5 Reasons to Hire a Real Estate Professional When Buying & Selling!

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. 

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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. 

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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?

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation today.

Why Are Mortgage Interest Rates Increasing?

According to Freddie Mac’s latest Primary Mortgage Market Survey, the 30-year fixed rate mortgage interest rate jumped up to 3.94% last week. Interest rates had been hovering around 3.5% since June, and many are wondering why there has been such a significant increase so quickly. 

Why did rates go up?

Whenever there is a presidential election, there is uncertainty in the markets as to who will win. One way that this is noticeable is through the actions of investors. As we get closer to the first Tuesday of November, many investors pull their funds from the more volatile and less predictive stock market and instead, choose to invest in Treasury Bonds.

When this happens, the interest rate on Treasury Bonds does not have to be as high to entice investors to buy them, so interest rates go down.  Once the elections are over and a President has been elected, investors return to the stock market and other investments, leaving the Treasury to raise rates to make bonds more attractive again.

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Simply put, the better the economy, the higher interest rates will go. For a more detailed explanation of the many factors that contribute to whether interest rates go up or down, you can follow this link to Investopedia.

The Good News

Even though rates are closer to 4% than they have been in nearly 6 months, they are still slightly below where we started 2016, at 3.97%.

The great news is that even at 4%, rates are still significantly lower than they have been over the last 4 decades, as you can see in the chart below.

Any increase in interest rate will impact your monthly housing costs when you secure a mortgage to buy your home. A recent Wall Street Journal article points out that, “While still only roughly half the average over the past 45 years, according to Freddie Mac, the quick rise has lenders worried that home loans could become more expensive far sooner than anticipated.”

Tom Simons, a Senior Economist at Jefferies LLC, touched on another possible outcome for higher rates:

“First-time buyers look at the monthly total, at what they can afford, so if the mortgage is eaten up by a higher interest expense then there’s less left over for price, for the principal. Buyers will be shopping in a lower price bracket; thus demand could shift a bit.”

Bottom Line

Interest rates are impacted by many factors, and even though they have increased recently, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation today.

Winter Is Coming… 5 Reasons to Sell Now!

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 sell now instead of in the dead of winter.

1. Demand Is Strong

The latest Realtors’ Confidence Index 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!

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Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

According to NAR’s latest Existing Home Sales Report, the supply of homes for sale is still under the 6-month supply that is needed for a normal housing market (which is 4.5-months).

This means, in most areas, 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 soon.

Also, as builders regain confidence in the market, new construction of single-family homes is projected to continue to increase, reaching historic levels in 2017. Last month’s new home sales numbers show that many buyers who have not been able to find their dream homes within the existing inventory have turned to new construction to fulfill their needs.

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

3. The Process Will Be Quicker

Fannie Mae announced that they anticipate an acceleration in home sales that will surpass 2007's pace. As the market heats up, banks will be inundated with loan inquiries causing closing timelines to lengthen. Selling now will make the process quicker & simpler. 

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 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.

According to Freddie Mac’s latest report, you can also lock-in your 30-year housing expense with an interest rate around 3.57% right now. Interest rates are projected to increase moderately over the next 12 months. Even a small increase in rate will have a big impact on your housing cost.

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.

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation today.

You Can Never Have TMI about PMI

When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase a home with a down payment below 20%, you can never have Too Much Information (TMI) about Private Mortgage Insurance (PMI).

What is Private Mortgage Insurance (PMI)?

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It's a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you've built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

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As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

According to the National Association of Realtors, the average down payment for all buyers last year was 10%. For first-time buyers, that number dropped to 6%, while repeat buyers put down 14% (no doubt aided by the sale of their home). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:

The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

“It's no doubt an added cost, but it's enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

If you have questions about if you should buy now or wait until you’ve saved a larger down payment, meet with a professional in your area who can explain your market’s conditions and help you make the best decision for you and your family.

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation today.

Why Waiting Until After the Holidays to Sell Isn’t a Smart Decision

Every year at this time, many homeowners decide to wait until after the holidays to put their homes on the market for the first time, while others who already have their homes on the market decide to take them off until after the holidays. Here are six great reasons not to wait:

1. Relocation buyers are out there. Companies are not concerned with holiday time and if the buyers have kids, they want them to get into school after the holidays. 

2. Purchasers that are looking for a home during the holidays are serious buyers and are ready to buy.

3. You can restrict the showings on your home to the times you want it shown. You will remain in control.

4. Homes show better when decorated for the holidays. 

5. There is less competition for you as a seller right now. Let’s take a look at listing inventory as compared to the same time last year:

6. The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will continue to surge reaching new heights in 2017, which will lessen the demand for your house.

Bottom Line

Waiting until after the holidays to sell your home probably doesn't make sense.

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation today.

The Truth About Housing Affordability

From a purely economic perspective, this is one of the best times in American history to buy a home. Black Night Financial Services discusses this in their most recent Monthly Mortgage Monitor.

Here are two of the report’s revelations:

1. The average U.S. home value increased by $13,500 from last year, but low interest rates have kept the monthly principal & interest payment needed to purchase a median-priced home almost equal to one year ago.
2. Home affordability still remains favorable compared to long-term historic norms.

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The report explains:

“Even though the value of the average home in the U.S. increased by about $13,500 over the last year, thanks to declining interest rates it actually costs almost exactly the same in principal and interest each month to purchase as it did this time last year.

Even taking into account the fact that affordability can vary – sometimes significantly – across the country based upon the different rates of home price appreciation we’re seeing, that’s a pretty incredible balancing act between interest rates and home prices at the national level…

Right now, it takes 20 percent of the median monthly income to cover monthly payments on the median-priced home, which is well below historical norms.”

However, the report warns that affordability will be dramatically impacted by an increase in mortgage rates.

“A half-point increase in interest rates would be equivalent to a $17,000 jump in the average home price, and bring that ratio to 21.5 percent. This increase is still below historical norms, but puts more pressure on homebuyers.”

Bottom Line

If you are ready and willing to purchase a home of your own, find out if you’re able to. Now is a great time to jump in.

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation today.

A Lack of Listings Remains ‘Huge’ Challenge in the Market

 

The housing crisis is finally in the rearview mirror as the real estate market moves down the road to a complete recovery. Home values are up, home sales are up, and distressed sales (foreclosures & short sales) are at their lowest mark in over 8 years. This has been, and will continue to be, a great year for real estate.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. According to the National Association of Realtors (NAR), buyer traffic and demand continues to be the strongest it has been in years. The supply of homes for sale has not kept up with this demand and has driven prices up in many areas as buyers compete for their dream home.

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Traditionally, the winter months create a natural slowdown in the market. Jonathan Smoke, Chief Economist at realtor.com, points to low interest rates as one of the many reasons why buyers are still out in force looking for a home of their own.

“Overall, the fundamental trends we have been seeing all year remain solidly in place as we enter the traditionally slower sales season, and pent-up demand remains substantial as buyers seek to get a home under contract while rates remain so low.”

NAR’s Chief Economist, Lawrence Yun, points out that the inventory shortage we are currently experiencing isn’t a new challenge by any means:

"Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in. Unfortunately, there won't be much relief from new home construction, which continues to be grossly inadequate in relation to demand."REAL ESTATE MARKET DATA BROWARD COUNTY FLORIDA 3Q 2016

That's National Information. Let's look a little closer to what's happening in Broward County Florida:

 

When Looking at the big picture in Broward County we can see tat inventory is below 3 months under $500,000 Range. Homes priced right are selling quickly and a new report shows in Broward County 30% of listings that sell first time are selling for OVER Asking Price! It's a great time to be a seller in the Under $500,000 range due to dangerously low inventory for Single Family Homes.

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For Sellers in the over $500,000 Price Range, please look at the numbers. A Balanced Real Estate Market is 6 Months inventory, anything over 6 months of inventory switches to a Buyers market, meaning sellers have more competition and fewer buyers! Hire a Real Estate Professional who understands this data and can help you strategically price a property correctly.

Bottom Line

Healthy labor markets and job growth have created more and more buyers who are not just ready and willing to buy but are also able to. If you are debating whether or not to put your home on the market this year, now is the time to take advantage of the demand in the market.

Whether you are thinking of Buying or Selling a Home contact a professional realtor who cares about you and your time. Contact Jay Cermak Top Fort Lauderdale Real Estate Agent at 954.235.3589 and schedule a FREE Real Estate Consultation today.

Dangers of “Tight Mortgage Credit” Headlines

The availability of mortgage credit is not at the same level that it was during the boom in housing (2005), and that’s good news. However, the constant headlines which talk about “tight credit” are causing some potential home buyers to doubt their ability to purchase. We want to rectify the misconception of what is required for a down payment in order to purchase a home in today’s market.

Freddie Mac recently discussed the confusion many first-time homebuyers have about the down payment they need in order to buy:

“Did you know that the average down payment among first–time homebuyers is 6% and it's 13–14% for repeat buyers…It's possible to put down even less.

Many potential homebuyers think that only the FHA helps make mortgage loans with low down payments. Not true.

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Freddie Mac's Home Possible mortgage products let qualified homebuyers put down as little as 3%.”

Brenda Garcia Lemus of John Burns Real Estate Consulting reports that this is also the case with newly constructed homes: 

“Our home-builder clients sell hundreds of homes every weekend to buyers with 5% down payments and below average credit scores. Yet, many middle-income households with average credit and access to a 5% down payment assume they cannot become homeowners because of the ‘tight credit’ headlines.”

Bottom Line

Before you ‘disqualify’ yourself, check with a professional in your market to find out what is possible in mortgaging today.

Contact Jay Cermak Real Estate Consultant with Keller Williams Realty at 954.235.3589 and schedule a FREE Real Estate Consultation Today!

Home Buyers: It’s Not Always Marriage Before Mortgage

There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family. Others may think they are too young. And still, others might think their current income would never enable them to qualify for a mortgage.

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We want to share what the typical first-time homebuyer actually looks like based on the National Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting statistics on the first-time buyer:

Unmarried couples jumped up to the third spot, right after their married counterparts and single women. Many couples are buying a home before spending what would be a down payment on a wedding.

Bottom Line

You may not be much different than many people who have already purchased their first home. Meet with a local real estate professional today who can help determine if your dream home is within your grasp.

Contact Jay Cermak Real Estate Consultant with Keller Williams Realty at 954.235.3589 and schedule a FREE Real Estate Consultation Today!