Lancaster Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Nov. 15, 2018

'Tis the Season: 5 Reasons Why Winter is a Great Time to Buy or Sell a Home

'Tis the Season: 5 Reasons Why Winter is a Great Time to Buyer or Sell a Home

 

It’s a common misconception that you shouldn’t try to buy or sell a home during the fall and winter months. 

 

This is generally considered the “offseason” in real estate. Many sellers mistakenly believe that the cold weather will keep buyers away and that no one is looking over the holidays. Unfortunately, many real estate professionals perpetuate this myth by advising their clients to “wait until the spring” to list their home. 

 

The truth is, homes are bought and sold year round. And while the market is typically quieter during the fall and winter, savvy buyers and sellers know how to use this slow down to their advantage. In fact, depending on your circumstances, now may be the ideal time for you to purchase or list a home.

 

If you’re in the market to buy or sell, there’s no need to wait for the spring. Read on to discover the top five reasons that it can pay to buy or sell a home during the offseason!

 

 

1. LESS COMPETITION

 

What’s the number one reason to buy or sell a home during the offseason? Less competition!

 

This can be particularly beneficial if you’re a seller. Come spring, a huge wave of new listings will hit the market. But if you list now, you will have fewer comparable homes with which to compete. 

 

In the spring and summer months, it can be difficult for your property to stand out in a crowded market. You may end up with a surplus of homes for sale in your neighborhood. Indeed, it’s not uncommon to see multiple listings on a single street during the peak selling season.

 

Inventory in the fall and winter months, however, can be significantly lower. That means your home will not only receive more attention from buyers, but you may also gain the upper hand in your negotiations. In fact, research found that homes listed in the winter are nine percent more likely to sell, and sellers net more above asking price in the winter than any other time of year.1

 

Buyers also have a lot to love about the real estate offseason. While some buyers need to move during the winter, many bargain hunters search this time of year in hopes of scoring a great deal.

 

Smart buyers will continue to scan the market during the fall and winter for hidden gems that pop up during the offseason. There are always highly motivated sellers who need to sell quickly. And with less competition to bid against you, you’re in a better position to negotiate a great price. If you’ve been looking for a good deal on a home or investment property, now may be the best time to look!

 

So while a “slow market” may scare off some buyers and sellers, it can actually be the perfect time of year for you to list or purchase a home. While the rest of the market is hibernating until spring, take advantage of this opportunity to get a jump start on your competition!

 

 

2. EVERYONE’S MORE MOTIVATED

 

During the spring and summer, you’re likely to encounter “lookie-loo” buyers who are just testing the waters and unrealistic sellers who are holding out for a better offer. But the serious buyers and sellers stay active during the cold weather and holiday season, often because they need to move quickly. In fact, research shows that homes listed in the winter sell faster than any other time of year.

 

January and February are peak job hiring months, which brings a surge of buyers who need to relocate quickly to start a new job.2And of course life changes like retirement, marriage, divorce, and new babies come year round. While families often find it more convenient to move during the summer when school is out, the reality is that many don’t have the option to wait. According to the National Association of Realtors, 55 percent of all buyers purchased their home at the time they did because “it was just the right time,” not because of seasonal factors.3

 

If you prefer to deal with serious, highly-motivated buyers and sellers who want to act fast and don’t want to waste your time, then the offseason may be the perfect real estate season for you.

 

 

3. GREATER PERSONAL ATTENTION

 

Another key benefit to buying and selling in the offseason is the increased personal attention you’ll receive.

 

While we strive to provide unparalleled client service throughout the year, we simply have more time available for each individual client during slower periods. Similarly, we find the other real estate professionals in our network—including title agents, inspectors, appraisers, insurance agents, and loan officers—are able to respond faster and provide more time and attention during the offseason than they are during the busy spring and summer months. The result is a quicker and more streamlined closing process for all involved.

 

 

4. COST SAVINGS

 

Clients who move during the offseason often report significant cost savings. Moving costs may be discounted by 15 percent or more during the winter months, and moving companies can typically offer more flexibility in their scheduling.4

 

Home renovations and repairs can also be less expensive in the offseason.Whether you’re fixing up your property prior to listing it or remodeling your new home before moving in, contractors and service providers who are hungry for business are often willing to work for a discount this time of year. If you wait until the spring and summer, you may be forced to pay a premium.

 

Home stagers and decorators are also more likely to negotiate their fees during the winter. And you can often score great deals on new furniture and decor during the holiday sales. 

 

Whether you’re buying or selling, count cost savings as another compelling reason to consider an offseason move.

 

 

5. EASIER TO MAINTAIN CURB APPEAL

 

Finally, listing your home during the fall and winter offers one key—but often overlooked—advantage: less lawn maintenance! 

 

Good curb appeal is crucial when selling your home. According to a recent report by the National Association of Realtors, 44 percent of home buyers drove by a property after viewing it online but did NOT go inside for a walkthrough.6That means if your curb appeal is lacking, buyers may never make it through the door.

 

If you list your home during the peak of the selling season, we will generally advise you to implement a frequent schedule of mowing, edging, watering, weeding, and trimming shrubs and hedges. You’ll probably want to plant flowers, as well, to brighten your exterior. After all, a lush landscape is a key element in attracting spring and summer buyers.

 

If you list in the offseason, however, your lawn maintenance list is significantly reduced. While we do recommend that our sellers keep their exterior clean, tidy, and free of leaves, snow, and ice, you will probably spend much less time on outdoor maintenance during the winter than you would if you listed your home in the summer.

 

 

ARE YOU READY TO MAKE YOUR MOVE?

 

Now that you know all the great reasons to buy or sell a home in the offseason, it’s time to decide whether you’re ready to make your move. 

 

Every client’s circumstances are unique. Whether you needto move quickly or you simply wantto take advantages of all benefits this season has to offer, it’s a great time to enter the market. 

 

Call Unruh Realty today at 717-733-2600 to schedule a FREE consultation … and you could be ringing in the New Year in your new home!

 

 

Sources:

1.     Redfin – 
https://www.redfin.com/blog/2013/12/why-winter-is-the-hottest-time-to-sell-your-home.html#.VjKYm2SrTKI

2.     Top Resume – 
https://www.topresume.com/career-advice/the-best-times-of-the-year-to-job-search

3.     National Association of Realtors – 
https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers

4.     Angie’s List –
https://www.angieslist.com/articles/why-winter-can-be-best-time-move.htm

5.     Build Direct –
https://www.builddirect.com/blog/the-best-times-of-the-year-to-get-deals-on-home-remodels/

6.     National Association of Realtors – 
https://www.nar.realtor/sites/default/files/reports/2017/2017-home-buyer-and-seller-generational-trends-03-07-2017.pdf

Oct. 17, 2018

"How's the Market?"

How's the Market?

 

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

 

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

 

 

CONTINUED GROWTH IN HOUSING MARKET

 

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

 

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

 

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

 

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

 

 

INVENTORY TO REMAIN TIGHT, NEW CONSTRUCTION MAY HELP

 

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

 

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

 

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

 

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

 

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

 

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

 

 

AFFORDABILITY REACHES LOWEST LEVEL IN A DECADE

 

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

 

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

 

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

 

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

 

 

MORTGAGE RATES EXPECTED TO CONTINUE RISING

 

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

 

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

 

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

 

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

 

 

WHAT DOES IT ALL MEAN FOR ME?

 

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

 

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

 

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

 

 

LET’S GET MOVING

 

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

 

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

 

 

Sources:

1.     S&P Dow Jones Indices Press Release -
https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/766551_cshomeprice-release-0828.pdf?force_download=true

2.     Freddie Mac Outlook Report -
http://www.freddiemac.com/research/forecast/20180827_strong_economic_growth.html

3.     DSNews -
https://dsnews.com/daily-dose/08-28-2018/freddie-weighs-in-on-housing-market

4.     PR Newswire -
https://www.prnewswire.com/news-releases/realtors-chief-economist-reflects-on-past-recession-whats-ahead-for-housing-300702632.html

5.     CNN Money -
https://www.keyt.com/lifestyle/where-is-the-us-housing-market-headed-4-things-you-need-to-know/787471572

6.     PR Newswire - 
https://www.prnewswire.com/news-releases/us-housing-starts-to-rise-2-4-yearly-to-2022--300711989.html

7.     Business Insider - 
https://www.businessinsider.com/housing-affordability-slowing-market-sales-2018-8

8.     Value Penguin -
https://www.valuepenguin.com/mortgages/historical-mortgage-rates

9.     Times Free Press -
https://www.timesfreepress.com/news/business/aroundregion/story/2018/aug/14/despite-prospects-higher-mortgage-rateshousin/476979/

Sept. 21, 2018

Are You Covered? A Homeowner's Insurance Guide

 

Homeowner's Insurance Guide

 

No one likes to think about disasters. Severe weather, fire, theft—or even a seemingly small issue like a broken pipe—can wreak havoc on your home and result in thousands of dollars in damages. Fortunately, a good homeowners insurance policy can offer you peace of mind that you and your family will be financially protected if disaster strikes. 

 

A homeowners insurance policy covers your home—as well as the belongings in it—in case of theft, accidental damage, or certain natural disasters. In fact, most financial institutions require that you purchase homeowners insurance before they issue a mortgage. While coverage varies, most policies also help to protect you from liability should someone outside your household become injured on your property. And that liability coverage is often extended to include damage you (or anyone living in your household) may do to someone else’s property.1

 

With all the protection offered, it’s equally important to understand what a home insurance policy does NOT cover. For example, homeowners insurance won’t pay to repair malfunctioning systems and appliances within your home. And terms vary, but standard policies typically exclude coverage related to floods, earthquakes, slow leaks, power failure, neglect, aging, faulty repairs or construction materials, and acts of war.2

 

Homeowners Insurance Covers Things Like:

      Structure

      Roof

      Windows

      Furniture/Personal Belongings

      Liability for Non-Residents Injured on Property

      Liability for Damage or Injury Caused by You or Your Pets

Most Standard Policies DON’T Cover:

      Malfunctioning Systems & Appliances

      Floods

      Earthquakes

      Slow Leaks

      Power Failures

      Neglect or Aging

      Faulty Repairs

      Acts of War

 

 

NARROWING THE COVERAGE GAP

 

So how do you minimize your risk when so many potential issues are excluded from a standard homeowners policy? Many insurers offer supplemental coverage options that can be tacked on to a basic policy. We explore this further in the section below on “7 Tips for Purchasing Homeowners Insurance.”

 

Some homeowners also choose to purchase a home warranty, which covers many of the systems and appliances in your home that are NOT covered by homeowners insurance. Home warranties are separate from homeowners insurance, so if interested you’ll need to seek out a policy through a dedicated provider.  Two of the most common home warranty companies are First American Home Warranty and American Home Sheild.  

 

While terms vary, a home warranty will often pay to repair or replace components of your HVAC, electrical, plumbing, and some appliances that fail due to age or typical wear and tear. Unlike homeowners insurance, home warranties aren’t required by mortgage companies. But many homeowners like the added financial protection and peace of mind that home warranties provide.3

 

Keep in mind, if you do purchase a home warranty, you will still be responsible for paying a service fee, or deductible, every time you use it. And you will be limited to using service providers who are contracted through your home warranty company.

 

 

7 TIPS FOR PURCHASING HOMEOWNERS INSURANCE

 

Whether you’re shopping for a new policy on your first home or you’re considering switching providers on an existing policy, it’s important to do your research beforehand. Not all insurance policies—or providers—are created equal. A little due diligence can save you time, money, and hassle in the long run.

 

1.    Prioritize Service and Value

 

When choosing an insurance provider, ask around for recommendations. Check with neighbors, friends, and family members, particularly those who have filed an insurance claim in the past. Find out if they had a positive or negative experience. Read online reviews. Ask your real estate agent for a referral to a reputable insurance broker who can help you compare your options.

 

Don’t just choose the cheapest policy. Instead, search for one that offers excellent client service and provides the best coverage for the cost.

 

2.    Choose the Right Level of Coverage

 

Your policy limits should be high enough to cover the cost of rebuilding your home. Don’t make the common mistake of insuring your home for the price you paid for it. The cost to rebuild could be higher or lower, depending on the value of your land, your home’s unique features, market factors, new building codes, and local construction costs.4

 

Also, consider whether you need a higher level of liability insurance to protect your assets. If your investments and savings exceed the liability limits in your policy, you may need to purchase an excess liability or umbrella policy.

 

Ultimately, you should make sure your coverage is adequate to mitigate your losses—but don’t pay for excess insurance you don’t need. 

 

3.    Inquire About Additional Coverage

 

Ask your insurance agent about additional coverage options that can help close any gaps you have in your policy.

 

For example, if you’re in a flood or earthquake-prone area, experts strongly recommend that you add those coverages to your policy. In fact, flooding is the most frequently occurring natural hazard, and a significant percentage of insurance payouts are for homes outside “flood zones,” or areas known to be at risk of flooding. So even if your home is not technically located in a flood zone, you may want to add flood coverage to your policy, just in case.5

 

Expensive jewelry, furs, collectibles, or artwork may not be fully insured by a standard policy. Ask about raising your limits for any items of particular value, or check with a specialty insurer about a separate policy for such items.

 

4.    Decide on “Replacement Cost” or “Actual Cash Value”

 

Insurers can use a variety of methods to determine how much they will pay to reimburse you for a loss, but the two most common are “replacement cost” or “actual cash value.”

 

If your seven-year-old sofa is damaged in a fire, replacement cost coverage will pay you the cost to purchase a new, comparable sofa at today’s prices. Actual cash value coverage will pay you for the depreciated value of the sofa you lost—so what you would pay to buy a seven-year-old sofa rather than a new one.6

 

While a replacement cost coverage policy will result in a bigger payoff if you suffer a loss, it will probably require a larger annual premium. Compare both options to find out which is the better fit for you.

 

5.    Consider a Higher Deductible

 

A deductible is the amount of money you are responsible for paying on a loss before your insurance company will pay a claim. Opting for a higher deductible can reduce your premiums. 

 

Note that in some cases, your insurance policy may have a separate or higher deductible for certain kinds of claims, such as those caused by floods, windstorms, hail, or earthquakes.

 

While a higher deductible can save you money on your premiums, opt for one that is still affordable given your current financial situation.

 

6.    Try Bundling Your Coverage

 

Combining your home, automobile, and other policies under one insurer can often result in a significant discount. And some insurers offer additional benefits, such as a single deductible if property insured by multiple policies is damaged. For instance, if a fire destroys your home and your car, you may only have to pay the higher of the two deductibles. Bundling can also make payment and renewal of your policies more convenient.7


However, bundling isn't always the best or least expensive option. In some cases, you may find better coverage options, service, and/or pricing if you split your policies between multiple insurers. So be sure to consider all of your options before making a final decision.

 

7.    Reassess Your Policy Each Year

 

Even if you’ve done all your due diligence before purchasing a homeowners insurance policy, don’t set your annual renewal on autopilot. Instead, when it comes time to renew, take some time to consider factors that have changed over the past year. 

 

For example, have you made any home improvements that would require you to raise your coverage limits? Have you made any security or safety improvements that qualify you for a discount on your premiums?8

 

Has there been a shift in market conditions that would make it more or less expensive to rebuild your home now? If so, you may need to adjust your coverage levels accordingly.

 

If you’ve made any changes to how you use your home, you may need to adjust your policy, as well. For example, if you’ve started a home-based business or occasionally rent out your home on a home-sharing site, you may not be fully covered by your existing policy.9

 

Finally, consider any changes to your financial situation that may require increased liability coverage limits. If you’ve grown your investments or inherited property, it may be time to purchase additional coverage to protect your expanding asset base.

 

 

MINIMIZE RISK, MAXIMIZE VALUE

 

Now that you understand the basics of homeowners insurance, you should be ready to start shopping for a policy that best fits your needs and budget. Your goal should be to minimize your risk while maximizing the value your policy provides. 

 

While you never want to leave yourself without a safety net should disaster strike, you also don’t want to overpay for insurance you don’t need (and will hopefully rarely use). Aim to strike a balance that will provide you with adequate protection at an affordable price.

 

 

NEED MORE GUIDANCE? WE CAN HELP

 

If you’re in the market to purchase homeowners insurance or a home warranty, give us a call! We get a lot of feedback from clients on the best (and worst) providers and are happy to share what we know.

 

We can also put you in touch with a trusted insurance professional who can answer your questions and help you find the best policy to meet your needs.

 

 

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

 

Sources:

1.     Insurance Information Institute -
https://www.iii.org/article/what-covered-standard-homeowners-policy

2.     Insure.com - 
https://www.insure.com/home-insurance/exclusions.html

3.     American Home Shield - 
https://www.ahs.com/home-matters/cost-savers/whats-the-difference-homeowners-insurance-vs-home-warranty

4.     Insurance Information Institute - 
https://www.iii.org/article/how-much-homeowners-insurance-do-you-need

5.     Realtor.com - 
https://www.realtor.com/advice/buy/buying-home-insurance

6.     Texas Department of Insurance - 
http://www.helpinsure.com/home/documents/acvvsreplace.pdf

7.     Insure.com - 
https://www.insure.com/home-insurance-faq/bundle-insurance-policies.html

8.     National Association of Insurance Commissioners - 
https://www.insureuonline.org/consumer_homeowners_ten_tips.htm

9.     HomeAway - 
https://help.homeaway.com/articles/Do-I-need-a-special-vacation-rental-insurance-policy-for-my-property

 

 

Sept. 5, 2018

What's the Best Use of Your Investment Property

 Renters for a Weekend or a While: What’s the Best Use of Your Investment Property?

What's the Best Use of Your Investment Property? 

 

The residential rental market is now the fastest-growing segment of the housing market. In the United States, the demand for single-family rentals, defined as either detached homes or townhouses, has risen 30 percent in the past three years.1And in Canada, rental units now account for nearly one-third of the country’s homes, with particular demand for multi-family units, including apartments and condominiums.2

 

At the same time, the short-term, or vacation, rental market is also booming. The popularity of online marketplaces like Airbnb, HomeAway, and VRBO has helped the short-term rental market become one of the fastest-growing segments in the travel industry.3

 

Now, more than ever, there is an abundance of opportunity for real estate investors. But which path is best: leasing your property to a long-term tenant, or renting your property to travelers on a short-term basis?

 

In this post, we examine the differences between the two investment strategies and the benefits and limitations of each category.

 

 

WHY INVEST IN A RENTAL PROPERTY? The Top 5 Reasons

 

Before we delve into the differences between long-term and short-term rentals, let’s answer the question: “Why invest in a rental property at all?”

 

There are five key reasons investors choose to real estate over other investment vehicles:

 

1.    Appreciation

 

Appreciation is the increase in your property’s value over time. And history has proven that over an extended period, the cost of real estate continues to rise. Recessions may still occur, but in the vast majority of markets, the value of real estate does grow over the long term.

 

2.    Cash Flow

 

One of the key benefits of investing in real estate is the ability to generate steady cash flow. Rental income can be used to pay the mortgage and taxes on your investment property, as well as regular maintenance and repairs. If appropriately priced in a solid rental market, there may even be a little extra cash each month to help with your living expenses or to grow your savings.

 

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

 

3.    Hedge Against Inflation

 

Inflation is the rate at which the general cost of goods and services rises. That means as inflation rises, the money you have sitting in a savings account will buy less tomorrow than it will today. On the other hand, the price of real estate typically matches (or often exceeds) the rate of inflation. To hedge or guard yourself against inflation, real estate can be a smart investment choice.

 

4.    Leverage

Leverage is the use of borrowed capital to increase the potential return of an investment. You can put a relatively small amount down on a property, finance the rest of the investment with a mortgage, and then profit on the entire combined value.

5.    Tax Benefits

Don’t overlook the tax benefits that can come with a real estate investment, as well. From deductions to depreciation to exemptions, there are many ways a real estate investment can save you money on taxes. Consult a tax professional to discuss your particular circumstances.

 

These are just a few of the many perks of investing in real estate. (For more detailed information, visit our previous post: Why Real Estate Investing Makes (Dollars and) Sense.  But what’s the best strategy to maximize returns on your investment property? In the next section, we explore the differences between long-term and short-term rentals.



LONG-TERM (TRADITIONAL) RENTAL MARKET

 

When most people think of owning a rental property, they imagine buying a home and renting it out to tenants to use as their primary residence. Traditionally, investors would use their rental property to generate an additional stream of income while benefiting from the property’s long-term appreciation in value.

 

In fact, that steady and predictable monthly cash flow is one of the key advantages of owning a long-term rental. And as an owner, you don’t usually have to worry about paying the utility bills or furnishing the property—both of which are typically covered by the tenant. Add to this the fact that traditional tenants translate into less time and effort spent on day-to-day property management, and long-term rentals are an attractive option for many investors.

 

However, there are also limitations to long-term rentals, which often come down to your ability to control the property. Perhaps the most obvious one is that you do not get to use the home or closely monitor its upkeep (this is different from a short-term rental, which we’ll share in the next section). 

 

In addition, while you can usually generate a steady, predictable income stream with a long-term rental, you are limited in your ability to adjust rent prices based on increasing or seasonal demand. Therefore, you may end up with a lower overall return on your investment. In fact, according to data from Mashvisor, in the 10 hottest real estate markets, short-term rentals produced “significantly higher rental income” than long-term rentals.4

 

 

SHORT-TERM (VACATION) RENTAL MARKET

 

Short-term rentals are often referred to as vacation rentals, as more and more travelers enjoy the benefits of staying in a home while on vacation. In fact, according to Wells Fargo, vacation rentals are steadily growing and predicted to account for 21% of the worldwide accommodations market by 2020.5

 

Investing in a short-term rental or funding your second-home purchase by renting it out can offer many benefits. If you purchase an investment property in a top travel destination or vacation spot, you can expect steady demand from travelers while taking advantage of any non-rented periods to enjoy the home yourself. In addition to greater control over how your property is used, you can also adjust your rental price around peak travel demand to maximize your returns.

 

But short-term rentals also have risks and drawbacks that may dissuade some investors. They require greater day-to-day property management, and owners are typically responsible for furnishing the property, upkeep, and utilities.

 

And while rental revenue can be higher, it can also be less predictable based on seasonal or consumer travel trends. For example, a lack of snowfall during ski season could mean fewer bookings and lower rental revenue that year.

 

In addition, laws and limitations on short-term rentals can vary by region. And in some areas, the regulations are in flux as residents and government officials adapt to a new surge in short-term rentals. So make sure you understand any existing or proposed restrictions on rentals in the area where you want to invest. 

Urban centers or suburban communities may be more resistant to short-term renters, thus more likely to pass future limitations on use. To lower your risk, you may want to consider properties in resort communities that are accustomed to travelers. We can help you assess the current regulations on short-term rentals in our area. Or if you’re interested in investing in another market, we can refer you to a local agent who can help.

 

 

WHICH INVESTMENT STRATEGY IS RIGHT FOR YOU?

 

Now that you understand these two real estate investment options, how do you pick the right one for you? It’s helpful to start by clarifying your investment goals. 

 

If your goal is to generate steady, predictable income with less time and effort spent on property management, then a long-term rental may be your best option. Also, if you prefer a less-risky investment with more reliable (but possibly lower) returns, then you may be more comfortable with a long-term rental.

 

On the other hand, if your goal is to purchase a vacation or second home that you’ll use, and you want to defray some (or all) of the expense, then a short-term rental may be a good option for you. Similarly, if you’re open to taking on more risk and revenue volatility for the possibility of greater investment returns, then a short-term rental may better suit your spirit as an investor.

 

But sometimes the decision isn’t always so clear-cut. If your goal is to purchase a future retirement home now to hedge against inflation, rising real estate prices, and interest rates, then both long- and short-term rentals could be suitable options. In this case, you’ll want to consider other factors like location, market demand, property type, and your risk tolerance.

 

 

HERE OR ELSEWHERE … WE CAN HELP

 

If you’re looking to make a real estate investment—whether it’s a primary residence, investment property, vacation home, or future retirement home—give us a call at 717-733-2600. We’ll help you determine the best course of action and share insights and resources to help you make an informed decision. And if your plans include buying outside of our area, we can refer you to a local agent who can help. Contact us to schedule a free consultation!

 

 

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

 

 

Sources:

1.     USA Today – 
https://www.usatoday.com/story/money/personalfinance/real-estate/2017/11/11/renting-homes-overtaking-housing-market-heres-why/845474001/

2.     The Globe and Mail – 
https://www.theglobeandmail.com/real-estate/the-market/article-demand-for-rental-housing-in-canada-now-outpacing-home-ownership/

3.     Phocuswright – 
https://www.phocuswright.com/Travel-Research/Research-Updates/2017/US-Private-Accommodation-Market-to-Reach-36B-by-2018

4.     Rented.com – 
https://www.rented.com/vacation-rental-best-practices-blog/do-long-term-rentals-or-short-term-rentals-provide-better-investment-returns/

5.     Turnkey Vacation Rentals – 
https://blog.turnkeyvr.com/short-term-vs-long-term-vacation-rental-properties/

 

 

 

July 17, 2018

Real Estate Relocation Guide: 7 Steps to a Seamless Move

 

7 Steps to a Seamless Move

 

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

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

 

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

 

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

 

 

1. Gather Information

 

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

 

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

 

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

 

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

 

Let us know if you’d like assistance with your information gathering process. We have a wealth of knowledge about the Lancaster County area, and we keep a number of reports and statistics on file in our office. We would be happy to share information and answer any questions you may have.

 

 

2. Identify Your Ideal Neighborhoods

 

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

 

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

 

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

 

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

 

We provide neighborhood assessments and advice as a free service if you’re relocating to our Lancaster County area. Or, if you’re moving out of town, we can refer you to a local agent who can help.

 

 

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

 

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

 

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

 

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

 

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

 

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

 

We would love to assist you if you have plans to buy or sell a home in our Lancaster County area. Please contact us at 717-733-2600  to schedule a free consultation so we can discuss your unique needs and devise a custom plan to make your relocation as seamless as possible. If you’re relocating outside of our area, we can help you find a trusted agent in your new city.

 

 

4. Prepare for Your Departure

 

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

 

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

 

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

 

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

 

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

 

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

  

 

5. Prepare for Your Arrival

 

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

 

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

 

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

 

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

 

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

 

If you’re relocating to our area, we can help!  Contact us for a list of preferred hotels, utility providers, contractors and more!

 

 

6. Get Settled In Your New Home

 

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

 

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

 

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

 

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

 

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

 

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

 

Need help with unpacking, organizing or decorating your new home? Contact us for a list of recommended professionals in our area. And when you’re ready to start exploring local “hot spots,” we’d love to fill you in on our favorite restaurants, stores, parks and other attractions!

 

 

7. Get Involved In Your New Community

 

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

 

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

 

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

 

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

 

Want more ideas on how to get involved in your community? Contact us for a free copy of our report, “Welcome Home: 10 Tips to Turn Your Neighborhood Into a Hometown Haven.”

 

 

LET’S GET MOVING

 

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

 

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

 

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

 

Click here to start your new home search!  

 

 

 

Sources:

1.     You Move Me - 
https://www.youmoveme.com/us/blog/105-tips-for-a-successful-relocation

2.     HouseLogic.com - 
https://www.houselogic.com/buy/house-hunting/must-have-items/

3.     Livestrong - 
https://www.livestrong.com/article/436651-the-effects-of-sunlight-fresh-air-on-the-body/

4.     Parents Magazine - 
https://www.parents.com/parenting/money/buy-a-house/make-moving-easier-on-you-and-your-kids/

5.     The Spruce - 
https://www.thespruce.com/starting-to-pack-for-your-move-2436470

6.     Moving.com -
https://www.moving.com/tips/hiring-quality-movers/

7.     The Spruce - 
https://www.thespruce.com/unpack-your-entire-home-2435815

8.     HouseLogic.com -
https://www.houselogic.com/buy/moving-in/before-you-move/

9.     HGTV - 
https://www.hgtv.com/design/real-estate/moving-checklist

10.   Moving.com - 
https://www.moving.com/tips/how-to-unpack-and-organize-your-house/

11.   ASPCA - 
https://www.aspca.org/pet-care/general-pet-care/moving-your-pet

12.   Psychology Today - 
https://www.psychologytoday.com/us/blog/is-where-you-belong/201607/why-youre-miserable-after-move

13.   The Daily Express - 
https://www.express.co.uk/news/uk/574171/Divorce-stressful-moving-home

May 8, 2018

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

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

 

10 Staging Secrets From the Pros

Source: National Association of Realtors

 

 

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

 

To get a plan customized for your particular property, give us a call to schedule a free consultation. We’d be happy to share our insider knowledge of the buyer preferences in your neighborhood … so you’ll know where to focus your time, money and energy to maximize your results.  We also work with local professional stagers- they don't work for free- but the results are worth every penny!  Click here to see our preferred home stagers.  

 

 

1. REMOVE CLUTTER

 

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

 

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

 

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

 

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

 

 

 

2. DEEP CLEAN AND DEODORIZE

 

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

 

If you have a large home, or are short on time, you may want to invest in a professional cleaning service. And if you have carpet, we generally recommend you rent a steam cleaner or hire a company to clean your carpets for you.  If you are looking for a professional carpet cleaner- check out The Rug Beaters- located in Brownstown, Pa.

 

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

 

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

 

 

3. DEPERSONALIZE

 

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

 

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

 

 

4. NEUTRALIZE YOUR COLOR PALETTE

 

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

 

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

 

 

 

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

 

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

 

 

5. INCREASE YOUR CURB APPEAL

 

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

 

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

 

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

 

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

 

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

 

 

6. FRESHEN KITCHENS AND BATHS

 

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

 

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

 

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

 

 

7. SET THE TABLE

 

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

 

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

 

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

 

 

 

8. REARRANGE FURNITURE

 

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

 

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

 

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

 

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

 

 

9. LIGHTEN UP

 

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

 

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


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

 

 

10. HIGHLIGHT YOUR BACKYARD’S BEST FEATURES

 

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

 

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

 

 

BEFORE YOU GET STARTED

 

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

 

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

 

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

 

Call Unruh Realty today at 717-733-2600 with questions or to schedule a free consultation!

 

 

 

Sources:

 

1.     National Association of Realtors – 
https://www.nar.realtor/sites/default/files/migration_files/reports/2017/2017-profile-of-home-staging-07-06-2017.pdf

2.     Real Estate Staging Association – 
http://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548

3.     Houzz – 
https://www.houzz.com/ideabooks/2661221/list/sell-your-home-fast-21-staging-tips

4.     HGTV – 
https://www.hgtv.com/design/outdoor-design/landscaping-and-hardscaping/10-curb-appeal-tips-from-the-pros-pictures

5.     National Association of Realtors – 
https://www.nar.realtor/sites/default/files/reports/2017/2017-home-buyer-and-seller-generational-trends-03-07-2017.pdf

6.     The Spruce – 
https://www.thespruce.com/must-try-neutral-paint-colors-797983

7.     HouseLogic – 
https://www.houselogic.com/sell/preparing-your-home-to-sell/home-staging-checklist/

8.     StageMyOwnHome.com – 
http://www.stagemyownhome.com/staging-the-dining-room.html

9.     Realtor.com – 
https://www.realtor.com/advice/sell/small-living-room-staging-tricks/

10.   SFGATE – 
http://homeguides.sfgate.com/stage-master-bedroom-34573.html

11.   HGTV – 
https://www.hgtv.com/shows/designed-to-sell/15-secrets-of-home-staging-pictures

April 17, 2018

House Care Calendar

 

House Care Calendar

 

A Seasonal Guide to Maintaining Your Home

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.(1)

The 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!  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.

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.

 

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)

 

 

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 us at 717-733-2600 or email WeCare@UnruhRealty.com 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

 

April 11, 2018

INTEGRITY. EXPERIENCE. RESULTS.

It's what we do.  

We've built a real estate search website with cutting-edge technology to ensure you never miss out on a newly listed property again!  Sign up for alerts and receive daily email alerts of new Lancaster area real estate listings and price changes of properties that meet your search criteria.  You can access your account anytime and unsubscribe at any time.  

It can be hard to know who to choose as a Realtor when it comes to one of the biggest financial decisions of your life...but we don't think it should be.  We believe that home is a big deal.  It's a special place to unwind and be together with your family. That makes what we do as realtors really important....and we don't take that lightly.  

We're not the glossiest firm or the biggest sales company.  That's okay by us.  Our focus is on performance, not glitz.  We are committed to you!

Give us a call today, we are ready to be on your side, making your real estate dreams come true.  

Unruh Realty is locally owned and operated in the heart of Ephrata, PA. We specialize in serving the Ephrata, Denver, Reinholds, Lititz, New Holland and surrounding areas. No matter if you're buying or selling - our real estate agents will go the extra mile for you. 

Posted in Buying, Real Estate
April 5, 2018

The Home Buyer's Guide to Getting Mortgage Ready

The Home Buyer's Guide to Getting Mortgage Ready

Getting Mortgage Ready

Don’t wait until you’re ready to move to start preparing financially to buy a home.

If you’re like the vast majority of home buyers, you will choose to finance your purchase with a mortgage loan. By preparing in advance, you can avoid the common delays and roadblocks many buyers face when applying for a mortgage. 

The requirements to secure a mortgage may seem overwhelming, especially if you’re a first-time buyer. But we’ve outlined three simple steps to get you started on your path to homeownership. 

Even if you’re a current homeowner, it’s a good idea to prepare in advance so you don’t encounter any surprises along the way. Lending requirements have become more rigorous in recent years, and changes to your credit history, debt levels, job type and other factors could impact your chances of approval.

It’s never too early to start preparing to buy a home. Follow these three steps to begin laying the foundation for your future home purchase today!

  

STEP 1: CHECK YOUR CREDIT SCORE

Your credit score is one of the first things a lender will check to see if you qualify for a loan. It’s a good idea to review your credit report and score yourself before you’re ready to apply for a mortgage. If you have a low score, you will need time to raise it. And sometimes fraudulent activity or erroneous information will appear on your report, which can take months to correct.

The credit score most lenders use is your FICO score, a weighted score developed by the Fair Isaac Corporation that takes into account your payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%).1

 

Fico Score

Source: myFico.com

 

Base FICO scores range from 300 to 850. A higher FICO score will help you qualify for a lower mortgage interest rate, which will save you money.2

By federal law, you are entitled to one free copy of your credit report every 12 months from each of the three major credit bureaus (Equifax, Experian and Transunion). Request your free credit report at https://www.annualcreditreport.com.

 

Minimum Score Requirements

To qualify for the lowest interest rates available, you will usually need a FICO score of 760 or higher. Most lenders require a score of at least 620 to qualify for a conventional mortgage.3

If your FICO score is less than 620, you may be able to qualify for a non-conventional mortgage. However, you should expect to pay higher interest rates and fees. For example, you may be able to secure an FHA loan (one issued by a private lender but insured by the Federal Housing Administration) with a credit score as low as 580 if you can make a 3.5 percent down payment. And FHA loans are available to applicants with credit scores as low as 500 with a 10 percent down payment.4

 

Increase Your Credit Score

There’s no quick fix for a low credit score, but the following steps will help you increase it over time.5 

1. Make Payments on Time

At 35 percent, your payment history accounts for the largest portion of your credit score. Therefore, it’s crucial to get caught up on any late payments and make all of your future payments on time.

If you have trouble remembering to pay your bills on time, set up payment reminders through your online banking platform, a free money management tool like Mint, or an app like BillMinder.

2. Avoid Applying for New Credit You Don’t Need

New accounts will lower your average account age, which could negatively impact your length of credit history. Also, each time you apply for credit, it can result in a small decrease in your credit score.

The exception to this rule? If you don’t have any credit cards—or any credit accounts at all—you should open an account to establish a credit history. Just be sure to use it responsibly and pay it off in full each month.

If you need to shop for a new credit account, for example, a car loan, be sure to complete your loan applications within a short period of time. FICO attempts to distinguish between a search for a single loan and applications to open several new lines of credit by the window of time during which inquiries occur.

3. Pay Down Credit Cards

When you pay off your credit cards and other revolving credit, you lower your amounts owed, or credit utilization ratio (ratio of account balances to credit limits). Some experts recommend starting with your highest-interest debt and paying it off first. Others suggest paying off your lowest balance first and then rolling that payment into your next-lowest balance to create momentum. 

Whichever method you choose, the first step is to make a list of all of your credit card balances and then start tackling them one by one. Make the minimum payments on all of your cards except one. Pay as much as possible on that card until it’s paid in full, then cross it off your list and move on to the next card. 

Debt

Interest Rate

Total Payoff

Minimum Payment

Credit Card 1

12.5%

$460

$18.40

Credit Card 2

18.9%

$1,012

$40.48

Credit Card 3

3.11%

$6,300

$252

 

4. Avoid Closing Old Accounts

Closing an old account will not remove it from your credit report. In fact, it can hurt your score, as it can raise your credit utilization ratio—since you’ll have less available credit—and decrease your average length of credit history. 

Similarly, paying off a collection account will not remove it from your report. It remains on your credit report for seven years, however, the negative impact on your score will decrease over time.

5. Correct Errors on Your Report

Mistakes or fraudulent activity can negatively impact your credit score. That’s why it’s a good idea to check your credit report at least once per year. The Federal Trade Commission has instructions on their website for disputing errors on your report.

While it may seem like a lot of effort to raise your credit score, your hard work will pay off in the long run. Not only will it help you qualify for a mortgage, a high credit score can help you secure a lower interest rate on car loans and credit cards, as well. You may even qualify for lower rates on insurance premiums.6

 

STEP 2: SAVE UP FOR A DOWN PAYMENT AND CLOSING COSTS

The next step in preparing for your home purchase is to save up for a down payment and closing costs.

Down Payment

When you purchase a home, you typically pay for a portion of it in cash (down payment) and take out a loan to cover the remaining balance (mortgage). 

Many first-time buyers wonder: How much do I need to save for a down payment? The answer is … it depends.

Generally speaking, the higher your down payment, the more money you will save on interest and fees. For example, you will qualify for a lower interest rate and avoid paying for mortgage insurance if your down payment is at least 20 percent of the property’s purchase price. But what if you can’t afford to put down 20 percent?

On a conventional loan, you will be required to purchase private mortgage insurance (PMI) if your down payment is less than 20 percent. PMI is insurance that compensates your lender if you default on your loan.7

PMI will cost you between 0.3 to 1.5 percent of the overall mortgage amount each year.8 So, on a $100,000 loan, you can expect to pay between $300 and $1500 per year for PMI until your mortgage balance falls below 80 percent of the appraised value.9 For a conventional mortgage with PMI, most lenders will accept a minimum down payment of five percent of the purchase price.7

If a five-percent down payment is still too high, an FHA-insured loan may be an option for you. Because they are guaranteed by the Federal Housing Administration, FHA loans only require a 3.5 percent down payment if your credit score is 580 or higher.7

The downside of getting an FHA loan? You’ll be required to pay an upfront mortgage insurance premium (MIP) of 1.75 percent of the total loan amount, as well as an annual MIP of between 0.80 and 1.05 percent of your loan balance on a 30-year note. There are also certain limitations on the types of loans and properties that qualify.1 

There are a variety of other government-sponsored programs created to assist home buyers, as well. For example, veterans and current members of the Armed Forces may qualify for a VA-backed loan requiring a $0 down payment.7 Consult a mortgage lender about what options are available to you.

TYPE

MINIMUM DOWN

ADDITIONAL FEES

Conventional Loan

20%

Qualify for the best rates and no mortgage insurance required

Conventional Loan

5%

Must purchase private mortgage insurance costing 0.3 - 1.5% of mortgage annually

FHA Loan

3.5%

Upfront mortgage insurance premium of 1.75% of loan amount and annual fee of 0.8 - 1.05%

 

Current Homeowners

If you’re a current homeowner, you may have equity in your home that you can use toward your down payment on a new home. We can help you estimate your expected return after you sell your current home and pay back your existing mortgage. Contact us for a free evaluation!

 Closing Costs

Closing costs should also be factored into your savings plan. These may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys and other fees associated with the purchase of your home. Closing costs vary but typically range between two to five percent of the purchase price.11 

If you don’t have the funds to pay these outright at closing, you can often add them to your mortgage balance and pay them over time. However, this means you’ll have a higher monthly payment and pay more over the long term because you’ll pay interest on the fees.

 

STEP 3: ESTIMATE YOUR HOME PURCHASING POWER

Once you have the required credit score, savings for a down payment and a list of all your outstanding debt obligations via your credit report, you can assess whether you are ready and able to purchase a home. 

It’s important to have a sense of how much you can reasonably afford—and how much you’ll be able to borrow—to see if homeownership is within reach.

Your debt-to-income (DTI) ratio is one of the main factors mortgage companies use to determine how much they are willing to lend you, and it can help you gauge whether or not your home purchasing goals are realistic given your current financial situation.

Your DTI ratio is essentially a comparison of your housing expenses and other debt versus your income. There are two different DTI ratios that lenders consider:

Front-End Ratio

Also called the housing ratio, this is the percentage of your income that would go toward housing expenses each month, including your mortgage payment, private mortgage insurance, property taxes, homeowner’s insurance and association dues.12 

To calculate your front-end DTI ratio, a lender will add up your expected housing expenses and divide it by your gross monthly income (income before taxes). The maximum front-end DTI ratio for most mortgages is 28 percent. For an FHA-backed loan, this ratio must not exceed 31 percent.13

Back-End Ratio

The back-end ratio takes into account all of your monthly debt obligations: your expected housing expenses PLUS credit card bills, car payments, child support or alimony, student loans and any other debt that shows up on your credit report.12

To calculate your back-end ratio, a lender will tabulate your expected housing expenses and other monthly debt payments and divide it by your gross monthly income (income before taxes). The maximum back-end DTI ratio for most mortgages is 36 percent. For an FHA-backed loan, this ratio must not exceed 41 percent.13

Home Affordability Calculator

To get a sense of how much home you can afford, visit the National Association of Realtors’ free Home Affordability Calculator at https://www.realtor.com/mortgage/tools/affordability-calculator. 

This handy tool will help you determine your home purchasing power depending on your location, annual income, monthly debt and down payment. It also offers a monthly mortgage breakdown that projects what you would pay each month in principal and interest, property taxes, and home insurance.

The Home Affordability Calculator defaults to a back-end DTI ratio of 36 percent. If the monthly cost estimate at that ratio is significantly higher than what you’re currently paying for housing, you need to consider whether or not you can make up the difference each month in your budget.

If not, you may want to lower your target purchase price to a more conservative DTI ratio. The tool enables you to scroll through higher and lower price points to see the impact on your monthly payments so you can identify your ideal price point.

(Note: This tool only provides an estimate of your purchasing power. You will need to secure pre-approval from a mortgage lender to know your true mortgage approval amount and monthly payment projections.)

Can I Afford to Buy My Dream Home?

Once you have a sense of your purchasing power, it’s time to find out which neighborhoods and types of homes you can afford. The best way to determine this is to contact a licensed real estate agent. We help homeowners like you every day and can send you a comprehensive list of homes within your budget that meet your specific needs.

If there are homes within your price range and target neighborhoods that meet your criteria—congratulations! It’s time to begin your home search. 

If not, you may need to continue saving up for a larger down payment … or adjust your search parameters to find homes that do fit within your budget. We can help you determine the right course for you.

 

START LAYING YOUR FOUNDATION TODAY 

It’s never too early to start preparing financially for a home purchase. These three steps will set you on the path toward homeownership … and a secure financial future! 

And if you are ready to buy now but don’t have a perfect credit score or a big down payment, don’t get discouraged. There are resources and options available that might make it possible for you to buy a home sooner than you think. We can help. 

Want to find out if you’re ready to buy a house? Give us a call! We’ll help you review your options, connect you with one of our trusted mortgage lenders, and help you determine the ideal time to begin your new home search.

 

 

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.

 

Sources:

1.     Quicken Loans Blog –
https://www.quickenloans.com/blog/how-does-your-credit-score-affect-your-mortgage-eligibility

2.     myFICO –
https://www.myfico.com/credit-education/credit-report-credit-score-articles/

3.     Bankrate –
https://www.bankrate.com/mortgages/what-is-a-good-credit-score-to-buy-a-house/

4.     Bankrate –
https://www.bankrate.com/finance/mortgages/7-crucial-facts-about-fha-loans-1.aspx

5.     myFICO –
https://www.myfico.com/credit-education/improve-your-credit-score/

6.     The Balance –
https://www.thebalance.com/having-good-credit-score-960528

7.     Bankrate –
https://www.bankrate.com/mortgages/how-much-is-a-down-payment-on-a-house/

8.     Bankrate –
https://www.bankrate.com/finance/mortgages/the-basics-of-private-mortgage-insurance-pmi.aspx

9.     Bankrate –
https://www.bankrate.com/finance/mortgages/removing-private-mortgage-insurance.aspx

10.   The Balance –
https://www.thebalance.com/fha-home-loan-pitfalls-315673

11.   Investopedia –
https://www.investopedia.com/terms/c/closingcosts.asp

12.   Bankrate –
https://www.bankrate.com/finance/mortgages/why-debt-to-income-matters-in-mortgages-1.aspx

13.   The Lenders Network –
https://thelendersnetwork.com/fha-debt-to-income-ratio/

March 5, 2018

How Much Is Your Home Worth?

Home is a big deal, we get it!

Just the thought of selling can provoke many emotions and fears, we understand! But we are here to walk you through and answer each and every question. 

We are excited to share with you this FREE, QUICK AND EASY Service!

This service has the ability to give you an automated property value for your home. By design, it uses an algorithm to compare your property with other properties that have sold. The algorithm will consider things like location, square footage, age of your home, design, and a number of other factors that can be found in various sources of public records.

WARNING: Like any automated property value system, it has some flaws. For example, if you own a 1956 Cape Cod, the system does not know if you have replacement windows or not. Nor does it know if the comparable homes had replacement windows. Water in the basement and pet odors are examples of other things that are not detected or exposed in public records.

BOTTOM LINE: If you own a newer home in a development, the value will likely be more accurate than if you own an older or isolated home, simply because more current data will be available for the newer home. Proceed with caution: We provide this service because people generally want to have an idea of their property’s value even before they talk with a Realtor. Know that there are many variables that are difficult for a computerized system to detect. Thus, depending on the data available, the accuracy of the stated value will vary. Any one of our agents has the ability to do a more thorough, comprehensive evaluation of your home and may even make suggestions as to how you can enhance your property’s value.

Call our local Ephrata office @ 717-733-2600 to arrange for a more personalized home value evaluation.

 

 

 

Posted in Real Estate, Selling