Tag: Home Buyer Information

Avoiding Regrets

Are you wondering if 2025 will be the year to move and buy a a home? If you are, you are not alone. Deciding whether to move and buy a home is a big decision. If you are considering a move, it is completely natural to fell anxious and unsure. It is a big change. You will be leaving something you know for the great unknown. That can be exciting, but you may be leaving familiar people and places behind. Will you regret this move? Most people do not regret moving somewhere new!

No regrets

A reason study on regret (https://studyfinds.org/the-road-not-taken-what-do-americans-regret-the-most/) nearly one third of baby boomers shared that they have regrets. Some of these regrets go way back more than thirty years and they still think about them more than three times a month. That is baby boomers, but what about younger people? Millennials report that they have regrets too. Some of these regrets include spending too much money, fighting with friends or family, and not speaking up for themselves. Notice that making a move or buying a house isn’t some of the top reasons for regret. In fact, only seventeen percent of those surveyed expressed regret over moving to a new area. This compares to half the people regret spending too much money. So, if you are thinking about moving, but are worried you might have regrets, flip that around and worry more about how you will feel, the future if you don’t take that step to buy a home and move now.

Work with an agent

Real estate agents can help you avoid regret. Working with an agent can make a huge difference by helping you reduce the chances that you will make a decision that you might later regret. Agent can share market insights with you. They know how to spot trends, and can help ensure that you buy at the right price. So you will have no regrets about spending too much money.

A real estate agent can also secure terms that benefit you. This will reduce the risk of buyers remorse. Agents know the different neighborhoods and the lifestyles that they offer. This will help you to find the right fit for you. Another thing that a real estate agent offers is emotional support. Your agent can be a great listener, help you cope with the feelings that you are wrestling with. Finally they can help you to make connections that will make you feel at home sooner. With the right agent by your side you can avoid any buyers remorse and find a home that fits you, your lifestyle and your future plans.

The Cost of Renting

If you are a renter, you’ve probably noticed that the cost of rent is high. But you have never known anything else, renting is what you do. Purchasing a place of your own is not something that you can even imagine. But have you ever consider the cost of rent over a lifetime? While you have been renting, have you ever thought about the long term costs of renting? Thinking about the big picture could be something that will motivate you to explore the idea of owning a place of your own.

According to a study done by Self Financial (https://www.self.inc/info.lifetime-cost-renting-america/). The average American will spend a staggering $333,065 on rent and related expenses over their lifetime. That is roughly $25,260 per year from age 22 to age 35. In Colorado, the annual number is more like $41,598. Additional costs include $12,145 for moving. The study factored in that renters move every couple of years. That is a lot of money. You may be asking why the study only figured from age 22 to age 35. I believe this may be because they figured that by that age many renters would have purchased a home. The study also factored in some additional expense like many renters only get about 25% of their security deposit back.

How can you keep the lifetime cost of renting down? It is scary to think of handing over that kind of money to a landlord. Let’s talk strategy and figure out how to minimize how much you spend on rent in a lifetime.

Live with family

The first way to save money on rent is to live with family for as long as possible. Not everyone can or wants to live with their family between the ages of 22 and 35, but if you can you are saving money. The reality is that many young adults do find themselves living at home. Eighty five percent of parents that were interviewed for the study listed above are thrilled to have their adult kids move back home. So live at home adn make an effort to save as much money as you can until you can afford to purchase a place of your own.

Move less often

Another way to save money on that lifetime cost of rent is to not move as often. The study mentioned above revealed that the average renter moves every 27.5 months. The study went on to say that a move, can cost a renter as much as $12,000. So if you rent, try to minimize how often you move. Not moving can add up to significant savings.

Don’t damage your rental

Another thing to consider when trying to save money is to avoid damaging the rental you are living in. The study above provided this statistic, 26% of renters surveyed claim to have lost their security deposit at least once. It is also estimated that renters will lose 25% of their security deposit over the course of time that they rent. It is true that landlords can sometimes make it tough to get your deposit back. But if you leave the place clean and it great condition, your landlord will not really have a reason to keep your deposit. This can save you money!

Renting for a period of time in life is almost unavoidable. There is nothing wrong with renting. But if you would like to purchase a home in the future, use this tips to save money. Then that down payment will be ready and waiting when you are ready to buy a home.

What NOT to Expect from Sellers

Congratulations you are under contract to buy a home. You are very excited and can hardly wait to move in. But what can you expect during the next phase of the transaction. Here are some things to remember that you should NOT expect of the seller during the under contract process.

No excessive showings

The first thing to remember, once you are under contract, is the house still belongs to the seller. During the under contract period the seller should allow you to get into the house for the necessary inspections. The seller should be willing to allow an additional quick showing for measurements. But, over and above those showings, endless visits to the house for whatever reason should not be expected. It is important to realize that it is still the owners home. They are living their lives and getting ready to move. They do not need a parade of people regularly visiting their home once the home is under contract.

No early move in

It is not uncommon to want to check and see if it is possible to move a few things in to the house before closing. It may happen that you end up in between places to live for a period of time, before you can close. If this happens it can be difficult to find a short term rental. In this situation, the question can come up, can we move in early? This is a tough request for the seller. The seller is trying to time their own move. It is also not in the best interest to allow for early move in or to allow the buyers to just move in a few things. When working with the seller, I always tell them to just say NO to this request.

No deliveries

Another thing that might happen, during the under contract period is needing to have things delivered to the new house. It would be so easy to just have it delivered early, before closing, and then you would not have to move it. As a buyer, if you are deliberately having Amazon or Wayfair deliver things to the house before closing you are not being appropriate. It is not the sellers responsibility to store or keep track of your belongings. The house is not yours until after closing. It is not uncommon for a piece of mail to be delivered to your new home before you close, but that is different than a delivery. No deliveries until the house is yours.

No head start on renovations

As a buyer, you may be buying a fixer upper. You are so anxious to get started on the renovations. It would be great if you could start before closing. You would like to ask the seller if it is okay. The short answer is NO! I know, I know, You just want to paint or have the hardwood floors sanded. Until it is your house, you need to stay excited and wait until after closing.

This blog post must seem like a lot of no’s. It is. Until after closing, the house belongs to someone else. Things happen and closings do not happen. If you have moved in or had things delivered to the home, what will happen now? Be patient and enjoy the process. The home will be yours soon enough. Schedule things to happen and packages to be delivered after closing.

2024 Real Estate in Review

What were the trends driving the real estate market in 2024? The year just ended was a mix for buyers and sellers. It was not an easy year for home buyers over all. It was particularly hard for first time home buyers that were dealing with higher interest rates and higher prices. The real estate market appears to be split into a couple of dominate groups. One is the first group is the first time home buyer that is struggling to get into the market. The other group is the current home owner, that may have a lot of equity and might be able to buy their move up home with cash.

First time home buyers

The percentage of first time home buyers has fallen to an historic low of only 24% according to the National Association of Realtors (NAR). As an example, prior to 2008 first time homebuyers made up 40% of the market. Today first time home buyers are finding that it take a lot of money to enter into the housing market. They have been hampered by high rent and may find themselves having a hard time saving the money for a down payment. The first time homebuyers that are able to get into the market to buy a home are older. The median age of first time home buyers in 2024 was at an all time high of 38 years of age.

Cash buyers

The other side of the real estate market in 2024 was the cash buyer. Cash buyers soared to an all time high of 26%, according to NAR data. Paying cash allows for these buyers to avoid a mortgage and the high interest rates that soared to over 7% in 2024. According to NAR, 31% of the repeat home buyers were able to pay cash for their home purchase. This is thanks to the appreciation that home owners have seen over the last several years.

Home sellers

That is the picture for homebuyers. What was 2024 like for home sellers? Nationally, home sellers were typically able to sell their properties at 100% of their asking price. This is the highest recorded list-to-sell median since 2002. Due to high demand sellers were likely to sell their homes quickly also. The majority of home sellers did not need to offer a sales incentive.

Bright spots in the market

There are two very bright spots in the housing market. One is for single women with no children or SINKs as they are called. Household with single incomes, women in particular, made up 20% of the home sales over the last year. Young males, on the other hand, only make up 8% of the home sales.

The other bright spot in the housing market is new home sales. New home sales nationally accounted for 15% of home sales. That is the highest number in seventeen years. Homebuyers are drawn to new construction for many reasons. Some reasons include the incentives that are being offered by builders, including a buy down of interest rates on the buyer’s loan. New homes also provide buyers with the ability to customize their home design and the ability to avoid renovations and problems with major mechanical systems in the home.

The National Association of Realtors update for 2024 shows a real mixed bag regarding the real estate market. First time homebuyers are struggling and sellers are doing well. The best way to stay updated on the market and how it affects you is to connect with an agent that you know like and trust that can guide you and help you to make good decisions in the market.

Are you ready to take out a mortgage?

Most buyers buy their home by taking out a mortgage. That can feel like a huge commitment and something that you may not feel like you are ready for. CNBC reported that an estimated 7.9 million renters were actually income “mortgage ready” to buy a home. What does that mean? It means that those people were qualified to buy and could have bought a home. This information is according to an analysis for the 2022 American Community Survey by the U.S. Census Bureau. Some of the people that were questioned may be perfectly happy to continue to rent. Others may not have been aware that they could qualify for a mortgage and would have bought if they knew that they could. If you are currently renting, but would love to buy, here are four things that may be keeping you from knowing that you are “mortgage ready.”

Fear of Rejection

The first thing that may be keeping you from applying for a mortgage is the fear of rejection. No one liked getting rejected, that is understandable. You may be underestimating your financial abilities and over estimating the strictness of the mortgage requirements. If you look past your fear and reach out to get pre-approved you can find out. Most lenders will also make a plan with you, if you are not ready. The plan can get you to a place that you are pre-approved.

Not Feeling Worthy

You may not feel like you are homeowner material. If you did not grow up in a family that owned a home, you may not feel that it is something that you can or should do. Renting is all that you have ever known. You may not see the benefits. The number one benefit is to build wealth.

Thinking the Process is too Difficult

Another reason you may not take the step to get pre-approved is because applying for a mortgage sounds like it is too complicated. The process probably sounds like it would require a lot of paperwork and time. The whole process from application, to closing can take 3 weeks to a month. But the pre-approval process may take you only a few minutes. In many situations a lender, that will be providing you with the loan, can tell you if you qualify, and how much money you can spend in a few short minutes. All you have to do is give them a call or fill out an online application, providing them with some basic information.

Assuming that Renting is Cheaper

A common misconception is that renting is always a more affordable option than buying a home. This may be another reason why you have not looked into applying for a mortgage. Depending on your area, and market conditions, buying a home can be more cost affective than renting. In addition. homeownership allows to grow your net worth by building equity. There are also potential tax advantages.

Don’t shut the door on homeownership before you explore if you can qualify and if the situation makes sense for you to buy. Call or email a trusted lender and real estate agent to explore your options.

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.

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

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.