The RE/MAX Associates Louisville Real Estate Blog

5 Types of People Who Attend open Houses

5 Types of People Who Attend open Houses

In the real estate world, Sunday’s are very important days. It’s the day of open houses, and it goes without saying, anyone can step inside to check out a home on the market. Keep in mind though, not everyone who goes inside is a potential buyer. Here are the five types of likely to walk into an open house.

The real buyer

Real home buyers are somewhere in the home buying process, and they’re checking out the market or they’re intent on buying a home and qualified. Sellers want these people coming through their doors.

Buyers are using open houses as their alternative visits as they’ve probably already toured the house with their agent during the week. Open houses allow them to casually walk around as if it was already their own.

The nosy neighbor

These people have been waiting to finally check out the home. Chances are their home is quite similar and they want to do a little comparison of properties.

Of course there are other reasons. Some neighbors like to see where all they can be seen from the house across the way. These neighbors just want to satisfy their curiosity about their home, or even the seller.

Agents looking for their clients

Agents are always on the hunt for new homes for their clients, and most of the time they are polite and professional.

There are the agents who will walk-and-talk around the house on the phone to their clients. They’ll describe what the home is like and tell their clients of the pros and cons of the home.

The agent who lost the listing

A lot of the times a sellers interviews multiple agents and selects which one they want to represent them. Agents spend...

What's the Fuss About A Sewer Inspection

One of a homeowner’s worst fears is a giant flood without any idea where it came from.  Toilets can back-up without reason, basements can flood, and it could all be because of a sewer line. In order to prevent a problem like this it’s best to take action before it happens. Homeowners should elect to have a sewer inspection before they buy their home. Here is how these inspections work and how to determine if you should get one yourself.

What is a sewer inspection?
Sewer inspections are made by calling a plumbing company and asking for a contractor to come and weave a camera through the pipes. Real estate agents are good go-to’s if the plumbing company doesn’t have a contractor on hand.

The contractor will use a snake with a camera attached to it and push it through the plumbing lines. They can see if there are any issues like corrosion, or any tree roots that have broken the lines. They also have the ability to see if there are any cracks or breaks in the street sewer lines. Usually if there is a problem from the home to the street it’s for the homeowner to cover, not the city. Hopefully they were smart enough to buy homeowners insurance.

Once the contractor finishes the inspection they can reveal what kind of material the sewer line was made out of, and if it meets today’s standards. Whatever issues may be present is always fair game to involve in the negotiations whether you are buying or selling.

How to know if an inspection is needed

How might you know if you should get an inspection? The sewer lines are rarely part of the home’s overall inspection. IF the home is 20 years or older, you should probably get one. Pipes don’t last forever; they erode or crack with time, and are terribly vulnerable to roots. So if a home has plenty of landscaping, don’t skip...

The Housing Bubble of 2016, & What You Need to Know

Nearly ten years ago the U.S. housing market was on top of a giant bubble. Too many eager buyers were willing to pay more than the asking price for even more houses. Another reason was due to the government forcing the banks to lend to nearly everyone, even the people who couldn’t afford it. When that happens the bubble will bust, leaving millions who lost savings, properties, and their home.

In 2012 home prices fell to their bottom after six long years of free fall. The market today has homes one point shy of the 2006 bubble peak.

June was the 50th straight month of home price appreciation with prices up 33% since 2012. The Black Knight Financial firm gave those statistics. It measured the average national home price in June at $265,000, which happens to be 1.1% shy of the record high.

What’s different about today is these prices aren’t being driven by flakey mortgages. What is driving them is the lack of homes accompanied by record low mortgage rates. The median household income to afford a median household is at 21%, which is quite strong. It was around 36% during the bubble years.

What’s so bad about that? Well it starts to get worrisome when the rates rise again, pushing prospective buyers out of affordability and dropping home prices. Even though rates are low, a good number of buyers still cannot qualify for mortgages, and or afford a down payment and when the prices rise, the down payment follows.

The problem with today is that there’s a segment of people who cannot qualify to buy a home, and a segment just as sizable that has seen nothing but depressing reports of the real estate market for the past five years, and they’re weary to buy tarnished assets.                            

 The second reason for this sharpening of home prices...

Ceiling Fan Info

Choosing a ceiling fan doesn’t appear to be too difficult, but there are a few things you need to know before you pull the trigger.

Every gust of air can make a difference in a home during the summer months. Ceiling fans can help with your personal comfort while keeping your utility bills down. In order to pick the winner, you must choose which room and where it will go. Have all your questions answered by reading on.

What size fan is best?

The fans amount of air moved depends on the number of blades as well as their length. The standard bedroom is 12 feet by 12 feet, and the standard four blades, 42inches is perfect. Any rooms larger than that are best suited by wider and longer blades. 52 inches should do the trick for larger rooms.

Your everyday ceiling fan has four blades, but other models make up to six blades; and the more blades the more air it moves. If you are searching for maximum air flow and are on a budget, look for a cheaper five bladed fan.

How long should the fan hang?

The minimum of space between the fan blades and the floor is seven feet. As you’ve noticed not all rooms are the same height, and often in different styles. One fan that would hang too low in one type of room may be perfectly for another.

Fan manufacturers know where their product is going, so they’ve come up with different styles. There are two basic models: standard and ceiling hugger-models.

The standard model has 6 or 8 inch-long downrod extending from the ceilings bracket to the motor. These ideally go on ceilings that are eight feet high. Anything higher and an extension rod may be necessary. If it’s too high the fan becomes useless.

For lower ceilings, the ceiling-hugger is great, as it’s useful and still leaves headspace.

Boxes always have the recommended “install distance”...

How Long it Takes to Close

After you’ve found the house you want, inspected it thoroughly, made an offer and been accepted, it’s time to close. How long exactly is this process? Here’s what the closing timeline will look like.

Average time frame to close

The average today is about 50 days to close. Yes that seems like forever, but there’s a reason it doesn’t happen quickly. To begin with, buyers that require mortgages must complete the loan process and property appraisal, and banks aren’t known to do their business quickly.

While the banks are doing their job in the background, home buyers must use that time to review the property title and do a complete inspection. This time also allows for both the buyer and seller to plan their move.

How to slow down a closing

Despite a home being under contract the occasional hitch can make closing time come to a drastic stop, and here’s how:

Funds: The most common reason closings get delayed is due to money. Poor finances. In order to keep things going at a good pace it’s best to get a mortgage preapproval letter. Often time’s sellers require them. Even in order to get this, it can take the lender an entire month to do their due diligence. Cash buyers don’t really have this problem.  

Appraisal differences

Banks must appraise the home in order for them to approve someone for a mortgage. If the appraisal doesn’t satisfy either party, a renegotiation may take place and that can take time.

No insurance

Waiting until the last minute to get home insurance can really slow down a closing. Most of the time it is required before you move.

Contingencies

Sellers...

5 Things Renters Should Know About Owning a Home

Renters who someday want to own their own home need to change the way they live in order to achieve that goal. There are financial changes, lifestyle changes, and new rules that will apply from making the transition.

It’s the duty of an agent to guide them in their transition.

Moving is already one of the most stressful times in people’s lives, but it could be even more for a first-time home owner. An agent’s knowledge and experience is their most cherished resource. Here are some of the things an agent should share with their new clients.

It’s an ever-changing financial investment

Renters are used to seeing their rent fly out the window every month, and even sometimes increasing. Often times they haven’t a clue as to where it goes. They aren’t aware that it goes towards property taxes, insurance, and things like trash pickup. As once-upon-a-time renters become their own landlords, they will become responsible for those types of expenses. Agents should sit down with their clients and talk about the changes that are coming.

It’s important to like your location for the long-haul

Renters can jump around from spot to spot, but when you own a home, you are set. It’s vitally important for a good agent to stress upon their client that location is a huge factor in home ownership. They need to know that their decision on where to live is one of the most important things to consider.

Abide by the new rules

Homeowners probably don’t think about the new rules of home owner’s association. They may not give a second thought to the neighborhood rules, so the more information they get about this the better.

Think like a homeowner

New homeowners may realize their...

How to Get Your Weeds Under Control

Weeds are definitely annoying, and always seem to pop up in the wrong places. They compete with other plans and often outgrow them if they’re not taken care of. They grow and spread quite easily by dispersing their seeds all over your yard.

The best way to defeat your enemy is to know your enemy. Take notice to what type of weeds are growing and find out the ones you don’t know. If you are in over your head and can’t count how many types of weeds you have, start with eliminating one species at a time. Surf the internet to find out what they are and the best way to kill them.

Weeding doesn’t have to be such a pain, so follow these steps and make it a breeze.

Right tools for the job

The fork-like claw is a new weed’s night mare, but virtually useless on established weeds. Buy yourself a sharp streel trowel to help you dig through the soil and get under the toughest weeds.

For weeds that have been around for a while and have big, long roots, use a spade to remove them for good. Always wear gloves to protect your hands from whatever may be in the dirt, or on a nearby plant. It’s okay to take them off when you are pulling brittle weeds with flimsy stems.

When to weed

Weeds are most easily pulled when the soil is damp. This way the roots easily slip out of the ground without leaving any parts behind. During the summer months, the mornings or late afternoons are best.

Instead of designating one day a week or month to weeding, just do a quick sweep every couple of days so nothing goes unpicked and nothing gets established.

How they spread

Some weeds like nutsedge and plantain grow in clumps and have strong roots that aren’t easily pulled. Use your trowel to dig under the root and wedge it up and out.

Some weeds spread by...

How Overpricing Your Home may Hurt You

The art of pricing a home for sale is one of the biggest parts of being in the real estate market. Each home has a true value, and if you want top dollar, finding the sweet spot is what you will have to do. The true value of a home is determined by what that specific potential buyer is willing to pay for it.

If you can price it closest to what you think someone will pay for it at the beginning, you have a better chance of getting top dollar. If you overprice it and it sits on the market for a while, you’ll probably be kicking yourself when you are forced to drop the price a time or two.

Do yourself a favor learn how to price your home correctly.

Price – buyer vs. seller

Sellers probably don’t have much perspective on the market and develop unreal expectations. They are only worried about their house, limiting their view.

Good agents live and breathe the market every day. They are well in tune with what’s going on because they’re the ones showing and touring homes, gaining an understanding of what drives home sales.

A lot of sellers overvalue their homes because they have that emotional attachment price tag tacked on too. Their home is only special to them, and no one else. It’s not uncommon for sellers to believe the agent’s price doesn’t match their own because they want a quick sale; and the friction begins.

Most good agents know what a home can truly sell for, because quality homes that show well sell in good days and bad.

First impressions last

Markets respond to new listings within a couple weeks, so it’s your job to make it attractive to potential buyers from the start. Your best bet is to follow exactly as your agent says, declutter, clean, painting, and staging in order to gain the advantage.

If you list at the wrong price you can leave a bad first impression...

Tips to Bounce Back After a Foreclosure or Short Sale

The recession that began in 2007 affected millions of Americans, and some are still recovering. Millions of homes were foreclosed, short sold, and straight up abandoned. Hope seemed lost for many, but it takes grit and determination to pick your life back up again.

As the economy slowly recovers, interest rates drop, and rents rise, some will be able to jump back into the market. For those of you who were burned by the market last time, here are five tips to jump back in:

Know your options

Waiting those long seven years after filing bankruptcy or settling a foreclosure is no longer required. Fannie Mae so graciously shortened the period to two years wait for homeowners who had justifying circumstances as prolonged income loss, or major medical expenses. She also gave three years after a foreclosure. This is way down from the four to seven it once was.

In order to get a Federal Housing Administration loan after a foreclosure, you must now wait three years, and maybe one with extenuating circumstances.

Stop being bad with money

This one is about self-control. You need to put your energy into eliminating your debt, building your wealth, and break your needless spending habits. Homebuyer’s biggest task is to save for closing costs. Pile up your cash from bonuses, odd jobs, tax refunds, and any extra money you can get your hands on. Set up automatic deposit to your savings account is a great way to grow your down payment funds, and don’t spend it!

Repair your credit

The FHA has a minimum credit score of 580 for maximum financing. There are lenders who loan the minimum, but other lenders require a FICO score of 640 and up. To build your credit score you must pay your bills on time, not take out new loans, and don’t run up your credit card bills. You can also request your...

Which State is Paying the Most in Closing Costs?

There was a study done earlier this month done by Bankrate.com that concluded Hawaii is paying the most in closing costs. They also have to work more hours every month just to afford their mortgage payment. They start their absurdly high mortgage payments from day one. They lead the nation in highest mortgages.

The CFPB TRID rule which came about last October has stated that estimated amounts homebuyers pay for closing costs are more accurate than ever. These costs include fees the lenders charge, any third-party fees for services like appraisals, etc.

Bankrate.com survey pool consisted of an average of online loan estimates for a $200,000 mortgage single-family home, which also had a 20% down payment.

Their study found that the average closing cost in Hawaii had $1,200 in origination fees, and $1,450 in third-party fees. The next state was New York with an average closing cost of $2,560. Not so far down the list were North Carolina, Delaware, South Carolina, and Connecticut.

The lower tier states were Pennsylvania at $1,840. The states who average below $2,000 were Wisconsin, Kentucky, South Dakota, Oklahoma, and Missouri.

The average closing cost for the entire nation was $2,130.

The cool thing about the CFPB new rules they published in October was it made closing cost estimates much more accurate. Lenders essentially must calculate all the costs ahead of time, allowing homebuyers to shop ahead of time and make sure they have the money needed. 

...

Mortgage Rates Move

A little interest rate drop wasn’t enough to spring the mortgage market back up, however refinances are elevated since the Brexit vote which caused the initial rate drop. The total mortgage application fell 3.5% just last week from the seasonally adjusted basis from the prior week, so says the Mortgage Bankers Association.

The rate sensitive refinance volume fell 4% last week; however it’s also 56% higher than this time last year even when rates were a bit higher. The fallen rates after the Brexit vote took the total number of borrowers benefiting from a refinance to 8.7 million.

Mortgage applications for homes are still up from a year ago, but are down 2% this week. A good thing about these is that they aren’t nearly as rate-sensitive each week.

Purchase applications are still being sought at a faster rate than last year, but this summer has slowed that after a strong start to the year.

America’s average contract interest rate for a 30-year fixed rate mortgage with conforming loan balances of $417,000 and less sunk to a 3.67% from 3.69%, and the points decreased 0.24% from 0.32 for the 80% loan-to-value loans.

Because home prices are still rising so fast, homebuyers haven’t been able to benefit as much from the lower rates. Prices are up 5.7% since June of last year, however down from a 5.9% gain in May. It’s still nothing to snub your nose at. Prices are still expected to rise another 5% throughout the year.

We are pretty sure mortgage rates won’t go as low as they did when Brexit became official, but they have yet to make any notable gains. Since July’s employment report was so positive, it could signal a boost to increase the rates.  It’s possible that bond yields could break out of their close range, and affect mortgage rates. 

...

How Hot Markets Can Hurt Sellers

Even though the market is red hot, it doesn’t mean it will be a breeze for you. It’s not always smooth sailing, so be prepared for some situations that may cause you trouble.

Trying to sell in a red hot market might seem like the best move of your life. Let’s face it, at the rate homes are selling lately, faster this year than last, signs are quite promising.

The key is to get your home set and ready to sell in a competitive market, but you should know what that means. Typically a hot market is one that sells homes within two months. The supply of inventory is a crucial factor in determining how hot it is. As more homes arise, demand seems to fall, but with fewer homes to choose from, demand rises.

Homeowners love hearing it’s a seller’s market, but that doesn’t mean all the cards are stacked in your favor. As in every big venture, there are risks; risks definitely worth considering. Below are five potential problems for sellers, as well as how to ease this burden.

The appraisal is below expectation

Offers are rolling in and they are way more than the asking price! Your big break, not so fast! If the home appraises low, buyers may take a hike. If this is the case, your best bet is to ask what the problems are, and fix them. You also have the option to renegotiate, or get yourself a second appraisal.

From For Sale to Sold

It’s totally possible you may sell your home faster than you can find one for yourself. Unless you have a super sweet deal, or somewhere to stay for the meantime, you will need to buy a second house. A portion of sellers find homes they want before listing their own, but in a true seller’s market, you will be among the buyers and bidding for homes too.

You should always have plan B, as in temporary housing. Moving twice is okay, and you’ll be glad you did it instead of...

Two Types of Construction Loans

Building your own home can be a nightmare if you don’t know what you’re doing. Know and understand what you’re getting yourself into before you apply.

Types of construction loans

The two types of construction loans are:

Construction-to permanent – This type of loan is where the lender advances the money to pay for the construction, and once the home is built, the lender then rolls the loan balance into the mortgage. This is the most common loan option.

Stand-alone construction – The lender often advances the money to build the home. Once the home is complete you get a mortgage to pay your debt of construction costs.

The nice thing about a construction-to-permanent loan is there is only one closing. The interest is paid on the balance of the loan during construction, and it converts into the mortgage once the home is built. Your maximum mortgage rate is set at the beginning when the papers are signed.

The stand-alone-construction loan is worth it because it allows for a smaller down payment. One of the negatives of this loan is your interest rate could rise, simply because you aren’t locking in the rate at the beginning. To go along with that, you could pay for two closings if your circumstances change during the building; you end up paying one for the construction loan, and then again for the mortgage.

Difficult to qualify

Qualifying for the construction-to-permanent is a difficult loan to acquire. It’s different than a typical mortgage because the lender doesn’t hold the house as collateral to back the loan during the construction. You have to at least put down 20% of the loan amount, while rarely allowing you to go down to 10%. The lender will size you up and see if you can afford the loan payments...