The RE/MAX Associates Louisville Real Estate Blog

20% of Millennials are Homeowners

The national Association of realtors combine with the nonprofit American student assistance program surveyed a group of 2,203 millennials ages 22-35 and found that 20% of them own a home while also having student debt. Their debt was more than their income! They averaged a debt of $41,200, and an average income of about $38,800.

The other 80% who do not own a home, 83% of them included their debt has stopped him from buying a home. Another 84% said they are waiting at least three years to buy because of their student loans. They are of the belief that their debt is also hindering their ability to save for retirement. 

A shocking 61% of respondents said they haven't saved a single penny for retirement, and 32% say they save occasionally for their retirement.

The fact that millennials and younger generations are having to borrow thousands, and sometimes hundreds of thousands of dollars just to get an education is severely limiting their housing situations. Not only are their housing situations in jeopardy, but future life decisions too. 

First-time home buying sales have been at record lows and this is partially to blame for the debt. Even the older millennial who do make a decent living are putting off buying a home because the down payments are still too large.

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When to Call A Plumber

Plumbing is often a household chore that isn't thought about until it's obvious it needs to be done. Your basic homeowner can operate a plunger and some drain cleaner, but that's usually about as far as their skills go. 

When you know what warning signs to look for, you can save yourself some money and some major hassle, not to mention the mess.

  1. Gurgling

Can you hear gurgling when you run the dishwasher, laundry, or toilet? It could very well be clogged! If it's gurgling when you're not using it, it's trying to find air because the pipes are backed up. 

If you can hear it when you are using it, turn it off immediately because it's on the way to the top! It's backing up!

  1. Hearing water in your pipes 

If you can hear water chugging on through your pipes when there's no water being run in the house you probably have a leak.

Look up, look on the walls, and look on the floor. You were looking for water stains if the spots are warm the leak is in your hot water line. Knowing where the leak is coming from is excellent information to pass on to your plumber. 

Having the problem identified before the plumber comes over could save you some money too!

Look at your water meter, and if it's running when no water is in use, there's a problem.

If you can hear water running in your toilet, these are usually simple fixes. All you may need is a simple flap replacement. If you can hear a hissing noise your internal tank is probably old and needs replacing.

  1. Low water pressure

Low water pressure is often a result of calcium buildup in your faucet's aerator. 

A simple remedy for this is to unscrew the aerator and clean the residue and placing it back. If this doesn't solve the problem you may have a bigger one. 

  1. Slow drainage

Are the sinks taking a little bit longer to drain?...

How to Handle A Home Left in A Trust

If you're lucky enough to inherit a house from my home trust it will no doubt be a tricky situation. No matter if it's from a parent, sibling, or other benefactor you will need to know the ins and outs of this situation so you can best serve yourself. Most likely somebody has passed away and left you their property. This will not be an easy time and judgment can be clouded as your personal and financial life will be trying to make sense of everything that's going on.

If you and your co-beneficiaries decide that one person will keep the home and pay the others off you'll want to know how to do this right so you don't cost yourself in the long run. How does a person pay the others off? 

The perfect scenario is win the entire party agrees that one of them will pay the others off. Rarely is it this mood; everybody usually has their best interest in mind and is looking out for themselves. Someone may have an emotional attachment to the property, while another sees it as pure dollar signs. 

A lot of the time it is just like a divorce, both parties are fighting for the property and a settlement is not the easiest to obtain. Because this is a trust, lawyers and or a mediator will be necessary. Mediation is always the first option and if that does not find a solution then lawyers will battle it out in court.

Paying off the others

If everyone can agree that one person will pay off everybody else the situation needs to be looked at as an "arms length transaction", which is when the property needs to be sold for fair market value and not include any emotional attachment. This is business, and it should be treated as such.

An appraisal of the property will be the first thing that is done, and if for whatever reason the party won't agree to that, then a real estate agents opinion will suffice. Everybody in the party should have a real estate agent to represent their interest during the process. This way nobody gets...

Homeownership is Still the American Dream

The American dream has long been about a big loving family, retirement, and most importantly homeownership. Homeownership is still a top five priority in Americans mines at cording to ReportLinker. 

They conducted a survey in which priorities Americans value most, and homeownership dropped one spot from last year. Above them are academic goals, marriage, and obtaining your career goals.

On the flip-side, when they looked at long-term financial goals homeownership was at the top of the list, with 54% of responders believing that owning a home is of the utmost important financial goals, and 81% of them also said homeownership is the best long-term investment.

As bad as American’s want to become homeowners, they are still hurdling obstacles from 2008. The recession in 2008, higher home prices, lack of supply, and student loans. 

With all these obstacles in the way, 31 percent of homeowners have a mortgage, and 15 percent own their home without a mortgage. 28 percent of respondents rent from a private landlord, and 15 percent live with family or friends for free. 

When they do finally achieve the American dream, what will they spend their money on? 41 percent said maintenance and repairs are the biggest priority. A slick remodel for comfort came in around 21 percent, and a remodel for better style was at 19 percent, and energy conservation was at 16 percent. 

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Increase in Minority Income Spurs More Homeownership

Median income increased from 2015 to 2016 to the highest point it’s ever been. Income levels rose 3.2 percent to $59,039 from 2015 to 2016. These numbers are setting records; its the highest point ever reached, and it’s the second year in a row it’s been rising. The statisics below can be found here.

Asian homes continue holding the highest median income at $81,431, Non-hispanic white households were next with $47,675, which is also up 2%. 

The two households with the lowest median income didn’t come without loss. They experienced the most growth from 2015 to 2016. Black households climbed to $39,490 which is up 5.7 percent. And the second highest growth sector was the Hispanic households, up 4.3 percent to $47,675

Forgetting the rising home prices, this increase in income explains why Hispanic home ownership is rising as well.  

Up from 2015, 2016 saw a whopping 45.6 percent increase in homeownership among Hispanics. This  demographic was the only one that saw an increase, all others saw a loss of homeownership. 

Experts, and all of America is hopeful and rooting for Hispanics and other minorities continue the trend increasing homeownership.

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Foreclosure Alternatives

Let’s say you’ve missed a few mortgage payments and your lender finally sends a notice of default. Times are tough and you’re growing desperate. You fully understand that you’re about to lose your home and take a huge hit on your credit. If foreclosure seems like your only option, think again. 

The absolute very first thing you should do when facing foreclosure is contact your lender. This will make them want to fight with you because they know you are willing to fight for a solution. The earlier you ask for help the greater your chances of winning are. 

Once you tap to your lender, you will have a few options before you. Yes, one will be the foreclosure opportunity, and it could work in your favor if done correctly. 

  1. Sale or rent

If you are in line to pay your mortgage off traditionally, but anticipate there could become a problem you can hold on as long as possible for a buyer. 

You can also rent their home to pay for your mortgage until the home sells.

  1. Short sale

This usually happens when the value of a home is lower than the equity, and there's not enough to cover the mortgage. This is also known as being underwater. The lender will agree to accept less than the amount owed by the borrower by the sale of a third party. 

A short sale will work Like this. A deal will be brokered so that the lender can sell the property for what they can. If the sale amount is less than what is owed, the money goes to the lender and the remaining is relinquished. Typically the lender will pay the seller's closing costs. Expect this process to be about 90 to 120 days. 

The One thing the seller must prove is there a hardship. This means the loss of income, death of a spouse, etc. the point is they must explain why they cannot pay their mortgage anymore. 

  1. Deed in lieu of foreclosure agreement

What...

Commissions

A real estate agent typically makes 5% - 6% of the sale price of the home. Both agents will usually split that 6%. However, negotiations are what it’s all about. These are net predetermined numbers, but the average is 5% - 6% and the agents will divide their earnings between themselves. 

Who pays the commission?

The seller of the property is the one who is on the hook. They pay both agents commission. The buyer is never responsible for paying commissions. The buyer isn’t getting away scott free though, they pay the closing costs. 

Are commission fees negotiable?

The most common way this is done is when the agent represents both the buyer and seller. If this is the case they will often lower their commission fees. This is what is known as “dual agency”. 

How commission works for buyers

If the seller is clever, and truly feel it is justified, they can raise the listing price in order to pass the cost along to the buyer. This is done by the buyer pays closing costs, and they get a little pricer as the listing price is increased. Again, the buyer is mainly responsible for closing costs, which doesn’t allow them to pay nothing. 

Do you pay commission if you don’t buy a home?

No! Agents are paid once a transaction has taken place, so if you don’t buy a home, there is no commission to be paid to the agent. Agents can protect themselves by drafting a buyer’s agency agreement which is a contract binding you to them for whatever terms and conditions they may set. 

What if the home doesn’t sell?

Typically not. Again, agents are paid after a transaction has been made, so if the home doesn’t sell there’s no commission to be paid. 

But, read your contract and make sure you don’t end up owning them money after the home sits on the market for a long while. It has happened where...

How to Best Work With An Agent

If you’re looking to be an active participant in the real estate market today, chances are you will be dealing with a realtor. What are their hours though and will they be flexible enough to work with yours?
We all have cray schedules between work, kids, family and friends plans, gym, etc. so when are a real estate agent’s hours available for you!

An agent’s hours depend on the individual. It depends on how committed they are to their clients. Will they open their schedule at a moment’s notice to show you a new house. They may work on certain days and not on others, or they may be available 24/7. It’s best to check with them to see their normal hours to best align your schedules. 

THere’s a thing called an 80-20 rule, and it indicates that 20% of the agents in the market and handling 80% of the sales. But what about the rest of the field? These agents mostly work part time around their home-life. This means they are taking kids to practice rather than showing you a house. Regardless, it’s always worth the ask to see which agent you get. 

If an agent is truly motivated they will always have open schedules for their clients. They should be working around their client’s schedule instead of their own. IT’s the mindset, of whatever it takes to get the sale.

Before you choose the agent you are going to be working with, it would be wise to communicate with them if you have a crazy-busy schedule. Let them know your day-to-day activities and when you can give your time. This will keep expectations at a certain level while avoiding any frustration. 

Sometimes emergencies comes up and can’t be predicted. In this case, the best thing you can do is give as much advance notice as possible. At times, an agent won’t always be available, but if they have a little lead time, the better your chances are. 

It’s also important to keep others’ schedule...