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For Buyers

What is the Best Investment for Americans?

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What is the Best Investment for Americans? | Simplifying The Market

Some are reporting that there is trepidation regarding the real estate market in the United States. Apparently, the American people are quite comfortable.

Porch.com, a major network helping homeowners with their renovation projects, recently conducted a survey which asked Americans:

“What do you believe is the safest investment over the next 10 years?”

U.S. housing came in at number one, beating out other investments such as gold, stocks, bonds, and savings.

Here is a graph showing the top five investments Americans selected:What is the Best Investment for Americans? | Simplifying The MarketThe findings of the Porch.com survey also coincide with two previous surveys done earlier this year:

  1. The Federal Reserve Bank’s 2019 Consumer Expectations Housing Survey reported that 65% of Americans believe homeownership is a good financial investment, and that the percentage has increased in each of the last four years.
  2. The Gallup survey showed that Americans have picked real estate as the “best” investment for six straight years.

Bottom Line

Based on all three surveys done this year, we can see that Americans still believe in homeownership as a great investment, and that feeling continues to grow.

Is A Bigger House Within Your Budget?

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Is A Bigger House Within Your Budget? | Simplifying The Market

At this time of year, many families come together to celebrate the season. It’s also the time when many realize their homes are just not quite big enough to host all of their guests and loved ones. Are you one of those homeowners dreaming for a larger space to call home?

You may have enough equity in your current home to move up.

According to the Q3 2019 U.S. Home Equity & Underwater Report by ATTOM Data Solutions,

“14.4 million residential properties in the United States were considered equity rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.”

This means that one in four of the 54 million mortgaged homes in the U.S. have at least 50% equity. If these homeowners decide to sell, they can use their equity to put toward the purchase of a new home. Maybe you’ll be one of them.

NAR recently released their 2019 Profile of Home Buyers and Sellers showing that,

“This year, home sellers cited that they sold their homes for a median of $60,000 more than they purchased it, up from $55,500 the year prior. This accounted for a 31 percent price gain, up from 29 percent the year before.”

Here’s the equity gain breakdown based on the number of years these sellers lived in their homes:Is A Bigger House Within Your Budget? | Simplifying The Market

Bottom Line

If you’re one of the many homeowners with big dreams of owning a larger home, let’s get together. Working with a trusted advisor to find out how much equity you have is a great first step in putting your move-up plan in motion.

It’s ‘National Roof Over Your Head’ Day!

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It’s ‘National Roof Over Your Head’ Day! | Simplifying The Market

Did you know that each year in the United States, we celebrate “National Roof Over Your Head Day” on December 3rd?

As noted on the National Calendar, it was “created as a day to be thankful for what you have, starting with the roof over your head. There are many things that we have that we take for granted and do not stop to appreciate how fortunate we are for having them.”

From bungalows to cottages, and farmhouses to treehouses, today we show our appreciation and gratitude for the places we call home. Owning the roof that shelters us is something many renters still aspire to, knowing there are so many financial and non-financial benefits to homeownership.

According to the 2019 State of the Nation’s Housing from the Joint Center for Housing Studies of Harvard University,

“Cost-burdened renters now outnumber cost-burdened homeowners by more than 3.0 million. In addition, renters make up 10.8 million of the 18.2 million severely burdened households that pay more than half their incomes for housing.”

Homeownership drives many benefits, including providing families with a place to feel secure. It also helps promote confidence that they are investing proactively in themselves and their communities. That is why there are 77.7 million owner-occupied housing units in the United States.

Many, however, fear it is too expensive to own a home. In reality, however, it’s actually more expensive to rent. Here’s the breakdown as a percentage of income necessary for both – affording median rent and owning a home:It’s ‘National Roof Over Your Head’ Day! | Simplifying The Market

Bottom Line

Today we pause to appreciate the places we call home, and all of the other reasons we have to be truly thankful. For those who don’t own yet and would like to, it’s a wonderful time to start identifying the steps to take toward homeownership. Let’s connect today to begin creating your plan.

Buyers Are Looking For Your Home [INFOGRAPHIC]

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Buyers Are Looking For Your Home [INFOGRAPHIC] | Simplifying The Market

Buyers Are Looking For Your Home [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Existing Home Sales are currently at an annual pace of 5.46 million.
  • The inventory of existing homes for sale remains below the 6 months needed for a normal market and is now at a 3.9-month supply.
  • Inventory remains low due to high demand from buyers who are still looking for a house to buy!

The True Cost of Not Owning Your Home

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The True Cost of Not Owning Your Home | Simplifying The Market

There are great advantages to owning a home, yet many people continue to rent. The financial benefits are just some of the reasons why homeownership has been a part of the long-standing American dream.

Realtor.com reported that:

“Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option…as people get more savings in their pockets, buying becomes the better option.”

Why is owning a home financially better than renting?

Here are the top 5 financial benefits of homeownership:

  1. Homeownership is a form of forced savings.
  2. Homeownership provides tax savings.
  3. Homeownership allows you to lock in your monthly housing cost.
  4. Buying a home is less expensive than renting.
  5. No other investment lets you live inside of it.

Studies have also shown that a homeowner’s net worth is 44x greater than that of a renter.

A family that purchased a median-priced home at the start of 2019 would build more than
$37,750 in family wealth over the next five years with projected price appreciation alone.

Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment – along with a profit margin!

Bottom Line

Owning a home has many social and financial benefits that cannot be achieved by renting. Let’s connect to determine if buying a home is your best move.

7 Reasons to List Your House This Holiday Season

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7 Reasons to List Your House This Holiday Season | Simplifying The Market

Around this time each year, many homeowners decide to wait until after the holidays to list their houses. Similarly, others who already have their homes on the market remove their listings until the spring. Let’s unpack the top reasons why listing your house now or keeping it on the market this winter may be the best choice you can make.

Here are seven great reasons not to wait:

  1. Relocation buyers are out there now. Many companies are still hiring throughout the holidays, and they need their new employees to start as soon as possible.
  2. Purchasers who are looking for homes during the holidays are serious buyers and are ready to buy now.
  3. You can restrict the showings on your home to days and times that are most convenient for you. You will remain in control.
  4. Homes show better when decorated for the holidays.
  5. There is minimal competition for you as a seller right now. Over the past few months we’ve seen the supply of homes for sale decreasing year-over-year, as shown in the graph below:7 Reasons to List Your House This Holiday Season | Simplifying The Market
  6. The desire to own a home doesn’t stop during the holidays. Buyers who were unable to find their dream homes during the busy spring and summer months are still searching, and your home may be the answer.
  7. Late fall and early winter make up the “sweet spot” for sellers. The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will continue to surge and reach new heights in 2020, which will lessen the demand for your house next year.

Bottom Line

It may make the most sense to list your home this holiday season. Let’s get together to determine if selling now is your best move.

The Cost Across Time [INFOGRAPHIC]

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The Cost Across Time [INFOGRAPHIC] | Simplifying The Market

The Cost Across Time [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • With interest rates around 3.66%, now is a great time to look back at where they’ve been over the past few decades. Comparatively, they’re pretty low!
  • According to Freddie Mac, rates are projected to increase to 3.9% by this time next year.
  • The impact your interest rate has on your monthly mortgage payment is significant. An increase of just $20 dollars in your monthly payment can add up to $240 per year and $7,200 over the life of your loan.
  • Maybe it’s time to lock in now, while rates are still historically low.

 

Buyers Are Looking Now. Are You Ready to List Your Home?

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Buyers Are Looking Now. Are You Ready to List Your Home? | Simplifying The Market

Inventory on the market today is low, especially among existing homes in the entry and middle-level tiers of the market. It is hovering well below the 6-month supply typically found in a more normal market, as shown in the graph below:
Buyers Are Looking Now. Are You Ready to List Your Home? | Simplifying The MarketWith inventory being one of the biggest housing market challenges today, finding a starter home right now isn’t easy. According to the Q3 Housing Trends Report from the National Association of Homebuilders (NAHB), 68% of those searching for a home think their search will get harder or stay about the same over the next 12 months.

The same study reveals,

“In Qtr3’19, buyers actively engaged in the process of buying a home are more likely to have spent at least 3 months searching (58%) than a year earlier (55%).”

 This is certainly no surprise, given the current inventory status. So, what’s the good news? The NAHB continues to say,

“If still unable to find a home in the next few months, the next step for most long-time searchers is to continue looking for the ‘right’ home in the same preferred location (52%). The next step for 35% is to expand their search area and for 16% is to accept a smaller/older home. Only 15% will give up looking.”

What does this mean for homeowners?

 If you’re thinking of selling your home, buyer demand is high – and those looking in your neighborhood aren’t planning on giving up anytime soon. The majority of potential buyers who are still searching for their dream home are eager, willing, and ready to buy, so maybe it’s time to list your house and make your move.

Bottom Line

With buyer demand as high as it is today, and inventory in the entry and middle-tier markets remaining low, it’s never been a better time to move up. Let’s get together to determine if now is your time to sell.

Expert Advice: 3 Benefits to Owning a Home

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Expert Advice: 3 Benefits to Owning a Home | Simplifying The Market

Success is something often worth repeating, and Brent Sutherland, a Certified Financial Planner and Real Estate Investor, has certainly made his way in a momentum-driving direction. Here are 3 tips he shares from a recent piece in Business Insider on the benefits of owning real estate:

1. Real estate diversifies your income

“While it is certainly important to be properly diversified with your investments, it is even more important to be diversified with your income. This is because the largest financial risk for most of you is the loss of your primary source of income, which is typically in the form of a day job.”

The article highlights how having multiple sources of income, such as those derived from real estate investments, can eventually lead to relying less and less on a day job. Sound dreamy? It can be. When done well, real estate investments may eventually open up your time and the financial freedom to explore other things, like travel and other aspirations you may have for the future, particularly in the golden years of retirement.

2. Real estate produces near-immediate results

“You can achieve and feel the results almost immediately. Property improvements are visible and tangible. You can cash, spend, and invest rent payments. Today! Not 30 years in the future.”

Currently, home prices are appreciating in all price ranges, and just last week CoreLogic announced their 12-month home value projection at 5.6%, an increase from 4.5% noted earlier this summer. With that in mind, real estate today is definitely driving immediate results!

3. Passive income can help you become financially independent sooner

“If you need $40,000 a year to live, you could alternatively invest in assets that generate an 8% cash-on-cash return. This is a very reasonable assumption. And it means you would only need to save a total of $500,000 (instead of $1 million). Yet, your investments would still meet your annual household living needs.

While returns, taxes, and inflation can, of course, affect your timeline, cash-flowing real-estate is a clear asset.”

Homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you’re contributing to your net worth by increasing the equity in your home, bringing you one step closer to true financial independence.

Bottom Line

If you want to increase your savings and overall net worth, real estate is a great way to go. To learn how you can make it happen, let’s get together to discuss the process.

Who is Brent Sutherland?

Sutherland was 35 when he bought his first single home to rent out for income, less than five years later, he owns eight additional properties and part of a commercial real estate project.

14 STEPS TO BUYING A HOME

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1. Get Pre-approved for a Loan
Before you start house hunting and making offers, you’ll need to begin the process of getting pre-approved for
a mortgage or loan. Pre-approval means you won’t waste time considering homes you cannot afford, and
ultimately makes your purchase offer competitive. You’ll need: copies of recent pay stubs, statements, and
copies of your past two W-2’s. We can recommend several excellent lenders.

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2. Decide on Your Budget
Calculate your down payment, your ability to qualify for a mortgage, and the closing costs associated with your
transaction to figure out a number you’re comfortable with — and how much home you can afford. Most loans

today require a down payment between 3.5-25% depending on the type and terms of the loan. There are zero-
money-down programs that you may qualify for, however, you will need to consult with your preferred lender to

determine which best suits your needs. Your mortgage payment to the lender can include the following items:
a. Principal and interest on the loan
b. Property taxes
c. Homeownerʼs insurance
d. Private Mortgage Insurance (PMI) if you put less than 20% down

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3. Explore Potential Neighborhoods
Exploring neighborhoods at different times of day (morning/mid-day/evening/weekdays vs. weekends) and
visiting local shops, restaurants, and parks can help you get a great feel for a neighborhood. Yelp reviews,
Google Reviews, and Google Maps are helpful tools for investigating everything from local school ratings to
average commute times.

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4. Start House Hunting
After loan pre-approval, you’ll be ready to kick-start the search. Be prepared to discuss with your REALTOR®
what you’re looking for in a future home. You’ll also need a list of your preferred neighborhoods or
communities. Think about your must-haves, like-to-haves, and deal breakers.

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5. Submit the Offer
Once the Paras Team help you find a home you love, you’ll work with us to create an offer. You’ll need: a pre-
approval letter from your lender; a personalized offer letter detailing what you love about the home (these are

particularly helpful in multi-offer situations); to decide on an Earnest Money deposit amount; to strategize
contract deadlines; and a list of comparable sales or Comparative Market Analysis report (your Paras Agent will
provide this for you).

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6. You’re Under Contract!
The offer has been submitted, negotiated, and accepted: you’re under contract! The process from here to the
finish line is generally around 30 days. Remember: within the first 4 days of acceptance, you’ll need to deposit
your Earnest Money check or wire at the Title Company.

Jessie Anderson
REALTOR®
Licensed Personal Assistant
801-673-8240
Jessie@ParasRealEstate.com

Kierstin Pierce
REALTOR®
801-809-6610
Kierstin@ParasRealEstate.com

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7. Lock in Your Interest Rate
Now that the home-buying process is off to a good start, be sure to call your mortgage lender to lock in your
interest rate. This will help prepare you for potential surprises at the closing table. Remember: do not make
any large purchases or open any lines of credit during the next 30 days! This could affect your credit and your
ability to obtain the loan.

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8. Home Inspection
You’ll have about 14 days to inspect the house during your Due Diligence Period. Find a home inspector you
trust to examine the home from top to bottom; we can provide a list of recommended inspectors. Consider
testing for radon gas, meth, mold, lead, or structural issues. You’ll want to be present during the home
inspection so you can ask questions and see potential problems for yourself before deciding which repairs to
request. Home inspections typically range from $300-$700 and are paid for by the buyer.

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9. Ask for Repairs
Once home inspections are complete, you’re ready to ask the seller for repairs. Consult with the Paras Team
to make sure you negotiate for the essentials — and skip the small stuff that could put your purchase at risk.

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10. Appraisal
Next, your lender will request an appraisal. As a buyer, you can’t do anything to influence this process, but it’s
a good idea to confirm that an appraisal has been requested. Appraisals range from $400-$600 and are paid
for by the buyer. When appraisal is complete — assuming the value is in line with the agreed-upon price —
the mortgage will continue. If not, you may be headed back to the negotiation table. Appraisals are part of the
Financing and Appraisal Deadline.

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11. Homeowner Insurance
As you approach Settlement, you’ll want to comparison shop to secure homeowner insurance on your new
home. Don’t skip this important step.

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12. Paperwork Prior to Settlement
A few days before Settlement, your paperwork — including the appraisal, income statements, and assets —
will be shared with your loan underwriter for final review. Two days before your Settlement date, your loan will
receive final approval and the loan documents will be ordered. The day prior to Settlement, an escrow officer
or closing attorney will calculate final costs and credits for both the buyer and seller.

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13. Settlement
Be prepared to hand over your closing costs (which range between 2-5% of your mortgage loan amount) and
down payment, and be ready to spend at least an hour signing documents. Remember: you will not get your
keys at the Settlement meeting. You’ll get your keys when possession terms from the contract are met (usually
1-3 business days after Settlement).

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14. It’s Official! You’re a Homeowner!!!
Once everything is signed and processed, the loan closes, property transfer is recorded, and possession terms
are met, the keys — and the home — are yours!

Remember: The buying process is intense, but with the right tools, preparation, and a stellar agent in your corner, it can also be fun!