3 Questions Every Buyer Should Ask Themselves

 If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market. Answering the following 3 questions will help you determine if now is actually a good time for you to buy in today's market.

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money. For example, a recent survey by Braunshowed that over 75% of parents say "their child's education is an important part of the search for a new home." This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the four major reasons why people buy a home have nothing to do with money. They are:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months.

What does that mean to you?

Simply put, if you are planning on buying a home that costs $250,000 today, that same home will cost you an additional $13,250 if you wait till next year. Your down payment will need to be higher as well to account for the higher home price.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The 'long term cost' of a home can be dramatically impacted by even a small increase in mortgage rates. The Mortgage Bankers Association (MBA), the National Association of Realtors, Fannie Mae and Freddie Mac have all projected that mortgage interest rates will increase over the next twelve months as you can see in the chart below: 

Bottom Line

Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

Who's Checking Your Credit?

Home Values Appraisers vs Homeowners

Home values assigned by appraisers were 1.93 percent lower than what homeowners estimated in June, according to the Quicken Loans’ national Home Price Perception Index (HPPI). The difference between value perceptions from appraisers and owners has slightly widened since May, when appraised values were 1.89 percent lower than expected.

Home valuations across the country rose in June, as reported by the Quicken Loans Home Value Index (HVI). The average home appraisal increased 0.84 percent since May and enjoyed a 4.47 percent boost since June 2015.

The June HPPI shows appraised values are 1.93 percent lower nationally than what homeowners estimated. While this isn’t a large discrepancy, the gap between expected and actual appraisal values grew slightly since May. The perception of home value varies widely across the country. Appraisals show home values higher than owner expectations by as much as 3 percent in Denver but, in contrast, were more than 3 percent lower in Baltimore, Detroit and Philadelphia.

“Perception is everything. It can make or break a home sale or mortgage refinance,” says Quicken Loans Chief Economist Bob Walters. “That’s why it’s so important for homeowners to realize how they perceive their home’s value could vary widely from how an appraiser views it. If the estimate is lower by just a few percentage points, the buyer could need to bring as much as another several thousand dollars to the table to avoid having to restructure the loan.”

Continuing the slow upward march, appraised values rose by 0.84 percent from May to June – as measured by the national HVI. Home values are making stronger annual gains, rising 4.47 percent since June 2015. The regional data shows equally robust growth. Each of the four regions measured displayed modest monthly gains and more meaningful year-over-year growth. The West remains the leader with a 5.84 percent annual increase in appraised value. The Northeast posted the smallest increase with a rise of 2.07 since last year.

“Nationally, home value increases are well within the healthy range,” says Walters. “Although, the variances across the country can influence owners’ perception. Owners in the West, where appraised values are rising more quickly, tend to underestimate their home’s value. The opposite is true for those in the Northeast, with appraised values showing slower growth.

Roadblocks to the American Dream

Here’s How Much You Need to Save Each Day to Buy a Home in 15 Top Cities

 New York City, N.Y.
Median home price: $413,900
Average down payment: 17.2% ($71,191 on a median-priced home)
Daily saving goal (5 years): $38.99
Daily saving goal (10 years): $19.49
Prices in the City That Never Sleeps may make homeowner hopefuls want to pack up and head for cheaper parts of the country. But you’d miss out on the world-class theater, museums, restaurants, and endless career opportunities.
The median sale price for those dreaming of a Manhattan address hit a record high of about $1.1 million in the second quarter of 2016, according to the most recent Elliman report. But those willing to buy in the city’s other boroughs—even hipster Brooklyn—as well as surrounding burbs can save bundles.
2. Los Angeles, Calif.
Median home price: $678,000
Average down payment: 18.3% ($124,074)
Daily saving goal (5 years): $67.95
Daily saving goal (10 years): $33.97
It may feel like you need the salary of a movie star or, at the very least, a Flo-from-Progressive-level commercial actress to afford your own digs in Los Angeles. But fortunately for those not being stalked by the paparazzi, a recent report by the Los Angeles County Economic Development Corp. projects that key employment sectors will add thousands of jobs in the next two years: health care; construction; and professional, scientific, and technical services. And there’s even a booming neighborhood where tech startups and outposts of companies like Google and Yahoo are clustered—it’s known as Silicon Beach.
3. Chicago, Ill.
Median home price: $264,900
Average down payment: 13.4% ($35,496.60)
Daily saving goal (5 years): $19.44
Daily saving goal (10 years): $9.72
Homes have been flying off the market in this Midwestern metropolis, with prices steadily climbing to about 5 percent higher in May than they were a year earlier, according to a recent report. And why wouldn’t they? A (relatively) laid-back alternative to the coastal cities, Chicago boasts pioneering theater companies, 20 Michelin-starred restaurants, and an increasingly vibrant music scene. It’s the future home of the Obama Presidential Center. And while winters can be rough, come spring Chicagoans enjoy 8,100 acres of parkland—not to mention 26 miles of public beaches.
But the secret is out: A recent analysis by realtor.com found that the downtown Loop neighborhood is one of the top 10 neighborhoods in the country for job growth, which is fueling household formation and new construction.
4. Dallas, Texas
Median home price: $333,400
Average down payment: 13.6% ($45,342.40)
Daily saving goal (5 years): $24.83
Although Dallas is in the middle of oil country, the slump in the price of crude doesn’t seem to be hurting its real estate market—at least, not yet. Home values rose 9.3 percent year over year in May, whereas the national rate was 5.9 percent, according to a recent CoreLogic report.
That makes sense as the population of the city has been growing as well (4.1 percent from July 2010 through July 2015, according to the U.S. Census Bureau), helped, no doubt, by the lower cost of living. Major companies are moving in, including Toyota, which is moving its North America headquarters from California to just outside Dallas, in Plano. The suburban city will also be home to the new regional headquarters of Fannie Mae.
5. Houston, Texas
Average down payment: 12.7% ($42,532.30)
Daily saving goal (5 years): $23.29
Daily saving goal (10 years): $11.65
Houston’s real estate market, on the other hand, got hit much harder by the turmoil in the oil industry. But the number of homes sold began to climb again in May, although year-over-year prices bucked the national trend by staying flat, according to the Houston Association of REALTORS®.
Still, the city isn’t all about oil—it’s also home to 26 Fortune 500 companies, and a realtor.com analysis last year found it was one of the top U.S. cities drawing millennial would-be home buyers.
6. Philadelphia, Pa.
Median home price: $235,000
Average down payment: 12.1% ($28,435)
Daily saving goal (5 years): $15.57
Daily saving goal (10 years): $7.79
Buying a home in the City of Brotherly Love is more affordable than in many of the other big Northeastern cities on this list, but here’s the thing: It doesn’t look like it will stay that way for long. Like the rest of the country, property prices are steadily rising.
They jumped nearly 22 percent this year alone, Kevin Gillen, senior research fellow at Drexel University’s Lindy Institute for Urban Innovation, told the Philadelphia Inquirer.
“The average Philadelphia home has achieved a new all-time high in value,” Gillen told the paper. But rest assured: It won’t approach New York levels anytime soon.
7. Washington, DC
Median home price: $439,900
Average down payment: 12.6% ($55,427.40)
Daily saving goal (5 years): $30.35
Daily saving goal (10 years): $15.18
Prices haven’t been rising quite so high in the nation’s capital as of late, and that has a lot to do with the uncertainty surrounding the presidential election, say local real estate agents. After all, whoever wins the Oval Office will determine who is placed in more than a few jobs in the city.
That’s a big reason why prices rose just 2.1 percent annually in the area in May. And by the time many aspiring homeowners save up that down payment and purchase a home, Hillary Clinton or Donald Trump might be gunning for a second term—and who knows what sort of impact that will have on real estate values!
8. Miami, Fla.
Median home price: $350,000
Average down payment: 14.1% ($49,349.99)
Daily saving goal (5 years): $27.03
Miami is known for its nonstop nightlife and Latin culture—the 2010 U.S. Census counted 70 percent of its residents as Hispanic. Located at the tip of the continental U.S., it’s no surprise that it’s known as the Gateway to the Americas, drawing people from across Latin America. The recent restoration of diplomatic ties—and soon, commercial flights—with nearby Cuba is sure to make its impact felt on the place many still call the Magic City.
But the number of sales here dropped about 10.4 percent annually in May, according to data from the Miami Association of REALTORS® provided to The Miami Herald.
Meanwhile, prices shot up as a strong dollar discouraged foreign buyers from snapping up those luxury condos at the same time that there are fewer foreclosures for investors and flippers to snap up, according to the Herald.
9. Atlanta, Ga.
Median home price: $269,900
Average down payment: 10% ($26,990)
Daily saving goal (5 years): $14.78
Daily saving goal (10 years): $7.39
Putting down roots in Atlanta, with its lower cost of living, burgeoning film industry, and usually pleasant weather, is still relatively affordable. But it may not stay that way for much longer.
The cost of purchasing a residence jumped 6.5 percent in April from a year earlier, above the national average, according to the latest S&P/Case-Shiller Home Price Indices report. That’s largely due to the lack of properties on the market at a time when more companies are moving down to the area, bringing a new crop of future Atlantans with them.
10. Boston, Mass.
Median home price: $449,900
Average down payment: 16.4% ($73,783.59)
Daily saving goal (5 years): $40.41
Home prices are steadily rising in the birthplace of the American Revolution—at the annual rate of about 5.7 percent in April compared with the same time a year earlier, according to the S&P/Case-Shiller report. That puts it right around the national average.
But hold on: Standard & Poor’s predicted in January that Boston home values will jump 24 percent by 2020! While the situation isn’t quite as bad as taxation without representation, lovers of the home of the Red Sox, The Pixies, The Freedom Trail, and Revere Beach, the country’s first public coastline park, should probably get a head start on saving as soon as possible.
11. San Francisco, Calif.
Median home price: $875,000
Average down payment: 21.8% ($190,750)
Daily saving goal (5 years): $104.46
Daily saving goal (10 years): $52.23
Holy moly! There’s no easy way to say this: Buying an abode in San Francisco ain’t cheap, so if you’re not well-off, you’d better start playing the lottery now. Some good news: While it remains one of the hottest real estate markets in the U.S., in June we started to see higher-priced homes flying off the market just a wee bit slower than before—perhaps a sign that the tide is finally turning.
Still, buyers shouldn’t hold their breath waiting for prices to soften on the city’s “affordable” residences. It might be a better plan to work on creating the next Snapchat. How hard could it be?
12. Detroit, Mich.
Median home price: $200,000
Average down payment: 12% ($24,000)
Daily saving goal (5 years): $13.14
Daily saving goal (10 years): $6.57
Buying a home in the former automotive manufacturing hub won’t set buyers back too much these days. Also, according to our calculations, it’s one of the U.S. cities where you can pay your mortgage off the fastest. Even so, interested buyers might want to get moving sooner rather than later.
In recent years, Detroit has been experiencing a resurgence as more startups, shops, and restaurants are moving in. That’s likely to lead to higher prices, so cash-strapped buyers should buy a home while they still can.
13. Phoenix, Ariz.
Median home price: $309,000
Average down payment: 11.9% ($36,771)
Daily saving goal (5 years): $20.14
Daily saving goal (10 years): $10.07
Plenty of buyers may still be able to swing the home prices in Arizona’s capital area, but they are going up—prices rose about 5.5 percent, according to the S&P/Case-Shiller report.
Still, you’ll get more bounce for the ounce than elsewhere. Our analysis found that Phoenix-area municipalities of Gilbert, Chandler, and Scottsdale offer some of the largest homes in America, and they’re likely to be relatively new construction as well. Speaking of Gilbert, it also made our list of boom towns with notable job growth, while Chandler is home to the satellite offices of several major tech companies.
14. Seattle, Wash.
Median home price: $445,000
Average down payment: 13.3% ($59,185)
Daily saving goal (5 years): $32.41
Daily saving goal (10 years): $16.21
Home prices here have been rising far faster than the national average. Seattle prices shot up 10.7 percent in April compared to the same time a year earlier, according to the S&P/Case-Shiller report.
Bidding wars have also been driving up the cost of homeownership, as about three-quarters of Seattle-area residences have been receiving multiple offers, according to a recent Seattle Times article. In a testament to how crazy it’s become, last month, more than 100 people were lined up, some of them having slept there overnight, to plunk down deposits on condos that haven’t even broken ground yet, according to the Times.
15. Minneapolis, Minn.
Median home price: $294,000
Average down payment: 11.2% ($32,928)
Daily saving goal (5 years): $18.03
Daily saving goal (10 years): $9.02
Even in the reasonably priced twin cities of Minneapolis and Saint Paul, prices rose 5.7 percent year over year in May—hitting their highest levels since well before the housing bubble burst in June 2006, according to the latest Minneapolis Area Association of REALTORS® report. And they can only be expected to keep on climbing.
This post was originally published on REALTOR.com.

Saving to Buy a Home? Do You Know the Difference Between Cost & Price?

 As a seller, you will be most concerned with the 'short term price' - where home values are headed over the next six months. As a buyer, you must be concerned not with price but instead with the 'long term cost' of the home. Many economists have pointed to Brexit (Britain's exit from the European Union) as a reason that interest rates will remain low for the next few months. But Trulia's Chief Economist Ralph McLaughlin warns that this will not always be the case in a recent post:

"While the departure of the UK from the European Union has driven down the 10-year bond, and thus mortgage rates, we expect them to rebound later in the year as uncertainty over the economic consequences of the departure lifts."

The Mortgage Bankers Association (MBA), the National Association of Realtors (NAR) and Freddie Mac all project that mortgage interest rates will increase by close to a full percentage point over the next twelve months. According toCoreLogic's most recent Home Price Index Report, home prices will appreciate by 5.3% over the next 12 months.

What Does This Mean as a Buyer?

Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.3% predicted by CoreLogic over the next twelve months

3 Crucial Questions Most Home Buyers Don't Know the Answer To...DO YOU?

 Whether you are considering the purchase of your first home or trading up to the home your family frequently fantasizes about, there are three crucial questions you must know the answer to:

1. What is the minimum down payment required to purchase a home?

2. What is the minimum FICO score required to qualify for a mortgage?

3. What is the maximum Back-End DTI Ratio allowed?

Best Buyer Tools

5 Ways to Save Money and Energy This Summer

Home improvements may improve the value of your home, but they often cost you a lot more. What if you could improve your home and save money at the same time? Summer is one of the best times of year to make some changes around your home that can help save energy, and therefore save you money as well. These five home projects are designed to help make your home more energy efficient - even during one of the most energy-heavy times of year - so you can save and enjoy your home more this summer.

1) Maintain Your HVAC UnitYour HVAC and AC unit need to be serviced each year, usually sometime in the spring or summer. Doing so can not only help ensure that it’s working when the temperatures hit their peak, it can also help save you money as well. Air conditioning maintenance helps ensure your unit is working at peak efficiency by keeping it clean and replacing any worn parts. This quick, yearly visit by a technician will help ensure your AC unit is working the way you want it to, when you want it to.

Cost
The cost of annual air conditioning maintenance averages out to around $100, but can go as high as $150, if you wait until the days are at their hottest.

Tips to Save Even More
Your AC’s filter is your best defense against dirt building up inside. Make sure you change it regularly to help the unit run more efficiently, which will help keep your monthly bills down.

DIY or Not?
Your HVAC unit should always be inspected and maintained by a qualified technician.

2) Repair Window Leaks
Did you know that even if your window isn’t leaking water when it rains, it could still be leaking air and raising your energy bills? Poor air seal or a large gap around your windows can account for as much as 40 percent of the money you use to heat and cool your home - a significant amount that just flies right out the window. Replacing your windows can help fix the air seal and save you a lot of money on your energy bills each month thereafter.

Cost
The average cost to replace your windows is about $830 for a vinyl sash window, but can go as high as $2650 for a wooden bay window replacement.

Tips to Save Even MoreReplace only the worst windows first, then use caulk to seal up the edges of the other windows to help stop energy loss while you wait to replace them all.

DIY or Not?
Window replacements should be carried out by professionals, but you can seal up air leaks yourself in the meantime.

3) Install an Attic Fan
The attic is often overlooked as one area that is responsible for a lot of the heat gain in your home. Attics often become superheated in the summer months with the combination of rising heat from below and the sun beating down from above. Installing an attic fan can help drop the temperature in your attic, which will prevent heat transfer back down into the rest of your home, making it more comfortable and lowering your energy bills.

Cost
The average cost of installing an attic fan is around $275 for a fan that can cool up to 2,500 square feet. Total costs can go as high as $321 for a fan that can cool 3,000 square feet.

Tips to Save Even More
Install a solar powered fan, which will cool your attic and won’t cost anything to run.

DIY or Not?
Attic fans should always be installed by a licensed electrician to minimize the risk of electric shock.

4) Install Window Shades
A lot of people assume that installing draperies is enough to give you the privacy and light blocking that you need. But if you live in a climate that sees a lot of sun in the summer months, drapes alone may not be enough to stop solar heat transfer through your windows. Installing window shades can help dramatically reduce the heat gain in your home, keeping things cool and comfortable inside, while helping to keep your energy bills down.

Cost
The average cost of installing window shades is around $500 to $600 for eight honeycomb shades. Total costs range from $250 for eight roller shades to $650 for eight Roman shades.

Tips to Save Even More
Make sure that your shades have a white, reflective surface on the side facing the windows to ensure that they will truly block the light and heat from entering your home.

DIY or Not?
You can easily install shades yourself with minimal tools and a few hours of time to save even more money.

5) Insulate Your Attic
The vast majority of homes are under-insulated, which means that a lot of the money you spend to heat and cool your home is going to waste. Attics in particular are in great need of extra insulation, because of the heat gain from the sun beating down on your roof, which can lead to your whole home rising in temperature. Adding some attic insulation will help keep your whole home cooler and more comfortable all summer long, resulting in lower AC bills.

Cost
The average cost to insulate an attic is around $897 for blown-in cellulose insulation in a 1,500 square feet space. Total costs range from $617 for R-13 roll insulation installed DIY to $1501 for R-19 roll insulation.

Tips to Save Even More

• Insulate the underside of your roof deck as well as your attic to help block additional heat transfer.
• Use the highest R-factor insulation that you can afford to get the most energy savings.

DIY or Not?
It is possible to install roll insulation yourself, but blown-in insulation should be done by a professional.

Save Energy, Save Money
No one likes to take on projects during the dog days of summer, but these five projects can help make your home a lot more comfortable and energy efficient once you’re done. Take on these five projects any time this summer to help get the most out of this time of year.

2 Tips For Getting The Most Money When Selling Your House

 Every homeowner wants to make sure they get the best price when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to ensuring you get the highest price possible.

1. Price it a LITTLE LOW

This may seem counterintuitive. However, let's look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).    Instead of the seller trying to 'win' the negotiation with one buyer, they should price it so that demand for the home is maximized. In that way, the seller will not be fighting with a buyer over the price, but instead will have multiple buyers fighting with each other over the house. Realtor.com, gives this advice:

"Aim to price your property at or just slightly below the going rate. Today's buyers are highly informed, so if they sense they're getting a deal, they're likely to bid up a property that's slightly underpriced, especially in areas with low inventory."

2. Use a Real Estate Professional

This too may seem counterintuitive. The seller may think they would net more money if they didn't have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional. Research posted by the Economists' Outlook Blog revealed that:

"The median selling price for all FSBO homes was $210,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $151,900. However, homes that were sold with the assistance of an agent had a median selling price of $249,000 - nearly $40,000 more for the typical home sale."

Bottom Line

Price your house at or slightly below the current market value and hire a professional. That will guarantee you maximize the price you get for your house.

BREXIT: What's the FIXIT for U.S. Home Buyers and Sellers?

 Now that much of the dust has settled and the panic has waned, let's take a look at what impact Britain's exit from the European Union may have on the U.S. housing market. The most immediate impact of Brexit will be on mortgage interest rates. Interest rates have remained at historic lows for the last several years. Contrary to what many experts believed, rates have remained low throughout the first half of 2016.

Possible impact of Brexit on mortgage rates?

In a recent article, the Washington Post explained:

"Brexit has spawned the recent bout of volatility in global financial markets. That has anxious investors scurrying for safety -- and few assets are safer than U.S. Treasuries. High demand for government debt pulls down interest rates. That all translates into ultra-low mortgage rates for American households. And with Britain voting for Brexit, they could go even lower."

However, the lower rates caused by Brexit may be short lived as Trulia Chief Economist Ralph McLaughlin pointed out in a recent post:

"While the departure of the UK from the European Union has driven down the 10-year bond, and thus mortgage rates, we expect them to rebound later in the year as uncertainty over the economic consequences of the departure lifts."

Bottom Line

Rates are already at historic lows. The UK's exit from the EU almost certainly guarantees they will remain low (and possibly go lower) over the next few months. If you were thinking of buying your first home or trading up to the house of your dreams, this may be the time to act. The cost of money may never be better for a potential buyer.

HAPPY 4th OF JULY