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First-Time Home Buyers Continue to Put Down Less Than 6%!

by Keeping Current Matters

First-Time Home Buyers Continue to Put Down Less Than 6%!

According to the Realtors Confidence Index from the National Association of Realtors, 61% of first-time homebuyers purchased their homes with down payments below 6% in 2017.

Many potential homebuyers believe that a 20% down payment is necessary to buy a home and have disqualified themselves without even trying, but in March, 71% of first-time buyers and 54% of all buyers put less than 20% down.

Ralph McLaughlin, Chief Economist and Founder of Veritas Urbis Economics, recently shed light on why buyer demand has remained strong,

“The fact that we now have four consecutive quarters where owner households increased while renters households fell is a strong sign households are making the switch from renting to buying.

Households under 35 – which represent the largest potential pool of new homeowners in the U.S. – have shown some of the largest gains. While they only make up a third of all homebuyers, the steady uptick in their homeownership rate over the past year suggests their enormous purchasing power may be finally coming to [the] housing market.”

It’s no surprise that with rents rising, more and more first-time buyers are taking advantage of low-down-payment mortgage options to secure their monthly housing costs and finally attain their dream homes.

Bottom Line

If you are one of the many first-time buyers unsure of whether or not they would qualify for a low-down payment mortgage, consult a local real estate professional who can set you on your path to homeownership!

RISING INTEREST RATES HAVE NOT DAMPENED DEMAND

by Keeping Current Matters

Real estate professionals around the country have not noticed a slowdown in demand for housing among young buyers; nearly 93% of all first-time homebuyers last quarter were between the ages of 21-35, with the largest share of buyers (51%) coming from those ages 26-30.

First American’s Chief Economist Mark Fleming had this to say,

“On a national level, mortgage rates would need to hit 5.6%, 1 percentage point above the current rate, before first-time homebuyers withdraw from the market.”

So, what is slowing down sales?

According to the last Existing Home Sales Report from the National Association of Realtors, sales are now down 3.0% year-over-year and have fallen for the last three months. If rising interest rates aren’t to blame, then what is?

Fleming addressed the cause, saying that:

“The housing market is facing its greatest supply shortage in 60 years of record keeping, according to the Federal Reserve Bank of Kansas City. The ongoing housing supply shortage will make it difficult for first-time buyers to find a home to buy, even when they are financially ready.”

Bottom Line

First-time homebuyers know the importance of owning their own homes and a spike in interest rates is not going to keep them from buying this year! Their biggest challenge is finding a home to buy!

Why Should You Use A Professional To Sell Your Home?

by Keeping Current Matters

When homeowners decide to sell their houses, they obviously want to get the best possible price for their home with the least amount of hassles along the way. However, for the vast majority of sellers, the most important result is actually getting their homes sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed a buyer’s behavior during the home buying process. According to the National Association of Realtors’ 2018 Home Buyer & Seller Generational Trends Report, the first step that “42% of recent buyers took in the home buying process was to look online at properties for sale.”

However, the report also revealed that 94% of buyers who used the internet when searching for homes ultimately purchased their homes through either a real estate agent/broker or from a builder or builder’s agent. Only 2% of buyers purchased their homes directly from a seller whom they didn’t know.

Buyers search for a home online but then depend on an agent to find the home they will buy (52%), to negotiate the terms of the sale (47%) & price (38%), or to help understand the process (60%).

The plethora of information now available has resulted in an increase in the percentage of buyers who reach out to real estate professionals to “connect the dots.” This is obvious, as the percentage of overall buyers who have used agents to buy their homes has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

HOW TO REMOVE LAYERS OF WALLPAPER

by REBAC Staff

                     

Removing “dated” wallpaper from your home can be a real chore, but there are a few ways you can make it a bit easier. This DIY project is a great way to help update your new home’s appearance without investing a great deal of money.

Step 1. Determine what type of wall structure is under the paper.

If you don’t know what kind of wall you have, the easiest way to find out is to remove a light switch plate and look inside. In a matter of seconds, you should be able to tell if the underlying surface is drywall, plaster, or paneling.

It’s important to know the base material, to determine how wet you can safely get the paper without damaging the underlying wall surface. Plaster and (most) paneling can take more water during the removal process than drywall (also called gypsum board). Drywall is coated with paper and will absorb any water that is applied. Once wet, it’s easy to damage this material.

Step 2. Gather the tools you will need.

This includes:

  1. Drop cloths/plastic sheeting to protect the floor (preferably disposable ones, so you can just throw them away when you’re finished).
  2. Wallpaper removal solution can be purchased at your local hardware store, or you can make your own by combining bargain-brand fabric softener with equal parts of hot water.

The hotter the water, the faster the solution will soak in and the easier it will be to remove the paper. Mix up small batches, and use it before the solution gets cold.

  1. Equipment to apply water to the walls. There are several methods to select from:
     
  • Steam machines can be rented to “steam off” the layers. These entail a rental charge and often result in steam burns for the person using them. Previously quite common, this method has lost favor in recent years.
  • Sponge mops can be dipped in water, or a wallpaper removal solution, and applied to the walls. This method is effective on walls that can handle the excess moisture, but it also means the solution runs down the handle and down the arms of the person applying it.
  • A hand-held spray bottle can be filled with hot water and wallpaper removal solution. This method works and works well, but it’s much slower. It may be perfect for removing a border, because it will reduce the mess of excess water and will be easier to direct. For large walls and whole rooms of wallpaper, you need a better method.
  • A garden “pump” style sprayer is probably the best way to get water onto the paper. You can control the stream, the strength of the spray, and the walls of the pressurized container will retain the heat of the hot water/remover solution better than a spray bottle or an open bucket, using the sponge mop method.
     
  1. Scraping tools are the work horse of this job. Your best option is a semi-flexible 3-inch blade scraper. Use this to remove any loose wallpaper, before wetting, and to remove damp wallpaper from the wall. You may also want a 1-inch putty knife for working around doors, windows, and tough-to-reach areas. A wider scraper can also be used if your wallpaper is easily releasing its hold.
  2. Scoring tools may, or may not, be helpful. They are used to make tiny holes in the wallpaper, allowing the water to seep in and loosen up the glue.

This is fine on a plaster surface that won’t be damaged by the tool. On drywall, however, this tool will also make tiny holes in the paper surface of the board, allowing water to seep into the chalk interior. If you have wood paneling under your wallpaper, the tool may scratch or mar the wood’s finish.

  1. Sponge, dishwashing soap and hot water for completing the job. A bucket or dishpan with soapy hot water will help you clean your sponge as you remove the last of the glue from the walls and clean up any messes.

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Step 3. Prepare the area.

This is going to be messy, so be sure to protect floors, woodwork, furniture, and other items from accidental over-spray, from dripping, and from sloshy wads of old paper mache. (After all, you make paper mache with paper, glue, and water, right?) Once it sets up, paper mache is super hard and durable.

Imagine how difficult it will be to remove a wad or even a smallish fleck of paper mache from your floor, furniture, or upholstery. Prevention is your best friend.

Step 4. Start soaking and scraping!

Listen to your favorite music, take your time, and be patient… It’s going to take a while. Admire your progress, rather than focusing on the work that still needs to be done.

Removal Tips

If the paper you are removing has a plastic or vinyl component, you may be able to get the wallpaper “started” in a corner. Spray your removal solution under that corner, then slowly peel back the paper in a whole sheet as the glue softens and dissolves.

Be careful not to over-soak the wall underneath (if it’s drywall). Be patient. It may take some time for the glue to soften. It’s much more efficient to wait than to pull too soon and tear the paper. In that case, your only option is scraping.

No matter what type of wallpaper you are removing, it’s best to start at the edge of a wall, at the woodwork, or at a seam. Starting in the middle of a sheet will be more difficult and will make it harder to lift big pieces at once.

If You Have Multiple Layers

On old plaster walls, it was common to wallpaper over existing wallpaper, and then to wallpaper over that, and so on. Most of this older wallpaper is uncoated, decorated paper and will readily absorb the water from your sprayer. Be patient and remove one layer at a time. Trying to remove multiple layers at once will usually take longer, and be more frustrating, than removing each layer individually.

Step 5. Clean up.

Use your sponge, rinsed in soapy water to wipe down the walls. This will be the final step, after the wallpaper is removed, to eliminate any remaining remnants of glue. Be sure your sponge is wrung out so you aren’t soaking the wall (particularly important on drywall surfaces).

When finished, towel-dry the walls and let them air-dry overnight before painting or doing any other finishing work on your new, paperless walls. Be sure to patch and make any needed repairs after the walls are fully dry, before painting or adding any new wall treatments.

 

Papering walls is a trend that comes and goes. That’s not a problem. Paint is currently more popular than wallpaper, and that’s not a problem either. The problem occurs when the two trends intersect, in the wrong order. It’s okay to place wallpaper over paint, but not paint over paper.

People do it. Perhaps the people who lived in your home before you did it. It’s tempting to imagine they wanted to harass you from afar, for what seems like forever. It’s kind of like a haunting.

No, seriously, people paint over paper for a number of reasons (and none of them have to do with you).

Why Would Someone Paint Over Wallpaper?

  • It seemed like a quick fix to update an old look.
  • Painting sounded much easier than stripping wallpaper, cleaning the glue and residue off the walls and THEN painting.
  • Their crazy Aunt Martha assured them it would work.
  • They were afraid of what they would find under the wallpaper: cracks, crumbling walls, or (gasp) even more wallpaper!
  • They didn’t know you weren’t supposed to paint over wallpaper and never even considered the position they would leave a future owner in by doing so.

See? None of these have anything to do with you. And yet, here you are, scratching your head and trying to figure out how to right the wrongs and fix this situation.

What Happens When Someone Paints Over Wallpaper?

Aside from frustrating future owners of the home, there are other things that can (and do) happen when you paint over wallpaper. Without proper priming, based on both the type of wallpaper AND the type of paint to be used, it can create a variety of problems:

  • Paint can simply fail to adhere to certain types of wallpaper.
  • Textures (like floral patterns) that initially appeared flat become REALLY obvious on a solid, painted wall.
  • Paint can make the wallpaper form bubbles and start curling at the edges and in corners.
  • The paper can “fail” and begin falling off here and there.
  • The paper will lose its porous nature and become thicker and stiffer, meaning you can no longer soak it off the walls.

In short, painted wallpaper often means headaches for anyone who eventually decides to remove it.

What Can You Do About It After the Fact?

Removing wallpaper is never easy. When the paper has been painted, it’s going to be difficult, and possibly impossible, to remove it without some damage to the underlying wall and additional repair work. If you have plaster walls, you have a fighting chance to avoid wall damage. If you have drywall (also called sheetrock or gypsum boards), not so much.

To remove the paper, you’ll have to punch holes through the paint to allow water to access the paper underneath. A scoring tool, sometimes called a “paper tiger,” will help accomplish this without causing undue damage to the wall underneath.

Once you’ve punched holes, you can rent a steam machine to remove the wallpaper or you can use a chemical remover, which dissolves the glue – if you have managed to pierce the paper so the chemicals can reach the glue. Steam is preferable, because it’s safer and less toxic.

After the glue is softened, begin removing the paper by pulling at loose corners and/or using a scraping tool. It often takes multiple attempts to even get water to the paper and even more attempts to get all the wallpaper off. Be patient, you are in this for the long haul.

It’s not going to be an easy project, but it is possible to undo the damage caused by painting over wallpaper. Good luck!

4 Reasons Why Summer Is a Great Time to Buy a Home!

by Keeping Current Matters

Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Insights reports that home prices have appreciated by 7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.

Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have increased by half a percentage point already in 2018 to around 4.5%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by nearly a full percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

5 Reasons Why to Sell This Summer!

by Keeping Current Matters

Here are five reasons listing your home for sale this summer makes sense.

1. Demand Is Strong

The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase…and are in the market right now! More often than not, multiple buyers are competing with each other to buy the same home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory has declined year-over-year for the last 35 months and is still under the 6-month supply needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.

Historically, the average number of years a homeowner stayed in his or her home was six, but that number has hovered between nine and ten years since 2011. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the average time it took to close a loan was 41 days.

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, AND you’ll be able to find a premium home to call your own!

Prices are projected to appreciate by 5.2% over the next year, according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

5. It’s Time to Move on With Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

Drop in Inventory Fuels Sales Slowdown

by Keeping Current Matters

Drop in Inventory Fuels Sales Slowdown [INFOGRAPHIC] | Keeping Current Matters

SELLING YOUR HOUSE ON YOUR OWN COULD COST YOU

by Keeping Current Matters

In this extremely hot real estate market, some homeowners might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.

However, a study by Collateral Analytics reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)

Why would FSBOs net less money than if they had used an agent?

The study makes several suggestions:

  • “There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
  • “Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
  • “Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.

Conclusions from the study:

  1. FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
  2. The data suggests the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

As Dave Ramsey, America’s trusted voice on money, explains:

“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”

What If I Wait Until Next Year to Buy a Home?

by Keeping Current Matters

What If I Wait Until Next Year to Buy a Home

We recently shared that national home prices have increased by 6.7% year-over-year. Over that same    time period, interest rates have remained historically low which has allowed many buyers to enter the  market.

As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage      interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.2% over the next 12 months.

What Does This Mean as a Buyer?

If home prices appreciate by 5.2% over the next twelve months as predicted by CoreLogic, here is a      simple demonstration of the impact that an increase in interest rate would have on the mortgage        payment of a home selling for approximately $250,000 today:

What If I Wait Until Next Year to Buy a Home? | Keeping Current Matters

Bottom Line

If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

Displaying blog entries 1-10 of 45