact your desire to buy or a sell a home this year.

 

Marie Kamprath, Hearthstone Group at Kelly Right Real Estate

208.691.2007

 

 

Sources:

  1. Inman News –
    https://www.inman.com/2017/11/03/what-to-expect-from-the-2018-housing-market/
  2. Freddie Mac September Outlook Report –
    http://www.freddiemac.com/research/outlook/20170921_looking_ahead_to_2018.html
  3. Marketplace.org –
    https://www.marketplace.org/2017/07/05/economy/tight-inventory-slows-housing-market-down-0
  4. National Association of Realtors Press Release –
    https://www.prnewswire.com/news-releases/existing-home-sales-to-grow-37-percent-in-2018-but-inventory-shortages-and-tax-reform-effects-loom-300549447.html
  5. Fox Business News –
    http://www.foxbusiness.com/features/2017/11/27/entry-level-buyers-drive-solid-new-home-sales.html
  6. Zillow Research  –
    https://www.zillow.com/research/2018-predictions-17217/
  7. National Association of Realtors’ Home Buyer and Seller Generational Trends Report  –
    https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends
  8. MyFico.com -
    https://www.myfico.com/crediteducation/questions/foreclosure-fico-score-affect.aspx
  9. RealtyTrac -
    http://www.realtytrac.com/news/foreclosure-trends/boomerang-buyers/
  10. National Association of Realtors -
    https://www.nar.realtor/taxes/tax-reform/the-tax-cuts-and-jobs-act-what-it-means-for-homeowners-and-real-estate-professionals
  11. Realtor.com -
    https://www.realtor.com/news/real-estate-news/tax-cuts-survey/
  12. Mortgage Bankers Association Economic Forecast  –
    https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary
  13. Kiplinger Economic Forecast  –
    https://www.kiplinger.com/article/business/T019-C000-S010-interest-rate-forecast.html#iOf4mkSFvvTmi2wr.99

Why Real Estate Investing Makes (Dollars and) Sense

 

Turn on the television or scroll through Facebook, and chances are you’ll see at least one advertisement for a group or “guru” who promises to teach you how to “get rich quick” through real estate investing. The truth is, much of what they’re selling are high-risk tactics that aren’t a good fit for the average investor. However, there is a way to make steady, predictable, low-risk income through real estate investing. In this blog post, we’ll examine the tried-and-true tactics that can be used to increase your income, pay off debt … even fund your retirement!

 

 

WHY INVEST IN REAL ESTATE?

 

One of the basic principles of real estate investment lies in this fact: everyone needs a place to live. And according to the Bureau of Labor Statistics’ most recent Consumer Expenditures Survey, housing is typically an American’s largest expense.1 

 

But there are other reasons why real estate is a great investment choice, and we’ve outlined the top five below:

 

1. Appreciation

Appreciation is the increase in your property’s value over time. History has proven that over an extended period of time, the value of real estate continues to rise. That doesn’t mean recessions won’t occur. The real estate market is cyclical, and market ups and downs are natural. In fact, the U.S. housing market took a sharp downturn in 2008, and many properties took several years to recover their value. However, in the vast majority of markets, the value of real estate does grow over the long term.

 

The S&P CoreLogic Case-Shiller National Home Price Index, which tracks U.S. residential real estate prices, released its latest results on August 29 with the headline “National Home Price Index Rises Again to All Time High.”2

 

 

 

While no investment is without risk, real estate has proven again and again to be a solid choice to invest your money over the long term.

 

2. Hedge Against Inflation

Inflation is the rate at which the general cost of goods and services rises. As inflation rises, prices go up. This means the money you have in your bank account is essentially worth less because your purchasing power has decreased. 

 

Luckily, real estate prices also rise when inflation increases. That means any money you have invested in real estate will rise with (or often exceed) the rate of inflation. Therefore, real estate is a smart place to put your money to guard against inflation.

 

3. Cash Flow

One of the big benefits of investing in real estate over the stock market is its ability to provide a fairly steady and predictable monthly cash flow. That is, if you choose to rent out your investment property to a tenant, you can expect to receive a rent payment each month. 

 

If you’ve invested wisely, the rent payment should cover the debt obligation you may have on the property (i.e. mortgage), as well as any repairs and maintenance that are needed. Ideally, the monthly rental income would be great enough to leave you a little extra cash each month, as well. You could use that extra money to pay off the mortgage faster, cover your own household expenses, or save for another investment property.

 

Even if you only take in enough rent to cover your expenses, a rental property purchase will pay for itself over time. As you pay down the mortgage every month with your rental income, your equity will continue to increase, until you own the property free and clear … leaving you with residual cash flow for years to come.

 

As the owner, you will also benefit from the property’s appreciation when it comes time to sell. This can be a great way to save for retirement or even fund a child’s college education. Purchase a property when the child is young, and with a little discipline, it can be paid off by the time they are ready to go to college. You can sell it for a lump sum, or use the monthly income to pay their tuition and expenses.

 

4. Leverage

One of the unique features that sets real estate apart from other asset classes is the ability to leverage your investment. Leverage is the use of borrowed capital to increase the potential return of an investment. 

 

For example, if you purchase an investment property for $100,000, you might put 10% down ($10,000) and borrow the remaining $90,000 in the form of a mortgage.

 

Even though you’ve only invested $10,000 at this point, you have the ability to earn a profit on the entire $100,000 investment. So, if the property appreciates to $120,000 – a 20% increase over the purchase price – you still only have to pay the bank back the original $90,000 (plus interest) … and you get to keep the $20,000 profit. 

 

That means you made $20,000 off of a $10,000 investment, essentially doubling your money, even though the market only went up by 20%! That’s the power of leverage. 

 

5. Tax Advantages

One of the top reasons to invest in real estate is the tax benefit. There are numerous ways a real estate investment can save you money each year on taxes:

 

Depreciation

When you record your income from a rental property on your annual tax return, you get to deduct any expenses associated with the investment. This includes interest paid on the mortgage, maintenance, repairs and improvements, but it also includes something called depreciation. 

 

Depreciation is the theoretical loss your property suffers each year due to aging. While it’s true that as a home ages it will structurally need repairs and systems will eventually need to be replaced, we’ve also learned in this post that the value of real estate appreciates over time. So getting to claim a “loss” on your investment that is actually gaining in value makes real estate an appealing investment choice.

 

Serial Home Selling

Even if you’re not interested in owning a rental property, other types of real estate investments offer tax advantages, as well. Generally, when you own an investment property you pay a capital gains tax on any profits you make when you sell the property. 

 

However, when you sell your principal residence, you are exempt from paying taxes on capital gains (up to $250,000 for singles and $500,000 for couples). The Internal Revenue Service (IRS) only requires that you live in the house for two of the previous five years. That means you can purchase an investment property, live in it while you remodel it, and then sell it for a tax-free profit two years later. This can be a great way to get started in real estate investing.

 

Section 1031 Exchanges

In addition to profiting off of your personal residence tax free, it is possible to sell an investment property tax free if you do it through a 1031 Exchange. If structured properly, the IRS Tax Code enables an investor to sell a property and reinvest the proceeds in a new property while deferring all capital gains taxes.

 

Tax-Deferred Retirement Account

It’s a common misconception that you can only purchase financial instruments (i.e. stocks, bonds, mutual funds, etc.) through an Individual Retirement Account (IRA) or 401(k). In actuality, the IRS allows individuals to invest retirement funds in real estate and other alternative types of investments, as well. By purchasing your investment property through an IRA, you can take advantage of all of the tax savings these accounts offer.

 

Be sure to consult a tax professional regarding all tax matters related to your real estate investments. If structured correctly, the profits you earn on your real estate investments can be largely shielded from tax liability. Just another reason to choose real estate as your preferred investment vehicle.

 

 

TYPES OF REAL ESTATE INVESTMENTS

 

While there are numerous ways to invest in real estate, we’re going to focus on three primary ways average investors earn money through real estate. We touched on several of these already in the previous section.

 

1. Remodel and Resell

HGTV has countless “reality” shows featuring property flippers who make this investment strategy look easy. Commonly referred to as a “Fix and Flip,” investors purchase a property with the intention of remodeling it in a short period of time, with the hope of selling it quickly for a profit.

 

This is a higher-risk tactic, and one for which many of the real estate “gurus” we talked about earlier claim to have the magic formula. They promise huge profits in a short amount of time. But investors need to understand the risks involved, and be prepared financially to cover additional expenses that may arise. 

 

Luckily, an experienced real estate agent can help you identify properties that may be good candidates for this type of investment strategy… and help you avoid some of the pitfalls that could derail your plans.

 

2. Traditional Rental

One of the more conservative choices for investing in real estate is to purchase a rental property. The appeal of a rental property is that you can generate cash flow to cover the expenses, while taking advantage of the property’s long-term appreciation in value, and the tax benefits of investing in real estate. It’s a win-win, and a great way for first-time investors to get started. 

 

And according to the U.S. Bureau of Labor Statistics, rents for primary residences have increased 21.9 percent between 2007 and 2015 as demand for rental units continues to grow.1

 

3. Short-term Rental

With the huge movement toward a “sharing economy,” platforms that facilitate short-term rentals, like Airbnb and HomeAway, are booming. Their popularity has spurred a growing trend toward dual-purpose vacation homes, which owners use themselves part of the year, and rent out the remainder of the time. There are also a growing number of investors purchasing single-family homes for the sole purpose of leasing them on these sites.

 

Short-term rentals offer several benefits over traditional rentals, which many investors find attractive, including flexibility and higher profit margins. However, the most profitable properties are strategically located near popular tourist destinations. You’ll need an experienced real estate professional to help you identify the right property if you want to be successful in this highly-competitive market.

 

 

DOES REAL ESTATE INVESTING SOUND TOO GOOD TO BE TRUE?

 

We’ve all heard stories, or maybe even know someone, who struck it rich with a well-timed real estate purchase. However, just like any investment strategy, a high potential for earnings often goes hand-in-hand with an increase in risk. Still, there’s substantial evidence that a well-executed real estate investment can be one of the best choices for your money.

 

Purchasing a home to remodel and resell can be highly profitable, as long as you have a trusted team in place to complete the remodel quickly and within budget … and the financial means to carry the property for a few extra months if delays occur.

 

Or, if you buy a house for appreciation and cash flow, you can ride through the market ups and downs without stress because you know your property value is bound to increase over time, and your expenses are covered by your rental income.

 

In either scenario, make sure you’re working with a real estate agent who has knowledge of the investment market and can guide you through the process. While no investment is without risk, a conservative and well-planned investment in real estate can supplement your income and set you up for future financial security.

 

If you are considering an investment in real estate, please contact us to set up a free consultation. We have experience working with all types of investors and can help you determine the best strategy to meet your investment goals.

 

Sources:

  1. Bureau of Labor Statistics Consumer Expenditure Survey Annual Report  – https://www.bls.gov/opub/reports/consumer-expenditures/2015/home.htm
  2. S&P Dow Jones Indices Press Release –
    https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/574349_cshomeprice-release-0829.pdf?force_download=true
  3. Durden, T. (2016 November 29). US Home Prices Rise Above July 2006 Levels, Hit New Record High [blog post] ZeroHedge  –
    http://www.zerohedge.com/news/2016-11-29/us-home-prices-rise-above-july-2006-levels-hit-new-record-hig
    h
  4.  

A rising real estate market

This could be a good time to cash in some equity, as the average sales price of homes are up 11% over last year to date in the greater Coeur d’Alene area, and 7.1% in the greater Spokane area. The average North Idaho sales price in August was $295,633! 

To put this in perspective, not many years ago those numbers were closer to $170,000! So perhaps some professional advice is in order...

The Consumer’s Guide to Hiring an Amazing Real Estate Agent

 

When you’re buying or selling a home, it’s crucial to work with a qualified real estate agent. Not just a professional, but an amazing agent and a market expert. So how do you ensure you’re hiring an amazing real estate agent?

 

There are currently more than two million real estate professionals in North America.1,2 With so many options to choose from, how does a prospective home buyer or seller choose the right agent or broker? According to the National Association of Realtors®, trust and reputation are the top deciding factors consumers use when hiring an agent.3

 

But how do you measure trust and reputation ... and what criteria can be used to help you make your decision?

 

In this guide, we've outlined the top attributes that amazing agents possess, as well as the questions you can ask to make sure you’re working with the right market expert to achieve your real estate goals.

 

 

5 ATTRIBUTES OF AN AMAZING AGENT

 

As we mentioned above, not all real estate professionals are the same. And it’s easy to be overwhelmed by the options and information about working with real estate professionals to buy or sell your home. In fact, many real estate markets are oversaturated with agents.

 

To help you understand what makes top agents and market experts stand apart from the competition, following are five key attributes of an amazing agent:

 

1. A Pricing Specialist

 

If an agent has their real estate license, they know the basics of the transaction process. They know what goes into buying and selling a home. However, there’s a difference between knowing the process and navigating it for an ideal result. This ideal result often means buying or selling a home for the best price.

 

For buyers, amazing agents have a strong understanding of market trends, competition, and how to make your offer attractive to sellers. They can help you identify and secure a deal to ensure you get the home you want, within your desired budget.

 

If you’re selling a home, market experts have experience pricing homes optimally for the market, and creating pricing plans to minimize the time spent selling the home. This will help you sell for your desired price, and avoid costs like additional mortgage and utility payments.

 

 

 

2. An Effective Time Manager

 

It’s common to underestimate the amount of time it takes to buy or sell your home. The average real estate agent may not be utilizing the latest tools and technology to make the transaction easier and more cost effective for their clients. Market experts have tools and strategies at their disposal to minimize the amount of time you spend on the process.

 

For sellers, market experts can make sure you only deal with qualified buyers, not the “window shoppers” who can waste your time. We also utilize the latest marketing practices to advertise and price your home effectively, ensuring it gets sold quickly.

 

When looking to buy a home, inexperienced agents may waste your time by showing you homes that are not a good fit for you. A market expert knows how to prioritize your needs and wants to find you the ideal home within your budget. They also know how to spot “red flags” and can steer you away from homes that are likely to turn up major issues in a real estate inspection, saving you time and money.

 

In addition, well-networked Realtors can gain access to the hottest listings before many websites do. Their extensive professional networks can help identify “pre-list” homes before they’re officially on the market. This can be invaluable in a highly-competitive real estate market.

 

 

 

3. A Market Insider

 

While most agents can pull market stats about a neighborhood, community or city, they may not understand important trends or developments that would affect your transaction. These can include the state of the school district, issues with a homeowner association, new businesses in the area, zoning rules or trends in home prices.

 

Market experts live and breathe local real estate and know the trigger points for buying and selling in this market. We also stay current on effective marketing and negotiation practices, resulting in our track record of success.

 

For sellers, we understand what features of your home and neighborhood are assets in the selling process. And for buyers, we share a deep understanding of market factors, including school and neighborhood quality, crime statistics, speed of sales and more.

 

 

 

4. A Strong Negotiator

 

Amazing agents truly set themselves apart in their ability to negotiate. Unfortunately, a large portion of agents don’t commit their full time to increasing this key skill.

 

Real estate negotiations can be challenging, even for seasoned professionals. It takes skill, experience and a knowledge of how to fight for your client’s best interests. While any agent can enter negotiations to buy or sell a home, they may not know the effective strategies to exit those negotiations with the result you want.

 

Experienced Realtors focus on negotiation as a key skill. We understand what to do before entering negotiations (establishing the upper hand to set up the best outcome), as well as during the process (when to offer or accept concessions).

 

 

 

5. An Effective Closer

 

Closing a deal fast is often a good thing. For buyers, it means you found the home you wanted quickly. For sellers, it often means you can avoid the added expenses of mortgage and utility payments, and maximize the value of your home sale.

 

However, an agent solely focused on speed can make decisions that aren’t in your best interests. Top real estate professionals know how to not only achieve your real estate goals quickly, but in the right way to avoid potential pitfalls.

 

Just like negotiations, the paperwork and process of closing a real estate transaction are complicated. And they can be overwhelming for the average agent who hasn’t handled a lot of transactions. Sales contracts, property disclosures, occupancy agreements and even lead paint records need to be executed with precision. Your agent not only needs to be familiar with these, but also stay current on any changes in requirements or regulations.

 

Market experts have a strong understanding of real estate contracts, timelines, clauses and contingencies within the closing process. In fact, avoiding pitfalls during the closing process is where many sellers find an experienced Realtor is a huge asset.

 

 

 

 

5 QUESTIONS TO ASK YOUR REAL ESTATE AGENT

 

So how do you know if you’re working with an amazing agent?

 

The first step would be to “shop around.” Many people work with the first agent they come across without a firm understanding of their level of experience. It’s always a good idea to interview a number of agents before selecting one. If you’ve gotten referrals from people you trust, then you may only need to interview 2-3 agents.

 

However, it can be tough to know what to ask in the interview process. Here are some questions that can help you qualify the best agent to help you achieve your real estate goals:

 

1.     Can you send me some information about yourself?

Look for professionalism and consistency. What are their professional accomplishments? Also, try to identify how they approach their work. Look for a business person who has a strategy and solid support system. If they’re a newer agent, ask about their team’s dynamic and accomplishments.

 

2.     How long have you been in real estate?

The average Realtor has 10 years of experience4. But while longevity is important, even more telling are the number of transactions they have closed or been involved in. So feel free to also ask: “How many homes have you sold in this area?”

 

3.     What will you do to keep me informed?

Do you want daily or weekly reports from your agent? Will the agent be able to meet these expectations? Determine how much communication you want, and then find an agent who will give you the attention and time you want and deserve.

 

4.     Can you provide me with further resources I may need?

From market reports and pricing trends to school performance and crime statistics, top agents have resources at their disposal. In addition, market experts have built strong relationships with their extended team of professionals, and can often get expedient service or be able to “cash in a favor” for you should a need arise.

 

5.  Seller only: Can you share with me your plan to market my property? Many agents will simply put your home in the MLS and wait for it to sell. An amazing agent should have a detailed plan of how to get your home exposure on social media, to their local networks, and more.

 

 

GET STARTED

 

Now that you’re armed with the 5 Attributes of Amazing Agents and the Top Questions to ensure you work with the best possible real estate agent, you’re ready to start interviewing agents. 

 

We’d love an opportunity to win your business. Schedule a free consultation with us to find out how true market experts can help you achieve your real estate goals!

 

 

Sources:

  1. National Association of REALTORS – https://www.nar.realtor/field-guides/field-guide-to-quick-real-estate-statistics
  2. Financial Post – http://business.financialpost.com/personal-finance/mortgages-real-estate/canada-housing-bubble-agents/wcm/b49d4e3a-bd8d-4d1c-9566-bd3d80c8e23a
  3. National Association of REALTORS – 

    https://www.nar.realtor/reports/highlights-from-the-profile-of-home-buyers-and-sellers

  1. National Association of REALTORS – https://www.nar.realtor/field-guides/field-guide-to-quick-real-estate-statistics

The Consumer’s Guide to Hiring an Amazing Real Estate Agent

The Consumer’s Guide to Hiring an Amazing Real Estate Agent

 

When you’re buying or selling a home, it’s crucial to work with a qualified real estate agent. Not just a professional, but an amazing agent and a market expert. So how do you ensure you’re hiring an amazing real estate agent? 

 

There are currently more than two million real estate professionals in North America.1,2 With so many options to choose from, how does a prospective home buyer or seller choose the right agent or broker? According to the National Association of Realtors®, trust and reputation are the top deciding factors consumers use when hiring an agent.3

 

But how do you measure trust and reputation ... and what criteria can be used to help you make your decision?

 

In this guide, we've outlined the top attributes that amazing agents possess, as well as the questions you can ask to make sure you’re working with the right market expert to achieve your real estate goals.

 

 

5 ATTRIBUTES OF AN AMAZING AGENT

 

As we mentioned above, not all real estate professionals are the same. And it’s easy to be overwhelmed by the options and information about working with real estate professionals to buy or sell your home. In fact, many real estate markets are oversaturated with agents.

 

To help you understand what makes top agents and market experts stand apart from the competition, following are five key attributes of an amazing agent:

 

1. A Pricing Specialist

 

If an agent has their real estate license, they know the basics of the transaction process. They know what goes into buying and selling a home. However, there’s a difference between knowing the process and navigating it for an ideal result. This ideal result often means buying or selling a home for the best price.

 

For buyers, amazing agents have a strong understanding of market trends, competition, and how to make your offer attractive to sellers. They can help you identify and secure a deal to ensure you get the home you want, within your desired budget.

 

If you’re selling a home, market experts have experience pricing homes optimally for the market, and creating pricing plans to minimize the time spent selling the home. This will help you sell for your desired price, and avoid costs like additional mortgage and utility payments.

 

 

 

2. An Effective Time Manager

 

It’s common to underestimate the amount of time it takes to buy or sell your home. The average real estate agent may not be utilizing the latest tools and technology to make the transaction easier and more cost effective for their clients. Market experts have tools and strategies at their disposal to minimize the amount of time you spend on the process.

 

For sellers, market experts can make sure you only deal with qualified buyers, not the “window shoppers” who can waste your time. We also utilize the latest marketing practices to advertise and price your home effectively, ensuring it gets sold quickly.

 

When looking to buy a home, inexperienced agents may waste your time by showing you homes that are not a good fit for you. A market expert knows how to prioritize your needs and wants to find you the ideal home within your budget. They also know how to spot “red flags” and can steer you away from homes that are likely to turn up major issues in a real estate inspection, saving you time and money.

 

In addition, well-networked Realtors can gain access to the hottest listings before many websites do. Their extensive professional networks can help identify “pre-list” homes before they’re officially on the market. This can be invaluable in a highly-competitive real estate market.

 

 

 

3. A Market Insider

 

While most agents can pull market stats about a neighborhood, community or city, they may not understand important trends or developments that would affect your transaction. These can include the state of the school district, issues with a homeowner association, new businesses in the area, zoning rules or trends in home prices.

 

Market experts live and breathe local real estate and know the trigger points for buying and selling in this market. We also stay current on effective marketing and negotiation practices, resulting in our track record of success.

 

For sellers, we understand what features of your home and neighborhood are assets in the selling process. And for buyers, we share a deep understanding of market factors, including school and neighborhood quality, crime statistics, speed of sales and more.

 

 

 

4. A Strong Negotiator

 

Amazing agents truly set themselves apart in their ability to negotiate. Unfortunately, a large portion of agents don’t commit their full time to increasing this key skill.

 

Real estate negotiations can be challenging, even for seasoned professionals. It takes skill, experience and a knowledge of how to fight for your client’s best interests. While any agent can enter negotiations to buy or sell a home, they may not know the effective strategies to exit those negotiations with the result you want.

 

Experienced Realtors focus on negotiation as a key skill. We understand what to do before entering negotiations (establishing the upper hand to set up the best outcome), as well as during the process (when to offer or accept concessions).

 

 

 

5. An Effective Closer

 

Closing a deal fast is often a good thing. For buyers, it means you found the home you wanted quickly. For sellers, it often means you can avoid the added expenses of mortgage and utility payments, and maximize the value of your home sale.

 

However, an agent solely focused on speed can make decisions that aren’t in your best interests. Top real estate professionals know how to not only achieve your real estate goals quickly, but in the right way to avoid potential pitfalls.

 

Just like negotiations, the paperwork and process of closing a real estate transaction are complicated. And they can be overwhelming for the average agent who hasn’t handled a lot of transactions. Sales contracts, property disclosures, occupancy agreements and even lead paint records need to be executed with precision. Your agent not only needs to be familiar with these, but also stay current on any changes in requirements or regulations.

 

Market experts have a strong understanding of real estate contracts, timelines, clauses and contingencies within the closing process. In fact, avoiding pitfalls during the closing process is where many sellers find an experienced Realtor is a huge asset.

 

 

 

 

5 QUESTIONS TO ASK YOUR REAL ESTATE AGENT

 

So how do you know if you’re working with an amazing agent?

 

The first step would be to “shop around.” Many people work with the first agent they come across without a firm understanding of their level of experience. It’s always a good idea to interview a number of agents before selecting one. If you’ve gotten referrals from people you trust, then you may only need to interview 2-3 agents.

 

However, it can be tough to know what to ask in the interview process. Here are some questions that can help you qualify the best agent to help you achieve your real estate goals:

 

1.     Can you send me some information about yourself?

Look for professionalism and consistency. What are their professional accomplishments? Also, try to identify how they approach their work. Look for a business person who has a strategy and solid support system. If they’re a newer agent, ask about their team’s dynamic and accomplishments.

 

2.     How long have you been in real estate?

The average Realtor has 10 years of experience4. But while longevity is important, even more telling are the number of transactions they have closed or been involved in. So feel free to also ask: “How many homes have you sold in this area?”

 

3.     What will you do to keep me informed?

Do you want daily or weekly reports from your agent? Will the agent be able to meet these expectations? Determine how much communication you want, and then find an agent who will give you the attention and time you want and deserve.

 

4.     Can you provide me with further resources I may need?

From market reports and pricing trends to school performance and crime statistics, top agents have resources at their disposal. In addition, market experts have built strong relationships with their extended team of professionals, and can often get expedient service or be able to “cash in a favor” for you should a need arise.

 

5.  Seller only: Can you share with me your plan to market my property? Many agents will simply put your home in the MLS and wait for it to sell. An amazing agent should have a detailed plan of how to get your home exposure on social media, to their local networks, and more.

 

 

GET STARTED

 

Now that you’re armed with the 5 Attributes of Amazing Agents and the Top Questions to ensure you work with the best possible real estate agent, you’re ready to start interviewing agents. 

 

We’d love an opportunity to win your business. Schedule a free consultation with us to find out how true market experts can help you achieve your real estate goals!

 

 

Sources:

  1. National Association of REALTORS – https://www.nar.realtor/field-guides/field-guide-to-quick-real-estate-statistics
  2. Financial Post – http://business.financialpost.com/personal-finance/mortgages-real-estate/canada-housing-bubble-agents/wcm/b49d4e3a-bd8d-4d1c-9566-bd3d80c8e23a
  3. National Association of REALTORS – 

    https://www.nar.realtor/reports/highlights-from-the-profile-of-home-buyers-and-sellers

  1. National Association of REALTORS – https://www.nar.realtor/field-guides/field-guide-to-quick-real-estate-statistics

Real Home Value Calculator: Tax Assessor Value vs Market Value

Real Home Value Calculator: Assessed Value vs Market Value

 

Understanding a home’s true market value is about more than pictures, software assessments and price-per-square-foot. Whether you’re a current homeowner thinking of selling or are house-hunting, it’s crucial you understand what factors affect home valuation. By partnering with a local market expert, sellers will avoid pricing their house out of the market (the kiss of death in real estate) and buyers will ensure they get a good deal on their next home. 

 

So, how do you accurately calculate a home’s value? After all, the value a home is assigned by its town or county and the one it’s given when it’s listed are often dramatically different from one another. Which one is accurate and what does it all mean? Read on to learn more.

 

Assessed Value vs Market Value: What’s the difference?

When it comes to home value, you’ll often hear two terms, assessed value and market value

 

A home’s assessed value is often the lower number of the two, and is the value given by your municipality or county. Investopedia defines assessed value as “the dollar value assigned to a property to measure applicable taxes.”1 Although property tax laws vary, assessors commonly arrive at this number by taking into account the following:

 

  • What comparable/similar homes are selling for in your area.
  • The value of recent improvements.
  • Income from renting out a room or space on the property.
  • How much it would cost to rebuild on the property.

 

A home’s market value, or Fair Market Value, is the price a buyer is willing to pay or a seller is willing to accept for a property. A skilled real estate professional will arrive at the value using a variety of metrics, including:

 

  • External characteristics, such as lot size, home style, the condition of the home and curb appeal.
  • Internal characteristics, such as the number of rooms and their size, the type and condition of the heating or HVAC system, the quality and condition of construction, the flow of the home, etc.
  • The sales price of comparable homes that have sold in your area.
  • Supply and demand; that is, how many buyers and sellers are in the area.
  • Location; that is, the quality and desirability of your neighborhood and other community amenities.

 

Why are these values often so different? An assessor usually estimates your property’s market value during a reassessment or if you make a physical change or improvement to it.2 As a result, a property may not be reassessed for many years. While your home’s market value may fluctuate with the market, your home’s assessed value is more likely to remain steady.3

 

What Determines a Home’s Value?

You’ve likely heard the motto of real estate: “Location, location, location.” This means a home’s value relies on its location. While the home and structures on the property will likely depreciate over time, the land beneath it tends to appreciate. Why? Land is in limited supply and a growing population puts increased demand on the housing supply. As a result, values increase.4 

 

Other factors that affect your home’s value include the function and appearance of the property, how well the home and other structures are maintained and whether the home is a lifestyle property, such as a ranch style with mountain views or waterfront bungalow. 

 

Ultimately, the best indication of a home’s value is the overall supply and demand of the market. This is why we recommend you partner with a real estate professional who takes all of these factors—the assessed value, local market conditions, home features and has physically walked through and experienced your home— into consideration to determine the most accurate market value. 

 

How to determine if a property is comparable to yours.

Both assessed value and market value are partially determined by the sales price of similar, or comparable, homes in the area. To determine if a home is comparable to yours, look for the following characteristics:

 

  • Lot size
  • Square footage
  • Home style or similar architecture 
  • Age
  • Location

 

While you may not find a home with the same exact characteristics as yours, you’ll likely find a few that are close. To account for any disparity, adjust the sales prices of the comparable properties. Look at the differences between your property and the one in question and determine if the differences increased or decreased the sales price and by how much. For example, if your home has two bathrooms and a similar home only has three, estimate how much that extra bathroom increased the sale price of the similar home. The adjusted sale price is the estimation of what the property would sell for if the properties were exactly the same.2

 

Where can you find comparable sales?

Fortunately, you can find comparable home sales in a variety of places.2

  • Your local assessor’s office is able to provide a list of recent sales you can browse and compare or a sales history of a particular house, home style or neighborhood.
  • Your municipality. Many cities keep local sales information in their offices or post it online.
  • Online databases, such as a real estate database
  • Your local newspapers may offer some real estate information in the form of quarterly sales reports in the business or real estate sections of the newspaper.
  • Our office. We can do Comparable Market Analysis for you.

 

How to calculate your home’s value.

By answering a few questions about your home, property and the local market, you can begin to estimate your property’s value. We’ve also included a worksheet for you below...

 

Home Value Questions:

When was your home last assessed?

What was its CMA assessment value?

What is your area’s average sales price?

What is your area’s average price/square foot?

 

Structure:

  • Is the architecture and exterior structure of the home consistent, superior or inferior to other homes in the area?
  • Does the era or genre (Modern, Victorian, Ranch, Cottage, etc.) add a premium based on current design trends?
  • How does the floor plan and room size proportions of the home compare to other homes on the market?

Interior Structure:

  • How does the kitchen compare to others on the market?
    • Updated or outdated
    • Floor plan
    • Appliance packages
  • How does the Master Suite compare to others on the market?
    • Size
    • First/second floor
    • Updated or outdated
    • Access to Master Bath
  • How does the Master Bath compare to others on the market?
    • Updated or outdated
    • Shower and bath
    • Flooring

Outside Areas:

  • Are there views, outdoor living areas or recreational areas?
    • Pools
    • Ponds
    • Patios
  • How does the landscaping and hard-scaping compare to the market? (e.g., built elements such as walkways, patios, decks, etc.)

Overall Condition of Home

  • What is the level of repair needed to compete with other homes?
  • Does the home need to be staged? How does it show?
  • What curb appeal projects are necessary to be consistent with others on the market?

If you want to accurately assess a home’s value, it’s crucial to know about the market activity of our local area. We can help! Give us a call to get the scoop on the local market.

 

Sources: 1. Investopedia http://www.investopedia.com/terms/a/assessedvalue.asp

    2. New York State Department of Taxation and Finance https://www.tax.ny.gov/pubs_and_bulls/orpts/mv_estimates.htm

                3. Realtor.com http://www.realtor.com/advice/sell/assessed-value-vs-market-value-difference/

                4. Investopedia, http://www.investopedia.com/articles/mortgages-real-estate/08/housing-appreciation.asp?lgl=myfinance-layout

 

What is Your Home Buying Power? or, What You CAN Afford

 

If you’re in the market for a new home or investment property, one of the first questions you’ll probably ask is, “What can we afford?” Many buyers become so caught up in how much they can afford that they don’t realize their total buying power—that is, the total amount of purchasing potential they actually have.

 

Buying Power Defined

Your buying power is comprised of the total amount of money you have available each month for a mortgage payment. This means the money you have each month after fixed bills and expenses. Any money you’ve saved for a down payment, the proceeds from the sale of your current home, if applicable, and the amount of money you’re qualified to borrow all impact your buying power as well. When you take all of this into account, you may find you are able to purchase a larger home or a home in a more desirable neighborhood, or you might realize you should be looking for homes in a lower price range.

 

What About Housing Affordability?

Housing affordability is a metric used by real estate experts to assess whether or not the average family earning an average wage could qualify for a mortgage on the average home.1 Although this figure is essential to creating a comprehensive overview of the real estate market, it’s not a factor you should consider in your home search. What may be considered affordable to you based on your income and other factors may be different than what’s affordable to the average buyer.

 

Why Buying Power Matters

A common misunderstanding is that a home’s list price determines whether or not you can purchase it. Although it’s important to look at the price tag, it’s essential to consider what your monthly payment will be if you own the home. After all, the purchase price doesn’t include the housing-related expenses, such as annual property taxes, homeowner insurance, associated monthly fees and any maintenance or repairs. Figuring out the payment will prevent you from overestimating or underestimating your buying power. After all, you’ll live with your monthly payment, not the sales price.

 

Once you have clarity on your buying power, you’ll be able to buy the home you want, instead of settling for a home because you feel it’s the only one you can afford. It will also prevent you from becoming “house poor,” a common term for someone who’s put all their money toward the down payment, leaving them nothing left over for fees outside of their monthly house payment. Both scenarios can negatively impact the lifestyle you want to live. Understanding your buying power can help you get the home you want without sacrificing the lifestyle you desire.

 

If you haven’t sold your current home yet, a Comparative Market Assessment (CMA) will give you a general idea of how much you may get for your home based on what other homes have sold for in your area. Contact our team for a FREE CMA!

  

Calculating Your Buying Power

You might be wondering, “How do I know what my buying power is?” Buying power is calculated by adding the money you’ve saved for a down payment and/or the money you made from selling your home (minus fees and mortgage payoff) to all of your sources of income and investments that could be used to make your monthly payment. Make sure to include your monthly pay, commissions or tips, dividends from investments, payments from rental properties or other monthly income you receive as well as the loan amount you’re willing to finance and qualify for.

 

Most lenders advised buyers to spend no more than 35 to 45 percent of their pretax income on housing, meaning all your income and sources of revenue prior to paying taxes. Make sure you factor in not only your mortgage payment, but also property tax and home insurance to the cost of housing.2 However, other financial experts advise spending no more than a very conservative 25 percent of your after-tax income on your housing expenses.2  Whether you plan to spend the average, play it conservative or split the difference is up to you.

 

Traditionally, mortgage lenders have targeted the ideal housing expense amount to be a ratio of 28 percent or less.3 

 

However, these figures bring up an important point: you don’t have to spend all of your savings and available monthly income on a mortgage payment. It’s important to set money aside for regular home maintenance, unexpected repairs and monthly fees, such as a condominium or homeowners association fee. While the above ratios are commonly accepted, a lender will look at your total financial picture when they decide how much they’re willing to lend. It may be tempting to take out a large loan in order to purchase the home of your dreams, but keep in mind the less money you have to borrow, the stronger your buying power may be.

 

4 Things That Impact Buying Power

1. Credit score. A great score can help you lock into a lower interest rate.

 

2. Debt-to-income ratio. The lower the ratio, the better risk you may be to lenders as long as you have an established credit history.

 

3. Assets, including the documentation of where the money for the purchase is coming from and the mix of your investments.

 

4. Down payment. The more you’re able to put down, the less you will have to borrow. With a down payment of 20 percent or more, you won’t have to purchase private mortgage insurance (PMI) and you may also be able to negotiate a lower interest rate.

 

How to Save for a Down Payment

If you’re thinking of buying a home one day, one of the first steps to take is to start saving for a down payment. Here are some tips to make saving easier.

 

First-time buyers:

1. Set a savings goal. One way to figure out how much to save is to use the average sales price for homes that are similar to what you want and figure out your target down payment percentage. For example, if homes are selling for $200,000 in your area and you want to put 20 percent down, you’ll have to save $40,000. Set a goal to save that amount within a specific time frame; just keep in mind the longer you save, the more the average selling price will change. Although the majority of buyers saved for six months or less, 29 percent of all buyers (and 31 percent of first-time buyers) saved for more than two years for a down payment.4

 

2. Cut back on expenses. Review your monthly expenses and look for ways to save. Twenty-nine percent of buyers cut spending on non-essentials items and 22 percent cut spending on entertainment while they were saving for a home.4 Think about items you can live without or cut back on temporarily while you’re saving.

 

3. Look for ways to boost your income. Get a side job or sell items online or at a garage sale to increase your income in a short amount of time. Be sure to save any windfalls you get, including your annual income tax refund or work bonuses.

 

4.  Check out home-buying programs. Your state, county or local government may offer special programs, such as grants, for first-time buyers to use.

 

5. Ask your family. Thirteen percent of all buyers, and 24 percent of first-time buyers, were given money from family or friends to use toward the down payment of their home.4 

 

Repeat buyers:

More than 52 percent of repeat buyers used the proceeds from the sale of their primary residence toward the down payment on their next home.4 Similarly, 76 percent tapped into their savings accounts.4 If you’re thinking of buying another home, here are more ways to save more money, in addition to the tips listed above:

 

1. Rent a room. If you have an income flat (or mother-in-law unit) attached to your home, rent it out and channel the income into a high-interest savings account.

 

2. Make your money work for you. If you don’t plan to buy for at least five years, invest it and let the compound interest work for you. Discuss this option with your financial planner or broker to see if this is ideal for you and your goals.

 

3. Tap into your 401(k). If you have a 401(k) plan, you may be allowed to borrow a portion of it, the lessor of up to $50,000 or half of its value, for your down payment. Remember, it’s a loan so you’ll have to pay it back. If you leave or lose your job before you’ve repaid the loan, you’ll have between 60 to 90 days to repay the balance or face stiff taxes and penalties.

 

If you want to buy an investment property

Whether you’re buying a second home or a rental property, here are a couple tips to save for a down payment.

 

1. Tap into your equity. If you’ve paid off or paid down your mortgage on your primary home, you may be able to tap into your equity to purchase another property. Contact your lender to learn more about a HELOC or home equity loan.

 

2. Get a partner. Find a friend or relative who’s willing to purchase property with you. Typically, you’ll split the costs and profits equally. Just make sure to work with an attorney to create a partnership agreement to fit your situation.

 

 

Work Out Your Buying Potential

What’s your buying potential? Fill out this worksheet to get an estimate.

 

 

Source: Iowa State University Extension, What is your house-buying power?

 

Monthly Payment on 30-Year Fixed Rate Mortgage

 

 

Didn’t see your desired loan amount? Use the table below to estimate your monthly payment (principal and interest) per $1,000 of your loan. To figure out an estimated loan payment, multiply the factor by the number of thousands in the amount of your mortgage.

 

For example, if you intend to borrow $400,000, with a loan term of 30 years at 4% interest, multiply 4.77x 400 = $1908 per month.

 

 

Source: HSH.com http://www.hsh.com/mopaytable-print.html)

 

Don’t forget to factor in property taxes and insurance. These are often added to your principal and interest of your mortgage payment—the money used to pay down the balance of your loan and the charge for borrowing the money. Since these numbers vary, contact your county assessor’s office for the current property tax rate and your insurer for a home insurance quote. Once you have these figures, divide each by 12 to estimate how much they’ll add to the above payment amounts.

 

Do you want a clearer picture of your buying power? Would you like to see what kind of homes you can get with your buying power? Give us a call!

 

Sources: 1. National Association of REALTORS https://www.nar.realtor/topics/housing-affordability-index/methodology

                2. Moneyunder30.com https://www.moneyunder30.com/percentage-income-mortgage-payments

                3. Credit.com https://www.credit.com/loans/mortgage-questions/how-to-determine-your-monthly-housing-budget/

                4. National Association of REALTORS, 2016 Profile of Home Buyers and Sellers

    5. Iowa State University Extension, What is your house-buying power? https://store.extension.iastate.edu/product/pm1460-pdf 

    6. HSH.com http://www.hsh.com/mopaytable-print.html

 

 

 

 

 

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