5 Reasons to Hire a Real Estate Professional

Whether you are buying or selling a home, it can be quite an adventurous journey; you need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but rather have been strengthened, due to the projections of higher mortgage interest rates & home prices as the market continues to pick up steam. 

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to make sure that you acquire your dream? 

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process. 

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $185,000 compared to $245,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a lowball offer?

Dave Ramsey, the financial guru, advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of the most important financial decisions of your life without hiring a Real Estate Professional?

Mortgage Interest Rates Ticking Upwards

Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Along with Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors are all calling for mortgage rates to continue to rise over the next four quarters.

This has caused some purchasers to lament the fact they may no longer be able to get a rate less than 4%. However, we must realize that current rates are still at historic lows.

Here is a chart showing the average mortgage interest rate over the last several decades.

Bottom Line

Though you may have missed getting the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or sister did ten years ago; a lower rate than your parents did twenty years ago and a better rate than your grandparents did forty years ago.

WASHINGTON (AP) – Nov 29, 2016 – U.S. home prices have fully recovered from their steep plunge during the housing bust and Great Recession, according to a private measure.

The Standard & Poor’s CoreLogic Case-Shiller national home price index is slightly above the peak it set in July 2006, after rising 5.5 percent in September from a year earlier. The milestone comes after more than four years of steady gains.

Still, prices have not fully recovered in many cities and other gauges show that home prices remain below their peaks.

Steady job gains and low mortgage rates have encouraged more Americans to buy homes. Yet the supply of available properties has dwindled, setting off bidding wars and pushing up prices at a rapid pace.

Seattle, Portland and Denver reported the largest annual gains in September for the eighth straight month.

“The new peak set by the S&P Case-Shiller CoreLogic national index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance,” David Blitzer, managing director at S&P Dow Jones Indices, said.

The ongoing recovery in home prices shores up Americans’ household wealth and should provide more homeowners the incentive to sell. The number of homes for sale is low partly because many families have little equity in their homes and would benefit little from a sale. Rising home values help counter that trend.

Yet many cities remain far below their pre-recession peaks, Blitzer said, including those that have seen large gains since the downturn, such as Miami, Tampa, Phoenix, and Las Vegas.

And other analysts caution that imbalances remain in the housing market.

“Inadequate supply of homes available to buy – especially at the entry-level end of the market – remains a huge problem,” Svenja Gudell, chief economist for real estate data provider Zillow, said.

Since the real estate market began recovering in 2012, prices have far outpaced Americans’ incomes. That has made it difficult for many would-be buyers, particularly younger Americans, to take advantage of low mortgage rates.

Home prices have increased at a 5.9 percent annual rate, adjusted for inflation, S&P says. Yet Americans’ after-tax incomes have increased just 1.3 percent during that time.

Mortgage rates have risen about a half-percentage point since the presidential election, to nearly 4 percent. That is still very low by historical standards, but could slow home sales in the coming months.

According to the S&P Case Shiller national home price index, home prices plummeted 27.4 percent from a peak reached in July 2006 through February 2012. They have since recovered that loss and are now 0.1 percent above the previous peak.

S&P Case-Shiller issues several home price measures, including a composite index of 20 large cities. That measure remains 7 percent below its housing bubble peak.

Most other measures of the housing market point to a solid recovery. Sales of existing homes rose to the fastest pace in nearly a decade in October. And developers broke ground on the most new homes in nine years last month. Sales of new homes slowed in October from the previous month, but are up a solid 12.7 percent in the first 10 months of this year compared to the same period in 2015.

Copyright © 2016 The Associated Press, Christopher S. Rugaber. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  

By COLLIN BREAUX
News Herald Reporter

PANAMA CITY BEACH — Every week this summer, Alan and Tracy Jagiello’s rental homes were full.

The couple rent out townhouses on the west and east ends of Panama City Beach using Airbnb, an online and app-based lodging service. In their first year using the service, the Jagiellos said they have had pleasant guests and no major problems. Their renters, who tend to be families and adults, are diligent about cleaning up when they leave.

“The quality of people has been really nice,” Alan Jagiello said. The couple actually have never met a renter in person, taking questions by phone or through the app. “They’ve been courteous. … We don’t advertise it as a Spring Break party. We have guidelines. You don’t have loud parties.”

The Jagiellos represent a new — and growing — economic sector. Airbnb, founded in 2008, allows renters to advertise their house for stays that can last a night, a week or a month. The company is active in over 34,000 cities and has more than 60 million guests. In mid-September, there were 1,000 listings in Panama City Beach, according to Airbnb Florida spokesman Benjamin Breit.

And as expected in a tourist destination, summer is the service’s the peak tourist season. That held true for the Jagiellos, who estimated they made thousands of dollars this summer.

“This was one of the best summers we’ve ever had,” Tracy Jagiello said.

And they aren’t alone.

“The annual earnings for the typical Airbnb host in Panama City Beach is $7,200,” Breit said.

Some of the Jagiellos’ renters came in for sports tournaments at Frank Brown Park. But whatever the reason for travel, the visitors are a lucrative side job for the couple; Alan Jagiello is a commercial pilot, while Tracy Jagiello is an IBM sales executive.

Rental property owners in Bay County must register and report income and taxes with the county clerk of court. For the Jagiellos, that means keeping track of rental payments and submitting monthly taxes.

Clerk of court tourist tax specialist Charlene Honnen said specific revenue figures for local Airbnb revenue are not available because individual property owners, not the company itself, report income. Airbnb began collecting and remitting the Florida Transient Rental Tax and Sales Tax in December 2015. Across the state, 31 counties are collecting home sharing taxes from the service, which are expected to generate millions in revenue, according to an Airbnb press release.

Still, tourism officials aren’t worried about Airbnb disrupting the local industry.

“I do not seeing Airbnb replacing hotels or rental management companies,” Bay County Tourist Development Council Director Dan Rowe said. “I see it as a niche marketing channel that connects visitors with the destination and the unique experiences that we offer.”

“We’re fine with it,” she said. “It won’t really affect us.”

The people affected by the service, however, plan to keep it around.

“The ease of use, the amount of places down here,” Alan Jagiello said. “It’s grown so quickly. You can find a lot of places outside the norm.”

Forecast: 17M first-time buyers within 5 years

NEW YORK – Oct. 18, 2016 – About 17 million first-time homebuyers may enter the housing market within the next five years, according to a new TransUnion study – and nearly three million first-timers are expected to enter the housing market in 2017.

TransUnion’s study found that younger consumers (ages 20-39) represent an increasing majority of first-time homebuyers. At the start of the new millennium, first-time homebuyers comprised less than half of agency and government loan purchases; by 2015, this had grown to over 55 percent. In the fourth quarter of 2015, consumers in this age group represented 60 percent of first-time homebuyers, up from 44 percent five years earlier.

The youngest consumer subset observed, those ages 20-29, also has seen major growth among first-time homebuyers: Their share has risen from 17 percent to 28 percent over the same timespan.

“First-time homebuyers are valuable prospects in the eyes of many mortgage lenders, as that time in a borrower’s life often corresponds to additional financial needs,” says Joe Mellman, vice president and mortgage line of business leader at TransUnion.

Mellman says that potential first-time buyers have “distinct credit characteristics that distinguish them from non-buyers.” Those characteristics include higher credit scores than non-buyers” but they’re also “more credit active and exhibit more credit responsible behavior.”

Partnering with AnswerMine, TransUnion developed a model examining thousands of credit attributes and scores. The resulting “First-Time Homebuyer Propensity Model” identifies specific consumers likely to become first-time homebuyers. By using this model, TransUnion determined that there could be nearly three million first-time homebuyers over the next year.

“We are quite pleased with the model’s accuracy in identifying first-time homebuyers. In a study earlier this year, we predicted just over 500,000 first-time homebuyers for the first quarter of 2016. Looking back at that time now, it turns out that is how many first-time homebuyers there actually were,” says Mellman.

Looking over the next five years, TransUnion estimates 13.8 to 17.1 million first-time homebuyers will enter the housing market based on U.S. consumers who don’t currently have a mortgage, long-term estimates for growth, and the percentage of first-time homebuyers in the agency and government purchase market.

If the model is accurate, it would add a significant number of consumers to the mortgage pool. For comparison, 6.2 million consumers opened a new mortgage in 2015, approximately three million of which were first-time homebuyers.

“It’s clear that there should be many new homebuyers in the market in the next few years,” says Steve Chaouki, executive vice president of TransUnion’s financial services business unit. “Our hope is that, with the use of trended data, mortgage lenders can better serve these consumers. We anticipate the benefits of trended data will continue to expand to other lenders, as we believe this is the future of credit scoring.”

© 2016 Florida Realtors®  

The Best Ways to Build Your Credit

NEW YORK – Oct. 18, 2016 – Once, building credit meant taking on debt – sometimes expensive debt like a car loan or a credit card with a high rate.

Today, it’s possible to build a good credit score in a year without a big chunk of cash upfront or a large debt at the end. You can make yourself look better to lenders while keeping more money in your pocket. Here’s how to do it right.

Old advice: Take whatever credit you can get, even at double-digit interest rates.

New advice: Start with a credit builder loan, then add a credit card to the mix.

With a credit-builder loan, you build credit and savings at the same time. The money you borrow is placed in a certificate of deposit or savings account that you can claim once you’ve made all the payments, which are reported to credit bureaus.

Many credit unions offer these loans. If yours doesn’t, check to see if there’s a community development financial institution near you that does, or investigate Self Lender, an online lender that makes one-year credit-builder loans of $550, $1,100 and $2,200. Someone who borrows $550, for example, would claim a $550 CD after making 12 payments of $48.50, plus a $12 administration fee.

These loans can help people build credit scores in the high 600s or even low 700s, says credit expert Barry Paperno, who blogs at Speaking of Credit.

“Regardless of the loan amount, one year of on-time-payment installment loan history with no other credit on the report should deliver a decent score,” says Paperno, who previously worked for credit scoring company FICO and credit bureau Experian.

Once your scores are in the mid-600s, you can qualify for a regular credit card. Using the card for a few small purchases each month and paying the balance in full will continue to build your scores.

You can get plastic even earlier if you have some cash to make a deposit on a secured card. Most require people to put down $200 to $2,000 in exchange for a credit limit equal to that deposit.

“Adding a secured credit card with even the smallest limit and obtained at about the same time as the installment loan would make for an even better score,” Paperno says.

Old advice: Regular credit cards are better than store cards for building credit.

New advice: Certain store cards may help you get a mortgage.

Store-branded cards have long been seen as a stepping stone to “real” credit cards. Store cards typically are easier for people who are building credit to get, but regular or general-purpose cards issued by national banks are weighed more favorably by credit-scoring formulas.

However, if you’re building or rebuilding credit with the goal of getting a mortgage, store cards may prove more helpful.

Mortgage buyer Fannie Mae now requires mortgage lenders to look more favorably on people who regularly pay off their credit card balances when that information, known as trended or time series data, is available. Research by Fannie Mae and credit bureau TransUnion has found that people who don’t carry balances are less likely to default on any credit account than those who do.

Unlike many big card issuers, some store-branded cards report actual amounts paid each month to credit bureaus. These including Synchrony Bank’s Amazon card and TD Bank’s Target card. If getting a mortgage is important to you, call the issuer and ask if it will report your actual payment amounts to the credit bureaus before you apply.

Old advice: Monitor your FICO scores to track your progress.

New advice: Keep tabs with free scores and buy the right FICO before you apply for loans.

FICO credit scores are used in far more lending decisions than rival VantageScores, but VantageScores have an edge for people new to credit.

FICO formulas require at least six months of credit history before a score can be generated, and at least one account must have been updated by the issuer in the previous six months. A VantageScore can be calculated as soon as a person’s first account is reported to the credit bureaus, typically within 30 days of approval. A VantageScore also can be calculated for anyone with a credit account that’s been updated in the prior two years.

Many credit card issuers offer free FICOs or VantageScores. The version of the FICO they typically offer is the FICO 8, the most commonly used score in lending decisions. It’s not the FICO that most mortgage lenders use, however – they typically use older versions of the scores pulled from each of the three credit bureaus:

• The score retrieved from Equifax credit bureau is typically called FICO Score 5 or Beacon 5.
• At Experian, it’s FICO Score 2 or Experian/Fair Isaac Risk Model V2SM.
• At TransUnion, it’s FICO Score 4 or FICO Risk Score, Classic 04.

Similarly, auto lenders use various versions of FICO Auto Scores, which have a 250-to-900 scale. FICO Auto Score 8 is commonly pulled from all three credit bureaus, while version 2 is popular at Experian, version 5 at Equifax and version 4 at TransUnion.

When you’re ready to apply for a major loan such as a mortgage or auto loan, you can get a better idea of how lenders are likely to view you by purchasing your scores from MyFico.com. Currently you can’t buy just an auto or mortgage score; you need to purchase your FICO 8s from each bureau for about $20 each, and the other scores come with the package.

Until then, go for a free score.

Copyright © 2016 The Associated Press. All rights reserved. This column was provided to The Associated Press by the personal finance website NerdWallet, Liz Weston. This material may not be published, broadcast, rewritten or redistributed.

Remodeling Tips for Homeowners

WASHINGTON – Sept. 28, 2016 – Homeowners looking for a remodeling project should head outside, according to a new report from the National Association of Realtors^® (NAR) and National Association of Landscape Professionals (NALP).

The 2016 Remodeling Impact Report: Outdoor Features shows that outdoor remodeling projects not only add value to a home upon resale, they also make non-moving homeowners happier.

“Realtors understand the importance of curb appeal because when it is time to sell, a home’s exterior is its first impression to potential buyers,” says NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “Realtors also know that these projects – from flowerbeds to fire pits – can bring homeowners who have no plans to sell even more enjoyment and satisfaction in their home.”

The report analyzes the reasons homeowners complete outdoor remodeling projects and the value of those projects, both financially and emotionally. Overall, lawn maintenance provides the most bang for the buck at the time of resale. Realtors ranked seeding lawn highest, recovering 417 percent of the project cost at resale. The project includes implementation of a standard lawn care program (303 percent of cost recovered) and updating landscaping with sod lawn (143 percent recovered).

When it comes to a homeowner’s enjoyment gain from projects, a new pool comes in at number one, receiving a perfect Joy Score of 10. (Joy Scores range from 1 to 10, with higher figures indicating greater joy from a project.)

Ninety-five percent of homeowners who completed a pool project said they have a greater desire to be at home; 90 percent felt a major sense of accomplishment; and 80 percent have an increased sense of enjoyment at home. However, Realtors estimate that homeowners only recoup 50 percent of the cost of pool construction on resale, making it one of the least profitable projects in the report.

The next most appealing project is an overall landscape upgrade (Joy Score of 9.8) followed by a new wood deck (Joy Score of 9.7). When asked why homeowners took on these projects, the most common response was to add features to their home and improve livability.

“Homeowners looking to take on large, expensive outdoor projects should do so for themselves, for the enjoyment they and their family will gain from the finished results, and not only to improve the value of their home for when they sell,” says Salomone. “Smaller projects will bring potential sellers the most value back upon resale – and have the benefit of costing less up front.”

“This report validates that outdoor remodeling and landscaping improvements are a necessity when it comes to improving your home’s resale value,” adds Missy Henriksen, vice president, public affairs, NALP.

The National Association of Landscape Professionals is the trade association for the landscape industry, which employs nearly 1 million landscape, lawn care, irrigation and tree care professionals.

© 2016 Florida Realtors®