Real Life vs. Reality TV: 5 Myths Explained

 Have you ever been flipping through the channels, only to find yourself glued to the couch in an HGTV 'show hole'*? We've all been there... watching entire seasons of "Love it or List it," "Fixer Upper," "House Hunters," "Flip or Flop," "Property Brothers," and so many more, just in one sitting. When you're in the middle of your real estate themed show marathon, you might start to think that everything you see on TV must be how it works in real life, but you may need a reality check.

Reality TV Show Myths vs. Real Life:

Myth #1: Buyers look at 3 homes and make a decision to purchase one of them.

Truth: There may be buyers who fall in love and buy the first home they see, but more often than not the process of buying a home means touring more than three homes.

Myth #2: The houses the buyers are touring are still for sale.

Truth: The reality is being staged for TV. Many of the homes being shown are already sold and are off the market.

Myth #3: The buyers haven't made a purchase decision yet.

Truth: Since there is no way to show the entire buying process in a 30-minute show, TV producers often choose buyers who are further along in the process and have already chosen a home to buy.

Myth #4: If you list your home for sale, it will ALWAYS sell at the Open House.

Truth: Of course this would be great! Open Houses are important to guarantee the most exposure to buyers in your area, but are only a PIECE of the overall marketing of your home. Just realize that many homes are sold during regular listing appointments as well.

Myth #5: Homeowners make a decision about selling their home after a 5-minute conversation.

Truth: Similar to the buyers portrayed on the shows, many of the sellers have already spent hours deliberating the decision to list their home and move on with their life/goals.

Bottom Line

Having an experienced professional on your side while navigating the real estate market is the best way to guarantee that you can make the home of your dreams a reality! *Show Hole - A side effect of binge-watching. Symptoms include a sense of emptiness and depression brought on by realizing you just wasted a good portion of your life watching several seasons of a TV show or an entire movie franchise all at once when you could have managed your time bette

Would You Qualify for a Mortgage Now?

The widespread myth that perfect credit and large down payments are necessary to buy a home are holding many potential home buyers on the sidelines. According to Ellie Mae's latest Origination Report, the average FICO score for all closed loans in May was 724, far lower than the 750 or 800 that many buyers believe to be true. Below is a graph of the distribution of FICO scores of approved loans in May (the latest available data):  Looking at the chart above, it becomes obvious that not only do you not need a 750+ credit score, but 54.9% of approved loans actually had a score between 600 and 749. More and more experts are speaking up about the fact that if potential buyers realized they could be approved for a mortgage with a credit score at, or above, 600, the distribution in the chart above would shift further to the left. Ellie Mae's Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a mortgage: "The high median credit score is due to many millennials believing they won't qualify with the score they have - and are therefore waiting to apply for a mortgage until they have the score they think they need." (emphasis added) CoreLogic's latest MarketPulse Report agrees that the median FICO score does not always tell the whole story: "The observed decline in originations could be a result of potential applicants being either too cautious or discouraged from applying, more so than tight underwriting as the culprit in lower mortgage activity." It's not just millennials who believe high credit scores and large down payments are needed. Many current homeowners are delaying moving on to a home that better fits their current needs due to a belief that they would not qualify for a mortgage today. So what does this all mean? Moe put it this way: "Many potential home buyers are 'disqualifying' themselves. You don't need a 750 FICO Score and a 20% down payment to buy." Bottom Line If you are one of the many Americans who has always thought homeownership was out of their reach, meet with a local real estate professional who can help you start the process of being pre-qualified to see if you are able to buy now!

MARKET UPDATE FOR JULY

MARKET UPDATE FOR JULY

Even as prices rise in many communities, homes are selling faster now than they have in the past several years. This creates a situation where buyers need to move fast in order to secure homes, and they may have to pay more for them. While increasing prices generally coax more selling activity, there has been some hesitancy among potential sellers who worry that they will not be able to buy a desirable and reasonably priced home once they sell.

New Listings were down 5.0 percent for Single Family homes and 3.1 percent for Townhouse-Condo properties. Pending Sales decreased 47.1 percent for Single Family homes and 50.4 percent for Townhouse-Condo properties. 

The Median Sales Price was up 3.9 percent to $639,000 for Single Family homes and 6.5 percent to $410,000 for Townhouse-Condo properties. Months Supply of Inventory increased 8.6 percent for Single Family units and 10.3 percent for Townhouse-Condo units. Low housing supply has already prevented an outright national boon in sales activity, despite a continuation of near record-low mortgage rates and an unemployment rate under 5.0 percent deep into 2016. 

The issue is not purchasing power. Many areas are falling behind last year's closed sales totals simply because of lack of available inventory. As this continues, higher prices may put a deeper squeeze on the current buyer pool.

Thinking of Selling Your House? Pick the Right Agent!

 Today, more and more sellers are stepping back, taking a look at the advice real estate professionals give them, and asking themselves whether they can trust that advice. And that is exactly what they should do. The most important question you can ask when you are choosing a real estate agent is whether you feel you can trust them. You must know that they're giving you great advice, and that they're going to be able to help you accomplish your family's goals. You must trust your listing agent enough to allow them to:

• Handle the liquidation of possibly the largest asset your family has
• Help set the market value of that asset (get the price right)
• Set the timetable for the liquidation of that asset
• Set a fair fee for the services required to liquidate that asset

All four of these require a tremendous amount of trust. They're going to sell your prized possession, set its value, set a time schedule as to when your family will be able to move, and determine the fee that you're going to pay to get those three things accomplished. You have to trust your agent enough to allow them to help you and your family reach your dreams. Whether you're a grandfather up North looking to move to Florida to spend your later years with your grandkids, or a young person who wants to take that job in San Francisco but first has to get your house sold in Chicago, you need an agent you can trust to help you move on with what's important. Agents: The key to your success in the second half of 2016 will be your ability to build a large inventory of salable listings

What Does Home Mean To You?

 No matter what shape or size your living space is, the concept and feeling of home can mean different things to different people. Whether it's a certain scent or a favorite chair, the emotional reasons why we choose to buy our own home are, more often than not, the more powerful or compelling ones. Every year, The Joint Center for Housing Studies at Harvard Universityconducts a survey to find driving factors behind why Americans decide to buy a home. The top 4 reasons to own a home cited by participants of the survey were not financial.

1. It means having a good place to raise children & provide them with a good education

From the best neighborhoods to the best school districts, even those without children at the time of purchase may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.

2. You have a physical structure where you & your family feel safe

It is no surprise that having a place to call home with the means for comfort and security is the number two reason.

3. It allows you to have more space for your family

Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.

4. It gives you control over what you do with your living space, like renovations and updates

Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building, or do you want to finally adopt that puppy or kitten you've seen online 100 times? Who's to say that you can't in your own home? The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:

5. Owning a home is a good way to build up wealth that can be passed along to my family

Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?

Bottom Line

Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that make a house a home.