Lee Morof's Real Estate Blog

Have you listed your home up for sale? If so, you’ve likely spent a lot of time crafting your listing and highlighting the many features of your home and property – but have you focused on the community around your home as well?

Let’s take a look at a few ways that you can promote the qualities of your local neighborhood as you’re working to convince a buyer that purchasing your home is a great decision.

Give Your Buyers The A Tour Of The Neighborhood

After your listing goes live it won’t be long before potential buyers and their agents are calling to set up viewings so they can see what your home looks like in person.

When a buyer tours your home, offer to spend a few minutes giving them a quick tour of the local community as well. Have a quick route determined beforehand which takes you past schools, medical facilities and other amenities that will help to reinforce that your area is a great one to live in.

Highlight Local Community Centers And Parks

Do you have a community center, fitness center or large park nearby? If so you’ll definitely want to ensure that your buyer knows about these – especially if you’re selling your home to a family with children.

Modern buyers are very appreciative of green space and local cultural amenities as in many areas they’re becoming a bit harder to find. Point out just how close those local running trails are or how the recreation center is just a short jog away.

Have A List Of Local Restaurants And Shops Handy

Whether you live in the suburbs or the downtown core of your city, it’s likely that you have a number of restaurants, cafés and shops nearby. Consider making a quick list of these, highlighting any favorites or popular spots that are well-known to everyone who lives in the area.

Virtually everyone likes to dine out on occasion, and many buyers will prefer to live in a community that has what they need within a short drive.

If you’re unsure of what community features you should be telling potential buyers about, be sure to ask your real estate agent as they have been through the selling process numerous times before and will know how to market the community around your home.

Economic news was lean last week as the first week of the month tends to be calm in the aftermath of the rush of end-of-month reporting.

Of note was CoreLogic’s report on housing markets, the release of the minutes from the most recent FOMC meeting and lower mortgage rates reported by Freddie Mac.

CoreLogic Reports Lowest Home Price Gains in Almost Two Years

August home prices hit their slowest growth rate in nearly two years according to CoreLogic data released last Tuesday. Annual home prices grew by 6.40 percent in August as compared to July’s reading of 6.80 percent. Year-over-year home price growth reached a rate of 11.40 percent in August.

Analysts have recently said that a slow-down in home price growth may increase slowing demand for homes as inventories of available homes have increased in recent months. Low inventories of available homes and high demand contributed to rapid growth of home prices in 2013.

The slower pace of home price gains is expected to continue next year; analysts predicted an annual growth rate of 5.20 percent in August 2015. Home prices remain about 12 percent below peak levels reached in 2006.

Federal Reserve Policy Makers Watch U.S. Dollar, European Markets

Minutes of the Federal Open Market Committee meeting held in September were released Wednesday. Of note were member concerns that changing the committee’s language for its oft-repeated assertion that target rates for federal funds would remain between 0.00 percent and 0.250 percent for a considerable time” after asset purchases under the QE program ended could be viewed as a fundamental policy change.

The FOMC also registered concerns over the impact of a stronger U.S. dollar on the economy and said that persistent weakening of the European economy could cause the dollar to strengthen too much. This would cause exports to decrease and could also slow inflation.

The Fed decided not change language in its forward guidance in order to avoid unintended reactions in the financial markets.

Mortgage Rates and Jobless Claims Fall

Freddie Mac’s Primary Mortgage Market Survey reported that average mortgage rates fell last week. The average rate for a 30-year fixed rate mortgage dropped by seven basis points to 4.12 percent with discount points higher at 0.50 percent.

The average rate for a 15-year fixed rate mortgage fell by six basis points to 3.30 percent with discount points unchanged at 0.50 percent. The average rate for a 5/1 adjustable-rate mortgage was lower by one basis point to 3.05 percent with discount points unchanged at 0.50 percent.

Weekly jobless claims were lower at 287,000 new claims filed against predictions of 294,000 new claims filed and the prior week’s reading of 288,000 new claims filed. This supports recent indications of stronger job markets; coupled with lower home prices, this could prompt more would-be homebuyers to buy homes.

What’s Ahead

Markets are closed for Monday’s Columbus Day holiday and no economic reports are scheduled for Tuesday. The Fed releases its Beige Book report Wednesday and the NAHB Home Builder’s Market index for October is due Thursday along with Freddie Mac’s PMMS report and weekly jobless claims.

Housing Starts and the Consumer Sentiment Index are scheduled for next Friday.

If you’re in the process of buying a new home, you’ve likely heard the term “closing costs” in regards to the many different fees and taxes that you’ll be required to pay during the purchase process.

In this post we’ll look at a number of these closing costs and what you will be expected to pay when you buy that next dream home.

Taking out a Mortgage? There Will Be Fees Attached

If you’re taking out a mortgage to finance the cost of buying your home you’ll end up incurring a variety of fees. Nearly all lenders will charge a mortgage application fee, which covers the cost of processing your application and all of the necessary paperwork.

You’ll likely have to pay for a professional appraisal of the home as well, as the lender will want to ensure that they aren’t lending you more than the house and property are actually worth.

Inspection And Insurance Costs Will Add Up

If you’re buying a pre-owned home you’ll need to pay for a home inspection to gain an understanding of the home’s condition and if you’ll need to make any repairs in the near future. You’ll also need to purchase homeowner’s insurance on the property to protect yourself in the event that something does go wrong with the home.

If you put less than 20 percent down on the cost of the home, your mortgage lender may also require that you purchase private mortgage insurance; this will vary depending on which state or province you are buying in.

Don’t Forget About Escrow Fees and Taxes

As with any major financial transaction you’ll need to satisfy the tax man by paying various taxes on your purchase. These will vary depending on where you are buying your home, but might include sales taxes, property taxes, transfer taxes, recording fees, title transfer fees and more.

If you used a third-party escrow service to manage these fees or to hold your deposit during the closing process you’ll also need to pay escrow fees prior to signing the final paperwork.

If you have other questions about the closing process and fees or costs that you’ll need to pay when you purchase a home, contact your local real estate agent. They’ve assisted many individuals just like you with their home purchase and will be able to provide expert advice.

Buying a home is a major financial transaction, especially if you’re going to need mortgage financing to help cover the purchase cost.

The only way to know if you’re getting the best deal on a mortgage is to shop around, but with so many different lenders vying for your business it can be very tough to choose which mortgage is the best fit for your own situation.

In this post we’ll share how you can compare mortgages from different lenders or underwriters so that you can get the best possible deal on your mortgage loan.

Start By Comparing Interest Rates

The most important factor in your mortgage is the interest rate that you’ll be required to pay so this should be your starting point.

While most lenders will keep their rates competitive with one another, you may find that there are discounts available based on your credit or financial history. You might also find that some lenders are willing to adjust the rate based on how long of a mortgage term you’ll need, and how much you’re investing in your down payment.

Get An Estimate Of Your Total Closing Costs

While the number that you’re likely focused on is the total monthly payment that you’ll be making for the next few years, you’ll also want to find out how much in fees and closing costs you will have to pay in order to take out the mortgage.

Every lender charges different fees and the amounts can vary wildly, so be sure to get an estimate on these costs to find out how they’ll affect your home purchase.

Watch Out For Early Payment Penalties

Finally, you’ll want to keep an eye out for early repayment penalties as these can cause you a headache later on if you decide you want to pay your mortgage off a bit faster. The ideal mortgage is one that allows you to repay the principal amount at any time without facing a penalty, but depending on the other terms that you require you might need to shop around a bit before you find a mortgage like this.

Are you thinking about buying a new home? Congratulations!

Buying a house, condo or townhouse is an exciting and rewarding time which tends to be a lot of fun. However, along the way you’ll need to make a number of decisions – including whether you want to buy a pre-owned home or one that has been built recently and is brand new.

Let’s take a quick look at some of the pros and cons of buying a new home versus buying pre-owned.

New Homes Tend To Have Fewer Problems

One of the major upsides of buying new is that newly-built homes tend to have very few problems within the first few years of ownership.

While you’ll still be required to make regular maintenance on a new home, when you buy pre-owned you’re buying a house that has seen years or decades of weather and regular wear-and-tear.

New Construction Allows For Customization

If you want to be able to customize certain aspects of your home, it might be better to buy brand new as the builder will be able to incorporate your requests as they’re building the home. Of course, you can always renovate and upgrade a pre-owned home but if you have significant needs you may find it easier to get them built into the home as it’s being developed.

The Major Downsides To Buying New: Cost And Location

While there are a number of upsides to buying new, there are some downsides that you’ll need to know.

First, new homes almost always cost more than an equivalent pre-owned home. Brand new homes are filled with new appliances, fixtures and modern building materials which add to the overall cost of the home. Unless the pre-owned home is on a larger lot or property, you’ll generally be able to save a bit when you buy pre-owned.

Depending on where you’re buying, you may also find that the location where brand new homes are being constructed is much further from the downtown or urban area. In many cities, the only available space for new construction is in suburban areas, which means that you may be in for a lengthy commute to and from work each day if you choose to buy new.

These are just a few of the factors that you’ll need to consider when buying your next dream home. For more information or to get your house hunt started, contact your local real estate agent and they’ll be happy to assist.

Last week’s economic news included multiple reports on housing and the labor sector. The good news is that job markets appear to be stronger, with new jobless claims and the national unemployment rate lower. Unfortunately, housing continues to struggle in its recovery.

Pending home sales slumped in August and the S&P Case-Shiller Housing Market Index reports for July showed slower growth in home prices with 19 of 20 cities posting lower gains than for June.

Mortgage rates were mixed, but remained relatively steady.

Housing Reports Show Slower Price Gains, Suggest Falling Demand

The National Association of REALTORS® released data for August that showed that pending home sales dropped by 1.10 percent to a reading of 104.7 as compared to July’s reading of 105.8. Pending home sales indicate upcoming closings and mortgage loan volume.

Pending home sales fell by 2.20 percent year-over-year. Analysts attributed the drop in pending sales to lower investor participation.

Analysts said that as distressed home sales diminish, mortgage rates and home prices rise, investors are not buying as many homes Regional results showed fewer pending sales in all regions except the West, where pending sales rose by 2.60 percent in August. A reading of 100 in the pending home sales index is consistent with 2001’s average contract level.

S&P Case-Shiller Housing Market Index reports indicated that July home prices gained 6.70 percent year-over-year as compared to June’s year-over-year reading of 8.10 percent. Prices even dropped in San Francisco to its lowest reading since 2012. On a seasonally adjusted basis, July home sales fell by 0.50 percent in July as compared to June’s decrease of 0.30 percent. 19 of 20 cities showed lower rates of price growth in July.

Slower growth of home prices was viewed by analysts as potentially increasing demand for homes provided that mortgage rates stay low.

Construction spending for August fell by 0.8 percent on a seasonally adjusted basis. The good news here is that spending on residential construction dropped only 0.10 percent.

Freddie Mac Mortgage Rates: No Major Changes

According to Freddie Mac’s PMMS report, average mortgage rates were a mixed bag. The average rate for a 30-year fixed rate mortgage dropped by one basis point to 4.19 percent with discount points lower at 0.40 percent. The average rate for a 15-year fixed rate mortgage held steady at 3.36 percent with discount points unchanged at 0.50 percent. The rate for a 5/1 adjustable rate mortgage fell by two basis points to 3.06 percent; discount points rose from 0.40 percent to 0.40 percent.

Lower mortgage rates are seen as a potential stimulus for housing markets as more buyers may be encouraged to enter the market.

Jobs Reports Readings Improve, Unemployment Rate Drops

Job markets are showing signs of improvement according to data on weekly jobless claims and reports released by the Department of Commerce. Weekly jobless claims grew by 287,000 as compared to expectations of 298,000 new claims filed. The prior week’s reading was also higher at 295,000 new claims filed.

The Department of Commerce released its Non-farm Payrolls report for August with more good news. 248,000 jobs were added against expectations of 220,000 new jobs and 180,000 new jobs reported in the prior week. The national unemployment fell below the six percent benchmark in August with a reading of 5.90 percent, which indicates proof that the jobs market is improving.

September’s Consumer Confidence Index suggests that economic conditions continue to concern consumers. The reading for September was 86.0 against an expected reading of 92.3 and Augusts reading of 93.4.

What’s Ahead

There is no scheduled housing news for next week other than Freddie Mac’s weekly report on mortgage rates. Other economic news includes Labor Market Conditions Index, Job Openings, and the release of minutes from the last FOMC meeting, which is expected to reaffirm the Fed’s position that it doesn’t expect to increase the target federal funds rate for a “considerable time” after the Fed concludes its asset purchases this year.

Whether you’re buying a home for the first time or you’ve decided it’s about time that you upgraded to a larger, more expansive house, if you’re making a real estate purchase you’ll need to be aware of how much you can reasonably afford to borrow in a mortgage. In today’s post we’ll take a look at a few ways that you can analyze your financial situation to help decide how much mortgage you can truly afford.

Prepare An Honest Monthly Budget

The first step in understanding how much of a monthly payment you can afford is to create an honest monthly budget which includes all of your family’s income and spending. Although you won’t have to pay them every month, it’s also important that you include costs that show up irregularly like car repairs, Christmas gifts or tuition bills as these still need to be paid. The more information you can place in your budget, the more accurate your financial picture will be.

Your Down Payment Plays A Huge Role

As you might imagine, the amount you can invest in your down payment plays a significant role in how much mortgage financing you will need. Every dollar that you can place in your down payment today is one less dollar that you’ll need to borrow and pay interest on over the amortization period of your mortgage. Take some time to consider how much you can put down, and see if there’s any way you can bump this figure a bit higher.

What Interest Rate Will You End Up Paying?

Small changes to your mortgage interest rate can have significant impacts on how much you are required to pay back over the life of your mortgage. As you’re shopping around, be sure to consider how long your interest rates are valid for and try to determine the lowest rate you might qualify for. You may also find it helpful to use an online mortgage calculator which can help you to understand how your interest rate impacts your monthly payments.

If you’re looking for a home upgrade that can add resale value to your home while paying itself off over time, look no further than a solar panel setup. In the past few years, the cost of installing residential solar has declined while the efficiency of the panels has increased. This combination has made home solar one of the best investments that a homeowner can make – provided they live in an area that receives a good deal of sunshine.

Solar Adds Immense Value To Your Home

While solar panel installations are not inexpensive, in almost every case they add at least their total cost to the value of the home as soon as they are installed. If you decide to sell your home, it will be very attractive to those who are interested in leaving a lighter footprint or for anyone who was thinking of going solar after they bought their new home.

A Quality Install Will Pay For Itself Over Time

As they generate electricity which can be used in your home or sold back in to the public grid, residential solar panels are one of the only home upgrades that will pay for themselves over time. If you live in a very sunny area and watch your home energy consumption, you may even find that after a few years your solar setup actually begins generating a profit each month. Home solar setups typically come with a 25-year warranty so you can rest assured that your panels will be producing energy for at least the next couple of decades.

Tax Credits And Incentives Reduce The Up-front Financial Cost

Renewable energy sources like solar quality for significant tax credits and rebates which will vary depending on the city and state or province that you live in. A quick web search will show you which types of incentives that you will qualify for, or you can call a local residential solar installer as they’ll be fully aware of all of the various incentives that are available.

For more information on home renovations or upgrades that have been adding value to homes in your community, contact your local real estate agent. They’ll be able to advise you on which upgrades you will need to make in order to keep up with other homes in your area so that if you do decide to sell, you’re able to stand up to your competition.

The stifling heat of July did not penetrate U.S. housing markets according to the S&P Case-Shiller 10-and 20 City Home Price Index reports.

San Francisco’s sizzling home prices dropped in July and posted its lowest price gains since 2012. According to the Case-Shiller 10 and 20-City Home Price Index reports, month-to-month home price appreciation fell to identical readings of an 0.60 percent increase as compared to a 1.00 percent increase reported in June.

Case-Shiller also reported that home prices grew by 0.50 percent throughout the nation. This was the seventh consecutive monthly increase for national home prices.

Year-over-year, seasonally adjusted home price growth was lower in July. Both the 10 and 20 city index reports showed a gain of 6.70 percent over July 2013 as compared to June’s year-over-year reading of an 8.10 percent gain in June. 19 of 10 cities tracked in the Case-Shiller 20 City Home Price Index reports posted lower average home prices in July.

New York posted a 1.10 percent gain in July, while home prices dropped by 0.40 percent in San Francisco. San Francisco showed a marked loss of momentum with July’s year-over-year reading of home price growth decreasing to 10.30 percent from June’s reading of 12.20 percent

On average, July’s home prices were approximately 16 percent below a 2006 peak.

Slowing Demand Puts Brakes on Home Prices

Analysts report that reduced demand for homes is contributing to lower price growth. Rising home prices have put homes out of reach of first-time and moderate income buyers and stringent mortgage credit standards that became effective in January have taken the edge off of high demand and low inventories of homes seen earlier in 2014.

Home prices continue to grow at two to three times the inflation rate according to David M. Blitzer, chair of the S&P Dow Jones Indices Committee. Stagnant wage growth has also quieted housing markets.

New Home Sales Buck Slowing Home Price Trends

The Department of Commerce reported that August sales of new homes grew by 18 percent in August to the highest reading since 2008. August sales of new homes topped out at 504,000 new homes sold on a seasonally adjusted annual basis. Analysts predicted new 426,000 new home sales and July’s reading was 427,000 new home sales.

Demand for new homes grew in direct opposition to Case-Shiller’s July data for existing home sales in 20 major metropolitan areas. While good news for home builders and those employed by them, new home sales account for only about a tenth of the housing market.

Analysts also note that new home sales readings are somewhat volatile and often subject to revision. Increases in new home sales are seen as a positive sign for the general economy as builders are expected to increase hiring and will buy more materials as home construction increases.