Lee Morof's Real Estate Blog

Delving into the real estate market for the first time can be a very intimidating thing with all of the mortgage and housing options available. Whether it’s market conditions or the amount you should be spending, there are a number of factors you’ll need to be aware of. If you’re just starting out and not sure where to begin, here are some points to consider that will set you on the right path.

Is It The Right Time To Buy?

Many people try to time the market, but the right time to buy a home is when it works for you. If you have a solid down payment and you’re truly prepared for home ownership, it’s probably the right time to start looking. While a good home and low interest rates can certainly push you in this direction, if it’s not quite the right time, hold off until it’s right for you.

What’s Your Payment Plan?

It’s easy for a first-time buyer to be taken in by their dream home, but it’s important to be clear on all the costs associated with home ownership like property tax, insurance, maintenance and other fees that will bump up the monthly payment. If you can formulate a budget that includes all of your monthly costs and is feasible in the long term, you’re good to go.

What Documentation Is Required?

Having your personal documentation in order and available will be one of the most important steps in your application, but there are a number of things you’ll need. Beyond recent paystubs, tax returns and bank statements, you’ll also need your credit report, so take a look over it to ensure that it’s correct and displays your financial history in a positive light.

Starting the Search

You may be ready to move as soon as you start looking, but buying your first home can be a rather lengthy process. Instead of being sucked in by too much house or taking the first home that appeals to you, ensure that you have a good sense of the size, neighborhood and style of house you want so you can get out there and find the home that works for you.

There are a lot of things to consider when it comes to buying your first home, but by being ready to invest and having your finances in order you’ll be well on your way. If you’re currently in the market for a home, contact your trusted real estate profesisional for more information.

Last week’s economic reports included new and pre-owned home sales, new jobless claims and Freddie Mac’s weekly mortgage rates survey.

Home Sales Mixed in October

According to the National Association of Realtors®, sales of previously owned homes reached a seasonally adjusted annual level of 5.60 million sales, which exceeded expectations and October’s reading of 5.49 million sales. Analysts had expected a rate of 5.44 million sales.

October sales of preowned homes rose 2 percent over September’s reading and were 5.90 percent higher year-over-year. This was the highest reading for sales of pre-owned homes since February 2007. High demand for homes is driving housing markets in spite of obstacles including rising mortgage rates and tight mortgage approval requirements.

Sales of new homes were lower in October, which indicated continued ups and downs in the economic recovery. October’s reading of 563,000 sales on a seasonally adjusted annual basis was lower than expectations of 595,000 sales and September’s downwardly revised reading of 574,000 new homes sold.

New home sales were 17.80 percent higher year-over year and 12.60 percent higher year to date, but analysts said that housing markets continue to be constrained by a short supply of available homes. Inventories of available homes are slowly increasing, which is expected to help curtail rapidly rising home prices caused by pent-up demand.

The median price of a new home was $304,500 in October as compared to September’s median price of $314,100 and October 2015’s median price of $298,700. There were 246,000 new homes for sale in October, which was the highest quantity of new homes on the market since September of 2009.

Mortgage Rates, New Jobless Claims Rise

Mortgage rates jumped last week in response to an increase in the 10-year Treasury note rate. The average rate for a 30-year fixed rate mortgage rose nine basis points to 4.03 percent; the average rate for a 15-year fixed rate mortgage was 11 basis points higher at 3.25 percent. The average rate for a 5/1 adjustable rate mortgage was five basis points higher at 3.12 percent. Last week’s readings were the first time in 2016 that mortgage rates exceeded four percent.

New jobless claims were also higher last week with 251,000 claims filed as compared to expectations 248,000 new claims and the prior week’s reading of 233,000 new claims filed. Last week’s reading marked the 90^th consecutive week of new jobless claims less than the benchmark of 300,000 new claims, an event that hasn’t occurred since 1970.

What‘s Ahead

Economic reports scheduled this week include Case-Shiller Housing Market Indexes, pending home sales and construction spending. Readings on inflation and labor will also be released along with weekly reports on mortgage rates and new jobless claims.

Are you selling your home? If so, you’re going to have to host an open house at some point. In today’s blog post we’ll explore a few staging tips that make your house feel like a model home.

Make A Solid First Impression

Start with the front of the home and give a great first impression. Have the sidewalk, driveway and walkways power washed. Ensure that the lawn, plants and landscaping are healthy and look great. Clean the windows and address any external paint issues that may have come up over the years.

The goal is to ensure that your guests think “WOW” when they drive up. Keep staging the front of your home until the neighbors are jealous.

Clean, Clean And Clean Some More

Even if you think your home is ‘clean enough’, it’s likely not. You’ve lived in your home for years, which means that your brain has learned to un-see certain aspects of it. Even if you’re sure you’ve cleaned it as much as possible, you may have missed a few spots.

Here’s a helpful exercise. Imagine that the President, Vice-President and Secretary of State are coming over for dinner. And that they’ll be touring through every room in your home to see how you live. That’s how clean your home needs to be for your open house.

Appeal To Your Target Buyers

Do you know what age range your expected open house guests are in? Are they first-time home buyers, young families or single professionals? If at all possible, try to stage your home to appeal to your guests. If they are younger, then you can stage the basement more as a media or entertainment room. If they have children, that might become storage and a play area. You get the idea.

Lighten Things Up A Bit

Regardless of what time of day you host an open house, you’ll want there to be a lot of light. Open up all the drapes and blinds to let in as much natural light as possible. If you have to use artificial light, invest in high-quality LED bulbs. There are models that can produce light that is close to sunlight in quality. The more light you have, the better your spotless home will look.

The More (Room), The Merrier

Finally, do your best to open up your space. Remove all clutter and store it. Arrange your furniture to maximize the walking areas. But try not to overdo it. You want your staged home to feel livable — and not like a series of large, empty caves.

There you have it — five great staging tips that will boost your next open house. Remember, the fastest way to sell your home is with the help of an experienced real estate agent. Contact us to learn more about open houses, staging and closing a quick sale!

Just because you live in a small space doesn’t mean your home needs to feel cramped. There are several renovations that are popular among interior designers to make a space feel larger. Incorporate them into your own home to give it a more open, spacious feel.

1. Crystal Clear

Glass is an absolutely phenomenal way to make a small space feel larger as it removes visual barriers to show off additional square footage, making it seem as though it’s part of the room. Whether you choose a glass railing for a staircases or room divider or incorporate a glass shower into a small bathroom, glass can help your home feel more spacious.

2. Make The Most Of Mirrors

Similar to glass, mirrors can make a small space feel big as they add an illusion of depth to a room. Try installing a large mirror on a wall in lieu of paintings or other decor if you’d like to make a room seem larger than it is.

3. Goodbye Island

If it’s your kitchen that’s feeling cramped, consider removing the island. Islands can add value to a home, but if your kitchen is small enough that it shouldn’t have been there in the first place then getting rid of it will create a much more functional space. Consider whether you’d still have ample counter space and storage without your island, and if the answer is yes it may be time to say goodbye to your island.

4. Tear Down The Walls

Creating an open concept floor plan is a fantastic renovation for a small home as it removes barriers between several small spaces to create one larger open space. Do you really need a wall between your kitchen and dining room? How about between your dining room and living room? If there’s a wall that simply isn’t necessary, it may be time to tear it down.

5. Keep It Light

A very quick and easy renovation to help open up a small space is to paint the walls in a light color as it will reflect more light than a darker shade, making the room feel airy rather than cozy. If you’re considering re-doing the floors, choosing a lighter color can further contribute to the feeling of a larger space.

Small spaces don’t have to cramp your style. In fact, they offer unique design opportunities and can make wonderful living spaces. If you’re looking for more homeowner advice, get in touch with your local real estate professional today.

Are you on the hunt for home renovations that will boost usability and value? Look no further than that unfinished basement. In this article, we’ll show you how to turn that dusty cave into an amazing new living space.

Note: finishing a basement isn’t the easiest job. For most basements, it’s a lot more than a weekend do-it-yourself project. If you’re not comfortable with construction be sure to enlist the help of a professional.

Step 1: Plan Everything Out

The first step is to plan out how you’re going to use the space. Are you going to make an office? A full suite? Is there any plumbing or wiring involved? Will you need to create full walls? Map out how you plan to use the available space so you have an idea of what you’ll need.

Step 2: Measure And Deal With The Floor

Once you figure out how you’ll use the space, you’ll need to measure everything out. Height can be an issue — especially in basements not designed as a living space. You can solve height problems by digging out the concrete slab. Once you get down deep enough, you pour a new slab.

Step 3: Frame Everything In

Is the basement at a good height? Next you’ll need to start framing everything in. Depending on how you have your walls mapped out, this might take a while. You may also need permits or to enlist licensed tradespeople, such as an electrician. If you’re just framing in a single room to add walls, it will be easier.

Step 4: Insulate And Install The Walls

After the framing process, you’ll insulate everything before installing the walls. Adding insulation can drive energy and heating costs down by a lot. So much so that in colder areas of the country, new homes must have insulated basements. After the insulation is in place, you’ll install the drywall and ready the walls for painting.

Step 5: Paint, Carpet And Finish Up

The final step is to get everything painted and finished. If you chose to go with a carpeted floor, you’ll want to save this for last. Once the painting is complete, install the carpets, baseboard and trim. Touch up any final areas and you’re all set.

Finishing your basement into a usable space is an excellent way to add value to your home. To learn more about building your home’s equity, give us a call.

Trusting another individual with your property can be nerve-wracking because it’s difficult to gauge how well they’ll care for their home from a viewing and rental application alone. However, there are several steps you can take to help ensure that you select responsible tenants that will take good care for your property while they live there.

1. Make Your Home Desirable

When creating your rental listing, show your property at its absolute best and list its attractive features. The listing should be well written with proper capitalization and full sentences, even if it’s only going on Craigslist. Include plenty of photos that are staged nicely to show the full potential of the home both inside and out.

If you want the best applicants, strive to be the best property! You need to attract tenants who are looking for a home rather than a crash pad.

2. Have A Thorough Application Process

Don’t be afraid to ask for in-depth information from your applicants. The more you know about them the more you can assess what kind of a tenant they’ll be. An application should ask for:

– full name
– the applicant’s job & their supervisor
– their income
– current address
– government identification (i.e. a photocopy of their driver’s license)
– next of kin or an emergency contact
– previous landlord references
– any additional info you think is necessary

3. Check References

One of the most important things you can do when choosing a tenant is check their references. At least one reference should be a past landlord, and it’s great to contact a current employer as well. Favor applicants who can prove they’ve been a good renter in the past and who seem to have reliable employment.

When calling references have a prepared list of questions. For past landlords you’ll want to ask about their cleanliness, if there was any damage to the property, noise complaints, or missed rent. When speaking to an employer, make sure to ask how long they’ve been working there, whether they’re a reliable worker, whether they’re respectful, and if they can see them continuing to work there for the long-term.

4. Meet Them!

Always meet potential tenants in person. See if they have a pleasant demeanor, if they’re easy to talk to and are polite to you, and whether they seem to take care of themselves. Trust your gut, if you have a bad feeling about someone then it may be best to keep looking.

Need more advice on income properties? Contact a your trusted real estate professional today.

Last week’s economic reports included readings on the National Association of Home Builders Housing Market Index, Commerce Department releases on Housing Starts and Building Permits issued and weekly reports on new jobless claims and mortgage rates.

Builder Sentiment Holds Steady, Demand for Homes Pushes Builders

November’s reading for the National Association of Home Builders Housing Market Index held steady with a reading of 65. Any reading above 50 indicates that a majority of home builders surveyed has a positive view of current and future housing market conditions. Tight supplies of available homes, steep competition for homes in desirable metro areas and rising home prices pressure home builders to produce more homes, but builder sentiment and housing starts are not always aligned, but data released by the Commerce Department indicates that builders are ramping up construction.

The Commerce Department reported that October’s reading of 1.323 housing starts exceeded September’s reading of 1.054 million starts and also surpassed the expected reading of 1.170 million starts. This suggests that builders are ramping up construction to quench ongoing demand for homes. October’s reading was 25.50 percent higher than September’s reading, which was the highest number of housing starts posted since 2007. Starts for multi-family homes of five units or more jumped 75 percent and starts for single family homes of four units or less increased by 11 percent.

Building permits issued in October rose to 1.229 million as compared to September’s reading of 1.225 million permits issued. Approaching winter weather and holidays typically cause slowing of construction.

Mortgage Rates Rise after Election

Last week’s survey of mortgage rates was mostly completed by the time presidential election results were released; this week’s readings showed higher rates for all types of mortgages. The average rate for a 30-year fixed rate mortgage increased from 3.57 percent to 3.94 percent; rates for a 15-year fixed rate mortgage rose from 2.88 to 3.14 percent and the average rate for 5/1 adjustable rate mortgages was also higher at 3.07 percent as compared to the prior week’s reading of 2.88 percent. Discount points were unchanged at 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages. Low mortgage rates have helped home buyers qualify for financing they need to buy homes; if rates continue to trend upward, demand for homes is likely to ease.

New jobless claims reached a 43-year low last week. 235,000 claims were filed as compared to expectations of 255,000 new claims and the prior week’s reading of 254,000 new jobless claims. Low layoff rates point to stronger economic conditions; job stability can encourage first-time home buyers to enter the market and existing home owners to buy larger homes.

What’s Ahead

Readings on new and pre-owned home sales, the Federal Reserve’s post meeting FOMC statement and reports on mortgage rates and new jobless claims will be released this week.

Real estate may be one of the most important things that you will ever invest in, but it can also be a useful means of increasing your financial well-being. If you’re getting into the real estate game and are wondering how you can make use of investing in homes to improve your net worth, here are three ways you can successfully work towards a real estate investment portfolio that will make you proud.

Home Equity Line of Credit Loan

Also known as HELOC, this is the type of loan where a homebuyer taps into the equity of their home while they are still paying off their mortgage. As the equity that has been paid into the home is available without the homebuyer having to apply for it, this allows those who invest in real estate to borrow against equity to renovate the property or pay for a deposit on another property.

Pick Properties That Will Appreciate

It goes without saying that most people want to invest in a property that will increase in value, so as an investor you need to be especially careful about what you invest in. Since you may have problems paying all your property fees if the value of one decreases, try and be aware of future market trends and neighborhood hotspots. This means diversifying the properties you invest in and including a buffer in your payment plan so that, even if the market takes a turn, you can still pay off your amount owing.

Investing In Under Market Value

There are few better ways to improve the financial feasibility of your investment portfolio than investing in a property that is under market value. Not only will you have an automatic gain with the purchase price, you will be able to invest that money into improvements in order to bump up the market price even more. While finding this type of property can be difficult for the newcomer, looking for neighborhoods with potential or properties that require little maintenance can be a good place to begin.

There are few better things to invest in than real estate, but it can be hard to know where to put your money in the beginning. Whether through a home loan or purchasing a property under market value, there are plenty of ways to bump up your net worth. If you’re currently considering an investment in real estate, contact your trusted real estate professional for more information.

According to the National Association of Home Builders Housing Market Index for November, builder sentiment was unchanged at a reading of 63. Readings above 50 indicate that a majority of builders are confident about housing market conditions. Readings for three sub-indexes used to calculate the Housing Market Index Readings for builder confidence in current market conditions and market conditions within the next six months were posted at 69. The reading for buyer foot traffic in housing developments was 47. Buyer traffic has not reached the benchmark reading of 50 since the peak of the housing bubble approximately 10 years ago.

NAHB Chair Ed Brady noted that survey information provided by most participating builders was gathered prior to the presidential election. Mr. Brady also noted that Housing Market Index readings have exceeded 60 for the past three months, which indicates slow but steady growth in housing markets.

Analysts: Builder Sentiment and Building Activity Inconsistent

While positive builder sentiment readings seem to contribute to stronger housing markets, analysts pointed out that housing starts are not consistent with high builder sentiment levels. Reasons for fewer home starts than the Housing Market Index suggests include approaching winter weather and ongoing shortages of labor and buildable lots.

Real estate pros count on building more homes (and building them faster) as the only solution to tight supplies of available homes and rising demand. These conditions create highly competitive markets that present obstacles to moderate income and first time home buyers. NAHB said that rising incomes, expanding labor markets and relatively low mortgage rates are fueling demand for homes. While mortgage rates have remained near historic lows, home prices have risen quickly in high-demand areas. This creates affordability challenges for home buyers, who also face strict home loan approval requirements.

3 Month Rolling Averages Show Regional Confidence Readings

NAHB reported its three-month rolling averages according to four regions included in Housing Market Index readings. The Northeast reading was 45; the Midwest region’s confidence reading was 58 and the Southern region reported a reading of 66. The West, which includes high-demand metro areas such as Portland, Oregon and San Francisco, California, had a November builder confidence reading of 77.

Do you believe that humans are changing the climate? As of today, the debate over carbon dioxide and climate change continues to rage. But regardless of your political standpoint, there’s always a case for reducing electricity use. Because who doesn’t like saving money, right?

Let’s explore a few ways that you can save energy while reducing your home’s carbon footprint.

Leverage The Power Of Automation

The technology behind home automation is improving at an amazing rate. Thermostats from companies like Nest make home heating and cooling simple. They learn from your use to automatically set temperatures up and down as needed. Going to be home late from work? No problem — you can use your smartphone to ensure your heat doesn’t come on until later.

Wash Cold, Hang Dry

You might not be aware of this, but cold water washing makes sense. Most washing machines and detergents are just as efficient with cold water as hot. So it makes sense to switch to washing in cold, especially if you have a newer washing machine.

To cut back even more, hang your clothes to dry instead of using the dryer. The technology behind clothes dryers hasn’t improved much over time. They still rely on warm air, forced ventilation and spinning around. All of which use a lot of energy.

Note: if you have to use your dryer, add a clean, dry towel to each load. Adding a towel will help your clothes to dry faster, thus saving you both time and money.

Modernize Your Home Lighting

Have you made the switch to power-efficient LED light bulbs yet? This one change can save an immense amount of electricity depending on the size of your home. And you can take things a step further by automating your home lighting as well. Systems from companies like Philips allow you to turn lights up, down and off as needed. You can also control these from your smartphone.

Kill Off The Vampires

Finally, watch for appliances and accessories that draw power when they’re not in use. ‘Electricity vampires’ like smartphone chargers, laptops and televisions can draw power 24/7. It’s a bit of a pain to have to unplug everything all the time. Instead, consider having these appliances plugged in to power bars. When you’re finished using them, you can switch the power bar off and go on with your day.

The above are just a few ways that you can reduce your home’s carbon footprint. If you’re interested in upgrading to a power-smart home, talk to your local real estate agent today. We’ll be happy to recommend local homes that are high-value and low-carbon.