Buying a New Home – Fix Your Financing!

Financing is one of the biggest factors in buying a new home.  From the appraisal, to the loan application, to the Good Faith Estimate, to the mortgage, to the large amounts of paperwork that get faxed, scanned, and e-mailed; you can almost spend as much time acquiring money to buy your home as you did finding the home itself.  Sometimes searching for a home takes less time & effort! In order to have the best chance at bidding for and putting a contract on the home that you are going to buy, we recommend that you begin with a lender commitment letter which shows your potential seller that you have the financing and ability to close on the loan. This gives you an edge over other home buyers and also dictates the amount of money you are able to spend on a loan.

Before you ever get this letter from your lender, you are going to need to seriously examine your financial situation in order to determine if you are ready to go through the rigorous loan process required most banks and lenders.  In order to do this, you will need to look at the amount of money you make, how long you have made this amount of money, if you are employed and how long you have been at your current employment, how much your monthly bills are (minimum payments on credit cards and fixed loans), and your credit score.

Your credit score should always be a work in progress in your daily life.  Pretty much all of your financial decisions in life affect your credit score, so you are not going to want to just wake up one day and decide to buy a home.  You will want to check your credit score, and if it need improvement, come up with a plan to get rid of all of the negative information on your score before you apply for a mortgage.  The earlier you start on your plan and get your score up, the longer you have a consistent good credit history, the better chance you have at an excellent interest rate and quality loan offering.

If you have low / no credit, there are several things you can do to “get some credit.”  Secure loans and credit cards are a great way to establish credit because these products are designed to report to the credit agency monthly with your on-time payments.  This establishes that you can maintain payments / credit and also boosts your score.  Another way to work on establishing your credit is to stay super strict on your credit usage.  This means that you should use a low percentage of the credit available to you and make your payments on time. Keeping your “credit utilization ratio” below 30 percent makes the credit agencies “happy.”

Finally, kind of a no-brainer, common sense concept, but you want to get rid of all derogatory marks on your credit.  This includes old utility bills, written off credit cards, old medical bills, and any other reported debts that you owe.  Really working on your credit score is vital to having the best chance at financing a new home loan with a lender or bank.  When you are ready to get started on your home buying process, Contact Ron Lee Homes for Homes for Sale to Build a New, Custom Home.  Call 985-626-7619 or E-mail Info@RonLeeHomes.com.


Click Here for the Source of the Information.

How to Be the Expert Home Shopper

Finding a new home to buy is an exciting and even entertaining way to spend your time.  The thrill of knowing that you are soon to become a homeowner and “have your own place” is one of the best experiences that you can have.  However, below are some tips on how to be the expert home shopper when it comes to finding either your dream home or your next investment.

Timing

There are a couple of things to take care of before you start your home shopper experience.  First of all, make sure you give yourself plenty of time, dependent on your personality, to make a good choice

of a home to buy.  This means that you don’t want to start looking for a new home when your lease is about to expire in a week or your are required to move within a couple of weeks.  Because it’s such a huge investment, buying a home shouldn’t be a rushed decision unless you are good at seeing something and making a quick decision, and you are comfortable with this process.

Secondly, find out how much home you can buy – how much you can afford. You will want to carefully and thoughtfully narrow your search to homes for which you are able to actually get a loan, so you don’t waste your time touring homes that may be out of your price range.  Also, be sure to put yourself in the best position as a buyer by getting a lender commitment letter to show that you pre-qualify for the financing on a new home.

Decide Your Features

This is your dream home, so dream big.  Sit down and brainstorm the features that you want in your new home.  Decide what you can and can’t live without and then stick to your list.  If a home that you are touring measures up to most of your wishlist, and you are willing to compromise on some items; that’s o.k. as long as your began your search with a clear idea of exactly the type of home you wanted to buy in mind.

Be Organized

Once you have given yourself plenty of time, gotten pre-qualified for your loan, decided what you wanted in a house; then you can begin the home buying process.  Stay organized by possibly using an app to map out the homes you are going to look at, take notes about the homes that you especially

like so you can keep your choices straight, and make sure you have enough time in a day to tour everything you want to see. If necessary, break up the tour days to allow yourself time to take a lunch break, relax and consider home options, and simply take care of yourself.  This isn’t a race, it’s a marathon, and there may be many homes in the bunch that you look at before you find the perfect one.  Dress comfortably with the weather in mind, and you might even want to wear shoes that slip on and off for those particular homeowners who require you to keep their floors neat and clean.

A Second Look / Comparison

Once you have your list of top selections, go out and tour them again because the second time through might help you see pros and cons that you didn’t see the first time through.  You will want to do this in a timely manner for homes that you really like because real estate is booming throughout the country, and homes are not staying long on the market. Home inventory is down to just over a 4-month supply which is the sign of a healty economy.

If you are interested in buying a new home for sale, Contact Ron Lee Homes at 985-626-7619 or E-mail Info@RonLeeHomes.com for more information on New Homes for Sale.


Click Here for the Source of the Information.

Items to Negotiate When Buying Your Home

So, you think you got the hard part out of the way when you were able to find a home to buy, in your price range and location, and it’s either a new home or quality home that is perfect for you.  However, before you hand over your precious investment money, there are several items to negotiate that you are going to want to address in the offer that you make on your new home.

Financing

In order to make you a more “quality buyer,” you are going to want to have a very good idea as to how much home you can afford.  Before you ever start your home buying process, you should make sure that your income and credit are in order, and you should meet with a lender in order to get a

lender commitment letter to use in making the offer on your home.  This letter shows the seller of the home and the Realtor or Realtors involved that you are a real buyer with financial backing who will be able to close on the home in a reasonable time period with minimal hassle.  This will make you a solid prospect, and you may be able to use this to beat out any other interested bids or prospects on the home.

Inspections, Repairs, & a Home Warranty

Unless the home that you are buying is an “as is” purchase, where you are taking the home without any changes, you will want to make sure you get a home inspection.  For the sake of expediency, you may want to put a time limit on the amount of time a seller has to get an inspector and make the inspection of the home. If there are repairs or major systems that have issues, you will want to negotiate the cost of these repairs off of the seller’s price or have the seller repair them before closing.  If the home passes inspection but is an older home or has questionable systems or appliances that will potentially bread down quickly, you can ask the seller to provide a home warranty on the home as part of the items to negotiate.

Closing Date

The sooner that you offer to close on the home, the better as far as any motivated seller can attest.  However, there will be times when a seller is selling and trying to move into another home and may be “stuck” in between the two homes during your home buying process.  In order to make you a

“better buyer,” you can offer a short-term lease back as part of your offer which gives you a small break on the purchase price and gives the seller more flexibility in their moving timeline.  Then you and the seller can agree on a fixed closing date that works for both, making you an attractive buyer with your willingness to negotiate to fit their lifestyle.

Closing Costs

In most of the items to negotiate above, you as the buyer are making yourself totally flexible and available to the seller, but don’t forget to take care of you.  If possible, you should ask that the seller help you pay some of the closing costs associated with your home purchase.  They may stick firmly to their selling price, but some sellers will be willing to give a little if they are getting a solid home buyer prospect who will close quickly and work with them on repairs of the home.  Closing costs can add up with the abstract of title, title insurance, deposits into escrow – prorated taxes and insurance – and your loan origination fees, so definitely try to negotiate these costs to get the seller to step up for some of them.  Remember, all the seller can say is “no,” so it doesn’t hurt to ask!

Click Here for the Source of the Information.

New Home Buying Trends of Millennials

Since the late 1990’s, home buyers interested in a buying a home have dramatically increased their usage of the Internet to find available homes for sale. In fact, 2016 statistics from the National Association of Realtors show that 95% of home buyers used Internet searches throughout their home buying process.  Of that 44% of home buyers started their home search online. And, 100% of home shoppers used the Internet to search for a specific property address.

Of these home buyers, 99% of Millennials, the new generation of home buyers, used the Internet to search for homes for sale compared to 89% of the Baby Boomer generation.  And, Millennials are known for their intensive and overwhelming dedication to complete research of any product that they will buy.  This generation is known for visiting multiple websites to compare just one product before purchasing it.  Also, Millennials are just now able to find employment in their field and begin to pay off student loans and begin their search for a home now that employment is on an upward trend after the Recession.  Because of the limited availability of extra cash for a down payment and the tightness of home inventory available to new home buyers, especially first-time home buyers, Millennials are interested in purchasing a home that does not need a lot of work or improvement in order to be able to support themselves and not spend money on repairs or renovations.

What has materialized out of this information is that Millennials may purchase a new home for sale, built brand new buy a builder instead of a “fixer-upper” home that requires additional money for upgrading or improvements.  Also, Millennials typically purchase their “starter home” with plans to move again soon in the future to a 2nd or 3rd home choice, so they actually spend less time in their first home purchase than previous first time home buyer trends would indicate.

This information has given valuable insight to professionals who assist Millennials in the search for the home that they are buying.  Builders know that Millennials may prefer to buy a new versus a previously owned home, so as long as they are a quality builder whose work is showcased effectively to a Millennial buyer, they start out with an “edge” over the competition.  This information has also helped Realtors who assist Millennial buyers by helping prep home sellers who have homes to sell in the price range of Millennial buyers to make sure their homes are improved, upgraded, and ready to sell without any additional construction or renovation work required.  Millennials tend to buy homes that are “just right.”

Click Here for the Source of the Information.

Amazing 1st Quarter Building Permit Data from the EDF

During a report about the 1st quarter of 2017, the St. Tammany Parish Economic Development Foundation has once again brought great news to the residents of St. Tammany Parish about the economic health of this area of the Northshore.  Building permits for the year 2017 so far show a year-over-year increase of 23.6% compared to 1st quarter 2016 for a total of 319 building permits. In addition to this exponential increase compared to last year’s 1st quarter, it also showed a 37.5% increase in building permits compared to the 4th quarter of 2016 (last quarter).

Numerous reports have been bringing the news that May, 2016, saw a decrease in housing inventory on a national scale to just a 2.6 month’s supply, so this drastic increase in building permits is excellent news for home buyers who are entering an extremely tight and competitive housing market in search of a home to buy.

Of the building permits issued, 82 of the permits were commercial building permits, which is a 3.8% increase compared to the first quarter of 2016. The St. Tammany Parish EDF also reported that house sales in the 1st quarter netted 761 houses, which is a 3.8% increase compared the previous year, and the average sales price was $238,068, which is actually slightly less than 2016, which was $238,151 – bucking the national trend.

The number of businesses being incorporated during the 1st quarter of 2016 was 777, which was an astounding 61% year-over-year increase compared to the 1st quarter of 2016.

“Every quarter, we report the number of new domestic entities filed with the Louisiana Secretary of State for St. Tammany Parish,” foundation CEO Brenda Bertus said. “The drastic increases in the months of January and March of 2017 from the same months in 2016 show an increase in growth and stability in St. Tammany.”

Click Here for the Source of the Information.

New Home Sales Enjoy a 12.2% Increase in May

1st quarter results are reporting an 11.3% increase in new home sales for the first 3 months of the year and a phenomenal 12.2% increase in new home sales compared year-over-year to May, 2016.  April’s home sales numbers increased the total amount of homes sold to 593,000, and the number of total new homes sales is 210,000. More good news for new home sales is that there has been a 2.9% increase in contracts for new homes for the month of May, bringing new home contracts to 610,000.

New home sales numbers are also calculated by a 3-month moving average that advances each month to encompass a new data set.  According to this moving average, new homes sold stood at 616,000, which compared to all post-recession numbers is near the high of 619,000. And, the month of May makes the third consecutive month of calculating 3-month moving averages that new home sales have been over 600,000.

According to a joint report by HUD and the Census Bureau, home inventory is on the rise, increasing from 240,000 where it stood for most of 2016 to 268,000, which averages out to a 5.3-month inventory, which will give home buyers a bit more breating room as they place bids and write contracts on homes for sale.

Builders, however, have gotten the message and a good start on new homes being built.  Homes under construction are up by 6% compared to last year, and completed builder new homes are up by 5% last year for a total of 62,000.  In St. Tammany Parish, building permits have increased by 23.6%, which matches the national reports of not-yet-started homes increaseing by 43% for a total of 53,000 in May.  May, 2016 only saw 37,000 homes-to-be-built.  The southern region saw a 6% increase in home sales during the month of May. Predictions of successful sales of single-family homes in the upcoming months are punctuated by solid builder confidence and tight inventory on existing and new homes for sale.

Click Here for the Source of the Information.

A 20% Increase in Home Sales During May

There is absolutely no doubt that the housing market is recovering steadily without any pit stops along the way. As statistics are released each month by multiple agencies, the news is always the same: records are being set, year-over-year increases in new home sales, existing home sales, and all home sales are happening almost every quarter, and the built-up housing inventory of the Recession is in its 103rd consecutive month of year-over-year decreases since the market dropped out in October, 2008.  That last statistic is pretty mind boggling when you think about how bad builders and home sellers alike were suffering, holding onto properties and paying the taxes, mortgages, and expenses on these properties – waiting for the market to turn.

Well, the good news is – it has! May, 2017 is showing the strongest sales numbers for any May in the 9-year history of the RE/MAX National Housing Report – a 20.6%, year-over-year increase of total home sales compared to 2016.  Two other records were also set during the month of May: the average time a home for sale was on the market was only 51 days, and the housing inventory supply shrank to a shockingly low time period of only a 2.6 month’s supply.

What isn’t news and is still being watched by many economists is the average home price increased to $232,500 – the second highest price in the month of May in the history of the report behind the median sales price of $236,062 in August, 2008, right before the Recession. Home prices and rising interest rates have been a concern as home buyers are trying to get loan approvals to being the home buying process.

“In May, we saw an uptick of both loan applications and home sales, which is encouraging in terms of more people getting into the market for homes,” said Adam Contos, RE/MAX Co-CEO. “We don’t expect that the Federal Reserve’s announcement on Wednesday to raise interest rates a quarter of a point will greatly affect the market’s momentum. But housing demand only intensifies the tug-of-war with tight inventories driving prices up.”

Click Here for the Source of the Information.