The RE/MAX Associates Louisville Real Estate Blog

Selling a Home To Millennials

There’s been a trend in the past decade where Baby Boomers with gigantic, luxury homes in the suburbs downsize for a significantly smaller home closer to the city. On the other side, a new trend shows millennials leaving their small city-life-living. They’re giving the suburbs a try, and finding that more space and some land of their own is pretty awesome, especially if they are thinking about starting a family in the near future. 

The millennials were born in a peculiar time. Think about it, from the mid 80’s to the late 90’s, American children were growing up in an environment that was dramatically changing culturally and socially. Their preferences are often and sometimes vastly different from their Baby Boomer parents. So here are a few tips to remember when you go to sell your home to a millennial. 

They are busy

(Most) Millennials are not scared of work and they choose to work a lot. What free time they do have they enjoy spending it with family and friends. They also happen be a bit more transient than their parents, so moving often isn’t a big deal. Another trait about them is they’re a little impatient. They would much rather prefer a home that is live-in ready than one that needs a little renovation or remodeling. 

Sadly, most millennials don’t want to take the time to make a house their home. Baby Boomers on the other hand, were all about this when they bought any house. 

House hunting is similar to dating

IF you know a millennial you know they are literally attached to their phones. They can order dinner, reserve a seat at the movies, and even find a person to take out all with their thumbs. 

With smart phones able to do nearly anything, they can home shop too. So as a seller, it’s important...

What A Lender Looks at

When you're in the market to buy a home having a clear picture of your finances your first step. If this is also your very first home, the endless list of things to consider is overwhelming. But one of the most important things to keep in the front of your mind is that mortgage lenders are quietly looking at your finances to decide if they should loan to you, and how much. 

So slow your roll visiting open houses and checking out neighborhoods; have your finances in check before you do any of this. Knowing your buying power isn't all that exciting, but knowing how these numbers impact your chances of getting a loan are vital to your success. 

Here are the 4 numbers lenders are carefully looking over:

1. Credit score 

A credit score is the most simple way a lender can see how diligent you are with paying your debts on time. There are five factors that determine this score, and they are weighted differently. The first, and most important factor is your payment history (35%), debts owed (30%), length of credit history (15%), credit mix and new credit (10% each). 

A credit score of 620 isn’t great, but it’s not awful. Now having a score in this ballpark won’t deny your chances to get a loan, but it will determine what kind of loan you get. With a lower credit score, you’ll get a higher interest rate, and just the opposite, a higher credit score gets a lower interest rate. 

2. Down Payment

Despite credit scores being the most heavily weighted factor, cash still reigns as king. The bigger down payment you throw down on the table, the more buying power you have. 

And generally, we all know the 20% down rule, it gives the buyer great benefits over not having a full 20%. One major one is sometimes you don’t need private mortgage insurance with 20% down. When sellers see a potential buyer throw down 20% down payment, they know the buyer is...

Why Your Neighbors Matter

It's always in the benefit of everyone to be on the good side of your neighbors. There is a smart strategy to be played when selling your home, and that is thinking of your neighbors home. If their house is in poor shape then it could impact what your home sells for. Hopefully they take good care of their property, because it could help your bottom line if they do.

Picture a scenario where you spent hours working on your curb appeal and even renovating a few rooms in your house, but when you step in the street to look at it all you can see is your neighbors disaster of a home. You can put a ton of money into sprucing up your home, but if your neighbors property doesn't look pleasant, then it will surely lessen your value.

But there is a way around this! Here's what you need to do to make sure you were on your neighbors good side. 

Build strong relationships

If you are planning on selling in the near future, it's still important to have good relationships with those around you. Who knows you may need them at the least unexpected time. 

It's somewhat common for issues to spring up in the middle of a sale. Sometimes the problems involve retaining wall's, fence repair, and matters of the lake will often bring your neighbor into your sale.

Being on good terms with your neighbors almost ensures their cooperation when you need them the most.

Keep them in the loop

If you do plan to sell in the near future, it's a courteous thing to do to inform them in advance. Yes, sometimes neighbors are nosy, but it's considerate to keep them current with a process like this.

Maybe you need their help for a small project and if they know you plan on moving they could be more than willing to help. 

Offer to pay for improvements...

An Empty Nester's Market

There's nothing new to report when I say there is a shortage of houses in the market. The demand is ever rising but homebuilders aren't erecting houses to meet the demand. The land isn't being sold, the permits aren't being filled and good help is difficult to come by. 


With the market the way it is, it's clear as to why it belongs to the sellers. Realtor.com has claimed that the average time a home sits on the market across the nation is 3.6 months. These are unseen level since January 2005. 


Dallas, TX's average is 42 days, Seattle is 36, while the country's average is 90 days. And to add the fact that interest rates just rose; buyers become a bit more motivated. With mortgage rates expected to rebound, buyers are thinking now is the time to jump in the market. Home prices are raising at twice the rate of average hourly wage, and twice the rate of inflation. Not the best news for first-time buyers, but it could be worse. 
On the other hand it's great news for empty-nesters and other homeowners who are looking to downsize. 

Developers have catered to this demographic by building luxury condominiums in major markets. Baby boomers are selling their ginormous estates and downsizing to accommodate their needs, so developers saw this as an opportunity.

...

Inexpensive Kitchen Upgrades Before You Sell

Your kitchen is the room of the house you spend most of your time in whether you know it or not. This is where you make your meals, entertain your friends, or talk to your family day today. 
One day you may look around and see your kitchen isn't quite up to your standards and it needs a fresh makeover ASAP. Luckily a kitchen up grade can be done for less than $5,000. 

Upgrades that will boost the value

1. Repaint the cabinets and replace hardware
A fresh coat of paint and some new knobs are easy ways to give your kitchen a quick makeover without it draining your wallet. Hardware is often underestimated in the change it can bring to a kitchen. A simple new look can help modernize cabinetry without a whole lot of effort. Try to get knobs with the same drill holes as your current ones, drilling new holes to perfection isn't always that easy. 

Estimated cost: $250 hardware, $300 paint

2.Add a backsplash
Does the ugly wall or old backsplash bother you when you're doing dishes? Adding a modern backsplash can do wonders for a kitchen. They're not that difficult to install, and they have the benefit of coming in many shapes, size, and styles. 

Estimated cost: $1,000

3. Replace the lights
You Lighting creates the feel of a room, so it's vital to have good lighting in a kitchen. Pendant lights the well above islands, and under cabinet lights provide a classier look. If your white fixtures are already modern, then all you may need is to replace your existing bulbs with LED's. Lighting is usually a bit expensive, but if you shop at the...

How Rate Hike Hurts Buyers

Yesterday, the federal reserve released some less than pleasant news for potential home buyers. Not only did they raise interest rates, they also said rates will steadily climb throughout the year. Despite the volatility with the rates in the past year, it looks like we will be watching them rise whether we like it or not. 

Monthly mortgage payments will also rise, and potentially tightening the housing supply. 

They announced rates will rise .25% and they also have two more installments of rate jumps during the year. 

Unbeknownst to some there is a difference between mortgage rates and short-term interest rates. The Fed determines the short-term interest rates which keeps mortgage rates at a similar number. Ultimately the Fed influences mortgage rates. 

It's most likely going to become harder to buy a house because it'll be more expensive month-to-month, and those who currently have a house probably won't be looking to move since their rates are locked in. The homeowners who were considering moving, could very well stay right where they are.

Last summer the rate on a 30-year-fixed mortgage was 3.44% and just last week they were 4.39% which is another historic low. This increase of .25% will force buyers to spend another 3% each month on their loans, assuming they have an average $250,000 house. 

Small increases aren't going to push many people out of the buying Poole, but when it keeps rising it will eventually push many people out. 

On the building side of things, materials are expensive as-is and continue to climb up in price, so raising rates could very well push a number of a builders out of the market.

In the past few years rents and housing costs have been rising faster than ever while the rest of the economy stays somewhat level. This is surely not helping the shortage of homes available.

Now is not the time to panic. Buyers can request adjustable rate mortgage is which are...

Listing Photos, How Crucial They Really Are

When selling your home the first metaphorical cast of the fishing line is your pictures. Having he right pictures can attract the right buyers which could earn you extra bucks. All potential buyers look at the listing pictures online first and foremost. They then decide if the house is worst a visit or not. 

It’s important to take quality listing photos, because of they don’t grab the attention of buyers, they will never step inside. The photographer will do most of the work, but it is up to you to prepare your home for the photo shoot. Your agent will have a detailed list of what to do with all the stuff laying around the house. 

Never list online without photos

A lot of buyers get alerts through text or email whenever a new house gets to market; and nothing is more frustrating than to see a house with a great address and not a single picture. 

Agents will never put the listing up without any photos, and they’ll scold the seller for listing it without pictures. If it’s listed without photos, they may come back to look again another day, or not at all. 

Clean, organize, and declutter

The first thing your agent will tell you to do is to clean and organize your home. This is putting away all the personal items like photographs, putting away pet bowls, fluffing the pillows, and making sure the house is now completely neutral. Also, it won’t hurt to clean the hell out of it so it really shines. 

The beauty of an online listing is house shoppers can zoom-in on photos. If the photos posted don’t give the buyer a good idea of what your home is like, they’ll believe you don’t care and aren’t serious about selling your home. 

Crappy photos won’t do

Photos that are blurry, crooked, cropped, just aren’t going to sell...

2017 Rate Volatility Impacts Affordability

Well interest rates rose again. Its always a little disheartening to the prospective home buyers when the rates rise because it’s a little less square footage they can afford. The upside is you will have a little more flexibility than you know. 

We are going to have a look back at some past rates since November, see how it effected affordability, and what to do to get the best deal you possibly can. 

2017 rate recap & projections

Since the election rates have risen .75%. This is due to the belief that Trump’s administration will stimulate the economy again, through lower taxes, deregulation, etc. 

The rates are leveling off in an almost unpredictable way. Since November the rates have been dropping and rising again, every single day. 

It all comes down to inflation. If there are threats of inflation, rates rise. As the administration operates day-to-day, investors bet inflation to relax, and other days they bet for it tossing upward. 

Holistically, rates are off from post election highs, up .5% from this last election. 

The volatility will continue as investors and the Fed attempt to predict where the rates will go. Here’s how it impacts your potential purchase. 

How the rates impact affordability 

For example, a $350,000 home that has a 20% downpayment, followed by a rate spike of .5% takes away $17,000  from your affordability. This seems like a huge number, and it is, but it’s not damning you to a lesser home. 

How much home you can afford is based on a debt-to-income ratio, which looks at all your debts (car payment, credit card debt, etc.) and is divided by your monthly income. Typically, if you spend 43% of your income on bills, lenders won’t lend to you. 

That $350,000 house you want, your DTI says you can only afford $333,000...

Staging Your House Like A Pro

When you decide it's time to sell your house there's one thing you must do, and that is stage your home. If you stage it just right, potential buyers will see themselves comfortably living in the space they're looking at. 

Any room they can't see themselves inhabiting is a roadblock to a potential sale. A general rule to go by is to make them fall in love right when they walk in the door, without being too distracting. Follow the simple rules to stage your home properly and you're practically be pushed out of your house by the buyers!

No huge projects

A big fallacy sellers sometimes succumb to is they have to redo a certain part of the house. Your remodel for somebody else to live in may not fit their taste. So let them remodel if it's necessary. Instead of spending the money to remodel just give them a price reduction. This could save you a ton of trouble and time.

Paint in neutral

The quickest and most effective improvement a home can undergo is a new paint job. Having a fresh coat of paint stripes for a good first impression, and not to gross anyone out stick to the neutral colors like creams whites and a pale apricot.

Gray has been pretty hot lately however it does not always match everyone's furniture.

Throw power

A cheap way to stage your home is to get yourself a few throw pillows it doesn't have to be anything fancy, just something to spruce up the furniture will do. 

The room really starts to flow when the throes match the furniture in colors and patterns. 

Easy on your own tastes

If your personality is very neutral you're in luck, but if it's not then it needs to come down.

Often times buyers get distracted by your personal photos and art pieces so much they don't see themselves living there. If your lifestyle of messiness is on display that will surely turn off any onlookers.

It's not a bad idea to put...

Considerations When Pricing Your Home

No two home is exactly the same, each with a different design and story, they are priced separate, but unique. It's difficult to pin price a home, but there are a few small things you can do to find A relative price. 
One of the best things you can do is look at the recent sales in the area and particularly in your neighborhood. Do your homework and add in a little extra market research and talk to your agent and you can come up with a pretty accurate price.
Here are several rules-of-thumbs to remember when pricing your house.

Look at recent comps

Markets are ever-changing so you'll want to only  look at the last three months comparable sales. Check out the current pending sales to get a good idea. And if you look at homes from six months ago, just know they're a bit dated and the market has probably changed. 

Fixtures and finishes matter

Today's buyers would rather have a delightfully decorated home with neutral finishes and fixtures as opposed to an unrenovated home.
It's important to look at homes objectively. Other buyers will too, so if your home is not updated, you won't get top dollar for your home. 
Chances are the money you spend on your upgrading, is less than the differences in value. 

Each home is unique

Homes with similar square footage and amenities should sell for the same price right? Absolutely not! One homes bedrooms may all be on the top floor, while having a much sweeter master bath, and the other homes kitchen is connecting to the dining room. Each home has its own layout, which some can be more valuable than others. 
Buyers really pay for...

Millennials Leverage FHA Loans in January

Ellie Mae Millennial Tracking has shown that millennial's are increasing their share in the housing market, they are accounting for 84% of closed loans with 35% being FHA loans. 

What appeals to millennials about the FHA loans is they offer a lower down payments and a lower FICO score requirement. It is expected that FHA loans will continue to increase, especially in the millennial generation. Two markets with the most millennial FHA loans happen to be in Owensboro Kentucky, and Atlanta Georgia. On average it takes 49 days to close. 

Collectively, the average millennial's FICO score was 724; and the average FICO score for conventional loans was 748. Yeah average FICO score for VA loans or 734 and the average for FHA loans were 690. 

...

Proper Paint Disposal

Painting is a messy ordeal no matter how small of a space there is to be painted. At least a little paint will always be left over when the job is finished. And according to a nonprofit company, Paintcare.org 70,000,000 gallons of paint go on used each year.

Eventually the paint must be disposed of, and disposed of properly. If the lazy route is taken, it can be an environmental hazard and nobody wants that. So here's what you need to know about disposing paint properly.

Paint goes bad

Check and see if the paint is still good. If only the can is left you can throw it away or donate it to Habitat for Humanity. If the paint is in fact bad there's no reason to low let it take up space on your shelf.

To make paint last it's all about ceiling. Water-based paint, if sealed correctly, will last up to five years; and oil based paint will last up to ten years. You will know if the paint is bad by the foul smell, or it's a hard texture. Stirring it a little bit will indicate whether it's still good or not.

Proper disposal

Never ever pour paint down the drain or throw in the trash. It really matters where you live because different states and cities have different regulations regarding paint disposal. Check with your local waste disposal companies first.
Here are some basics to begin

Water-base: put them in a well ventilated area without the lid to let the paint Harden. This may take a few weeks depending on the weather. To speed up the process kitty litter or paint hardener may be added. Once the paint is solid place it in the trash and recycle the can.

Oil-base: Federal and local regulations designate oil based paints as hazardous waste. They have strict procedures for disposing of this material paint.
Never let them dry like water based paints because they will email...