Lee Morof's Real Estate Blog

Many people associate the fall months with cooler temperatures and changing colors. But another defining characteristic of fall is that the days become shorter. Yes, there’s limited daylight, as the sun rises later and sets earlier.

Noting this, it’s important to take any exterior lighting into consideration if you’re listing your home this fall. It’s important because you want your home to have a welcoming vibe to it, but with the potential for showings to occur in limited daylight, some modifications and new light installations may be necessary in order for it to stand out. What’s more is that exterior lighting can serve as a theft deterrent.

Here’s a closer look at some fall outdoor lighting tips to enhance the appeal of your home this fall:

Go Solar

Solar lighting is an effective, sustainable way to highlight the landscape of your yard, and illuminate paths and walkways. Just make sure that you’re placing solar lights in areas that receive lots of sunlight during the day so that they have plenty of energy after the sun goes down.

Border Patios, Decks

If your backyard features a patio, deck or gathering space away from the home, don’t miss an opportunity to border it with lights to better highlight said features. If your deck or patio has railing, consider stringing lights throughout it.

Here’s another neat idea: If you have a patio umbrella, consider purchasing lights that fit within it. You should be able to purchase an umbrella solar light set from your local hardware store, which does wonders in providing accent lighting for this area. Even if the umbrella isn’t staying with the house, it can still make for a nice touch.

Don’t Shine Lights On Windows

Any lights that shine on windows will only hinder your home’s appearance. That’s because they’re likely to create a glare. Make sure that any lighting that you incorporate is well balanced and only goes to help the home’s overall appearance. On a similar note, make sure that any lighting doesn’t clash with each other.

Consider Uplighting

Uplighting, or shining lights so that they are hitting your home at an upward angle, is a creative way to make your home appear larger. Additionally, uplighting can help accentuate unique architectural features. Be sure to uplight from each side of the house for the best overall look.

Light For Safety

Finally, you should also be arranging lights in a way that promotes safety on your property. For instance, if there are any steps or inclines, make sure that the areas are well lit to avoid the potential for injury.

Contact your trusted real estate professional for many other tips to make your home showing a success!

Reality TV shows have energized everyday people to dive into the real estate market and make money flipping houses. The dramatic presentation and profitable end results make the industry seem like a sure thing. But house-flipping, like any industry, has its share of challenges.

Television often props up ratings by showing industry pros overcoming adversity and getting a big win. But reality, unlike Reality TV, is filled by behind-the-scenes unknown obstacles. While house-flipping has emerged as a viable niche profession, these are some of the common misconceptions entrepreneurs may want to consider before wading into the business.

Perfect Properties Are Available

On television, the home-flipping team often settles on that perfect property that will yield amazing results. It’s important to understand that’s a Hollywood formula designed to improve viewership.

In reality, the perfect home is like finding a unicorn. Most flipping projects deal with less-than-perfect properties. What remains important for home-flippers is that the property enjoys structural integrity and the basic elements are in place.  

Projects Run On Time

Watching a home-flipping show makes the process seem quick and easy. After all, many of the shows run between 30 minutes and one hour. Your project time will be considerably longer.

Starting with a listing search through the initial buy, even industry insiders spend months securing a property. After that, the permitting process can be onerous and renovations are commonly met with unforeseen setbacks. Whether you discover mold behind walls or structural issues, remodeling generally experiences delays. Once you get everything copacetic, inspection waiting periods can be excessive. Projects rarely run on time.

Construction Budgets Are Just Math

Watching a TV personality whip out a calculator and add up remodeling costs makes it look simple. There are square footages, materials, labor and other tangibles. Home builders and remodeling professionals are quick to dispute such simplicity because too many “intangibles” exist.

Consider replacing the clapboard on the exterior of a home. One might expect to calculate the square footage and order an equal amount of material. But an experienced contractor might tell you to start by ordering an additional 10 percent to account for waste. That’s because a percentage of material that gets cut might not be reusable.

After accounting for that 10 percent, add another 10 for human error. Many types of clapboard require builders to set the commercially-cut end to the interior only. When inexperienced workers make erroneous cuts, increased waste can be produced. This theme runs across a variety of materials and other aspects of construction. It’s unlikely your crew will be filled with 25-year veterans. Mistakes are more common and costlier than you might expect.

ROI Can Be Measured Accurately

Beginner home-flippers tend to look at the cost of the property, add updating costs and the average market value of similar homes as the basis for determining return on investment (ROI). But selling prices can be more fickle than one might expect.

Today’s home buyers are looking for certain things from newly renovated properties. The math no longer amounts to adding total rooms, bathrooms, square footage and location. While the country is in the midst of a seller’s market due to a significant inventory shortage, home-flippers would be wise to calculate ROI based on a sliding scale.

If the property lacks the conveniences favored by Millennials or other groups buying up homes, it could sell for less than expected. That’s another reason why home-flippers are wise to enlist the guidance of a local real estate professional to gain a reasonable grasp on home trends and pricing.

Your trusted real estate professional is ready to help you find the right project property if you are ready to take on the challenge of house flipping!

Opinions differ about whether home buyers are best served by purchasing an older home or new construction.

New homes enjoy that “new home” smell and the idea that you are the very first occupant can be very appealing. On the other hand, older homes resonate with nostalgia and many architectural design elements are no longer commonly used.

While some people feel strongly one way or the other, it’s a lot like comparing apples and oranges. The right home for any home buyer is the one that fits your lifestyle. Consider these pros and cons of new and older homes when making your decision.

Construction Differences

Home builders often tout the state-of-the-art aspects of new construction. Perhaps the biggest pro to new construction is the integration of smart and energy efficient technologies.

Today’s homes often come tech-ready with the ability for homeowners to control the environment through mobile apps. Solar panels are more common than ever, and new kitchen, HVAC and other necessities benefit from the latest advancements. Aside from being tremendously convenient, many of the new technology and materials can save you a significant amount of money.

On the flip side, older homes often require updating to include smart technologies. Gaining those conveniences could mean laying out a substantial amount of cash.

But don’t think for a moment that new construction somehow outpaces older homes in terms of energy efficiency. Materials used to build houses decades ago tend to be more durable. Items like thick, hardwood flooring were once commonplace. Today, they are considered high-end materials.

The Bottom Line: New construction offers modern conveniences while older homes showcase vintage materials.

New And Older Construction By The Numbers

One argument for buying new construction leans on the cost of upkeep.

An American Housing Survey reportedly pointed to new construction homeowners spending less on maintenance than their older construction counterparts.

The report promulgated by the Census Bureau indicates that 73 percent of people who owned a home four years old or less spent under $25 monthly on monthly maintenance. Only 11 percent spent upwards of $100 while 26 percent of older homeowners topped this cost. When routine maintenance exceeds $1,000 annually, that’s significant.

On the other side of the coin, older homes often come at a discounted price.

New home listing prices reportedly exceed those of similar older homes by upwards of $100,000 or 30 percent on average. This initial cost should be a strong consideration when doing the long-term math on homeownership. At $1,000-$1,200 additional cost annually, an older homeowner may have to live in the home for a very long time before it became less cost-effective.

The Bottom Line: Homeowners either pay on the front or the back end.

Homeowners Insurance Coverage

One of the common misconceptions about coverage stems from the idea that higher-priced new homes cost more to insure. This is often not true.

When taking out a policy, homeowners often insure the home based on the purchase price. This may satisfy the lender, but it may not be adequate to rebuild in the event of a total loss. New construction estimates tend to be fairly accurate because materials and labor costs haven’t changed significantly.

On the other hand, older homes are often made from materials that are considered specialty of high-end on today’s market. That means rebuilding an older home to its former luster could far exceed the current value. If that nostalgic feel is important, homeowners may need to insure the structure at a higher replacement cost.

The Bottom Line: Both types of homes could require similar coverage.

Regardless of what experts say about new and older construction, it’s important to consider a wide range of pros and cons and determine the home that’s right for you. Speak with an experienced real estate professional for detailed information on the properties that you are considering.

Many of us are guilty of plopping on the sofa and binge-watching reality TV home flipping shows. The allure of buying and selling homes for big profits with no boss looking over our shoulders has major lifestyle appeal.

Shows like “Love it or List it,” “House Hunters,” “Flip or Flop” and others make it look incredibly simple. Even when they face adversity such as rotted wood or bad pipes, the way the reality TV stars overcome adversity is more of an inspiration than a deterrent. And plenty of everyday people do manage to succeed in the house-flipping industry.

But many of the myths these ratings-driven shows perpetuate could use a little busting.

Consider these four common house-flipping myths and the true facts behind them.

1: Three Viewings And A Closing

Reality TV shows tend to show viewers the industry professional looking at no more than three homes before making a flipping decision. That may play into the limited time slot they have but it’s far removed from reality.

True Facts: It’s not uncommon for potential home buyers to fall head over heels for the first property they view. After all, buyers often already like the neighborhood, school system, and home style. But the National Association of Realtors reports that the average person looks at about 10 properties before making a decision. Home flippers are additionally tasked with developing a return on investment plan. Three and done is not reality, it’s just TV.

2: Homes Linger On The Market

TV shows follow home flippers who seem to have all the time in the world before making an offer.

True Facts: Most of the purchase and sale process is simply staged for television. The homes have been pre-purchased before filming. Today, we are experiencing a seller’s market, meaning there are more buyers than inventory. Homes move quickly.

3: Open Houses Are A Sure Thing

On real estate reality TV shows, the fully renovated home is amazingly staged and sells during the first open house. Multiple offers are often floated.

True Facts: Only in a perfect world or on TV does this happen. Matching properties with potential buyers requires hard work from real estate agents. They must align purchase limits, pre-approved house shoppers, family size, school systems, location, and other expectations. Most homes are sold by real estate professionals setting up appointments and making multiple showings.

4: Homeowners Make Fast-Sell Decisions

On real estate reality TV, homeowners seem to take just moments to decide whether to love it or list it. This certainly doesn’t mirror the process of ordinary homeowners.

True Facts: Homeowners sell their properties for a wide range of reasons. These may include downsizing, retirement, relocation or an expanding family among many considerations. The vast majority of people mulling over a sale also take a long look at their next home options. It’s completely unrealistic to think someone made such a major life decision in five minutes or less.

Reality real estate TV shows are wonderfully entertaining to watch. So is science fiction. Enjoy your binge-watching and speak to a real-life real estate professional before making any major decisions. 

Home price growth slowed to its lowest pace in nearly a year according to the Case-Shiller Home Price Indices. National home price growth averaged 6.00 percent year-over-year as compared to 6.20 percent growth in June.

The 20-city home price index rose 0.10 percent in July to a seasonally adjusted rate of 5.90 percent year-over-year. Slowing home price growth was attributed to buyer fatigue and rising inventories of available homes.

Las Vegas Home Price Growth Tops 20-City Home Price Index

Las Vegas, Nevada topped the 20-City Home Price index with a year-over-year home price growth rate of 13.70 percent. Las Vegas home prices crashed during the recession but continued to recover as the economy improved.Seattle, Washington home prices rose 12.70 percent year-over-year in July; San Francisco, California held third place in the 20-city Home Price Index with year-over-year home price growth of 10.80 percent. Five cities posted higher home price growth rates than in June.

Freddie Mac Predicts Further Slowing In Home Price Growth For 2018 And 2019

Prior to the release of July’s Case-Shiller data, Freddie Mac analysts said that home buyer budget limitations coupled with more homes for sale caused home price growth to slow. Freddie Mac projected home price growth of 5.50 percent for 2018 and 4.50 percent growth in 2019.

FHFA, the agency that oversees Fannie Mae and Freddie Mac, released its home price index for July and reported lower home price growth in July. After posting steady year-over-year growth rates of 6.80 percent for April, May and June, July home price growth dipped to 6.40 percent. Data in home price data reported by FHFA includes homes connected with mortgages held or guaranteed by Fannie Mae And Freddie Mac.

While slower growth in home prices are good news for potential home buyers, rising mortgage rates, strict mortgage credit requirements and competition with cash buyers continue to create headwinds for home buyers who depend on mortgage financing to fund their home purchases.

For the greatest market advantage, be sure to contact your trusted real estate professional if you are interested in buying a new property or considering listing your current property.

A young long-haul trucker driver once took an elder’s advice and invested all of his money into real estate. Even though he was seldom at home to enjoy the fruits of his labor, he hired a property management company to handle the properties. The advice that stuck with the driver was simple. “They’re not making any more of it, land that is.”

In terms of growing personal wealth, the real estate market may fluctuate, interest rates change, and the GDP can bounce like a ball. But, land is permanent. That may seem like a simplistic view of wealth management. Maybe it is. But that trucker retired early with multiple investment properties and a reasonably wealthy man.

His portrait in wealth management success highlights the notion that real estate remains a strong financial driver. The next logical question is whether or not now is the time to build a powerful real estate portfolio.

Current Market Conditions

Real estate investment does not necessarily follow the popular stock market thinking about buying low and selling high. In fact, investors such as the trucker had no plans to sell at all. That being said, the current real estate trends are widely considered a “seller’s market.” Are they really?

With Millennials and soon Generation Z buying up homes, inventory remains lower than demand. That naturally has resulted in an uptick in listing prices. Couple the supply and demand issue with a Fed raising rates and one might think this is a bad time to buy. Nothing could be further from the truth.

Buying rental properties are long-term investments. Buyers would be wise to do the math on how much the monthly mortgage, insurance, taxes and overhead measure against the potential revenue. Some property owners do their math based on 10 months rather than 12 to account for unexpected expenses. If the math works, it could be a valuable asset.

Real Estate Less Risky Than Stocks

Return on investment in real estate has the potential to far outpace stock buys. Consider that when you purchase a stock, things outside your control impact value and dividends. Think for a moment about how Elon Musk turned Tesla stocks into a roller coaster ride due to a few odd tweets and media interviews.

Owning property insulates investors from many external forces. Over time, rental revenue pays down the note. This allows owners the ability to siphon off money or leverage equity for additional real estate buys. With measured determination, your wealth management portfolio could include multiple properties that are paid off at retirement age. It worked for a truck driver who took some simple advice from an elder.

There’s little doubt that real estate remains a strong asset for increasing personal wealth. If you are considering a purchase, be sure to contact your trusted real estate professional as soon as possible.

It’s not uncommon today to move several times during adulthood, whether across town or across the country. Seasoned home buyers have been through the real estate process, often more than once. However, even if the home purchase has become routine, there are mistakes that can be avoided.

Stuck In The Past

The real estate market doesn’t stand still. It cycles and shifts, which is why it’s often recommended to rely on a real estate professional for an understanding of the current market. Home buyers with property purchased ten years ago, likely won’t have the same experience buying today. Don’t get stuck in the past, thinking the process will play out the same. It may, but it’s important to be ready for changes.

Skipping Homework

Whether upgrading to a larger home to accommodate a growing family or downsizing as the nest empties, it’s essential to do the homework before placing the current home on the market and committing to a new one. Certain homework needs to be done before beginning the buying process, especially if the purchase is reliant on the sale of the current home.

• Determine if buying with cash or need to sell current home.
• If need to sell current home first, will seller of new home offer contingency?
• Is a flexible timeline needed for closing on current home/buying new?

Working out these types of critical details, even for seasoned home buyers, can be daunting, which is why it can be helpful to have a trusted real estate agent.

Allowing Emotions To Lead

Maybe the current house wasn’t the “forever” home. Seasoned home buyers, just like first-timers, can find themselves lost in emotions when searching for the perfect house. It’s a pitfall every home buyer should work to avoid. The home may have some of the exact features desired or be in the ideal location, but if it doesn’t fit the budget or has other issues, it’s not the right one.

Overextending Resources

Home buying is an exciting experience and it can be easy to become caught up in the process. However, overextending resources can make life after the purchase difficult. To help protect against overextension of resources later, always factor in the following when buying a home:

• Budget
• Time
• DIY Abilities

Overextending on budget can directly affect the ability to make any needed repairs and if schedules are hectic, there might not be enough time for projects. In addition, it’s important to honestly take stock of DIY ability, and it’s okay to acknowledge that some jobs/repairs will require professionals or some level of assistance. 

The key for seasoned home buyers, as well as first-timers, is to never be afraid to ask questions, make lists, and rely on professional help from your trusted real estate professional.  

The Federal Open Market Committee of the Federal Reserve announced that it raised the target federal funds rate to a range of 2.00 percent to 2.25 percent. This was the third consecutive increase in the Fed’s key interest rate and was the eighth time the Fed raised its key interest rate since 2015.

In its customary post-meeting statement, Committee members cited strong economic conditions and continued labor market growth coupled with historically low unemployment rates as a basis for raising the federal funds interest rate.

Fed Cites Steady Inflation, Healthy Household And Business Spending

Further economic conditions cited in the FOMC statement were steady inflation, which has held close to the Fed’s objective of two percent for a year. Projections on long-term inflation were “little changed” according to the statement.

FOMC’s statement explained how committee members make decisions about the target range for the federal funds rate. The Federal Reserve must make decisions based on its legislative mandate of achieving and maintaining maximum employment and an inflation rate at or near two percent.

The FOMC also considers measures of economic and labor conditions, pressures on inflation and projections on inflation. Committee members keep up-to-date on domestic and global economic developments.

After the FOMC statement was released, Fed Chair Jerome Powell gave a press conference.

Fed Chair: Economy Strengthening Without Need Of Fed Accommodation

Federal Reserve Chair Jerome Powell expressed confidence in current economic conditions and said that future rate hikes would help maintain the Fed’s goals and promote healthy economic growth. Mr. Powell said that future meetings of the Federal Open Market Committee would be guided by asking and answering the question of whether current monetary policy is set to achieve FOMC goals. Analysts interpreted Chair Powell’s comments as indicating that current economic conditions are as good as could be expected and that the Fed’s monetary policy decisions are working as planned.

Homeowners looking to maximize their return on investment often want to know what season best achieves that goal. Getting near or full asking price can be influenced by a wide range of factors, including market trends, inventory and interest rates to name a few.

It will come as good news to know there are strong indicators that this fall has unique listing advantages. That means listing a home this fall could help sellers get the price they want.

1: Inventory Remains Very Tight

The rules of supply and demand apply equally to the housing market and there are not enough homes to go around.

The single-family housing shortage has been driven by multiple factors. A large population of Millennials have entered the real estate market at a time when new home construction had been stifled for years. Simply put, the supply of new homes has significantly fallen behind the demand.

Although builders are starting to ramp up construction, the economic boom continues to position first-time buyers more quickly than the lagging supply. The real estate wild card may be how quickly construction outfits put more homes in play.

Should the building sector pivot to take advantage of higher prices, inventory could loosen in 2019. That makes this fall a prime time to maximize profitability and avoid the risk of improving supply.

2: Fall Looks Like A Seller’s Market

Although summer was once again a popular time to sell, it appears home sales did not satisfy the high demand. With fewer listings available and plenty of active buyers jumping on properties, listing this fall could put sellers in the driver’s seat.

One interesting caveat is a recent study that says buying a home is currently less expensive than renting in 35 percent of American counties. Talk about motivated buyers. By listing a property now, the odds are on the seller’s side that the home will close at a desirable price.

3: Homes Move Quickly

Market data shows that homes are selling at a fast clip across the country. According to a report by realtor.com, the median days on the market rate continues to decline.

From 2012 to 2017, the number of days a home spent on the market declined by nearly one-third in some comparable months. This year, homes are selling at a staggering rate in traditionally high-priced metropolitan markets. According to research, homes in San Jose, California, were only on the market an average of 28.6 days. In Seattle, Washington, homes sold at an average rate of 34.1 days and Nashville, Tennessee, saw a short 40.6 window. While these areas may be considered hot, they show that homes are moving quickly even in high-end areas.

Sellers may find the elixir they are looking for by listing this fall. Economic and market indicators point to a vibrant seller’s market flush with motivated buyers.

Whether you are ready to sell your current home or look for a new property, be sure to contact your trusted real estate professional.

The average homeowner feels secure knowing they have insurance in the event of a severe weather calamity. Most people believe that no matter what happens, they have paid for protection against disaster.

Unfortunately, not every homeowners insurance policy provides full reimbursement from severe weather losses. Hurricanes, tornados, earthquakes and other rare catastrophes may not be covered under your current policy. Consider the impact of these extreme events and whether you are fully insured for the subsequent losses.

1: Hurricane Damage May Not Be Fully Covered

The recent national mobilization to deal with the fallout from Hurricane Florence highlights just how catastrophic severe weather can be to people and property. That being said, homeowners generally anticipate calling their insurance carrier to file a claim after returning home and assessing the damage.

It may come as a surprise, but many policies limit reimbursement to damage attributed to high winds. For example, a tree falls on a garage or vehicle and the insurance outfit writes a check.

But damage attributed to water can be tricky. Many policies do not cover flood insurance. That could mean that water backed up in the street or a stream, lake or pond overflowing into your home might not be covered. That’s why homeowners are advised to clarify water-related coverage.

2: Floods May Not Be Covered

People living near bodies of water may be required to carry flood insurance when applying for a mortgage. Flooding represents a high risk that can result in a total loss. Lenders are often apprehensive about approving mortgages for properties in so-called “floodplains.”

FEMA offers coverage through the National Flood Insurance Program. Homeowners living just outside a flood zone may not be required to buy additional coverage. However, you are taking a significant risk.

If your policy does not cover flooding, you could be on the hook for the full cost of the home’s repair or replacement. Considering the average flood insurance policy runs about $700, it may be worth the expense to protect your investment.

3: Tornado Insurance Coverage Can Be Murky

Although most policies cover damage from tornados, premiums can run higher in regions prone to these severe weather storms. But, like hurricanes, tornados that additionally bring about flooding can pose a problem for homeowners who make a claim. A carrier may conclude that the high wind and impact damage enjoys coverage. Water, however, can be a very gray area. 

4: Earthquakes Often Not Covered

Like people who live in flood plains, earthquake riders may be required in certain areas of the country. Without additional coverage, the destruction caused by these catastrophic events may not be reimbursed. It’s imperative that people living in or around regions prone to earthquakes carry specific coverage. Imagine losing your home and still owing a monthly mortgage payment.

The important thing to glean from this overview about severe weather claims is that homeowners are wise to dig deep into their policies and have a clear, concise understanding about coverage. Keep in mind that water damage from flooding, rain and even sewer back-ups pose a significant threat to your home. For a few dollars more, enhanced severe weather insurance may be worth every penny.

Your trusted real estate professional is knowledgable about high and low risk properties. Be sure to utilize this valuable resource if you are in the market for a new property.