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January
16

Before you engage in any real estate transaction, you need to know as much as you can about the home's value. There are two related but distinct processes that help people pin down the valuation of a property before they move forward: comparative market analysis and home appraisal.

Both of these will be performed at different steps in the sale process. Knowing the difference between the two can save you some valuable time.

  • Comparative Market Analysis (CMA)
    comparative market analysis is typically performed by a real estate agent. Thanks to MLS, real estate pros have the opportunity to compare your home to others that have sold in your general area. Selling prices, time on market, home improvements, and square footage can be used to determine an approximate value of your home.

    When a CMA is completed, it will provide you with a low, medium, and high selling price for your home. It will also give an estimate of the average number of days your home may be on the market.

  • Home Appraisal
    The home appraisal is paid for by potential home buyers — either out of pocket or as part of the fees they will ultimately finance in their mortgage.

    An appraisal of the home is performed after the buyer applies for a loan with a bank or other lender. Once the buyer submits an offer and requests financing, a licensed appraiser is dispatched.

    All practicing home appraisers must be licensed or certified by the state. Although they visit a property at the request of the bank, appraisers are intended to report neutral observations about each home. The comprehensive report they compile helps to determine the home's fair market value.

    This protects the bank from lending too much money for any given home.

    Though an appraisal will include some basic information on the home's condition, more time is spent on recent information about similar listings and housing market conditions in the neighborhood.

    Minor repairs and renovations performed before an appraisal can help raise the home's assessed value.

CMA Versus Home Appraisal: Final Considerations

Both a comparative market analysis and home appraisal provide valuable insights that help you and your real estate agent move toward a successful sale. Assuming a property spends only a moderate amount of time on the market, each usually needs to be completed only once.

Sometimes, however, a lender might request a new appraisal even if the previous appraisal was only a short time ago. You might even get a CMA before you make a final decision about selling your home. Each situation is different.

An experienced real estate agent can help you by ensuring you're equipped with an accurate CMA. Plus, when the time comes to prepare for an appraisal, they can guide you on the most important steps to raise your home's value in your budget and timeline.

As with anything in real estate, the sooner you get started with selling your home, the smoother the process.

Reach out to a trusted Montague Miller & Co real estate professional to help you make your next move.

January
1

 

Last year, one factor drove the real estate market more than any other: rising mortgage rates.

In March 2022, the Federal Reserve began a series of interest rate hikes in an effort to pump the brakes on inflation.1 And while some market sectors have been slow to respond, the housing market has reacted accordingly.

Both demand and price appreciation have tapered, as the primary challenge for homebuyers has shifted from availability to affordability. And although this higher-mortgage rate environment has been a painful adjustment for many buyers and sellers, it should ultimately lead to a more stable and balanced real estate market.

So what can we expect in 2023? Will mortgage rates continue to climb? Could home prices come crashing down? While this is one of the more challenging real estate periods to forecast, here's what several industry experts predict will happen to the U.S. housing market in the coming year.

MORTGAGE RATES WILL FLUCTUATE LESS

In 2022, 30-year fixed mortgage rates surged from roughly 3% in January to around 7%. According to Rick Sharga of real estate data company ATTOM, "We've never seen rates double in so short a period."2

This year, economists forecast a less dramatic shift.

In an interview with Bankrate, Nadia Evangelou, senior economist for the National Association of Realtors, shares her vision of three possible mortgage rate scenarios:3

  1. Inflation continues to surge, forcing the Fed to repeatedly raise interest rates. In that scenario, she predicts that rates could reach as high as 8.5%.
  2. Inflation decelerates and mortgage rates follow suit, averaging 7 to 7.5% for the year.
  3. Rising interest rates trigger a recession, which could ultimately lead mortgage rates to drop closer to 5% by the end of the year.

Realtor.com forecasts something similar to scenario #2 above: "Mortgage rates will average 7.4% in 2023, trickling down to 7.1% by year's end."4 The Mortgage Bankers Association, however, projects something closer to Evangelou's scenario #3, with the 30-year fixed rate declining steadily throughout the year, averaging 6.2% in Q1 and 5.2% by Q4.5

Economists at Fannie Mae fall somewhere in the middle. In a recent press release, they predicted that the U.S. economy will experience a "modest recession" this year.6 But in their December Housing Forecast, they project that 30-year fixed mortgage rates will only fall by half a point from an average of 6.5% in Q1 to 6.0% in Q4.7

"From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession," said Fannie Mae Chief Economist Doug Duncan.6

What does it mean for you?  Even the experts can't say for certain where mortgage rates are headed. Instead of trying to "time the market," focus instead on buying or selling a home when the time is right for you. There are a variety of mortgage options available that can make a home purchase more affordable, including adjustable rates, points, and buydowns—and keep in mind you can always refinance down the road. We'd be happy to refer you to a trusted mortgage professional who can outline your best options.

SALES VOLUME WILL FALL AND INVENTORY WILL RISE

It looks like the home-buying frenzy we experienced in recent years is behind us. While the desire to own a home remains strong, higher mortgage rates have made it unaffordable for a large segment of would-be buyers.

Many economists expect the number of home sales to continue to decline this year, leading to an increase in listing inventory and days-on-market, or the time it takes to sell a home. But, there is a wide range when it comes to specifics.

Economists at Fannie Mae forecast that total home sales will fall by around 20% this year before rising again by nearly 15% in 2024.7 National Association of Realtors Chief Economist Lawrence Yun projects a less extreme dip of 7% in 2023 with a rebound of 10% next year.8

Realtor.com Chief Economist Danielle Hale foresees something in between. "The deceleration in home sales is likely to continue as high home prices and mortgage rates limit the pool of eligible home buyers. We anticipate that existing home sales will decline another 14.1% in 2023." She expects this drop in sales to lead to a nearly 23% increase in inventory levels this year, offering more choices for buyers who have struggled to find a home in the past.9

However, given the severe lack of housing supply, even with a double-digit increase, the market is expected to remain relatively tight and below pre-pandemic levels. Hale points out: "It's important to keep historical context in mind. The level of inventory in 2023 is expected to fall roughly 15% short of the 2019 average."9

What does it mean for you?  If you've been frustrated by a lack of inventory in the past, 2023 may bring new opportunities for you to find the perfect home. And today's buyers have more negotiating power than they've had in years. Contact us to find out about current and future listings that meet your criteria.

If you're hoping to sell, you may want to act fast; rising inventory levels will mean increased competition. We can help you chart the best course to maximize your profits, starting with a professional assessment of your home's current market value. Reach out to schedule a free consultation.

HOME PRICES WILL REMAIN RELATIVELY STABLE

While some economists expect home prices to fall this year, many expect them to remain fairly stable. "For most parts of the country, home prices are holding steady since available inventory is extremely low," said Yun at a November conference.8

Nationally, Yun expects the average median home price to tick up by 1% in 2023, with some markets experiencing greater appreciation and others experiencing declines.8 Economists at Fannie Mae offer a similar projection, forecasting a slight decrease in their Home Price Index of about 1.5%, year-over-year.7

Other experts foresee a larger fluctuation. Hale expects U.S. home prices to rise by 5.4% this year, while Morgan Stanley is forecasting a 7% drop from the peak in June 2022.9,10

Still, many economists agree that a housing market crash like the one we experienced in 2008 is highly unlikely. The factors that caused home prices to plunge during the Great Recession—specifically lax lending standards and a surplus of inventory—aren't prevalent in our current market.10 Therefore, home values are expected to remain comparatively stable.

What does it mean for you?  It can feel scary to buy a home when there's uncertainty in the market. However, real estate is a long-term investment that has been shown to appreciate over time. And keep in mind that the best bargains are often found in a slower market, like the one we're experiencing right now. Contact us to discuss your goals and budget. We can help you make an informed decision about the right time to buy.

And if you're planning to sell this year, you'll want to chart your path carefully to maximize your profits. Contact us for recommendations and to find out what your home could sell for in today's market.

RENT PRICES WILL CONTINUE TO CLIMB

 Affordability challenges for would-be buyers, inflationary pressures, and an overall lack of housing could continue to drive "above-average" rent price increases in much of the country.11 The Federal Reserve Bank of Dallas expects year-over-year rental price growth to tick up to 8.4% in May before moderating later in the year.12

According to Hale, "U.S. renters will continue to face challenges from limited supply and excess demand in the coming year that will keep upward pressure on rent growth. At a national level, we forecast rent growth of 6.3% in the next 12 months, somewhat ahead of home price growth and historical rent trends."9

However, there are signs that the surge in rent prices could be tapering. According to Jay Parsons, head of economics for rental housing software company RealPage, there's some evidence of a slowdown in demand. He predicts that market-rate rents will rise just 3.3% this year. Still, analysts agree that a return to lower pre-pandemic rental prices is unlikely.10

What does it mean for you?  Rent prices are expected to keep climbing. But you can lock in a set mortgage payment and build long-term wealth by putting that money toward a home purchase instead. Reach out for a free consultation to discuss your options.

And if you've ever thought about purchasing a rental property, now may be a perfect time. Call today to get your investment property search started.

WE'RE HERE TO GUIDE YOU

While national real estate forecasts can provide a "big picture" outlook, real estate is local. And 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 drive home values in your particular neighborhood.

If you're considering buying or selling a home in 2023, contact us now to schedule a free consultation. We'll work with you to develop an action plan to meet your real estate goals this year.

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

  1. Forbes -
    https://www.forbes.com/advisor/investing/fed-funds-rate-history/
  2. Bankrate -
    https://www.bankrate.com/mortgages/will-mortgage-rates-go-up-in-december-2022/
  3. Bankrate -
    https://www.bankrate.com/real-estate/housing-market-predictions-2023/
  4. com -
    https://www.realtor.com/news/trends/2023-the-year-of-the-homebuyer-our-bold-predictions-on-home-prices-mortgage-rates-and-more/
  5. Mortgage Bankers Association -
    https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/mortgage-finance-forecast-dec-2022.pdf?sfvrsn=b584bf7_1
  6. Fannie Mae -
    https://www.fanniemae.com/newsroom/fannie-mae-news/economy-still-expected-enter-and-exit-modest-recession-2023
  7. Fannie Mae -
    https://www.fanniemae.com/media/45801/display
  8. National Association of Realtors -
    https://www.nar.realtor/newsroom/nars-lawrence-yun-predicts-us-home-prices-wont-experience-major-decline-could-possibly-rise-slightly
  9. com -
    https://www.realtor.com/research/2023-national-housing-forecast/
  10. The New York Times -
    https://www.nytimes.com/2022/11/04/realestate/housing-market-interest-rates.html
  11. CNBC -
    https://www.cnbc.com/2022/09/28/how-much-higher-rent-will-go-in-2023-according-to-experts.html
  12. Federal Reserve Bank of Dallas -
    https://www.dallasfed.org/research/economics/2022/0816

 

December
27


 

From summer vacations to winter holidays, it seems each season offers the perfect excuse to put off our to-do list. But be careful, homeowners: neglecting your home's maintenance could put your personal safety—and one of your largest financial investments—at serious risk.

In no time at all, small problems can lead to extensive and expensive repairs. And even if you avoid a catastrophe, those minor issues can still have a big impact. Properties that are not well maintained can lose 10 percent (or more) of their appraised value.1The good news is, by dedicating a few hours each season to properly maintaining your home, you can ensure a safe living environment for you and your family ... and actually increase the value of your home by one percent annually!1 You just need to know where and how to spend your time.

Use the following checklist as a guide to maintaining your home and lawn throughout the year. It's applicable for all climates, so please share it with friends and family members who you think could benefit, no matter where their home is located.

Winter

While it can be tempting to ignore home maintenance issues in the winter, snow and freezing temperatures can do major damage if left untreated. Follow these steps to ensure your house survives the winter months. 

Inside

  • Maintain Heating System
    Check and change filters on your heating system, per the manufacturer's instructions. If you have a boiler, monitor the water level.
  • Tune Up Generator
    If you own a portable generator, follow the manufacturer's instructions for proper maintenance. Make sure it's working before you need it, and stock up on supplies like fuel, oil and filters.
  • Prevent Frozen Pipes
    Make sure pipes are well insulated, and keep your heat set to a minimum of 55 degrees when you're away. If pipes are prone to freezing, leave faucets dripping slightly overnight or when away from home. You may also want to open cabinet doors beneath sinks to let in heat.

Outside

  • Drain and Shut Off Outdoor Faucets
    Before the first freeze, drain and shut off outdoor faucets. Place an insulated cover over exposed faucets, and store hoses for the winter.
  • Remove Window Screens
    Removing screens from your windows allows more light in to brighten and warm your home during the dark, cold winter months. Snow can also get trapped between screens and windows, causing damage to window frames and sills.
  • Service Snowblower
    Don't wait until the first snowstorm of the season to make sure your snowblower is in good working order. Check the manufacturer's instructions for maintenance or have it serviced by a professional.
  • Stock Up on Ice Melt
    Keep plenty of ice melt, or rock salt, on hand in preparation for winter weather. Look for brands that will keep kids and pets safe without doing damage to your walkway or yard.
  • Watch Out for Ice Dams
    Ice dams are thick ridges of solid ice that can build up along the eaves of your house. They can do major damage to gutters, shingles and siding. Heated cables installed prior to the first winter storm can help.14
  • Check for Snow Buildup on Trees
    Snow can cause tree limbs to break, which can be especially dangerous if they are near your home. Use a broom to periodically remove excess snow.15

 Spring

After a long, cold winter, many of us look forward to a fresh start in the spring. Wash away the winter grime, open the windows, and prepare your home for warmer weather and backyard barbecues.

Inside

  • Conduct Annual Spring Cleaning
    Be sure to tackle those areas that may have gone neglected—such as your blinds, baseboards and fan blades—as well as appliances, including your refrigerator, dishwasher, oven and range hood. Clear out clutter and clothes you no longer wear, and toss old and expired food and medications.
  • Shut Down Heating System
    Depending on the type of heating system you have, you may need to shut your system down when not in use. Check the manufacturer's instructions for proper procedures.
  • Tune Up A/C
    If your home has central air conditioning, schedule an annual tune-up with your HVAC technician. If you have a portable or window unit, be sure to follow the manufacturer's instructions for proper maintenance.2
  • Check Plumbing
    It's a good idea to periodically check your plumbing to spot any leaks or maintenance issues. Look for evidence of leaks—such as water stains on the ceiling—and check for dripping faucets or running toilets that need to be addressed. Inspect your hot water heater for sediment build up. Check your sump pump (if you have one) to ensure it's working properly.3
  • Inspect Smoke Alarm and Carbon Monoxide Detectors
    Check that your smoke and carbon monoxide detectors are functioning properly. Batteries should be replaced every six months, so change them now and again in the fall. Follow the manufacturer's instructions to test your individual devices. And even properly functioning devices should be replaced at least every 10 years, or per the manufacturer's recommendation.4

Outside

  • Inspect Perimeter of Home
    Walk around your house and look for any signs of damage or wear and tear that should be addressed. Are there cracks in the foundation? Peeling paint? Loose or missing roof shingles? Make a plan to make needed repairs yourself or hire a contractor.
  • Clean Home's Exterior
    Wash windows and clean and replace screens if they were removed during the winter months. For the home's facade, it's generally advisable to use the gentlest method that is effective. A simple garden hose will work in most cases.5
  • Clean Gutters and Downspouts
    Gutters and downspouts should be cleaned at least twice a year. Neglected gutters can cause water damage to a home, so make sure yours are clean and free of debris. If your gutters have screens, you may be able to decrease the frequency of cleanings, but they should still be checked periodically.6
  • Rake Leaves
    Gently rake your lawn to remove leaves and debris. Too many leaves can cause an excessive layer of thatch, which can damage the roots of your lawn. They can also harbor disease-causing organisms and insects.7 However, take care because overly vigorous raking can damage new grass shoots.

  • Seed or Sod Lawn
    If you have bare spots, spring is a good time to seed or lay new sod so you can enjoy a beautiful lawn throughout the remainder of the year. The peak summer heat can be too harsh for a new lawn. If you miss this window, early fall is another good time to plant.8
     
  • Apply a Pre-Emergent Herbicide
    While a healthy lawn is the best deterrent for weeds, some homeowners choose to use a pre-emergent herbicide in the spring to minimize weeds. When applied at the right time, it can be effective in preventing weeds from germinating. However, a pre-emergent herbicide will also prevent grass seeds from germinating, so only use it if you don't plan to seed or sod in the spring.
  • Plant Flowers
    After a long winter, planting annuals and spring perennials is a great way to brighten up your garden. It's also a good time to prune existing flowers and shrubs and remove and compost any dead plants.

  • Mulch Beds
    A layer of fresh mulch helps to suppress weeds, retain moisture and moderate soil temperature. However, be sure to strip away old mulch at least every three years to prevent excessive buildup.9

  • Fertilize Lawn
    Depending on your grass type, an application of fertilizer in the spring may help promote new leaf and root growth, keep your lawn healthy, and reduce weeds.10
  • Tune Up Lawn Mower
    Send your lawn mower out for a professional tune-up and to have the blades sharpened before the mowing season starts.11

  • Inspect Sprinkler System
    If you have a sprinkler system, check that it's working properly and make repairs as needed.
  • Check the Deck
    If you have a deck or patio, inspect it for signs of damage or deterioration that may have occurred over the winter. Then clean it thoroughly and apply a fresh coat of stain if needed.
  • Prepare Pool
    If you own a pool, warmer weather signals the start of pool season. Be sure to follow best practices for your particular pool to ensure proper maintenance and safety.

Summer

Summer is generally the time to relax and enjoy your home, but a little time devoted to maintenance will help ensure it looks great and runs efficiently throughout the season.

Inside

  • Adjust Ceiling Fans
    Make sure they are set to run counter-clockwise in the summer to push air down and create a cooling breeze. Utilizing fans instead of your air conditioner, when possible, will help minimize your utility bills.  
  • Clean A/C Filters
    Be sure to clean or replace your filters monthly, particularly if you're running your air conditioner often. 
  • Clear Dryer Vent
    Help cut down on summer utility bills by cleaning your laundry dryer vent at least once a year. Not only will it help cut down on drying times, a neglected dryer poses a serious fire hazard.
  • Check Weather Stripping
    If you're running your air conditioner in the summer, you'll want to keep the cold air inside and hot air outside. Check weather stripping around doors and windows to ensure a good seal.

Outside

  • Mow Lawn Regularly
    Your lawn will probably need regular mowing in the summer. Adjust your mower height to the highest setting, as taller grass helps shade the soil to prevent drought and weeds.
  • Water Early in the Morning
    Ensure your lawn and garden get plenty of water during the hot summer months. Experts generally recommend watering in the early morning to minimize evaporation, but be mindful of any watering restrictions in your area, which may limit the time and/or days you are allowed to water.
  • Weed Weekly
    To prevent weeds from taking over your garden and ruining your home's valuable curb appeal, make a habit of pulling weeds at least once per week.
  • Exterminate Pests
    Remove any standing water and piles of leaves and debris. Inspect your lawn and perimeter of your home for signs of an invasion. If necessary, call a professional exterminator for assistance.

Fall

Fall ushers in another busy season of home maintenance as you prepare your home for the winter weather ahead.

Inside

  • Have Heater Serviced
    To ensure safety and efficiency, it's a good idea to have your heating system serviced and inspected before you run it for the first time.
  • Shut Down A/C for the Winter
    If you have central air conditioning, you can have it serviced at the same time as your furnace. If you have a portable or window unit, ensure it's properly sealed or remove it and store it for the winter.
     
  • Inspect Chimney
    Fire safety experts recommend that you have your chimney inspected annually and cleaned periodically. Complete this task before you start using your fireplace or furnace.
  • Seal Windows and Doors
    Check windows and doors for drafts and caulk or add weatherstripping where necessary.
  • Check Smoke Alarm and Carbon Monoxide Detectors
    If you checked your smoke and carbon monoxide detectors in the spring, they are due for another inspection. Batteries should be replaced every six months, so it's time to replace them again. Follow the manufacturer's instructions to test your individual devices. And even properly functioning devices should be replaced at least every 10 years, or per the manufacturer's recommendation.3

Outside

  • Plant Fall Flowers, Grass and Shrubs
    Fall is a great time to plant perennials, trees, shrubs, cool-season vegetables and bulbs that will bloom in the spring.12 It's also a good time to reseed or sod your lawn.
  • Rake or Mow Leaves
    Once the leaves start falling, it's time to pull out your rake. A thick layer of leaves left on your grass can lead to an unhealthy lawn. Or, rather than raking, use a mulching mower to create a natural fertilizer for your lawn.
  • Apply Fall Fertilizer
    If you choose not to use a mulching mower, a fall fertilizer is usually recommended. For best results, aerate your lawn before applying the fertilizer.13
  • Inspect Gutters and Roof
    Inspect your gutters and downspouts and make needed repairs. Check the roof for any broken or loose tiles. Remove fallen leaves and debris.
  • Shut Down Sprinkler System
    If you have a sprinkler system, drain any remaining water and shut it down to prevent damage from freezing temperatures over the winter.
  • Close Pool
    If you have a pool, it's time to clean and close it up before the winter.

    While this checklist should not be considered a complete list of your home's maintenance needs, it can serve as a general seasonal guide. Systems, structures and fixtures will need to be repaired and replaced from time-to-time, as well. The good news is, the investment you make in maintaining your home now will pay off dividends over time.

    Keep a record of all your maintenance, repairs and upgrades for future reference, along with receipts. Not only will it help jog your memory, it can make a big impact on buyers when it comes time to sell your home … and potentially result in a higher selling price.

    Are you looking for help with home maintenance or repairs? We have an extensive network of trusted contractors and service providers and are happy to provide referrals! Call or email us, and we can connect you with one of our preferred vendors.

    Sources:

    1. HouseLogic.com –
      https://www.houselogic.com/organize-maintain/home-maintenance-tips/value-home-maintenance/
    2. Home Advisor –
      https://www.homeadvisor.com/r/servicing-your-air-conditioner/
    3. Keyes & Sons Plumbing and Heating –
      http://keyes-plumbing.com/things-to-check-in-spring/
    4. Allstate Insurance Blog –
      https://blog.allstate.com/test-smoke-detectors/
    5. Houzz –
      https://www.houzz.com/ideabooks/17268616/list/how-to-wash-your-house
    6. Angie's List –
      https://www.angieslist.com/articles/why-gutter-cleaning-so-important.htm
    7. Angie's List –
      https://www.angieslist.com/articles/what-thatch-and-how-does-it-impact-my-lawn.htm
    8. HGTV –
      http://www.hgtv.com/design/outdoor-design/landscaping-and-hardscaping/lawns/top-spring-lawn-care-tips-pictures
    9. This Old House –
      https://www.thisoldhouse.com/more/may-mulching
    10. Lowes –
      https://www.lowes.com/projects/lawn-and-garden/fertilize-your-lawn/project
    11. The New York Times –
      https://www.nytimes.com/guides/realestate/home-maintenance-checklist
    12. Better Homes and Gardens Magazine –
      https://www.bhg.com/gardening/yard/garden-care/what-to-plant-in-the-fall/
    13. The Spruce –
      https://www.thespruce.com/late-fall-fertilizing-2152976
    14. This Old House –
      https://www.thisoldhouse.com/how-to/how-to-get-rid-ice-dams
    15. Houzz –
      https://www.houzz.com/ideabooks/55572864/list/your-winter-home-maintenance-checklist

     

    December
    5

    You don't have to break the bank to celebrate the holidays in style—even in this season of inflation. Prices may be higher on everything from food to gifts to decorations, but there are still plenty of opportunities to eke out extra savings.

    For example, according to the U.S. Environmental Protection Agency (EPA), you can save a couple of hundred dollars a year just by sealing your home and boosting its insulation.1 Other small fixes—such as swapping old light bulbs for LEDs and plugging electronics into a powerstrip—can boost your yearly savings enough to pay off some of your holiday budgets.

    And thanks to a pandemic-era boom in online shopping, it is easier than ever to find deals on new and pre-owned furniture, thrifted gifts, DIY decor, and more. Even secondhand stalwarts like Goodwill have joined the digital fray, making it a cinch to score gently-used treasures at extra-low prices.2

    You won't be the only one bargain-hunting your way to a more financially-stable New Year. Multiple surveys have found that inflation is not only chilling people's spending, it's also prompting shoppers to search for better deals and creative ways to reduce their bills.3

    Here are some strategies you can use to boost your holiday budget by trimming household expenses:

    1. Hunt for Deals on Groceries

    If you're finding it harder than it used to be to serve your family dinner on a budget, you're not alone. With the U.S. food-at-home index (a measure of grocery price inflation) at a 43-year high, many families are struggling to control costs on food staples, such as meat, dairy, produce, and grains.4

    That's made pulling off holiday gatherings especially stressful lately. But don't despair: Even with inflation, retailers are still giving motivated shoppers plenty of opportunities to whittle down their bills.

    The key is to pay attention to the cost of each item on your shopping list—not just the most expensive—and look for easy swaps and discounts. For example, try buying non-perishable items in bulk, especially when they're on sale, and only in-season produce. Or trade name-brand goods for less expensive options from a store's private label. As you tap into your inner bargain hunter, you could be surprised by what you save when you're more mindful of your selections.

    And unlike in the old days, you no longer have to clip your way through paper flyers to snag a bargain. Instead, you can save both time and money by scouting for deals online, digitally clipping coupons, and earning cash back through special apps and browsers. For example, coupon aggregation sites, like Coupons.com, and shopping apps—such as Checkout 51 and Ibotta—make it easy to score discounts and cashback on a variety of purchases, including groceries.

    Also, check to see if your neighborhood grocer posts their weekly flyers online. If you're hosting a holiday party, the markdowns you find can help you narrow your food and recipe choices, based on what's currently on sale.

    2. Prep Your Home for Holiday Guests With Pre-Owned Finds

    You don't have to sacrifice style for the sake of preserving your holiday budget either. If you're expecting company this year and would like to add some festive flair to your home, you can do so inexpensively—especially if you're willing to decorate with items that are secondhand.

    Thrifting is back in vogue, with an increasing number of shoppers preferring pre-owned furniture and home goods. A recent study found that the "re-commerce" market grew almost 15% last year, which was twice the pace of general retail.5 Plus, buying used isn't just a great way to save money, it also helps the environment by keeping reusable items out of landfills.

    Fortunately, it's become easier to score secondhand deals online. For example, you can scout consumer marketplaces on Facebook, Craigslist, and OfferUp. Or you can take advantage of neighborhood freecycles and "Buy Nothing" groups. And a number of thrift shops now have e-commerce sites, including major chains, like Goodwill.

    If you're handy with a paintbrush or have some basic carpentry skills, you can also modernize some of your existing furniture by upcycling it yourself. Or, if you enjoy crafting, search through your own recycling or sewing bin for raw materials to make one-of-a-kind decorations.

    Don't stress yourself out, though, if you don't have the time or money to dress your home the way you hoped. "A house doesn't have to be perfect or completely done for it to feel festive or inviting," designer Justina Blakeney noted in an interview with the Washington Post. "These are family and friends, and they are not judging you."6 

    3. Forgo Major Renovations in Favor of DIY Home Improvements

    Holidays are always a tricky time to undergo big renovations. But with ongoing worker and material shortages, now is an especially bad time to commit. Inflated costs can add thousands to your reno budget –—and unnecessary stress to your holiday.

    Instead of suffering through an ill-timed remodel, you're better off saving this time of year for simpler, less expensive projects you can do yourself.

    One winter-perfect upgrade to consider: Build a DIY fire pit so that you and your guests can roast marshmallows and relax in the cozy comfort of your backyard. You can also add some extra ambiance by hanging energy-efficient LED outdoor string lights that change from white to colorful. These are festive enough for the holidays, but also versatile enough to use year-round.

    Or, if you'd rather curl up by an indoor fire, channel your DIY energy into a fireplace upgrade. Adding a wooden beam to the top of your mantel can add an extra layer of coziness. Alternatively, re-tiling or painting your fireplace surround can lend contemporary flair.

    Just be sure to stick to DIY projects that you know you can do a quality job on—especially if your changes will be difficult to reverse. Feel free to reach out for a free assessment to find out how your planned renovations could impact your home's resale value. 

    4. Invest in Home Maintenance Projects That Cut Your Utility Bills

    You can save money by completing basic home maintenance tasks, such as swapping your furnace filter and updating your lightbulbs. But if you really want to lower your bills this winter, consider projects that make your home more energy efficient.

    According to the EPA, 9 out of 10 homes in the U.S. are under-insulated, which wastes energy and money.7 Luckily, there are plenty of DIY insulation projects that you can complete in just a few days. For example, the EPA offers guides on how to:

    • Insulate your attic or basement crawl space
    • Weatherstrip doors and windows
    • Seal areas around the house that may be leaking air, including electrical outlets and fireplaces

    The savings you get from these projects can really add up. The EPA estimates that sealing and insulating your ducts can make your HVAC system up to 20% more efficient.8 And thanks to new provisions from the Inflation Reduction Act, you can also save a bundle this year by investing in certain energy-efficient upgrades and claiming a tax credit.9 Be sure to check with us about any local rebates and incentives that may be available, too, before getting started on a project. 

    5. Use Expense Tracking to Boost Your Holiday Budget

     To avoid overextending yourself during the holidays (or anytime), one of the best things you can do is track your income and expenses. If your monthly budget is usually tight, you may need to make some adjustments to free up cash for holiday expenditures.

     For example, here's a sample budget worksheet. Start by adding in your expenses: Under the "Typical" column, you can list your standard expenses, and under the "Adjusted" column, list any areas where you could cut back on spending.

    Then consider how your standard wages may be adjusted this month by extra shifts, additional tips, or an end-of-year bonus. By decreasing your spending and/or increasing your income, you can build room in your budget for holiday gifts and gatherings.

    HOUSEHOLD BUDGET WORKSHEET

     

    Typical

    Adjusted

    Difference (+/-)

    HOUSING

    Mortgage/taxes/insurance or Rent

     

     

     

    Utilities (electricity, water, gas, trash)

     

     

     

    Phone, internet, cable

     

     

     

    Home maintenance and repairs

     

     

     

    FOOD

    Groceries

     

     

     

    Restaurants

     

     

     

    TRANSPORTATION

    Car payment/insurance

     

     

     

    Gas, maintenance, repairs

     

     

     

    OTHER

    Health insurance

     

     

     

    Clothing and personal care

     

     

     

    Childcare

     

     

     

    Entertainment

     

     

     

    Charitable contributions

     

     

     

    Savings, retirement, college fund

     

     

     

    INCOME

    Salary/wages

     

     

     

    Bonus, tips, other

     

     

     

    MONTHLY TOTALS

    Total Adjusted Income

     

    Total Adjusted Expenses

    -

    EXTRA SAVINGS FOR YOUR HOLIDAY BUDGET

     

    Feel free to use this worksheet as a template that you can personalize to your needs.

     WE'RE HERE TO HELP

     We would love to help you meet your financial goals now and in the year ahead. Whether you want to find lower-cost alternatives for home renovations, maintenance, or services, we are happy to provide our insights and referrals.

    And if you're saving up to buy a new home, we can help with that, too. This is the perfect time to score a great deal because only the most motivated homebuyers and sellers are active in the market right now. So reach out to schedule a free consultation. We can fill you in on some of the exciting programs and incentives we're seeing that help make homeownership more affordable.

    The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

    Sources:

    1. S. Environmental Protection Agency (EPA) - https://www.energystar.gov/campaign/waysToSave#!card0-GW91
    2. USA Today - https://www.usatoday.com/story/money/retail/2022/10/05/goodwill-launches-online-store-goodwillfinds-website/8185084001/
    3. Retail Dive -
      https://www.retaildive.com/news/inflation-drives-shopping-changes-consumers-survey/629973/
    4. NBC News -
      https://www.nbcnews.com/select/shopping/how-save-groceries-ncna1299053
    5. CNBC - ​​https://www.cnbc.com/2022/09/14/secondhand-shopping-is-booming-heres-how-much-you-can-save.html
    6. Washington Post -
      https://www.washingtonpost.com/home/2021/11/09/holiday-entertaining-tips/
    7. S. Environmental Protection Agency - https://www.energystar.gov/campaign/seal_insulate/why_seal_and_insulate
    8. Energy Star -
      https://www.energystar.gov/campaign/waysToSave
    9. The White House -
      https://www.whitehouse.gov/cleanenergy/?utm_source=cleanenergy.gov

    October
    30

    According to Redfin, a national real estate brokerage, there's a pretty good chance you can find a condo or co-op that'll cost you less to own per month than it would to rent one!

    Landlords have every right to get as much for their rental as possible. If there are renters who are ready, willing, and able to pay them what they're getting per month, then the market has spoken, and that is ultimately what defines and creates the market value.

    The good news is, you might be able to buy your own home and pay less per month than you do in rent!

    People often presume that buying a home will cost them more than renting. It certainly can, but it doesn't always. A lot depends upon:

    • Where you live
    • What's available to purchase
    • How much homes sell for in your area
    • How much rents are in area

    It's not a no-brainer. You have to look into those things. But most likely you won't be able to buy just any house on the market and have it cost you less per month than something you could rent in the area. That's not how it works. For instance, you're probably not going to be able to buy a 4-bedroom, 3-bath colonial on a cul de sac for less than it costs you to rent a 2-bedroom, 1-bath apartment. But, you might be able to find a 2 bedroom, 1 bath condo or co-op that'll cost you less per month than that apartment!

    In fact, according to recent monthly rental market data from Redfin, there's a pretty good chance you can find a condo or co-op that'll cost you less to own per month than it would to rent one! While other types of property cost more per month to own than to rent, condos and co-ops are about $200 cheaper per month to own on average on a national level. And that's not just right now; it has been cheaper to own a condo — by even more than that at times — going back to at least April of 2019.

    Again, real estate values and markets function on a local level, so you can't entirely bank on national statistics. But they're at least a good indication that there are possibilities worth looking into if your rent is creeping higher, and you'd like to have some control over how much you're shelling out every month for a place to live! In the least, it's worth asking your local real estate agent to help you figure out if there are condos (or perhaps even another type of home) for you to buy, that'll cost you less per month than your current rent.

    The Takeaway:

    If you're feeling like rent prices are skyrocketing, you're not imagining things. While they're driven by supply and demand in the market, some landlords are also using software that helps them not only determine how much they can get for rent, but also encourages them to avoid bargaining with renters and to be firm on higher monthly rental rates.

    The good news is that you might be able to buy your own condo or co-op, and pay less per month than you would in rent, based upon national rental market data. Reach out to your local real estate agent for a more accurate assessment of the options and possibilities in your area. With offices in Charlottesville, Madison, Amherst, Orange & Culpeper, our Montague Miller & Co real estate professionals can help you with your home search!

    Resources: Redfin

    October
    29

    Some Highlights

    • Even with higher mortgage rates, the mortgage process doesn't need to be something you fear. Here are some steps to help as you set out to buy a home.
    • Know your credit score and work to build strong credit. When you're ready, lean on the pros and connect with a lender so you can get pre-approved and begin your home search.
    • Any major life change can be scary, and buying a home is no different. Partner with a trusted real estate professional to take fear out of the equation.

    Resources: Keeping Current Matters

    October
    16

    When you're selling your home, first impressions are everything. Typically, each home buyer is looking for something different in the house they buy. However, there are common problems that will make them walk — and, maybe, even run — out of your home if they see them. The good news is there are several things you can do to make buyers fall in love with your home.

    1. Boost Your Curb Appeal
      Start with your yard. You won't believe the difference mowing your lawn, trimming hedges, picking up toys, adding fresh mulch, and raking leaves make. Best of all, improving the visual appearance of your yard doesn't cost you much. Just remember, once you're committed to selling your home, you'll need to stay on top of lawn work until the property has sold and is no longer your responsibility.

      If you have a plain yard, you should consider adding one or two flower beds or planting an ornamental tree to spruce things up.

    2. Tweak the Interior
      Take a look at the interior of your home. Is the paint chipped, streaked, or just tired looking? Do the fixtures and door handles match? Are the outlet covers and light switches working properly?

      The odds are good that when you look at the interior of your home through the eyes of a prospective buyer, you'll realize that things are a bit dated. Now that you're selling your home, it's time to change that. A quick run to the hardware store for updated door fixtures, outlet covers, and paint won't cost too much. With a weekend's worth of work, you'll have given the inside of your home a facelift and made it more appealing to buyers.

      When choosing fixtures and, more importantly, paint, stick to neutral options.

    3. Upgrade the Kitchen
      Buyers have said that the kitchen was what made them decide to place an offer on a home.

      If you're on a shoestring budget, you'll want to devote your funds to:

      - Ensuring the plumbing works perfectly,
      - Repairing and/or replacing damaged cabinet doors,
      - Making sure the kitchen is well lit,
      - Repainting,
      - Relining the shelves/drawers,
      - Refinishing hardwood floors,
      - Cleaning grout and re-grouting any damaged/crumbling grout.

      If you have more money to devote to upgrading the kitchen, consider:

      - Replacing older countertops with new granite countertops,
      - Upgrading to energy-efficient appliances.

    4. Ceilings
      If your home was built prior to the 1980s and has a popcorn-finished ceiling will want to have it tested for asbestos. If the test is positive, you'll want to replace the ceiling before speaking to a real estate agent. Now that buyers understand the potential health risks connected to asbestos, they won't consider a home with the material.

      Even if the test comes back negative, you should still consider having the ceilings replaced. Not only does the popcorn finish give the house a dated feel, but it's also extremely difficult to keep clean or paint, which serves as a turn-off for any prospective buyers.

    5. Remove the Clutter
      It's difficult for prospective buyers to fully appreciate the full potential of your home if it's full of clutter, so after deciding to sell your home, put any items you can temporarily live without into storage.

    With these tactics and fixes, there's no doubt buyers will fall in love with your home. Ask your trusted Montague Miller real estate agent for more tips on how to get the most out of your sale.

    October
    16

    If you're planning to sell your home, consider staging it. From decluttering and cleaning to rearranging and styling, successful home staging can make you money. In fact, according to the National Association of REALTORS®, most sellers' agents agree a well-staged home increases the dollar amount home buyers offer.

    If you are an HGTV fan, you know home staging is when the "pros" go through a home clearing out the clutter, highlighting its strengths, and presenting each room in the best light that will attract the largest group of potential home buyers.  

    But, do you need to hire a professional stager? Maybe not. Use these six tips to manage the styling and upgrading of your home to fetch a higher sales price.

    1. Ban the Clutter
      Nothing turns away prospective buyers quite as quickly as clutter. For some buyers, clutter makes it impossible for them to see the home because all they can see is the mess. For others, clutter makes them feel as if the home does not have enough space for their own needs because it does not have enough room for yours. Clear away the clutter, so the home's spacious design shows through.

    2. Spruce up the Front Door
      When selling your home, the front door of your home is the first thing most people notice, so make sure it really shines. Give it a fresh coat of paint, add some outside, potted plants, and a new rug. If the front door is inviting and welcoming, the home will sell faster and for a better price.

    3. Place Furniture Strategically
      The placement of your furniture can add to or detract from your home. In the main living areas, put the furniture into conversation groupings rather than pushing it up against the wall. Then, in other rooms, make sure the furniture accentuates the home's positive features while drawing the eye away from negative ones. Remove some furniture, if needed, to help the room look as large as possible.

    4. Spruce up a Neglected Bedroom
      Do you have a guestroom or a master bedroom that you've neglected over the years? Take some time to spruce it up. Transform the guest room into a kid's bedroom (even if you don't have kids) to make the home appealing to families who do. Make sure the bed is the focal point of your master bedroom space. Aim for symmetry where clutter rules. With these tips, your home will be much more appealing.

    5. Add Lighting
      Most homes do not have the right amount of lighting for proper home staging techniques. Even if your home has plenty of natural light, you want to ensure that you have 100 watts of lighting for every 50 square feet of living space. Adding lighting on multiple levels of the room, including overhead lights and table lamps, will make the space feel warmer and inviting.

    6. Clean and Organize the Kitchen, Inside and Out
      The kitchen will make or break your home's ability to shine, so spend a significant amount of time here as you stage the property. Make sure you clean it well and pack away all clutter so the countertops can be clear. Then, clean out each cupboard and pantry to make it look like it has plenty of storage space. Remember, potential buyers will be looking inside these spaces. Finally, update any outdated appliances and cover any ugly cabinets with a fresh coat of paint. Don't forget to invest in a new sink faucet if an upgrade is needed.

    In a competitive market or in a situation where you need to sell your home quickly, staging is the key. Keep these tips in mind, and don't be afraid to talk to a professional stager. Often, the cost of professional staging is made back with a higher sales price and less time on the market!

    October
    2

    Deciding whether to jump into the housing market or rent instead is rarely an easy decision – especially if you're a first-time homebuyer. But in today's whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership. 

     A real estate boom during the pandemic pushed home prices to an all-time high.1 Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down.

     But is renting a better alternative? Rents have also soared along with inflation – and are likely to continue climbing due to a persistent housing shortage.2 And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future.

     So, what's the better choice for you? There's a lot to consider when it comes to buying versus renting. Luckily, you don't have to do it alone. Reach out to schedule a free consultation and we'll help walk you through your options. You may also find it helpful to ask yourself the following questions: 

    1. How long do I plan to stay in the home?

     You'll get the most financial benefit from a home purchase if you own the property for at least five years.3 If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.

     There are costs associated with buying and selling a home, and it may take time for the property's value to rise enough to offset those expenditures.

     Even though housing markets can shift from one year to the next, you'll typically find that a home's value will ride out a market's ups and downs and appreciate with time.4 The longer you own a property, the more you are likely to benefit from its appreciation.

     Once you've found a community that you'd like to stay in for several years, then buying over renting can really pay off. You'll not only benefit from appreciation, but you'll also build equity as you pay down your mortgage – and you'll have more security and stability overall.

     Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow. 

    2. Is it a better value to buy or rent in my area?

     If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area.

     One helpful tool for evaluating your options is a neighborhood's price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent.5 Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term.

     According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing home 10 years ago would have gained roughly $225,000 in equity — all while maintaining a steady mortgage payment.6

     In contrast, someone who chose to rent for the past 10 years would have not only missed out on those equity gains, but they would have also seen U.S. rental prices increase by around 66%.7

     So even if renting seems like a better bargain today, buying could be the better long-term financial play.

     Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is the better value in your particular neighborhood.

    3.Can I afford to be a homeowner?

     If you determine that buying a home is the better value, you'll want to evaluate your financial readiness.

     Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that's a sign you may be better off waiting until you've built a larger rainy-day fund.

     Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won't be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs.

     Still, you could find that the monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it's not always the cheaper option.

     Plus, even though you'll be in charge of financing your home's upkeep if you buy, you'll also be the one who stands to benefit from the fruits of your investment. Every major upgrade, for example, not only makes your home a nicer place to live; it also helps boost your home's market value.

     If you want to buy a home but aren't sure you can afford it, give us a call to discuss your goals and budget. We can give you a realistic assessment of your options and help you determine if your homeownership dreams are within reach.

    4. Can I qualify for a mortgage?

     If you're prepared to handle the costs of homeownership, you'll next want to look into how likely you are to get approved for a mortgage.

     Every lender will have its own criteria. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment.

     For example, lenders like to see evidence that your income is stable and predictable. So if you're self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren't at risk of becoming financially overextended.

     In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate.

     Whatever your circumstances, it's always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you're interested, and we'll give you a referral to a loan officer or mortgage broker who can help.

    5. How would owning a home change my life?

     Before you begin the preapproval process, however, it's important to consider how homeownership would affect your life, aside from the long-term financial gains.

     In general, you should be prepared to invest more time and energy in owning a home than you do renting one. There can be a fair amount of upkeep involved, especially if you buy a fixer-upper or overcommit yourself to a lot of DIY projects. If you've only lived in an apartment, for example, you could be surprised by the amount of time you spend maintaining a lawn.

     On the other hand, you might relish the chance to tinker in your very own garden, make HGTV-inspired improvements, or play with your dog in a big backyard. Or, if you're more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners.

     The great thing about owning a home is that you can generally do what you want with it – even if that means painting your walls fiesta red one month and eggplant purple the next!

     The choice – like the home – is all yours.  

    HAVE MORE QUESTIONS? WE'VE GOT ANSWERS 

    The decision to buy or rent a home is among the most consequential you will make in your lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don't hesitate to reach out for a personalized consultation from our Montague Miller & Co trusted real estate professionals, regardless of where you are in your deliberations. We'd be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals.

    The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. 

    Sources:

    1. CNN -
      https://www.cnn.com/2022/08/11/homes/home-prices-second-quarter/index.html
    2. NPR - https://www.npr.org/2022/07/14/1109345201/theres-a-massive-housing-shortage-across-the-u-s-heres-how-bad-it-is-where-you-l
    3. Bankrate -
      https://www.bankrate.com/mortgages/5-year-real-estate-rule/
    4. Federal Reserve Bank of St. Louis -
      https://fred.stlouisfed.org/series/MSPUS
    5. National Association of REALTORS - https://www.nar.realtor/blogs/economists-outlook/price-to-rent-ratios-by-state-from-2014-2019
    6. National Association of REALTORS -
      https://www.nar.realtor/blogs/economists-outlook/single-family-homeowners-typically-accumulated-225K-in-housing-wealth-over-10-years
    7. Statista -
      https://www.statista.com/statistics/200223/median-apartment-rent-in-the-us-since-1980/
    September
    30

    Selling your home upon retirement is a question millions of people grapple with. While it might seem logical to scale down when you retire, is it really the best option? 

    There's no "one size fits all" solution for selling your home. Most people will find there are pros and cons to the choice they have to weigh before making a decision.

    • Pro: Selling Can Give You Retirement Income
      If you've worked hard to build equity in your house, selling it could be exactly the step you need to take to ensure a comfortable retirement. Plus, if you've been living in the home consistently in recent years, you may be eligible to shield much of the sale's proceeds from taxation. This can be the solution for retirees who find themselves without enough savings.

    • Pros: Selling Means Fewer Recurring Costs
      No matter how well-maintained your home is, there'll always be costs involved in keeping it running. Your HVAC system, plumbing, electrical wiring, and much more can all fail without much warning. By selling, you avoid all these inevitable challenges of home ownership. Plus, you may find that you can reduce the overall costs of your utilities.

    • Pros: Selling May Mean More Accessible Accommodations
      With age, many people face security and safety concerns they did not have in their youth. One of the most serious ones is the risk of a serious slip and fall, particularly when your home has many stairs. The cost of remodeling a home to make it more comfortable in retirement may be greater than what you are willing to invest in your retirement income.

    • Pros: Selling May Mean More Flexibility in Retirement
      Your desires in retirement might be very different from what you wanted from your home years or decades ago. You might want to move closer to relatives, for example, get into a community more in keeping with your needs, or even move to another country. In all these situations and more, maintaining your home can make it harder for you to focus on the present.

    • Cons: Renting May Not Be Worth It
      One of the biggest questions about selling is whether it makes financial sense. While your home might be appreciating in value, the cost of rent in your community is probably rising as well. If you know where you want to live after selling, take a close look at the nearby housing and the financial resources it will take for you to live comfortably there.

    • Cons: Sentimental Value Matters
      By the time they reach retirement, many people have spent decades in one home. There's simply no way to put a price on the sentimental value such a property can offer. It may make more sense to keep the home in the family if you consider it an important part of your legacy. This may be a matter to bring up with adult children or others with a close connection to the place.

    • Cons: It May Not Be the Right Time for Selling Your Home
      If your home is appreciating in value — or a minor improvement could substantially raise its sale price — it may be worth it to wait a little longer before making your move. In a "seller's market," a delay of just three months can make a big difference in what you can expect from your sale. If conditions are ideal, it may make sense to wait six months or even another year.

    Ultimately, selling your home is a deeply personal decision. It's best made with input from a real estate agent you can rely on. Reach out to a Montague Miller & Company real estate professional to help you make your next move.

    September
    30

    Selling your home soon? As you look at your finances and list your home, it's probably tempting to focus on your potential earnings. However, every real estate transaction comes with closing costs for the buyer and the seller.

    You probably already know you're responsible for the agents' commissions, but what about the rest of your closing costs?

    Before selling your home, make sure you understand all the closing costs you'll be expected to cover. Here are some common costs that may surprise you:  

    1. Pro-Rated Property Taxes
      You're responsible for all property taxes up to the date of the sale. That means if you're selling in July, you need to pay your property tax for the first seven months of the year — not wait until next year to file. Make sure you're aware of the final number because you must provide this to the buyers. This is required because buyers will get a bill next year for the whole year, including the months you still owned the home.

    2. Transfer Taxes and Fees
      Real estate transactions are essentially title transfers from one owner to another. Before your sale is complete, you must pay state and county or city fees in order to process this transfer. You may also need to pay transfer taxes. While most sellers are aware that it costs money to transfer a title, many are surprised by the final percentage, which can fluctuate wildly depending on your location. Make sure you're aware of the local requirement beforehand.

    3. Title Insurance
      If you think buyers are always responsible for buying a title insurance policy, think again. Many states now require sellers to cover the new homeowner's title insurance policy. This coverage is designed to protect the mortgage lender from any future claims, and they won't approve the transaction without it. Find out now if you will be responsible for the buyer's title insurance coverage.

    4. Home Preparations
      Staging a home for market success is about more than just cleaning thoroughly and rearranging the furniture. Your real estate agent will know which services are the most valuable, especially to sellers who want to ask for more money or sell more quickly. For example, renting a storage unit will make it much easier to clear out a third of your clutter and personal possessions, leaving a more neutral and walkable space for potential buyers. Carpet cleaning, painting, lawn care, and professional photography services are also important investments for serious sellers.

    Of course, your final closing costs before selling your home will depend on a lot of different factors. From zip code and loan terms to the buyers' willingness to negotiate, these factors will help you figure out just how much to set aside for closing. Understand your responsibilities and prepare yourself for every possible expense.

    September
    7

    Mortgage rates have been on a roller coaster ride this year, rising and falling amid inflationary pressures and economic uncertainty. And even the experts are divided when it comes to predicting where rates are headed next.1

    This climate has been unsettling for some homebuyers and sellers. However, with proper planning, you can work toward qualifying for the best mortgage rates available today – and open up the possibility of refinancing at a lower rate in the future.

    How does a lower mortgage rate save you money? According to Trading Economics, the average new mortgage size in the United States is currently around $410,000.2 Let's compare a 5.0% versus a 6.0% fixed-interest rate on that amount over a 30-year term.

    Mortgage Rate
    (30-year fixed)

    Monthly Payment on $410,000 Loan
    (excludes taxes, insurance, etc.)

    Difference in Monthly Payment

    Total Interest Over 30 Years

    Difference in Interest

    5.0%

    $2,200.97

     

    $382,348.72

     

    6.0%

    $2,458.16

    + $257.19

    $474,936.58

    + $92,587.86

    With a 5% rate, your monthly payments would be about $2,201. At 6%, those payments would jump to $2,458, or around $257 more. That adds up to a difference of almost $92,600 over the lifetime of the loan. In other words, shaving off just one percentage point on your mortgage could put nearly $100K in your pocket over time.

    So, how can you improve your chances of securing a low mortgage rate? Try these eight strategies:

    1. Raise your credit score.

    Borrowers with higher credit scores are viewed as "less risky" to lenders, so they are offered lower interest rates. A good credit score typically starts at 690 and can move up into the 800s.3 If you don't know your score, check with your bank or credit card company to see if they offer free access. If not, there are a plethora of both free and paid credit monitoring services you can utilize.

     If your credit score is low, you can take steps to improve it, including:4

    • Correct any errors on your credit reports, which can bring down your score. You can access reports for free by visiting AnnualCreditReport.com.
    • Pay down revolving debt. This includes credit card balances and home equity lines of credit.
    • Avoid closing old credit card accounts in good standing. It could lower your score by shortening your credit history and shrinking your total available credit.
    • Make all future payments on time. Payment history is a primary factor in determining your credit score, so make it a priority.
    • Limit your credit applications to avoid having your score dinged by too many inquiries. If you're shopping around for a car loan or mortgage, minimize the impact by limiting your applications to a short period, usually 14 to 45 days.5

     Over time, you should start to see your credit score climb — which will help you qualify for a lower mortgage rate. 

    1. Keep steady employment.

    If you are preparing to purchase a home, it might not be the best time to make a major career change. Unfortunately, frequent job moves or gaps in your résumé could hurt your borrower eligibility.

    When you apply for a mortgage, lenders will typically review your employment and income over the past 24 months.5 If you've earned a steady paycheck, you could qualify for a better interest rate. A stable employment history gives lenders more confidence in your ability to repay the loan.

    That doesn't mean a job change will automatically disqualify you from purchasing a home. But certain moves, like switching from W-2 to 1099 (independent contractor) income, could throw a wrench in your home buying plans.6

    1. Lower your debt-to-income ratios.

    Even with a high credit score and a great job, lenders will be concerned if your debt payments are consuming too much of your income. That's where your debt-to-income (DTI) ratios will come into play.

    There are two types of DTI ratios:7

    1. Front-end ratio — What percentage of your gross monthly income will go towards covering housing expenses (mortgage, taxes, insurance, and dues or association fees)?
    2. Back-end ratio — What percentage of your gross monthly income will go towards covering ALL debt obligations (housing expenses, credit cards, student loans, and other debt)?

    What's considered a good DTI ratio? For better rates, lenders typically want to see a front-end DTI ratio that's no higher than 28% and a back-end ratio that's 36% or less.7

    If your DTI ratios are higher, you can take steps to lower them, like purchasing a less expensive home or increasing your down payment. Your back-end ratio can also be decreased by paying down your existing debt. A bump in your monthly income will also bring down your DTI ratios. 

    1. Increase your down payment.

    Minimum down payment requirements vary by loan type. But, in some cases, you can qualify for a lower mortgage rate if you make a larger down payment.8

    Why do lenders care about your down payment size? Because borrowers with significant equity in their homes are less likely to default on their mortgages. That's why conventional lenders often require borrowers to purchase private mortgage insurance (PMI) if they put down less than 20%.

    A larger down payment will also lower your overall borrowing costs and decrease your monthly mortgage payment since you'll be taking out a smaller loan. Just be sure to keep enough cash on hand to cover closing costs, moving expenses, and any furniture or other items you'll need to get settled into your new space.

    1. Compare loan types.

    All mortgages are not created equal. The loan type you choose could save (or cost) you money depending on your qualifications and circumstances.

    For example, here are several common loan types available in the U.S. today:9

    • Conventional — These offer lower mortgage rates but have more stringent credit and down payment requirements than some other types.
    • FHA — Backed by the government, these loans are easier to qualify for but often charge a higher interest rate.
    • Specialty — Certain specialty loans, like VA or USDA loans, might be available if you meet specific criteria.
    • Jumbo — Mortgages that exceed the local conforming loan limit are subject to stricter requirements and may have higher interest rates and fees.10

    When considering loan type, you'll also want to weigh the pros and cons of a fixed-rate versus variable-rate mortgage:11 

    • Fixed rate — With a fixed-rate mortgage, you're guaranteed to keep the same interest rate for the entire life of the loan. Traditionally, these have been the most popular type of mortgage in the U.S. because they offer stability and predictability.
    • Adjustable rate — Adjustable-rate mortgages, or ARMs, have a lower introductory interest rate than fixed-rate mortgages, but the rate can rise after a set period of time — typically 3 to 10 years.

    According to the Mortgage Bankers Association, 10% of American homebuyers are now selecting ARMs, up from just 4% at the start of this year.12 An ARM might be a good option if you plan to sell your home before the rate resets. However, life is unpredictable, so it's important to weigh the benefits and risks involved. 

    1. Shorten your mortgage term.

    A mortgage term is the length of time your mortgage agreement is in effect. The terms are typically 15, 20, or 30 years.13 Although the majority of homebuyers choose 30-year terms, if your goal is to minimize the amount you pay in interest, you should crunch the numbers on a 15-year or 20-year mortgage.

    With shorter loan terms, the risk of default is less, so lenders typically offer lower interest rates.13 However, it's important to note that even though you'll pay less interest, your mortgage payment will be higher each month, since you'll be making fewer total payments. So before you agree to a shorter term, make sure you have enough room in your budget to comfortably afford the larger payment. 

    1. Get quotes from multiple lenders.

    When shopping for a mortgage, be sure to solicit quotes from several different lenders and lender types to compare the interest rates and fees. Depending upon your situation, you could find that one institution offers a better deal for the type of loan and term length you want.

    Some borrowers choose to work with a mortgage broker. Like an insurance broker, they can help you gather quotes and find the best rate. However, if you use a broker, make sure you understand how they are compensated and contact more than one so you can compare their recommendations and fees.14

    Don't forget that we can be a valuable resource in finding a lender, especially if you are new to the home buying process. After a consultation, we can discuss your financing needs and connect you with loan officers or brokers best suited for your situation.

    1. Consider mortgage points.

    Even if you score a great interest rate on your mortgage, you can lower it even further by paying for points. When you buy mortgage points — also known as discount points — you essentially pay your lender an upfront fee in exchange for a lower interest rate. The cost to purchase a point is 1% of your mortgage amount. For each point you buy, your mortgage rate will decrease by a set amount, typically 0.25%.15 You'll need upfront cash to pay for the points, but you can more than make up for the cost in interest savings over time.

    However, it only makes sense to buy mortgage points if you plan to stay in the home long enough to recoup the cost. You can determine the breakeven point, or the period of time you'd need to keep the mortgage to make up for the fee, by dividing the cost by the amount saved each month.15 This can help you determine whether or not mortgage points would be a good investment for you. 

    Getting Started

    Unfortunately, the rock-bottom mortgage rates we saw during the height of the pandemic are behind us. However, today's 30-year fixed rates still fall beneath the historical average of around 8% — and are well below the all-time peak of 18.45% in 1981.16, 17

    And although higher mortgage rates have made it more expensive to finance a home purchase, they have also eliminated some of the competition from the market. Consequently, today's buyers are finding more homes to choose from, fewer bidding wars, and more sellers willing to negotiate or offer incentives such as cash toward closing costs or mortgage points.

    If you're ready and able to buy a home, there's no reason that concerns about mortgage rates should sideline your plans. The reality is that many economists predict home prices to continue climbing.18 So you may be better off buying today at a slightly higher rate than waiting and paying more for a home a few years from now. You can always refinance if mortgage rates go down, but you can't make up for the lost years of equity growth and appreciation.

    If you have questions or would like more information about buying or selling a home, reach out to schedule a free consultation with your local Montague Miller & Company real estate professional. We'd love to help you weigh your options, navigate this shifting market, and reach your real estate goals!

    Sources:

    1. Washington Post - https://www.washingtonpost.com/business/2022/08/04/mortgage-rates-sink-below-5-percent-first-time-four-months/
    2. Trading Economics - https://tradingeconomics.com/united-states/average-mortgage-size
    3. NerdWallet - https://www.nerdwallet.com/article/finance/what-is-a-good-credit-score
    4. org - https://www.debt.org/credit/improving-your-score/
    5. The Balance - https://www.thebalance.com/will-multiple-loan-applications-hurt-my-credit-score-960544
    6. Time -https://time.com/nextadvisor/mortgages/how-lenders-evaluate-your-employment/
    7. Bankrate - https://www.bankrate.com/mortgages/why-debt-to-income-matters-in-mortgages/
    8. NerdWallet - https://www.nerdwallet.com/article/mortgages/payment-buy-home
    9. Consumer Financial Protection Bureau - https://www.consumerfinance.gov/owning-a-home/loan-options/
    10. NerdWallet - https://www.nerdwallet.com/article/mortgages/jumbo-loans-what-you-need-to-know
    11. Bankrate - https://www.bankrate.com/mortgages/arm-vs-fixed-rate/
    12. MarketWatch - https://www.marketwatch.com/picks/as-mortgage-rates-rise-heres-exactly-how-more-homebuyers-are-snagging-mortgage-rates-around-4-01656513665
    13. Consumer Financial Protection Bureau - https://www.consumerfinance.gov/owning-a-home/loan-options/#anchor_loan-term_361c08846349fe
    14. Federal Trade Commission - https://consumer.ftc.gov/articles/shopping-mortgage-faqs
    15. Bankrate - https://www.bankrate.com/mortgages/mortgage-points/
    16. CNBC - https://www.cnbc.com/select/mortgage-rates-today-still-relatively-low/
    17. Rocket Mortgage - https://www.rocketmortgage.com/learn/historical-mortgage-rates-30-year-fixed
    18. MarketWatch - https://www.marketwatch.com/picks/continuing-home-price-deceleration-heres-what-5-economists-and-real-estate-pros-predict-will-happen-to-the-housing-market-this-year-01659347993
    August
    15

    Remember the first time you laid eyes on your home? Your jaw dropped at the beautiful front yard. You were amazed at how all those windows sparkled as you walked up to the door. After you moved in, you thanked your lucky stars for sending you your dream home. You loved your house when you first bought it and knew you would live there forever. Wait a minute... Forever? That's an awfully long time to live at the same address. Here's what to do when you think you've fallen out of love with your home. 

    There are different reasons people fall out of love with their dream homes. The good news is more often than not, it's possible to identify the issue and fall back in love with your home all over again.

    Before selling your home, you need to answer a few questions:

    • Have you really given your house a chance?
    • Would you fall back in love with your house if you invested a little into some home improvement projects?
    • Is the house the problem, or are you secretly dissatisfied with your life and laying the blame on your home?

    If you've only been in your house for a few months, it's likely that you haven't actually fallen out of love with the place but are simply suffering from either a case of buyer's remorse or feelings of being unsettled. In this situation, the best thing to do is give things some more time. The chances are good that you'll relax and fall in love with your home all over again. If you discover that your emotional detachment from your house stems from it needing work or remodeling, you need to come to a few decisions. You can choose to invest the time and money into making the improvements your happiness relies on, or speak to a real estate agent about selling your home. It's important to note that sometimes finding your dream home means making improvements.

    If you decide that it's not your house but rather something else triggering your sense of dissatisfaction, look around the community. You may find that it holds the secret to helping you feel fulfilled. The odds are that there are volunteering opportunities and clubs near your home to help you fill up your life and feel happier.

    If you absolutely can't stand the idea of spending any more time in your house, then it's time to talk to a real estate agent about selling your house. When shopping for a new house, remember the issues that caused you to fall out of love with your house and avoid those pitfalls with your next purchase.

    When you decide that selling your home is the best solution, always make sure you deal with a real estate agent you trust to get you the best price for the home. Call on one of our Montague Miller & Co real estate professionals to help you with your next move.

    August
    1

    The process of buying a new home can be both exhilarating and exhausting. But the journey doesn't stop when you close on your property. On the contrary, you still have quite a bit to do before you can begin the process of settling into your new place.

    Fortunately, you don't have to do everything in a day. You don't have to do it all alone, either. When you work with us to sell or purchase a home, you'll have an ally by your side long after your transaction has closed. We'll continue to be a resource, offering advice and referrals whenever you need them on packing, hiring movers and contractors, and acclimating to your new home and neighborhood.

    When it comes to a life event as stressful as moving, it pays to have a professional by your side. Here are some of our favorite pro tips to share with clients as they prepare for an upcoming move.

    1. Watch out for moving scams.

    Maybe you receive a flyer for a moving company in the mail. Perhaps you find a mover online. Either way, never assume that you're getting accurate information. According to the Better Business Bureau, moving-related fraud is on the rise. In 2021 alone, individuals and families reported more than $730,000 lost to moving scams, an increase of 216% over the previous year.1

    How can you tell if a moving deal is too good to be true? Trust your instincts. If the price appears too low or you can't pin down the mover's physical business address, try someone else. The same goes for any moving company representative who dodges questions. Reputable movers should offer transparent pricing, conduct in-home estimates, and provide referrals and copies of their insurance documents upon request.2 For help finding trustworthy movers, reach out. We'd be happy to share our recommendations. 

    1. Insure your belongings.

    Your moving company promises to take care of your custom piano or your antique furniture. But don't just take their word for it. Ask to see how much insurance they carry and talk about how the claims process works. That way, you'll know what is (and isn't) covered in case of loss or damage.

    Of course, some items are priceless because they're irreplaceable. You might want to move your more sensitive valuables (jewelry, documents, family heirlooms, etc.) in your own vehicle just to be safe. For added peace of mind, call your rental or home insurance provider if you're moving anything yourself. You might already be protected or be able to purchase extra insurance to cover your move. If those options are unavailable, you could opt for moving insurance from a third-party carrier.3

    1. Start packing when you start looking for a new home.

     As soon as your house hunting begins in earnest, think about packing away things you won't need for the next few months. These could include seasonal or holiday decor, clothing, and books. Tackling just one or two boxes a day will give you a head start.

    If you're going to put your current home on the market, you'll want to declutter anyway. Decluttering will make your home seem larger, and depersonalizing helps buyers envision their own items in the space. Consider selling, donating, or throwing out possessions you no longer need. The things you want to keep can be placed in storage until you officially start moving to a new place.

    1. Pack to make unpacking easier.

    Have you ever opened a packed box only to find that it's filled with an assortment of items that don't belong together? This isn't efficient and will only make unpacking harder. A better way to pack is to bundle items from a single room in a labeled box. Labels can let movers know (and remind you) where to place each box, whether it's fragile, and which side needs to be up. Some people like to assign colors to each room in their new home to make distributing color-coded boxes a breeze.

    Feel free to unleash your inner organizer with this project. For example, you could create a spreadsheet and assign each box a number. As boxes are packed, simply fill in the spreadsheet with a list of contents. Anyone with access to the spreadsheet can log in and quickly find the desired item.

    1. Think outside the box when transporting clothes.

    Who wants to worry about boxing up clothes? If you plan on hiring professional movers, ask if you can leave clothing in your dressers. In many cases, they will use plastic to wrap the dresser so the drawers don't fall out during transport. If keeping your clothes in your furniture makes it too heavy, the movers might be able to wrap and move drawers by themselves.

    Another easy transport trick involves turning clean garbage bags into garment bags. Poke a hole in the bottom of a garbage bag, turn the bag upside down, slide it over five to seven garments on hangers, and lay the items flat in the back seat or trunk of your vehicle. The bags will help prevent wrinkling, and your clothes will be ready to hang up when you get to your new home.

    1. Document prior to disassembling appliances and furnishings.

    Few things are as confusing as looking at a plastic baggie filled with nuts, bolts, and screws from your disassembled dining room table or sorting through a box of electrical wires and cords to see which ones fit your TV.

    The best workaround to easier reassembly is to document the disassembly process. Take photos and videos or thorough notes as you go. Whether it's your headboard or treadmill, be very precise. And just a tip: Construct your beds first when you get to your new home. After a long moving day, the very last thing you want is to be assembling beds into the wee hours of the morning.

    1. Prioritize unpacking kids' rooms.

    Children can become very stressed by a big move. To ease their transition, consider prioritizing unpacking their rooms as their "safe zones."4 You aren't obligated to unpack everything, certainly. However, set up your children's rooms to be functional. That way, your kids can hang out in a private oasis away from the chaos while you're running around and moving everything else.

    Depending upon how old your youngsters are, you might want to give them decorating leeway, too. Even if it's just letting them choose where furniture goes, it gives them a sense of buy-in. This can help ease the blues of leaving a former home they loved.

    1. Be a thoughtful pet parent.

    Many types of pets can't handle the commotion of moving day. Knowing this, be considerate and seek ways to give your pets breaks from the action. You might ask a friend to pet sit your pooch or keep your kitty in a quieter room, like a guest bathroom.

    Be sure to check in on your pet frequently. Pets like to know that you're around. Give them treats, food, and water throughout the day. When it's time to transport your pet, do it calmly. At your new property, give your pet access to just a room or two at first. Pets typically prefer to acclimate themselves slowly to unfamiliar environments.5

    1. Plan for your move like you're planning for an exciting vacation.

    When you plan vacations, you probably look up local restaurants, shops, and recreational areas. Who says you can't do the same thing when moving? Create a list of all the places you want to go and things you want to do around your newly purchased home. Having a to-explore list keeps everyone's spirits high and gives you starting points to settle into the neighborhood.

    And don't feel that you have to cook that first night. Once the moving trucks are gone, you can always pop over to a local eatery or order DoorDash for major convenience. The first meal in your new home should be a happy, welcoming treat. And if you're relocating to our neck of the woods, we would love to introduce you to all the hot spots in town and recommend our local favorites. 

    1. Pack an "Open Me First!" box.

    You won't be able to unpack all your boxes in one day, but you shouldn't go without your sheets, pillows, or toothbrush. Designate some boxes with "Open Me First!" labels. (Pro tip: Keep a tool kit front and center for all that reassembling.)

    Along these lines, use luggage and duffel bags to transport everyone's personal must-have items and enough clothing for a couple of days. That way, you won't have to rummage through everything in the middle of your move looking for sneakers or snacks.

    When packing your "Open Me First!" boxes, think about which items you'll need in those first 24 hours. For example, toilet paper and hand soap are musts. A box cutter will make unpacking a lot easier, and paper towels and trash bags are sure to come in handy. Reach out for a complete, printable list of "Open Me First!" box essentials to keep on hand for your next move!

    LET'S GET MOVING

    Getting the phone call from your real estate agent that your bid was accepted is a thrilling moment. Make sure you keep the positivity flowing during the following weeks by mapping out a streamlined, efficient move. Feel free to get in touch with us today to help make your big move your best move.

    Sources:

    1. Better Business Bureau - https://www.bbb.org/article/scams/24198-bbb-scam-alert-avoid-moving-scams-this-national-moving-mont
    2. org -
      https://www.move.org/how-to-tell-moving-company-scam/
    3. Forbes -
      https://www.forbes.com/advisor/homeowners-insurance/moving-insurance/
    4. New York Times -
      https://www.nytimes.com/2020/07/13/parenting/moving-tips-kids.html
    5. ASPCA -
      https://www.aspca.org/pet-care/general-pet-care/moving-your-pet
    July
    6

    Moving doesn't have to be a stressful experience.

    You're moving! Let's face it; whether you're moving across the street or across the country, it can be one of life's more stressful events. Before you surround yourself with cardboard boxes and packing tape, use these tips to find and hire a reliable moving company in your area.

    1. Stay Local
      Use someone in your local community. Ask your real estate agent, family, or friends who they trust for moving projects. They will point you in the right direction.

      The majority of moving scams are found online so stay local by searching businesses in your hometown. You can search online but remember, by staying local, it is easier to verify that they are a legitimate business.


    2. Read Reviews
      In the moving industry, reputation is everything. You're going to tell everyone how great the movers were and that word of mouth is what keeps their business going.

      Further, check out the reviews posted for several moving companies that you are researching. In doing so, you will help ensure that you get a great company for a good value.


    3. Visit the BBB
      Visit the Better Business Bureau and check for any complaints or reports against the moving company. Look for customer complaints and business reports, and even check their Department of Transportation license. Simply ask your moving company for their DOT Number.

      You can then search the database to investigate their record. Make sure the company is insured. Check their insurance number. Visit the moving companies beforehand to see what their operations are like.


    4. Get Estimates
      Get at least three estimates from three different companies that have passed your initial screening tests. Try to ask for a not-to-exceed binding estimate. This means a cap will be placed on the maximum amount they can charge you for the move.

      When the moving company comes to your home, show them your belongings. Further, let them see your home's layout and what challenges they may face with stairs or other obstacles in moving items out of your home. Estimates should be free and always conducted in person. Phone estimates are bad.


    5. Check the Paperwork
      Just like selling your home comes with paperwork, so should a good moving company provide you with several documents. They should give you a bill of lading, which is a legal document that serves as a receipt of the shipment of goods.

      Further, an inventory list should include all of the items they are moving for you. The most important document is the estimate itself which should be a written binding estimate which is dated and signed by the moving company.

    You Are Ready to Move

    You have checked potential companies thoroughly and should feel good about your choice. You have done your homework. Now choose the best one. A smooth transition awaits.

    June
    24

    Every buyer-to-be knows searching for a home can be a challenge. However, your house hunt doesn't have to mean chaos if you start with an organized plan. Streamlining your search starts with a healthy dose of preparation by including a great real estate agent, setting a budget, creating a wish list, and reviewing real estate listings that meet your requirements.

    These six tips can keep you organized and focused as you search for your new home.

    1. Involve Your Agent
      Your real estate agent isn't there just to set up visits and oversee the closing process when you're buying a house. They're also your number one resource for answering questions, sharing ideas, and providing real estate advice.

    2. Set a Budget
      While you don't have to know exactly how much you'll be able to spend at the start, it's a good idea to narrow your budget down to a comfortable range. Setting a sensible budget from the start makes every step that comes after easier. You can always adjust later if your finances change.

    3. Scout First
      Before you start scheduling visits, it's a good idea to scout some neighborhoods and identify possible matches. Doing online research will help you narrow down the possibilities. You can learn even more by driving through the most appealing spots that your research uncovers. Be sure to write down the info of any homes that catch your eye so that you can visit them later for a closer look.

    4. When in Doubt, Make a List
      Making lists are a great way to stay organized and super helpful when buying a house. Making lists of your needs, wants, and deal-breakers will help you lock in on the best fits and save time by quickly eliminating homes that just aren't a match.

    5. Ask Around
      Have any friends or family members who recently bought in a new community or live in a neighborhood you're considering? It helps to get the inside scoop on a neighborhood from someone you trust.

    6. Get Pre-Approved
      Want to impress potential sellers and gain some peace of mind in the process? Getting pre-approved for a mortgage is an excellent idea when shopping for a house and will make life much easier when it's time to make an offer. Get this step out of the way early and you'll be in great shape.

    Creating a plan before you start your search for a home gives you the chance to enjoy the process and to make an efficient, informed decision when it's time to place an offer on your new house.

    June
    1

     

    The last two years caught many of us off guard—and not just because of the pandemic. They also ushered in the hottest housing market on record, with home prices rising nationally by nearly 19% in 2021, driven primarily by low mortgage rates and a major supply shortage.1

     But while some had hoped 2022 would bring a return to normalcy, the U.S. real estate market continues to boom, despite rising interest rates and decreasing affordability.

     So what's driving this persistent demand? And is there an end in sight?

    Here are three factors impacting the real estate market right now. Find out how they could affect you if you're a current homeowner or plan to buy or sell a home this year.

     MORTGAGE RATES ARE RISING FASTER THAN EXPECTED

     Over the past couple of years, homebuyers have faced intense competition for new homes—in part due to historically low mortgage rates that were a result of the Federal Reserve's efforts to keep the economy afloat during the COVID-19 pandemic.

     However, in response to a concerning level of inflation, the Fed is now reversing those efforts by raising the federal funds rate. And as a result, mortgage rates are rising, as well. Few experts predicted, though, that mortgage rates would go up as quickly as they have.

     In January 2022, the Mortgage Bankers Association projected that rates would reach 4% by the end of this year.2 By mid-April, however, the average 30-year fixed mortgage rate had already hit 5%, up from around 3% just one year prior.3 On a $400,000 mortgage, that 2% difference could translate into an additional $461 per monthly payment.

     Since then, mortgage rates have continued on an upward trend. So what impact are these rising rates having on demand? While many buyers had hoped for a cooling effect, experts warn that may not be the case.

     Ali Wolf, chief economist at housing market research firm Zanda, told Fortune magazine, "Rising mortgage rates are having a counterintuitive effect on the housing market. Home shoppers are actually sprung into action in an attempt to buy a home before mortgage rates rise any higher."4

     Since inventory remains low, the resulting "race" has kept the homebuying market highly competitive–at least for now.

     What does it mean for you?

     While current 30-year fixed mortgage rates represent an increase over previous months, they remain well below the historical average of 8%.5 As inflation across the economy continues, the Fed is likely to raise rates further this year. Buyers should act fast to secure a good mortgage rate. We'd be happy to refer you to a lender who can help.

     For sellers, speed is also of the essence. The pool of potential buyers may shrink as mortgages become more expensive. And if you plan to finance your next home, you'll want to act quickly to secure a favorable rate for yourself. Contact us today to discuss your options.

     HOME PRICES KEEP CLIMBING

     History shows that higher interest rates don't necessarily translate to lower home prices. In fact, home prices rose 5% between 1980 and 1982, a period of significantly higher mortgage rates and inflation.5

     Forecasters expect that home prices will continue to go up throughout 2022, though likely at a slower pace than the 18.8% increase of the last 12 months.4 Bank of America predicts that prices will be up approximately 10% by the end of this year, while Fannie Mae estimates 11.2%.6,7

     In addition to limited supply and a race to beat rising mortgage rates, home values are also climbing because of positive economic indicators, like low unemployment.8 Plus, rents are soaring–up 17% from a year ago–which is prompting more first-time homebuyers to enter the market.9 Add to that the continued popularity of remote work, and it's easy to see why property prices continue to surge.

     However, it's not all bad news for prospective homebuyers. Economists expect that as mortgage rates rise, the rate of appreciation will continue to taper, though the effect may be gradual.

     "Eventually mortgage rates will slow down home prices," according to Ken Johnson, an economist at Florida Atlantic University interviewed by Marketwatch.10 "We should not see rapid upticks in prices as mortgage rates rise." Forecasters agree—Fannie Mae expects price increases to slow to 4.2% in 2023.7

     What does it mean for you?

     While the pace of appreciation is likely to decrease next year, home prices show no signs of going down. However, current labor shortages are leading to higher salaries and better job opportunities for many workers. You may find that your income growth outpaces home prices, making homeownership more affordable for you in the future.

     For homeowners, the outlook's even brighter. You could find yourself sitting on a nice pile of equity. Contact us for a free home value assessment to find out.

     INVENTORY REMAINS EXTREMELY LOW

     As noted, one of the largest hurdles to homeownership is a lack of inventory. According to a February 2022 report by Realtor.com, there's an expanding gap between household formation and home construction, which has resulted in a nationwide shortage of 5.8 million housing units.11

     The origins of this shortage date back to the 2008 housing crisis, during which crashing home values led contractors to stop building new properties—a trend that has not been fully reversed.12

     That decline in home construction also resulted in a decrease in the number of home building professionals, a trend that was exacerbated by job losses during the COVID-19 pandemic. Now, many builders are limited by their ability to find qualified labor.

     Another major challenge is a staggering increase in the cost of materials. Pandemic-related supply chain shortages have been a significant driver, with home building material costs rising on average 20% on a year-over-year basis. The price of framing lumber alone has tripled since August 2021.13

     These trends add tens of thousands of dollars to the cost of a typical home. Factors like a lack of buildable land in many areas, restrictive zoning, and a shortage of developers are also contributing to the issue.14

     Most homebuying experts agree that the lack of inventory is the primary factor driving rising housing prices and unprecedented competition for homes. With available housing units near four-decade lows, the end of the current housing boom is not yet in sight.15

     What does it mean for you?

     Prospective buyers should be prepared to compete for a home, since low inventory can lead to multiple offers. You may also need to expand your search parameters. If you're ready to look, we're ready to help.

     For sellers, the picture is rosier. In this strong market, your home may be worth more than you realize. Contact us to find out how much your home could sell for in today's market.

     WE'RE HERE TO GUIDE YOU

     While national real estate trends can provide a "big picture" outlook, 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're considering buying or selling a home, contact one of our Montague Miller & Co real estate professionals to schedule a free consultation. We can help you assess your options and make the most of this unique real estate landscape.

    Sources:

    1. Marketwatch - https://www.marketwatch.com/picks/home-price-appreciation-will-normalize-what-5-economists-and-real-estate-pros-predict-will-happen-to-home-prices-in-2022-01646940841
    2. Bankrate -
      https://www.bankrate.com/mortgages/mortgage-rate-forecast
    3. CNBC -
      https://www.cnbc.com/2022/04/16/heres-how-much-the-same-mortgage-costs-now-compared-to-last-year.html
    4. Fortune -
      https://fortune.com/2022/03/23/housing-market-interest-rate-economic-shock/
    5. National Association of Realtors -
      https://www.nar.realtor/blogs/economists-outlook/instant-reaction-mortgage-rates-april-07-2022
    6. Fortune -
      https://fortune.com/2022/03/16/home-prices-2022-2023-bank-of-america-forecast-mortgage-rates/
    7. Fortune -
      https://fortune.com/2022/03/07/what-home-prices-will-look-like-2023-fannie-mae/
    8. Fortune -
      https://fortune.com/2022/03/17/home-prices-drop-housing-markets-california-michigan-massachusetts-corelogic/
    9. CNN -
      https://www.cnn.com/2022/03/23/success/us-national-rent-february/index.html
    10. MarketWatch -
      https://www.marketwatch.com/story/home-prices-increase-at-one-of-the-fastest-rates-on-record-but-higher-mortgage-rates-should-slow-future-growth-11648559497
    11. com -
      https://www.realtor.com/research/us-housing-supply-gap-expands/
    12. NPR -
      https://www.npr.org/2022/03/29/1089174630/housing-shortage-new-home-construction-supply-chain
    13. Investopedia -
      https://www.investopedia.com/housing-market-dips-in-early-march-2022-5222449
    14. NPR -
      https://www.npr.org/2022/03/29/1089174630/housing-shortage-new-home-construction-supply-chain
    15. Fortune -
      https://fortune.com/2022/03/14/housing-market-key-metric-inventory-zillow-bad-for-buyers/

    May
    23

    Some Highlights

    What does the rest of the year hold for the Houseing Market? Here's what experts have to say about what lies ahead.

    Home Prices are projected to rise and so are mortgage rates.  Experts are also forecasting another strong year for home sales as people move to meet their changing needs. 

    Connect with a Montague Miller & Co local real estate professional so you can make your best move this year.

    Resources: Keeping Current Matters, CoreLogic, Freddie Mac, Fannie Mae, NAR, Calculated Risk, MBA

    May
    1

    Our nation is in the midst of a serious housing crunch. Last year, a lack of inventory and soaring prices left many would-be homebuyers feeling pinched. But now, with interest rates climbing, many of them are also feeling desperate to lock in a mortgage—which has only added fuel to the fire.1

    Fortunately, if you're a buyer struggling to find a home, we have some good news. While it's true that higher mortgage rates can decrease your purchasing budget, there are additional ways to compete in a hot market.

    Yes, a high offer price gets attention. But most sellers consider a variety of factors when evaluating an offer. With that in mind, here are five tactics you can utilize to sweeten your proposal and outshine your competition.

    We can help you weigh the risks and benefits of each tactic and craft a compelling offer designed to get you your dream home—without giving away the farm. 

    1.   Demonstrate Solid Financing

    The reality is, no one gets paid if a home sale falls through. That's why sellers (and their listing agents) favor offers with a high probability of closing.

    Sellers particularly love all-cash offers because there's no chance of financing issues cropping up at the last moment. But don't despair if you can't pay cash for your home. According to the National Association of Realtors, only about 1 in 4 home purchases are all-cash deals, which means the vast majority are financed with a mortgage.2

    If sellers are assured that financing will come through, buying with a mortgage doesn't have to be a big disadvantage. The most important step you can take as a buyer is to get preapproved before you start looking for homes. A preapproval letter shows sellers that you are serious about buying and that you will be able to make good on your offer.

    It's also important to consider the reputation of your lender. While sellers may not know or care about a lender's reputation, their agents often do. Some lenders are much easier to work with than others, especially if you are pursuing certain types of mortgages like FHA or VA loans.3 If so, you'll want a lender who specializes in these types of mortgages. If you're unsure who to choose, we are happy to refer you to reputable lenders known for their ease of doing business.

    2.   Put Down a Sizeable Deposit

    Buyers can show sellers that they're serious about their offer and have "skin in the game" by putting down a large earnest money deposit.

    Earnest money is a deposit held in escrow by a title company or the seller's broker or lawyer.  If the purchase goes through, it is applied to the down payment and closing costs—if the sale falls through, the buyer may lose some or all of that deposit.

    While an earnest money deposit is typically around 1-2% of the sale price, offering a higher deposit can help demonstrate to the buyer that you are serious about the property.4 However, this strategy can also be risky. We can help you determine an appropriate deposit to offer based on your specific circumstances.

    3.   Ask for Few (or No) Contingencies

    Most real estate offers include contingencies, which are clauses that allow one or both parties to back out of the agreement if certain conditions are not met. These contingencies appear in the purchase agreement and must be accepted by both the buyer and seller to be legally binding.5

    Common contingencies include:

    • Financing: A financing contingency gives the buyer a window of time in which to secure a mortgage. If they are unable to do so, they can withdraw from the purchase and the seller can move on to other buyers.
    • Inspection: An inspection contingency gives the buyer the opportunity to have the home professionally inspected for issues with the structure, wiring, plumbing, etc. Typically, the seller may choose whether or not to remediate those issues; if they do not, the buyer may withdraw from the contract.
    • Appraisal: Most lenders will not offer a mortgage on a home that costs more than it's worth. An appraisal contingency gives the buyer an opportunity to get the home professionally assessed to ensure that its value is at or above the sales price. If an appraisal comes in low, the seller may be asked to renegotiate the contract.
    • Sale of a prior home: Some buyers cannot afford to purchase a new home until they sell their previous one. If the buyer is unable to sell their current home within a specified window of time, this contingency enables them to withdraw from the contract without penalty.

    Since contingencies reduce the likelihood that a sale will go through, they generally make an offer less desirable to the seller. The more contingencies that are included, the weaker the offer becomes. Therefore, buyers in a competitive market often volunteer to waive certain contingencies.

    However, it's very important to make this decision carefully and recognize the risks of doing so. For example, a buyer who chooses to waive a home inspection contingency may find out too late that the home requires extensive renovations, and a buyer who waives the appraisal may risk their mortgage falling through. If you back out of a home purchase without the protection of a contingency, you could lose your earnest money deposit.6 We can help you assess the risks and benefits involved.

    4. Offer a Flexible Closing Date and/or Leaseback Option

    When it comes to selling a house, money isn't everything. People sell their homes for a wide variety of reasons, and flexible terms that work with their personal situations can sometimes make all the difference. For example, if a seller is in the process of planning a significant move, they may prefer a longer closing timeline that gives them time to find housing in their new location.

    Similarly, short-term leaseback options, in which the sale is completed but the seller retains the right to rent the home for a specified period of time, can be compelling.7 These arrangements enable the seller to use the money from the sale of their home to purchase their next house. A leaseback agreement also makes it possible for them to avoid moving twice when their next home is not yet ready to occupy.

    Flexible closing dates and leaseback options can provide a powerful advantage for first-time homebuyers. If you have a month-to-month or easily transferable lease, for example, you may be able to offer a more flexible timeline than a buyer who is simultaneously selling their existing home.

    Of course, the value of these terms depends on the seller's situation. We can reach out to the listing agent to find out the seller's preferred terms, and then collaborate with you to write a compelling offer that works for both parties.  

    5. Work With a Skilled Buyer's Agent

    In this ultra-competitive real estate market, one of the greatest advantages you can give yourself is to work with a skilled and trustworthy real estate professional. We will make sure you fully understand the process and help you submit an appealing offer without taking on too much risk.

    Plus, we know how to write offers that are designed to win over both the seller and their listing agent. The truth is, listing agents play a huge role in helping sellers evaluate offers, and they want to work with skilled buyer's agents who are professional, communicative, and courteous.

    Once your offer is accepted, we'll also handle any further negotiations and coordinate all the paperwork and other details involved in your home purchase. The best part is, you'll have a knowledgeable, licensed advocate on your side who is watching out for your best interests every step of the way.

    Helping You Get to the Right Offer

    In many cases, a competitive offer doesn't need to be all-cash, contingency-free, or significantly above asking price. But if you're serious about buying a home in today's market, it's important to consider what you can do to sweeten the deal.

    If you're a buyer, we can help you compete in today's market without getting steamrolled. And if you're a seller, we can help you evaluate offers by taking all the relevant factors into account. Contact a local Montague Miller & Co real estate professionals today to schedule a free consultation.

    Sources:

    1. National Association of Realtors -
      https://www.nar.realtor/newsroom/pending-home-sales-dwindle-4-1-in-february
    2. National Association of Realtors -
      https://www.nar.realtor/newsroom/existing-home-sales-fade-7-2-in-february
    3. Forbes -
      https://www.forbes.com/advisor/mortgages/housing-crisis-tips/
    4. com -
      https://www.realtor.com/advice/finance/earnest-money-deposit-mistakes-buyers-make/
    5. Bankrate -
      https://www.bankrate.com/real-estate/contingency-clause/
    6. Home Buying Institute -
      http://www.homebuyinginstitute.com/mortgage/risks-of-waiving-a-contingency/
    7. com -
      https://www.realtor.com/advice/sell/what-is-a-rent-back-agreement
    April
    26

    April
    26

    March
    9

    Key Factors That Impact Affordability Today | MyKCM

    You can't read an article about residential real estate without the author mentioning the affordability challenges that today's buyers face. There's no doubt homes are less affordable today than they were over the last two years, but that doesn't mean homes are now unaffordable.

    There are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let's look closely at each of these components.

    1. Home Prices

    The most recent Home Price Insights report by CoreLogic shows home values have increased by 19.1% from last January to this January. That was one reason affordability declined over the past year.

    2. Mortgage Rates

    While the current global uncertainty makes it difficult to project mortgage rates, we do know current rates are almost one full percentage point higher than they were last year. According to Freddie Mac, the average monthly rate for last February was 2.81%. This February it was 3.76%. That increase in the mortgage rate also contributes to homes being less affordable than they were last year.

    3. Wages

    The one big, positive component in the affordability equation is an increase in American wages. In a recent article by RealtyTrac, Peter Miller addresses that point:

    "Prices are up, but what about wages? ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income."

    The National Association of Realtors (NAR) also recently released information that looks at income and affordability. The NAR data provides a comparison of the current median family income versus the qualifying income for a median-priced home in each region of the country. Here's a graph of their findings:

    Key Factors That Impact Affordability Today | MyKCM

    As the graph shows, the median family income (shown in blue on the graph) is greater than the qualifying income needed to buy a median-priced home (shown in green on the graph) in all four regions of the country. While those figures may vary in certain locations within each region, it's important to note that, in most of the country, homes are still affordable.

    So, when you think about affordability, remember that the picture includes more than just home prices and mortgage rates. When prices rise and rates rise, it does impact affordability, and experts project both of those things will climb in the months ahead. That's why it's less affordable to buy a home than it was over the past two years when prices and rates were lower than they are today. But wages need to be factored into affordability as well. Because wages have been rising, they're a big reason that, while less affordable, homes are not unaffordable today.

    Bottom Line

    To find out more about affordability in our local area, let's discuss where home prices are locally, what's happening with mortgage rates, and get you in contact with a lender so you can make an informed financial decision. Remember, while less affordable, homes are not unaffordable, which still gives you an opportunity to buy today.

    March
    9

    Down Payment Assistance Programs Can Help You Achieve Homeownership | MyKCM

    For many homebuyers, the thought of saving for a down payment can feel daunting, especially in today's market. That's why, when asked what they find most difficult in the homebuying process, some buyers say it's one of the hardest steps on the path to homeownership. Data from the National Association of Realtors (NAR) shows:

    "For first-time home buyers, 29 percent said saving for a downpayment [sic] was the most difficult step in the process."

    If you're finding that your down payment is your biggest hurdle, the good news is there are many down payment assistance programs available that can help you achieve your goals. The key is understanding where to look and learning what options are available. Here's some information that can help.

    First-Time and Repeat Buyers Are Often Eligible

    According to downpaymentresource.com, there are thousands of financial assistance programs available for homebuyers, like affordable mortgage options for first-time buyers. But, of the many programs that are available, down payment assistance options make up the large majority. They say 73% of the assistance available to homebuyers is there to help you with your down payment.

    And it's not just first-time homebuyers that are eligible for these programs. Downpaymentresource.com notes:

    "You don't have to be a first-time buyer. Over 38% of all programs are for repeat homebuyers who have owned a home in the last 3 years."

    That means no matter where you are in your homeownership journey, there could be an option available for you.

    There Are Local Programs and Specialized Programs for Public Servants

    There are also multiple down payment assistance resources designed to help those who serve our communities. Teacher Next Door is one of those programs:

    "The Teacher Next Door Program was designed to increase home ownership among teachers and other public servants, support community development and increase access to affordable housing free from discrimination."

    Teacher Next Door is just one program that seeks to help teachers, first responders, health providers, government employees, active-duty military personnel, and veterans reach their down payment goals.

    And, most importantly, even if you don't qualify for these types of specialized programs, there are many federal, state, and local programs available for you to explore. And the best way to do that is to connect with a local real estate professional to learn more about what's available in your area.

    Bottom Line

    If saving for a down payment seems daunting, there are programs available that can help. And if you work to serve our community, there may be even more opportunities available to you. To learn more about your options, let's connect so you can start your homebuying journey today.

    Resources: Keeping Current Matters, Teacher Next Door, Simplifying the Market, National Association of Realtors (NAR)

    March
    9

    Highlights

    • Today's housing market is the direct result of low supply and high buyer demand. Here's what that means for you and your plans to buy or sell.
    • For buyers, expect competition, be ready to move fast, and be prepared to submit your strongest offer. For sellers,  know your house will be the center of attention  and that it'll likely sell quickly and get multiple offers.
    • If you're ready to move, let's connect to talk about our local area and how you can take advantage of today's unprecedented housing market.

    Resources by Keeping Current Matters, NAR

    February
    8

    What's Your Home Buying Power?

    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 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
    1. 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. 
    1. 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.
    1. Check out home-buying programs. Your state, county or local government may offer special programs, such as grants, for first-time buyers to use.
    2. 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.
    1. 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.
    1. 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 of 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.

    1. 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.

     

    Housing Expense Ratio:

    1. Monthly income before taxes

    $

    2. Multiply line 1 by 0.28

    X 0.28

    3. Monthly mortgage payment (PITI) should not exceed this amount

    = $

    4. Monthly income before taxes

    $

    5. Multiply line 4 by 0.36

    X 0.36

    6. Total monthly payments on all debts (including mortgage) should not exceed this amount

    = $

    7.  Subtract the total monthly payments on all outstanding debts (e.g., car loans, credit cards, student loans, etc.)

    - $

    8. The monthly mortgage payment should not exceed this amount

    $

    9. Look at line 3 and line 8. The lower figure is an estimate of the maximum mortgage payment in consideration of your income and debts.

    $

    10. Multiply line 9 by 0.80

    X 0.80

    11. This equals portion of your mortgage payment that is the principal and interest only

    $

    12. Use the table below to see the size of the loan you may be able to obtain with this monthly mortgage payment.

     

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

     

    Monthly Payment on 30-Year Fixed Rate Mortgage

    Loan amount

    3%

    3.5%

    4%

    4.5%

    5%

    5.5%

    6%

    $50,000

    211

    225

    239

    253

    268

    284

    300

    $75,000

    316

    337

    358

    380

    402

    426

    450

    $100,000

    421

    449

    477

    506

    536

    568

    600

    $150,000

    632

    674

    716

    759

    804

    852

    900

    $200,000

    842

    898

    954

    1012

    1072

    1136

    1200

    $250,000

    1052

    1123

    1193

    1265

    1340

    1420

    1500

    $300,000

    1263

    1347

    1431

    1518

    1608

    1704

    1800

     

    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.

    Interest Rate

    15-Year Term

    30-Year Term

     

    Monthly Payment

    Monthly Payment

    3%

    6.90

    4.21

    3.5%

    7.14

    4.49

    4%

    7.39

    4.77

    4.5%

    7.64

    5.06

    5%

    7.90

    5.36

    5.5%

    8.18

    5.68

    6%

    8.44

    6.00

    Source: HSH.com 

     

    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  2. Moneyunder30.com 3. Credit.com  4. National Association of REALTORS, 2016 Profile of Home Buyers and Sellers 5. Iowa State University Extension  6. HSH.com 

     

     

     

     

     

    February
    1

    You may have heard that it's important to get pre-approved for a mortgage at the beginning of the homebuying process, but what does that really mean, and why is it so important? Especially in today's market, with rising home prices and high buyer competition, it's crucial to have a pre-approval letter prior to making an offer. Here's why.

    Being intentional and competitive are musts when buying a home this year. Pre-approval from a lender is the only way to know your true price range and how much money you can borrow for your loan. Just as important, being able to present a pre-approval letter shows sellers you're a qualified buyer, something that can really help you land your dream home in an ultra-competitive market.

    With limited housing inventory, there are many more buyers active in the market than there are sellers, and that's creating some serious competition. According to the National Association of Realtors (NAR), homes today are receiving an average of 3.8 offers for sellers to consider. As a result, bidding wars are still common. Pre-approval gives you an advantage if you get into a multiple-offer scenario, and these days, it's likely you will. When a seller knows you're qualified to buy the home, you're in a better position to potentially win the bidding war.

    Freddie Mac explains:

    "By having a pre-approval letter from your lender, you're telling the seller that you're a serious buyer, and you've been pre-approved for a mortgage by your lender for a specific dollar amount. In a true bidding war, your offer will likely get dropped if you don't already have one."

    Every step you can take to gain an advantage as a buyer is crucial when today's market is constantly changing. Interest rates are rising, prices are going up, and lending institutions are regularly updating their standards. You're going to need guidance to navigate these waters, so it's important to have a team of professionals such as a loan officer and a trusted real estate advisor making sure you take the right steps and can show your qualifications as a buyer when you find a home to purchase.

    In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. Not only does being pre-approved bring clarity to your homebuying budget, but it shows sellers how serious you are about purchasing a home.

    Resources: Freddi Mac, NAR, Keeping Current Matters

    March
    3

    So many of us are asking this question right now and it's not an easy one to come to a quick conclusion.

    Whether you're buying your first home or selling your current house, if your needs are changing and you think you need to move, the decision can be complicated. You may have to take personal or professional considerations into account, and only you can judge what impact those factors should have on your desire to move.

    However, there's one category that provides a simple answer. When deciding to buy now or wait until next year, the financial aspect of the purchase is easy to evaluate. You just need to ask yourself two questions:

    1. Do I think home values will be higher a year from now?
    2. Do I think mortgage rates will be higher a year from now?

    From a purely financial standpoint, if the answer is 'yes' to either question, you should strongly consider buying now. If the answer to both questions is 'yes,' you should definitely buy now.

    Nobody can guarantee what home values or mortgage rates will be by the end of this year. The experts, however, seem certain the answer to both questions above is a resounding 'yes.' Mortgage rates are expected to rise and home values are expected to appreciate rather nicely.

    What does this mean to you?

    Let's look at how waiting would impact your financial situation. Here are the assumptions made for this example:

    • The experts are right - mortgage rates will be 3.18% at the end of the year
    • The experts are right - home values will appreciate by 5.9%
    • You want to buy a home valued at $350,000 today
    • You decide on a 10% down payment

    How Smart Is It to Buy a Home Today? | MyKCM

    Here's the financial impact of waiting:

    • You pay an extra $20,650 for the house
    • You need an additional $2,065 for a down payment
    • You pay an extra $116/month in your mortgage payment ($1,392 additional per year)
    • You don't gain the $20,650 increase in wealth through equity build-up

    Consider this...

    There are many things to consider when buying a home. However, from a purely financial aspect, if you find a home that meets your needs, buying now makes much more sense than buying next year. Connect with one of Montague Miller's real estate professionals who can help you make your next move.

    Resource: Keeping Current Matters March 3, 2021

    February
    7

    In 1963, Martin Luther King, Jr. inspired a powerful movement with his famous "I Have a Dream" speech. Through his passion and determination, he sparked interest, ambition, and courage in his audience. Today, reflecting on his message encourages many of us to think about our own dreams, goals, beliefs, and aspirations. For many Americans, one of those common goals is owning a home: a piece of land, a roof over our heads, and a place where we can grow and flourish.

    If you're dreaming of buying a home this year, start by connecting with a local real estate professional to understand what goes into the process. With a trusted advisor at your side, you can then begin to answer the questions below to set yourself up for homebuying success.

    1. How Can I Better Understand the Process, and How Much Can I Afford?

    The process of buying a home is not one to enter into lightly. You need to decide on key things like how long you plan on living in an area, school districts you prefer, what kind of commute works for you, and how much you can afford to spend.

    Keep in mind, before you start the process to purchase a home, you'll also need to apply for a mortage.  Lenders will evaluate several factors connected to your financial track record, one of which is your credit history. They'll want to see how well you've been able to minimize past debts, so make sure you've been paying your student loans, credit cards, and car loans on time. If your financial situation has changed recently, be sure to discuss that with your lender as well. Most agents have loan officers they trust and will provide referrals for you.

    According to ConsumerReports.org:

    "Financial planners recommend limiting the amount you spend on housing to 25 percent of your monthly budget."

    2. How Much Do I Need for a Down Payment?

    In addition to knowing how much you can afford on a monthly mortgage payment, understanding how much you'll need for a down payment is another critical step. Thankfully, there are many different options and resources in the market to potentially reduce the amount you may think you need to put down.

    If you're concerned about saving for a down payment, start small and be consistent. A little bit each month goes a long way. Jumpstart your savings by automatically adding a portion of your monthly paycheck into a separate savings account or house fund. AmericaSaves.org says: 

    "Over time, these automatic deposits add up. For example, $50 a month accumulates to $600 a year and $3,000 after five years, plus interest that has compounded."

    Before you know it, you'll have enough for a down payment if you're disciplined and thoughtful about your process.

    3. Saving Takes Time: Practice Living on a Budget

    As tempting as it is to pass the extra time you may be spending at home these days with a little retail therapy, putting that extra money toward your down payment will help accelerate your path to homeownership. It's the little things that count, so start trying to live on a slightly tighter budget if you aren't doing so already. A budget will allow you to save more for your down payment and help you pay down other debts to improve your credit score.

    A survey of millennial spending shows, "68% reported that shelter in place orders helped them save for their down payment." Danielle Hale, Chief Economist at realtor.com, also notes:

    "If there is any silver lining to the current economic landscape, it's that mortgage rates are hanging around record lows…Additionally, shelter-in-place orders helped many who were fortunate enough to keep their jobs save for a down payment — one of the largest hurdles of buying a home. The combination of low rates and the opportunity to save is enabling many millennials to move up their home buying timeline."

    While you don't need to cut all of the extras out of your current lifestyle, making smarter choices and limiting your spending in areas where you can slim down will make a big difference.

    Bottom Line

    If homeownership is on your dream list this year, take a good look at what you can prioritize to help you get there. To determine the steps you should take to start the process, connect with a local Montague Miller & Co real estate professional today. 

    research by Keeping Current Matters

    December
    1

    There's no doubt 2020 has been a challenging year. A global pandemic coupled with an economic recession has caused heartache for many. However, it has also prompted more Americans to reconsider the meaning of "home." This quest for a place better equipped to fulfill our needs, along with record-low mortgage rates, has skyrocketed the demand for home purchases.

    This increase in demand, on top of the severe shortage of homes for sale, has also caused more bidding wars and thus has home prices appreciating rather dramatically. Some, therefore, have become cautious about buying a home right now.

    The truth of the matter is, even though homes have appreciated by a whopping 6.7%  over the last twelve months, the cost to buy a home has actually dropped. This is largely due to mortgage rates falling by a full percentage point.

    Let's take a look at the monthly mortgage payment on a $300,000 house one year ago, and then compare it with that same home today, after it has appreciated by 6.7% to $320,100:

    Compared to this time last year, you'll actually save $87 dollars a month by purchasing that home today, which equates to over one thousand dollars a year.

    But isn't the economy still in a recession?

    Yes, it is. That, however, may make it the perfect time to buy your first home or move up to a larger one. Tom Gil, a Harvard trained negotiator and real estate investor, recently explained: 

    "When volatile assets are facing recessions, hard assets, such as gold and real estate, thrive. Historically speaking, residential real estate has done better compared to other markets during and after recessions."

    That thought is substantiated by the fact that homeowners have 40 times the net worth of renters. Odeta Kushi, Deputy Chief Economist for First American Financial Corporation, recently said: 

    "Despite the risk of volatility in the housing market, numerous studies have demonstrated that homeownership leads to greater wealth accumulation when compared with renting. Renters don't capture the wealth generated by house price appreciation, nor do they benefit from the equity gains generated by monthly mortgage payments, which become a form of forced savings for homeowners."

    In summary, 

    With home prices still increasing and mortgage rates perhaps poised to begin rising as well, buying your first home, or moving up to a home that better fits your current needs, likely makes a ton of sense.

    research by Keeping Current Matters

    June
    29

    May
    11

     

    Two Big Myths in the Homebuying Process | MyKCM

    The 2020 Millennial Home Buyer Report shows how this generation is not really any different from previous ones when it comes to homeownership goals:

    "The majority of millennials not only want to own a home, but 84% of millennials in 2019 considered it a major part of the American Dream."

    Unfortunately, the myths surrounding the barriers to homeownership – especially those related to down payments and FICO® scores – might be keeping many buyers out of the arena. The piece also reveals:

    "Millennials have to navigate a lot of obstacles to be able to own a home. According to our 2020 survey, saving for a down payment is the biggest barrier for 50% of millennials."

    Millennial or not, unpacking two of the biggest myths that may be standing in the way of homeownership among all generations is a great place to start the debunking process.

    Myth #1: "I Need a 20% Down Payment"

    Many buyers often overestimate what they need to qualify for a home loan. According to the same article:

    "A down payment of 20% for a home of that price [$210,000] would be about $42,000; only about 30% of the millennials in our survey have enough in savings to cover that, not to mention the additional closing costs."

    While many potential buyers still think they need to put at least 20% down for the home of their dreams, they often don't realize how many assistance programs are available with as little as 3% down. With a bit of research, many renters may be able to enter the housing market sooner than they ever imagined.

    Myth #2: "I Need a 780 FICO® Score or Higher"

    In addition to down payments, buyers are also often confused about the FICO® score it takes to qualify for a mortgage, believing they need a credit score of 780 or higher.

    Ellie Mae's latest Origination Insight Report, which focuses on recently closed (approved) loans, shows the truth is, over 50% of approved loans were granted with a FICO® score below 750. See graph below:

    Two Big Myths in the Homebuying Process | MyKCM

    Even today, many of the myths of the homebuying process are unfortunately keeping plenty of motivated buyers on the sidelines. In reality, it really doesn't have to be that way.

    If you're thinking of buying a home, you may have more options than you think. Connect with a Montague Miller & Co REALTOR® to answer your questions and help you determine your next steps.

    April
    14

    Buying your first home can seem overwhelming. Thankfully, there's a lot of great information out there to help you feel more confident as you learn about the process. For those in younger generations who aspire to buy, here are three things to consider sooner rather than later in your journey:

    1. Understand What it Takes to Purchase a Home

    Overall, Millennials make up the largest group of homebuyers in today's real estate market, and Gen Z is not too far behind. A recent study shared by Freddie Mac shows, however, that Generation Z isn't as confident in the homebuying process as Millennials. The best thing potential young buyers can do is understand what it takes to buy a home. Learn as much as you can about the mortgage process, down payment options, and the overall steps to take along the way. 

    2. Realize Your Opportunity to Build Wealth 

    Homeownership allows you the chance to put a small portion of the home's value down when you buy, and then watch your appreciation grow on the full value of the home – not just on the down payment. It's one of the best investments you can make, and a form of "forced savings"  working in your favor over time. The added bonus? You get to live there, too.

    3. Find Someone You Trust to Help You Through the Process 

    Having someone you trust to guide you through this process is invaluable. Finding a local real estate expert to help you navigate through the transaction and feel more confident as you make important decisions could be the best choice you make.

    For Millennials and Gen Z'ers thinking about buying, today's historically low interest rates combined with the outlook for future home appreciation is a big win. This means whatever you buy today, you'll be bragging about 10 years from now. You can feel confident about that!

    Bottom Line

    If you're ready, buying your first home sooner rather than later is one of the best decisions you can make. But there are many things to consider before taking that step, so it is critically important to educate yourself properly. Any one of our Montague Miller & Co REALTORS® can help you confidently navigate through the full journey.

    Previously published by Keeping Current Matters

    November
    8

    Home buyers are ready to plant roots: Today's buyers are young, multicultural, tech-savvy, and eager to buy a home as a personal investment, according to the National Association of REALTORS®' 2019 Profile of Home Buyers and Sellers. Young adults ages 25 to 34 make up a quarter of all home buyers, the largest share. Meanwhile, first-time buyers are getting older: The median age of this cohort rose to 33—the highest on record in the NAR survey.

    Snapshot of Home Buyers

    • Average age: 47
    • Median household income: $93,200
    • Living situation: 61% married; 17% single females; 9% single males; 9% unmarried couples
    • Demographics: 84% white; 7% Hispanic; 5% Asian; 4% African American; 3% other
    • Average length of house hunt: 10 weeks (touring a median of 9 homes)
    • Primary reason for purchase: Desire to own a home
    • Most common house type purchased: Detached single-family home, 1,850 square feet, three bedrooms, two baths
    • Median cost of home purchased: $257,000
    • Most common method for finding real estate agent: Referral from friend, neighbor, or relative
    •  
    • Published in National Association of REALTORS®' 2019 Profile of Home Buyers and Sellers
    June
    18

    During the housing market crash, Gen X homeowners lost more wealth than other generations. However, things are changing now! A strong economy, increasing home prices, and the recovery of the housing market are helping this generation to regain their lost wealth.

    According to Pew Research Center,

    "Their fortunes have rebounded more than those of other generations during the post-recession economic expansion and as home and stock prices have risen. Since 2010, the median net worth of Gen X households has risen 115%. In fact, in 2016, the most recent year with available data, the net worth of a typical Gen X household had surpassed what it was in 2007 ($84,200 vs. $63,400)".

    The same report also mentioned,

    "15% of Gen X's homeowners were 'underwater' on their homes in 2010 (meaning they owed more than they owned). By 2016 only 3% were underwater."

    As a result of homes regaining market value and their increasing net worth, many Gen Xers are presented with the opportunity of selling their current home in order to move up to the house they always dreamed of!

    According to the 2019 Home Buyers and Sellers Generational Trends Report by the National Associations of Realtors, in 2018 Gen Xers made up the second largest share of home buyers by generation at 24%.

    The report also provided some highlights about their purchase:

    • Greatest share that purchased a multi-generational home (16%).
    • Largest share that purchased a detached single-family home (88%).
    • Highest median household income ($111,100).
    • Bought the most expensive homes of all the generations.
    • Job-related relocation was identified as the primary reason to buy.

    But this generation is not only buying- they are selling too!

    • Largest share of home sellers (25%).
    • Highest median household income among sellers ($123,6000).
    • Tenure in the previous home was a median of 9 years.
    • House too small was indicated as the primary reason to sell.
    • 91% sold the home using a real estate professional.

    Bottom Line

    If you are a Gen Xer who would like to know exactly how much your house is worth today so that you can move up to the home of your dreams, contact one of our Montague Miller & Co real estate professionals who can help you analyze your current circumstances.

    First Published by Keeping Current Matters

    June
    1

    Are You On the Home Buying Journey

    June
    25

    Video: What's the First Step on the Home Buying Journey?

    January
    4

    Shared Information by Association of Exclusive Buyers Agents (NAEBA) and Keeping Current Matters

    Are you coming up on retirement age and thinking about where you'd like to live in "your golden years?" More and more baby boomers are entering retirement age, and question whether or not to sell their homes and move. In today's housing market climate, with low available inventory in the starter and trade-up home categories, it makes sense to evaluate your home's ability to adapt to your needs in retirement.

    According to the National Association of Exclusive Buyers Agents (NAEBA), listed here are 7 important factors you may want to consider when choosing your retirement home.

    1. Affordability

    "It may be easy enough to purchase your home today but think long-term about your monthly costs. Account for property taxes, insurance, HOA fees, utilities – all the things that will be due whether you have a mortgage on the property."

    Would moving to a complex with homeowner association fees be cheaper than having to hire all the contractors you would need to maintain your home, lawn, etc.? Would your taxes go down significantly if you relocated? What is your monthly income going to be like in retirement?

    1. Equity

    "If you have equity in your current home, you may be able to apply it to the purchase of your next home. Maintaining a healthy amount of home equity gives you a source of emergency funds to tap, via a home equity loan or reverse mortgage."

    The equity you have in your current home may be enough to purchase your retirement home with little to no mortgage. Homeowners in the US gained an average of over $14,000 in equity last year.

    1. Maintenance

    "As we age, our tolerance for cleaning gutters, raking leaves and shoveling snow can go right out the window. A condominium with low-maintenance needs can be a literal lifesaver, if your health or physical abilities decline."

    As we mentioned earlier, would a condo with an HOA fee be worth the added peace of mind of not having to do the maintenance work yourself?

    1. Security

    "Elderly homeowners can be targets for scams or break-ins. Living in a home with security features, such as a manned gate house, resident-only access and a security system can bring peace of mind."

    As scary as that thought may be, any additional security and an extra set of eyes looking out for you always adds to peace of mind.

    1. Pets

    "Renting won't do if the dog can't come too! The companionship of pets can provide emotional and physical benefits."

    Evaluate all your options when it comes to bringing your 'furever' friend with you to a new home. Will there be necessary additional deposits if you are renting or in a condo? Is the backyard fenced in? How far are you from your favorite veterinarian?

    1. Mobility

    "No one wants to picture themselves in a wheelchair or a walker, but the home layout must be able to accommodate limited mobility."

    Sixty is the new 40, right? People are living longer and are more active in retirement, but that doesn't mean that down the road you won't need your home to be more accessible. Installing handrails and making sure your hallways and doorways are wide enough may be a good reason to look for a home that was built to accommodate these needs.

    1. Convenience

    "Is the new home close to the golf course, or to shopping and dining? Do you have amenities within easy walking distance? This can add to home value!"

    How close are you to your children and grandchildren? Would relocating to a new area make visits with family easier or more frequent? Beyond being close to your favorite stores and restaurants, there are a lot of factors to consider.

    Bottom Line

    When it comes to your forever home, evaluating your current house for its ability to adapt with you as you age can be the first step to guaranteeing your comfort in retirement. If after considering all these factors you find yourself curious about your options, contact a Montague Miller & Co real estate professional who can evaluate your ability to sell your house in today's market and get you into your dream retirement home!

    Shared information by National Association of Exclusive Buyers Agents (NAEBA) and Keeping Current Matters

    March
    26

    Are you beginning your new home purchasing journey? Consider the following key factors when choosing the right location for your family, as well as for optimizing the property's resale potential. 

    Aerial Google Map photo of a Charlottesville neighborhood

    TRYING BEFORE BUYING

    Consider the option of renting before purchasing. This is a very good idea, especially when moving a long distance or to an unfamiliar city or region, and it will likely help in making a more informed home-purchasing decision.

    LOCAL TAXES, OTHER EXPENSES

    It's important to research the local taxes and additional home-purchasing expenses. Even if you're renting to start, property taxes can have a strong influence on housing costs and on the overall cost of living. Don't forget about the additional expenses of living in a certain neighborhood. If you're moving into a country club development or a condo, you may be responsible for a costly homeowner's association fee. A change in the tax rate can also affect monthly payments, so by having an idea of how rates have moved over the past several years can offer a view of what they might do in the future.

    PRIORITIZING SAFETY

    Another very important aspect of a home-purchasing decision is the local crime rate. Crime statistics and neighborhood stability go hand in hand. While a less safe area may have lower rents and home prices, making it cheaper to locate there, it may also come with greater risk of property damage or theft. Your real estate agent will be able to offer sound insight on local statistics.

    EDUCATION AND LIFESTYLE AMENITIES

    The quality of the school system will affect property resale values. On the other hand, if you're renting and do not have children, good schools in the area may not be a priority, with the exception of resale value.

    Local amenities are also a key factor in choosing where to buy a home. The availability of neighborhood parks, libraries, bike trails, local business and shops all affect property values.

    FUTURE DEVELOPMENT

    A quiet, private neighborhood with dense tree cover may sound ideal to a prospective homebuyer, but for developers, it means more opportunities to expand. It's important to find out what other developments are planned the area, as the supply pipeline—and construction process—can impact the resale value of a property.

    Our Montague Miller & Co REALTORS® are familiar with these factors and will help guide you in finding the right neighborhood for you and your family. Ready to move forward?  Contact one of our agents in your area to help with your journey! 

     

     

    January
    8

     

    No need to push the panic button now that you want to buy a new home… Review this Quick Guide on Credit Scores and see how you stack up!

    Credit scores range between 200 and 850, with scores above 620 considered desirable for obtaining a mortgage. The following factors affect your score:

    Your payment history.

    Did you pay your credit card bills on time? Bankruptcy filing, liens, and collection activity also affect your history.

    How much you owe and where. 

    If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, spreading debt among several accounts can help you avoid approaching the maximum on any individual credit line.

    The length of your credit history.

    In general, the longer an account has been open, the better.

    How much new credit you have.

    New credit—whether in the form of installment plans or new credit cards—is considered more risky, even if you pay down the debt promptly.

    The types of credit you use.

    Generally, it's desirable to have more than one type of credit—such as installment loans, credit cards, and a mortgage.

     

    December
    28

    Purchasing a new home, especially your first home may be both exciting and foreboding and a lot of emotions in between!  However, with the help of a professional REALTOR® early in the process you may quickly realize you are not alone and can relax and enjoy the journey!

    The National Association of REALTORS® (NAR) recently released their 2017 Profile of Home Buyers and Sellers in which they surveyed recent home buyers and sellers about their experiences. An entire section of the profile is dedicated to buyers' experiences with their real estate agents.

    Here are the top 5 benefits of using a real estate agent when buying your new home as cited by recent buyers:

    1. Helped the buyer understand the process – 60%

    If you are new to the home buying process, an experienced real estate professional can explain exactly what to expect during the entire transaction so you aren't caught off guard.

    1. Pointed out unnoticed features/faults with the property – 56%

    Whether it's pointing out possible uses for an extra bedroom/office, or using their trained eye to see potentially disastrous hazards that may be hiding out of site, your agent is there to protect your interests and make sure your home buying experience is a good one.

    1. Negotiated better sales contract terms – 47%

    When it comes to negotiating the complex terms of your contract and coming to an agreement with the seller, it never hurts to have someone who has been there before on your side. If earlier in your search you found a couple of less than desirable features on the home you are going to purchase, your agent can make sure that contingencies are in place for you to pay the best price. Their analysis of comparable properties in the area will also help to make sure that your dream home is priced properly for the market.

    1. Provided a better list of service providers – 46%

    Real estate agents are titans of networking. Many have a list of preferred providers who they have worked with in the past and who they trust to work as a part of your team to make your dream come true. This can include mortgage professionals (listed as the #8 reason to use an agent at 22%), home inspectors, plumbers, contractors, painters, landscapers, home stagers, and so many more!

    1. Improved the buyer's knowledge of search areas – 44%

    Local real estate professionals are often members of community organizations and are usually well versed in their area's history. Their ties to the community make them a great resource whether you plan to relocate to a new area or across town.

    If your plans for the coming year include purchasing your dream home, start your search with Montague Miller & Co and enlist the help of a local real estate partner who lives and works in the area and can help you make the most powerful and confident decisions for you and your family.

     

    November
    5

    You decide the time is now to buy your first home. You have heard time and again it's better to start building equity in your home instead of renting year after year. So, what's the next step?
     
    You may be closer than you think!  Besides being confident that this is the time to move forward, first learn what you need to know about the Mortgage Process:
    1. What you will need to Qualify in Today's Market
    2. What Steps to Take
     
    September
    17

    This is the right house for us!

    Many first home buyers wonder how they will know when they have found the right house, and that's perfectly normal! Here are a few preliminary things you should know about finding the right house.

    • First, an ethical real estate agent will never, pressure you into buying a house.
    • Second, you will instinctively know it when you see it.
    • Third, you may want to sleep on the decision. Don't.

    Forget the fact that you are not the only one looking at this house. Trust your instincts. 

    Real estate professional of 40 years, Elizabeth Weintraub, cleverly draws from her experience the following signs that will clue you in!

    10 Little Signs You Will Know You Have Found the Right House

    • You Really Want to Go Inside the House
    • The House Embraces You the Moment You Enter
    • You Don't Feel Funny in the Bathroom
    • You Are Possessive About the House
    • You Begin to Envision Furniture Arrangement
    • You Can See Yourself Painting a Wall Your Favorite Color
    • The House Fits Your Basic Needs
    • You Want to Stop Looking at Other Homes
    • You Can't Wait to Brag About This House to Your Friends
    • Every Thought in Your Mind Tells You to Buy That House

    Except for that nagging little thought, that wonders if you should sleep on it, every other thought in your head says this is the perfect house for you. No doubt about it, this will be your home!

    April
    29

    wedding registry for down payment title graphic

    If you're getting married, skip the traditional wedding registry and ask your guests to contribute towards a down payment for a home instead.  The folks at the National Association of Realtors teach you all you need to know about the process here.

    Looking for an online wedding registry to fund your down payment?

    Here are the most popular:

    Hatch My House

    Down Payment Dreams

    However, be careful when choosing any of these options as some charge hefty service fees to use their service.

    A better resource for this type of creative home financing comes from the FHA Bridal Registry Program. This program, created in the late nineties by the United States Department of Housing and Urban Development (HUD), allows you to receive wedding gifts to pay for your home purchase, provided you use an FHA loan instead of conventionalmortgage.

    Before choosing an online registry or government program, be sure to consult a qualified mortgage professional to learn about the pros and cons of each one.

    March
    11

    Montague Miller Real Estate Feb 2016 Graphic

     
    March
    16

    difference between cost and price buying a home

     

    As a seller, you will be most concerned about 'short term price' – where home values are headed over the next six months. As a buyer, you must be concerned not about price but instead about the 'long term cost' of the home.

    The Mortgage Bankers Association (MBA), the National Association of RealtorsFannie Mae and Freddie Mac all projected that mortgage interest rates will increase by about three-quarters of a percentage point over the next twelve months.

    According to CoreLogic's most recent Home Price Index Report, home prices will appreciate by 5.2% over the next 12 months.

    What Does This Mean as a Buyer?

    Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.2% predicted by CoreLogic over the next twelve months:

    Cost of Waiting | Keeping Current Matters

    April
    13

    buying home less expensive than renting title graphicIn the Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage throughout the 100 largest metro areas in the United States.

    The updated numbers actually show that the range is from an average of 16% in Honolulu (HI), all the way to 55% in Sarasota (FL), and 35% Nationwide!

    The other interesting findings in the report include:

    • Interest rates have remained low and even though home prices have appreciated around the country, they haven't greatly outpaced rental appreciation. "In the past year, these two trends have made homeownership even more affordable compared with renting."
    • Some markets might tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
    • Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven't been that high since 1989.

    Bottom Line

    Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, lock in your housing cost with a mortgage payment now.

    February
    3

    how long to save down payment title graphicIn a recent study conducted by Builder.com, researchers determined that nationwide it would take "nearly eight years" for a first-time buyer to save enough for a down payment on their dream home.

    Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage a renter spends on housing in each state and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.

    According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state:

    Years Needed to Save 10% Down | Keeping Current Matters

    What if you only needed to save 3%?

    What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states as shown in the map below.

    Years Needed to Save 3% Down | Keeping Current Matters

    Bottom Line

    Whether you have just started to save for a down payment, or have been for years, you may be closer to your dream home than you think! Meet with a local real estate professional who can help you evaluate your ability to buy today.