Rent vs. Buy: Either Way You’re Paying A Mortgage

There are some people that have not 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 your mortgage or your landlord’s.

As The Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return.  

That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Christina Boyle, a Senior Vice President, Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

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.

The graph below shows the widening gap in net worth between a homeowner and a renter:

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting with home values and interest rates projected to climb.

Contact Jay Cermak, Realtor at 954-235-3589 and schedule a FREE Homebuyer's Real Estate Consultation today!  Stop paying someone else's mortgage and invest in your financial future!

Search Fort Lauderdale Homes for Sale at Http://JaySellsFortLauderdale.com

Existing Home Sales Up 3.9% across the U.S.

Great news!  According to the National Association of Realtors Existing Home Reports:

Some Highlights:

• The annual adjusted sales are currently at a 5.36 million pace.
• 14,684 homes sell every day in the United States.
• October marked the 44th consecutive month of price gains.

There are many buyers and sellers who are still nervous about the Real Estate market after the last crash.  Some people are still not sure if the real estate market is still good and they should buy and sell again.  This shows the market is strong all across the U.S. and may be stronger in your local market.

Contact Jay Cermak, Realtor at 954-235-3589 and find out how the Real Estate market is in Fort Lauderdale!

Search Fort Lauderdale Homes for sale online at http://JaySellsFortLauderdale.com

Distressed Property Sales Hit New Low

The National Association of Realtors (NAR) just released their Existing Home Sales Report revealing that distressed property sales accounted for 6% of sales in October. This is down from 9% in 2014 and the lowest figure since NAR began tracking distressed sales in October 2008.

Below is a graph that shows just how far the market has come since January 2012 when distressed sales accounted for 35% of all sales.

Existing Home Sales Up Year-Over-Year

Mortgage interest rates remained below 4% in October prompting existing home sales to stay at a healthy annual pace of 5.36 million. Year-over-year sales were up 3.9%.

Inventory of homes for sale remain below the 6-month supply that is necessary for a normal market, as they fell 2.3% to a 4.8-months supply. The shortage in inventory has contributed to the median home price rising an additional 5.8% to $219,600.

NAR’s Chief Economist, Lawrence Yun had this to say about the lack of inventory:

"New and existing-home supply has struggled to improve so far this Fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets."

There is good news though, as Yun went on to say:

"As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago."

Bottom Line

If you are debating putting your home on the market this year, now may be the time. Buyers are still out there looking for their dream home. Meet with Jay Cermak, real estate professional, to help you determine your best plan.  Call today 954-235-3589!

Search Fort Lauderdale Homes for sale online at http://JaySellsFortLauderdale.com

Millennials: What FICO Credit Score is Needed to Buy a Home?

In a recent article by the Wharton School of Business at the University of Pennsylvania, it was revealed that some Millennials are not looking to purchase a home simply because they don’t believe they can qualify for a mortgage.

The article quoted Jessica Lautz, the National Association of Realtors’ Managing Director of Survey Research, as saying that there is a significant population that does not think they will be approved for a mortgage and doesn’t even try. The article also quoted Fannie Mae CEO Tim Mayopoulos :

“I do think that there’s a sense out there in the marketplace among borrowers that credit may not be available, especially for people with lower credit scores.”

So what credit score is necessary?

A recent survey reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780.

In actually, the FICO score on closed loans (as reported by Ellie Mae) is much lower and has been dropping over the last several months.

Bottom Line

Millennials who are considering a home purchase should get advice from a local real estate or mortgage professional now. They may be surprised how much the requirements for a mortgage have eased.  For Fannie Mae and VA Loans, credit requirements are even lower.

Contact Jay Cermak, Realtor today at and schedule a Homebuyer's consultation today at 954-235-3589!

Find Fort Lauderdale Homes for Sale online at http://JaySellsFortLauderdale.com

Equity Matters A LOT… Just Ask Freddie Mac

There are many reasons, both financial and non-financial, that homeownership remains an important part of the American Dream. One of the biggest reasons is the fact that it helps build family wealth. Recently, Freddie Mac wrote about the power of home equity. They explained:

“In the simplest terms, equity is the difference between how much your home is worth and how much you owe on your mortgage. You build equity by paying down your mortgage over time and through your home's appreciation. In a nutshell, your money is working for you and contributing toward your financial future.”

They went on to show an example where a person bought a home for $150,000 with a down payment of 10% ($15K), resulting in a loan amount of $135,000. The buyer secured a 30-year fixed-rate mortgage at 4.5% with a monthly mortgage payment of $684.03 (not including taxes and insurance).

The chart below demonstrates the home equity built after 7 years of making mortgage payments and assuming the historic national average of 3% per year home appreciation:

And that number continues to build as you continue to own the home.

Merrill Lynch published a report earlier this year that showed the average equity homeowners have acquired by certain ages.

Bottom Line

Home equity is important to building wealth as a family. Referring to the first scenario above, Freddie Mac explained:

“Now, if you continued to rent, and made the same payment of $684.03 per month, you'd have zero equity and no means to build it. Building equity is a critical part of homeownership and can help you create financial stability.”

Put your housing cost to work for you and your family. Meet with a real estate professional today to explore your options.  Contact Jay Cermak, Realtor at 954-235-3589 to schedule a Real Estate Consultation.  Let us help you buy/sell a home to help you build equity.

Singles Are Falling For Their Dream Home

We are obsessed with understanding the Real Estate Market and the demographics of our Clients!  The National Association of Realtors conducted a study to find out the buyers who are Single and broke it down by Women and Men.  Check it out!

Some Highlights: 

• 24% of all recent home buyers were single at the time of purchase
• 47% of single men cite the desire to own a home of their own as the primary reason to buy
• 18% of first-time buyers were single women

Contact Jay Cermak, Real Estate Match Maker at 954-235-3589 and schedule your homebuyer's consultation!  Find out if you qualify to buy your Dream Home!  We will connect you with a Mortgage Professional who can help you determine how much home you can qualify for.

Search homes for sale online at http://JaySellsFortLauderdale.com

Should I Pay a Mortgage Interest Rate over 4%?

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.

Interest rates have been at a historic low for the past couple years, and we hear many buyers wanting to wait to see if they drop again.  Historically speaking, they can't stay low forever and will go back up.  It's just a matter of when!

Call Jay Cermak, Realtor at 954-235-3589 and schedule your Real Estate consultation today!  

How to Get the Most Money from the Sale of Your House

Every homeowner wants to make sure they maximize the financial reward when selling their home. But, how do you guarantee that you receive maximum value for your house? Here are two keys to insuring 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 actually, this just dramatically lessens the demand for your house. (see chart)

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so 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.

In a recent article on realtor.com, they gave 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. Yet, studies have shown that typically homes sell for more money when handled by a real estate professional.

Recent research posted by the Economists’ Outlook Blog revealed:

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

Call Jay Cermak, Real Estate Consultant at 954-235-23589 and schedule a time for us to come preview your home and conduct a home seller's consultation.  Typically homes don't sell for 3 reasons it's Price, marketing and the realtor that was hired.  

Selling Your Home? The Importance of Using a Real Estate Professional

When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home 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 the purchaser’s behavior during the home buying process. For the past three years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ most recent Profile of Home Buyers & Sellers.

However, the report also revealed that 95% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.

Buyers search for a home online but then depend on an agent to find the actual home they will buy (53%) or negotiate the terms of the sale & price (48%) or understand the process (60%).

The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious, as the percentage of overall buyers who used an agent to buy their home 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.

Contact Jay Cermak, Realtor at 954-235-3589 and schedule your Home Seller's Consultation today!  As an Internet Marketing specialist and listing specialist, Jay knows how to take your home and showcase it online in the best light with the most photos and a large social media and internet presence, guaranteed to sell for top dollar in less time!

Why You Should Sell Your Home Now… Before Winter Hits

People across the country are beginning to think about what their life will look like next year. It happens every Fall. We ponder whether we should relocate to a different part of the country to find better year-round weather or perhaps move across the state for better job opportunities.

Homeowners in this situation must consider whether they should sell their house now or wait. If you are one of these potential sellers, here are five important reasons to do it now versus the dead of winter.

1. Demand is Strong

Foot traffic refers to the number of people out actually physically looking at home right now. The latest foot traffic numbers show that buyers are still out in force looking for their dream home. These buyers are ready, willing and able to buy…and are in the market right now!

As we get later into the year, many people have other things (weather, holidays, etc.) that distract them from searching for a home. Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing supply is still well under the 6 months’ supply necessary for a normal market. This means that, in many markets, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.

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. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future.

Also, new construction of single-family homes is again beginning to increase. A study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference).

The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.

3. The Process Will Be Quicker

One of the biggest challenges of the housing market in recent times has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.

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

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 18.1% from now to 2019. 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. You can also lock-in your 30-year housing expense with an interest rate below 4% right now. Rates are projected to rise by this time next year.

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 back 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.

Call Jay Cermak, Realtor today at 954-235-23589 and schedule your home selling consultation! 

Slaying Myths About Buying A Home

Many potential first-time home buyers believe that they have to have a "perfect" credit score & 15-20% for a down payment in order to buy a home.  Arming yourself with information about what's really going on in the housing market will ensure you become the "King or Queen of Your Castle".  Check out these amazing stats of credit scores and down payments needed to buy a home.

Some Highlights:

• Interest Rates are still below historic numbers.
• 88% of property managers raised their rent in the last 12 months!
• Credit score requirements to be approved for a mortgage continue to fall. The 723 average score is the lowest since Ellie Mae began reporting on scores in August 2011.
• The average first-time home buyer down payment was 6% in 2015 according to the National Association of Realtors.

With rent's rising at an alarming rate, homeownership may still be cheeper than rent AND it's an investment in your future!  Schedule a homebuyers consultation with Jay Cermak, Realtor at 954-235-3589 and lets come up with a plan to help you buy a home sooner than later!

Search Fort Lauderdale homes for sale in Broward County at http://JaySellsFortLauderdale.com

The Importance of Home Equity to a Family is...

There has been much written about how dramatically home values have increased over the last several years. With the increase in values, comes an increase in the equity each home owning family now has. The Joint Center of Housing Studies at Harvard University recently reported that, after taking inflation into account, aggregate home equity has increased 60% since 2010. Home equity is the major component of most family’s overall wealth.

Why is this so important?

Throughout history, families have tapped into their homes for many important reasons. Perhaps it was to get seed capital to start a new business; perhaps to help finance their children’s college education; perhaps to get needed medical attention not covered by insurance.

Up to ten years ago, families were able to use the equity in their homes to better the living situation for themselves and their family. More small businesses were created. College students weren’t forced to take on massive student debt. People could get needed medical care.

This hasn’t been the case over the last ten years as families found themselves in a position of having zero equity or, even worse, negative equity post the housing collapse. However, that is about to change.

Using your home as an ATM is not a good idea.

We realize that there are inherent risks to tapping into the equity in your home especially if you do it for the wrong reasons. Back in 2005-2007, homeowners were using their homes as their own personal ATM machine to buy depreciating assets like cars, boats and jet skis. This reckless behavior should never be repeated.

However, using your equity (aka family wealth) to invest in yourself, your children or other family members that could use help still makes sense. And the good news is that more and more families can do this as home values continue to increase.

Bottom Line

Home equity gives families an additional financial option when money is needed. The proper use of this family wealth can be used to grow generational wealth.

As Julián Castro, U.S. Secretary of HUD, recently explained:

“Generation after generation, the primary vehicle to create wealth in our country has been through homeownership. In the U.S., homeownership has provided an opportunity for one generation to hand over to the next that opportunity and that wealth.”

Are you ready to invest in your Family's Future?  Consider buying that investment property to pay for your child's tuition.  Financial Advisers suggest buying a Condo near a college when a child is born.  By time your child is ready to go to College you can have the investment property paid off and they can either live in it, or you can sell the property and use the money to pay for the college tuition.

Contact Jay Cermak, Realtor at 954-235-3589 today to discuss your Real Estate Options here in Fort Lauderdale, Florida and Broward County.

Search Fort Lauderdale Homes for Sale online at http://JaySellsFortLauderdale.com

Homeownership Builds Wealth and Offers Stability

The most recent Housing Pulse Survey released by the National Association of Realtors revealed that the two major reasons Americans prefer owning their own home instead of renting are:

1. They want the opportunity to build equity.
2. They want a stable and safe environment.

Building Equity

In a recent article, John Taylor, CEO of the National Community Reinvestment Coalition, explained that those who lack the opportunity to become homeowners have a weakened ability to reinvest their wealth:

“We traditionally have been huge supporters of homeownership. We see it as a way to provide stability for households but also as an asset-building strategy. If you continue to be a renter, locked out of the homeownership arena, increasingly those things are further and further out of reach. They’re joined at the hip. They perpetuate each other.”

Family Stability

Does owning your home really create a more stable environment for your family?

A survey of property managers conducted by rent.com last month disclosed two reasons tenants should feel less stable with their housing situation:

• 68% of property managers predict that rental rates will continue to rise in the next year by an average of 8%.
• 53% of property managers said that they were more likely to bring in a new tenant at a higher rate than negotiate and renew a lease with a current tenant they already know.

We can see from these survey results that renting will provide anything but a stable environment in the near future.

Bottom Line

Homeowners enjoy a more stable environment and at the same time are  given the opportunity to build their family’s net worth.  Thinking of buying or selling a home in Fort Lauderdale please contact us at 954-235-3589.  Search Fort Lauderdale Homes for Sale at http://JaySellsFortLauderdale.com