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The Fed cut rates. Why are they still high?

If you are like most buyers, sellers and even some real estate agents, you get excited when the Federal Reserve cuts benchmark interest rates. After all, shouldn’t lower rates from the Fed mean lower interest rates for mortgages? It is understandable that so many people believe that a fed rate cut leads directly to lower mortgage rates. It is a common misconception. Media outlets fuel this assumption, highlighting potential benefits to home buyers and sellers.

What are rates based on?

So, what does a rate cut really mean for buyers and sellers? When the Fed cuts rates they are typically trying to stir the economy by making borrowing cheaper in the short term. Mortgage rates, don’t always move in lockstep. The Federal Reserve controls short-term interest rates. But the 30 year fixed rate mortgage rate follows long-term rates. The long term rates are primarily influenced by the bond market-specifically the yield on the 10 year U.S. Treasury Bond. Since mortgage lenders tend to set their rates based on what’s happening with these long-term bond yields this is the key thing to watch. But, even watching the 10 year U.S. Treasury Bond doesn’t give you a clear picture of what to expect regarding mortgage interest rates and where they are going. There is so much more that goes into whether interest rates go up or down. It is hard to predict even for a mortgage expert or economist.

How it affects you

Of course mortgage interest rates matter somewhat when you are deciding to buy or sell a home. The current interest rate will make a difference in your monthly payment and what you can afford. Remember, if you can afford the payment, whether you buy or sell a house should be based on if it makes sense for you personally. For example, if you need to sell a home because you are getting a divorce or because you just had a new baby, you should make the change in your housing because it is important to you personally. Interest rates, whether they go up or down this week, should not really matter.

Home Buyers

So what do the Fed’s interest rate changes mean for home buyers and sellers? It is important to understand that mortgage interest rates are influenced by complex factors. This includes, but is not limited to, the Federal Reserve. As a buyer you should stay informed about what is happening in the economy. You should work closely with your lender to get a feel for what mortgage rates likely will do and how that could affect you. Don’t want to time the market perfectly. There is no perfect. Lock your rates when the numbers work for you.

Home Sellers

As a home seller, it is easy to get caught up in the belief that the lowering of rates will mean that home buyers will be flocking to your home. Lower rates may mean more buyers in the market. The most important thing for you to focus on when selling your home is pricing your home competitively and making sure it looks its best.

Famous last words

Here are five things that home buyers often say that they may later regret. As an experienced real estate agent, I know that each and every buyer is different. However, it is amazing, how often home buyers will say the same things to me. Here’s a fun post of common, famous last words of buyers.

Five things you might say

  1. “I know what I can afford.” I asked that the buyers that I work with get pre-approved before we start looking at homes. Some home buyers find this annoying and tell me that they know what they can afford. You may think that you know, but unless you are in the mortgage business, the odds of you knowing exactly where you stand and what you can afford is slim. Before you look at houses get pre-approved.
  2. “I will never buy a _____ style house.” I know whenever I say never that it too often happens. It is best to leave the words always and never out of any conversation. Keep an open mind and your perfect home may be hiding behind a style of home that you would have never considered.
  3. “I want to sleep on it.” Sometimes sleeping on it means that you miss out. There is a saying that I like to use: “if you sleep on it, you may not sleep in it.” Taking a night or a day to think about it seems reasonable, but depending on the market that you are shopping in, that hesitation could lead to heartbreak. Walking away for an hour to think about it probably will not cost you the house, and will give you a chance to clear your head and decide how you would like to proceed.
  4. “I don’t want to get involved in a bidding war.” You have found the house that you love and you want to buy. When your agent calls, they find out that there are two offers on the home already. Are you going to walk away? More often that not you will have your agent write up your best offer to see if you can buy the home that you love. The fear that buyers have in this situation is that they will pay too much for the home.. Make sure that you have your agent guide you. Have your agent look at comparable properties that have recently sold, so you are making informed decisions.
  5. “We can always increase our offer, but we can’t reduce it.” All buyers want to buy a home for the best price possible.In order to accomplish this some buyers want to write an offer that is unrealistically low. In doing this they risk insulting the seller. In this case you may not get a response. Sometimes even if the price is increase, the seller may not be willing to sell the home to you. Coming in too low may work against you.

As the buyer you are wanting to get the best deal. You also want to be able to find the house of your dreams. You want time to go through the process without the pressure of competing with other buyers. Make sure you connect with an agent to guide you through the process looking out for your best interest along the way. By doing this you can make wise decisions.

Insurance Costs Continue to Climb

Colorado homeowners insurance costs continue to climb. Now, Colorado ranks seventh in the country for above-average homeowners insurance costs, according to data from Barkrate. Extreme weather and Colorado wildfires have lead to increased premium costs. A study that was just released by the National Bureau of Economic Research, found that insurance premiums have increased by 33% nationwide in the last three years. The increases that are occurring nationwide are due to extreme weather events. It is expected that insurance premiums, in Colorado, will increase by as much as $700, in the next 10 years. These increases are happening all across the state of Colorado, including parts of the state that are NOT affected by wildfires.

Insurance changes

Why is this happening? Professionals believe that insurance was underpriced for a long time. This was because the average homeowner would file a claim only every eight years. But now we are seeing a change. Homeowners are filing claims far more often and the payout for insurance companies in much higher. Both due to the increase in catastrophes and the increase in wildfires. Unfortunately insurance premiums have had to adjust for that increased risk and payout.

Dropping coverage

Another thing that is happening in Colorado is insurance companies are dropping certain residence in high risk areas. The insurance companies are unable to turn a profit due to the increase in extreme weather events, so they are refusing to provide insurance. What can the homeowner do?

Do a check up

A bill passed in this year’s legislative session that requires the state’s Division of Insurance to conduct a market study into increasing costs and canceled policies. They are to study potential solutions and make recommendations. The results of that study are required to be released publicly by January 0f 2026. In the meantime, as a homeowner, take a moment to check your insurance policies. Make sure that you are properly insured. Insurance should not be skimped on. Do a check up with your insurance professional annually. Ask questions before the unthinkable happens and it is too late.

Time for photography

You have contacted an agent to sell your home. You have met with them and signed all of the necessary documents. One of the next steps is having your home photographed. Preparing your home for real estate photography is crucial for attracting potential buyers. Preparing for the photos means making sure that your home looks its best, so that you can sell for top dollar. Here are some instructions for preparing your home for your photo session.

Make sure your home looks its best

One thing to keep in mind as you prepare for your photo session is that your home will photograph just the way it is. That means if a comforter on your bed is not straight, if will photograph just that way. If the dog bowl is in kitchen, it will be in the kitchen and in the picture. It is important to make sure your home looks its best in each area of your home. Here are some tips for you to make sure your home looks its best.

Remove clutter

It is important that you remove clutter from your home. Remove the clutter from the counter tops in the kitchen, living areas and throughout the house. Wipe down surfaces, including counter tops, appliances and cabinets. Make sure that magnets and photos are off the fridge. Put all of the dishes away and make sure the sink is empty.

In living areas, of your home, again, remove clutter. Arrange your furniture to create an open and inviting space. Fluff your cushions, and pillows. Make sure that lights are on and curtains are open to let as much light in as possible. Turn off the TV and hide remotes.

Clean, clean, clean

In bathrooms of your home, clear all surfaces of toiletries including toothbrushes, soap and razors. Remove extra towels, and bathmats. Wipe down all surfaces, including sinks, showers the toilet. Make sure that the toilet seat is down. Also make sure that glass shower doors and mirrors are streak free. Keep the shower curtain open, but remove shampoo, conditioner and soaps.

It is important that your bedroom also be clutter free. Make your bed and fluff pillows. Remove anything under the bed that might be seen in pictures. Clear away any items from your closet floors and shelves. Less is better in your closet. Removing some items will make your closet appear more spacious.

Don’t forget the exterior

The exterior of your home should also look its best. You want to give a good first impression. Time any overgrown plants and trees. Make sure the lawn has been recently mowed. Remove toys from the yard and clean up any pet waste. Be sure to remove any dead or dying potted plants and replace with new. Uncover pools and hot tubs so they look inviting.

Remember being prepared is the best way to get the best photos. According to a study done by Zillow, homes with clutter-free, clean photos sold 32% faster than homes with cluttered photos. By following these instructions, you can help ensure that your home looks its best for your photographer. This also increases your chances of selling your property for the highest possible price.

How will you feel someday if you buy a house now?

What kind of feelings might you have if you stopped renting and purchased a home now? I know you may be hearing that now is a bad time to buy. You may also be hearing that you should wait for interest rates to drop. May people feel like they just can’t buy a house because prices are too high, interest rates are high and the economy is not what it should be. Well, there may not be a better time to buy a home. All of the concerns that are listed above may apply to next year, and the year after that. It can always feel like buying a home is just too hard and out of reach.

It is not possible for everyone to buy a home. But in 2023, the last data available from Realtor.com shows that 32% of all buyers were first-time home buyers in 2023. In 2022 which was another tough year for home buying, 26% of all buyers were first time home buyers. It might be possible for you to buy a home. Here are some surprising feelings you may have ten years from now if you take the leap and buy a home now.

Glad

The first feeling that you may have is that you are GLAD, you got into the market when you did. The house you purchased is likely going to be worth a lot more money in ten years than it is today.

Wishful

Another feeling you may have is WISHFUL! It is hard to afford one house at any given hime, based on your salary and savings. But in the future, when you look back at the price that you paid for your home, you may be wishing you had purchased more than one home, when you did.

Relieved

RELIEVED is another feeling that you could feel in ten years. You will be feeling relieved because you will see how much more people are paying in rent, than you are paying in your mortgage. You have a pretty consistent monthly mortgage payment. It only adjusts annually if taxes or insurance go up. You are not having to worry about those rental increases.

Successful

Buying a home isn’t always easy, but you have done it. There may be struggles, particularly in the early years when the budget is tight. But you have gotten through it. You are building equity and you can take pride and feel SUCCESSFUL because you did it.

Nostalgia

Even if your first home is not your dream home, it more than likely will not be the house you live in for twenty years. You can pay down your mortgage and upgrade to a nicer home. Even if that first home was not the nicest home, you can look back at it with NOSTALGIA as you remember the memories that were made there.

Stop wondering if you can buy a home. Call Lestel and find out if you can! (970)310-8379

Let’s Learn about Poudre School District

Let’s learn about Fort Collins Schools and who services the area’s educational needs. Poudre School District (PSD) services Fort Collins, Timnath, Wellington, Laporte, Red Feather Lakes, parts of Loveland, Windsor and other areas all the way to the Wyoming boarder. That is over 1,800 square miles. During the 2023-2024 school year, 25,967 students were enrolled in the district. There were also 3,134 students that were served by the district authorized charter schools and other programs.

PSD school buildings

The district has fifty four school buildings that span elementary, middle, middle-high, comprehensive high school, and even alternative schools. Alternative schools can be everything from alternative high schools to online, hybrid, and charter schools. PSD is quick to say that your school buildings are aging. There is an estimated one billion needed for capital improvements and maintenance. There are still thirty two school buildings in the district that do not have mechanical cooling. Classroom temperatures in those buildings can reach 85 degrees during classes in August and other hot times of year. But even with the challenges of aging buildings, PSD is succeeding with what they set out to do, educate the children that attend their schools.

PSD Students

The graduation rate demonstrates this. The class of 2023 had a graduation rate of 86.9 percent. That was the second highest rate of graduation, in the district, in more than a decade. Here is some additional information about our students. Eighty percent of PSD high school students participate in career and technical education courses, compared to a state average of seventy two percent. Last year 623 PSD students received career and technical education (CTE) industry certifications, showing that they have real-world, job ready skills for the work place. In addition, sixty six percent of PSD graduates earned free college credits.

PSD Teachers

Attracting and keeping good teachers is important for the success of a school district and the children of that district. The district had a ninety two percent retention rate for its teachers in 2023-2024. Teachers love working for the district and stay, but it is not because of the pay. The average PSD teacher’s salary is nine to twelve percent less than similar districts along the Northern Front Range.

We are Proud of the quality of education that is provided by Poudre School District. The numbers show that they are doing what they set out to do. Providing a successful, inspiring place for every child to think, learn and grow. The district prepares children to be successful in a changing world. Thank you PSD for what you do!

Is it time to buy another rental?

You are the owner of a rental property. Things are going well. You may be managing the property yourself or you may instead, have hired a property management company. You enjoy the rental income that comes in. It, for the most part, seems like being an owner of a rental property works for you. Is it time to buy another rental?

How do I make a decision?

When deciding if it is time to buy another rental there are thins to think about and consider. The first things to find out is if you would quality to purchase another investment property. Call your favorite local lender and complete an application. Prior to completing the application it would be important to look at finances to see if you have enough money saved to put twenty five percent down. I know, you say, I only have to put twenty percent down on an investment property. Why are you suggesting that I put twenty five percent down? I am suggesting twenty five percent down because you can save at least a quarter percent on the interest rate for the loan to purchase the property. It is worth it. Don’t you think?

What else should you consider when trying to decide if it is time to buy another rental? What are your overall financial goals? Do you need to save for retirement? Are you wishing you had extra money each month? Do you have kids that are younger and saving for their college education seems a dream, but far from reality?

Questions you should ask

Here are questions you should consider before making your decision about purchasing another rental. What is the real estate market like where you would be purchasing your investment property? It is a buyer’s market or seller’s market? What is the rental market like in your area? Is there a shortage that exceeds demand or are there too many rentals available? Call your favorite realtor and get the answers to these questions. Also ask your realtor about the current market. What is the current rate of appreciation? It is ideal to buy in a market that is showing healthy appreciation. If the market that you would be purchasing in is not showing much appreciation what is expected? That is hard for anyone to predict but talk to knowledgable people, that you trust and get their impression of the market and what they think might be happening in the future.

Knowing the answers to these question, you can make an educated decision about purchasing another rental property. Buying an investment is not usually an emotional decision like buying a home that you will live in. DO the research and decide what is best for you.

Thinking of buying an investment property for your college student?

You are considering buying an investment for your college student to live in while they go to school. What questions should you ask yourself before making this decision?

A significant amount of money will be spent on housing if you have a child going to college. According to an article published by Education Data Initiative, the average room and board costs can range from $8,000 to over $14,000 per year. The costs vary depending on a two year school or four year, and whether it is public or private school. Those are averages and the actual cost may be higher or lower depending up the school your student attends. Regardless of where your student attends school, housing costs are a significant amount of money. For this reason, many parents consider purchasing an investment property for their child to live in while in school. But is buying an investment right for you?

Does the math work?

Here are some questions to ask yourself before you decide. Does the math make sense? Would buying a property, actually save you money? Depending on the real estate market where your child will be living, does the cost of buying and maintaining a property save you money over the cost of a dorm room?

Renting rooms?

With that question being asked, do you plan on other students renting rooms to cover some of the costs? This is one way a parent might justify the cost of buying a place. Tenants could defray costs. If that is the plan, make sure your child feels comfortable living with whoever has committed to renting there. Also make sure the other students sign a lease. If the tenant/students back out, do the numbers still work or would it be cheaper to have your student in the dorm.

Is your child responsible?

Is your child responsible enough to handle living in their own place and being in charge of it? This can be a growing and learning experience for your student to live in a place and be responsible for the day-to-day upkeep. But it can also be distracting or in some cases, overwhelming. The most important thing for your student is school. You want them to focus and be successful at school. If they are able to learn life skills and school at the same time this might be a great experience for them.

Appreciation?

Another question to ask is regarding appreciation. Will the property will appreciate enough over time to offset the carrying costs and the costs of sale. This question is impossible to predict, but with research you may have a good idea whether you will make a profit over the time that you own the property. One last question to ask is if the property will sell easily when your child graduates. This is another question that is impossible to answer but you can make some educated predictions. Is what you would like to purchase a popular, desirable choice in the real estate market? If the property cannot be sold quickly could you continue to use it as an investment property? Will you hire a property management company to manage the property at that point?

These questions are not intended to scare you away from buying an investment property for your child to live in while in college. These questions are meant to ensure you make a well informed decision. If you feel a purchase is right, be sure to connect with a business savvy real estate agent to guide you, like me! Call Lestel 970-310-8379.

Don’t be afraid of the buyers agent agreement

If you are a buyer, planning to buy a home, you have probably heard that there are changes coming coming in real estate. These changes are regarding how buyer’s agents get compensated. Some agents have been implementing the changes ahead of time, others are waiting until the deadline, 8/17/24. What will be required starting 8/17/24 is that all agents will need to sign a written agreement with a buyer prior to showing a home to a buyer. This agreement will include language that states how much compensation the agent will receive. Signing an agreement with an agent sounds like a new thing, but it really is not. There is no reason to be afraid of signing an agreement.

Let’s take a closer look at what must be included in the included in the agreement. There are four items included in the agreement between the agent and the buyer. The four requirements are:

The first requirement

The amount of compensation that the agent will be earning needs to be stated specifically and conspicuously. In the past the buyer may not have known what their agent was earning. Now the buyer has a say in how much their agent will earn and who will pay for that compensation.

The second requirement

The compensation cannot be open-ended and must be objective. For the most part, agents working for the seller have been paid whatever the seller decided to offer the buyer’s agent. It was usually a percentage of the sales price of the home. The seller still may pay the agent that sells their home, but the agreement between the buyer and their agent must state specifically what their agent will be paid. The agreement cannot say, “whatever the seller is willing to pay.” The buyer and the agent will agree what the agent will be compensated. They will also agree how the compensation will be earned. The agreement could be a percentage of the purchase price, a flat fee or an hourly rate, as an example.

The third requirement

The agreement between the buyer and their agent will include terms that limit your agent from being paid more than you’ve agreed upon. For example, the seller may be willing to pay the buyer’s agent compensation in the amount of “X” of the sales price, but if you have agreed upon less than that, the seller can only pay whatever amount you have agreed upon with your agent.

The final requirement of the agreement

The agreement must state that fees and compensation are negotiable. Many people incorrectly believe that there is and was a “standard” real estate compensation for agents. They have always been negotiable. Just because they are negotiable does not mean that your agent will be willing to work for whatever fee you offer them. Each agent will have fees they are willing to work for and may not work for less. You can shop around for agents who will charge the lowest rates. Make sure that you know what services you will be receiving. The level of service may be less than the agent that works for a higher compensation.

The changes were made to benefit the public and to make the process of working with a real estate agent more transparent.

How long will it take to find my next home?

Buyers often wonder how long it will take for them to find the perfect home. It is important to know this in order to plan when to start the home search in earnest. According to the National Association of Realtors it typically takes about ten weeks to find a home. That is based on their data. I do NOT agree. That sounds like an eternity to me.

There is no way to predict how long it will take to find a home. Buyers often take as much time as they have to work with. If you hare not in a rush, you will take much longer than someone that has a short time frame and needs something quick. Market conditions will also affect how long it takes you to find a home. If there are a lot of homes for sale in the price range you are looking and there are not many buyers looking, you will have more control over how long it takes. If there are few homes for sale and many buyers competing for those few homes, it could take you longer to find a home. You cannot control supply and demand. In order to make your home search as efficient and stress free as possible here are some things to be aware of in searching for a home.

Know the areas you like

Know the areas that you are interested in before you begin your home search. You can certainly change your mind, but knowing the areas you are most interested in saves time looking in places you do not want to live. You can focus on the houses, because you know the location that you want.

Know your price

Know your price range. Get pre-approved for a mortgage before you start looking. Accept the reality of what you can afford and look at homes only in that range. Looking at your specific price range allows you to hone in on the perfect house for the money that you can spend. Don’t waste time looking above your price range. I know, you just want to see what a bit more money could buy. It is pointless and makes it difficult for you to like the houses that you can afford. Doing this also adds time to the process due to the psychological and emotional toll that it takes on your during the process.

See houses as soon as they are listed

Make sure you can take time to see a home as soon as it is listed. House hunting can be a daily process, not just saved for the weekend. Real estate cam be fast paced and the good homes sell fast. Try to be the first to see a home and you could be the one to make that home yours.

Make a strong offer

Make sure that your offer is strong the first time. In the world of real estate if you do not make a strong offer the first time you write, you may not get a second chance. The seller may have multiple offers to consider, or the seller may just reject the offer you have presented/. Don’t loose out on the house you want over a few thousand dollars. Make a strong offer the first time.

While you can’t control supply and demand or overall market conditions you can keep the length of time it takes you to find a house to a minimum if you remember these take aways.