Be Thankful You Don’t Have to Pay Your Parents’ Interest Rate!

Interest rates hovered around 4% for the majority of 2017, which gave many buyers relief from rising home prices and helped with affordability. In the first quarter of 2018, rates have increased from 3.95% up to 4.45% and experts predict that rates will increase even more by the end of the year.
The rate you secure greatly impacts your monthly mortgage payment and the amount you will ultimately pay for your home. Don’t let the prediction that rates will increase stop you from purchasing your dream home this year.

Let’s take a look at a historical view of interest rates over the last 45 years.

Bottom Line

Be thankful that you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.

7 Tips Toward Getting Your Offer Accepted

Here it is, mid-March, just at the beginning of the ‘Spring Selling Season’ for residential properties, and we’ve already begun to experience a high number of multiple offers received on homes listed for sale in the greater Portland metro area.  Yes, ever since last spring, many owners have received more than one offer on their home, but it’s been just in the past couple of weeks are we seeing 10+ offers submitted on well-priced homes.  Recently, several buyers lost out on a home that received multiple offers, with the accepted offer being $10k, $39k or even ‘over $50k’ over the published list price.  

The multiple offers and price appreciation are starting quickly this year, so it makes me wonder what the rest of the spring and summer real estate market will bring and how best to prepare my buyers for what to expect.

Here are some things Buyers can do to be ultra-prepared for this hyper competitive market.

 1.       Be Prepared Financially – Talk your lender before you begin looking at homes.  You’ll want to keep updated with the lender to understand the financial impact should you need to raise the upper end of your preferred price point.  How will increasing the sale price affect the amount needed for earnest money, down payment, and on-going monthly mortgage payments?  Don’t wait until you see the perfect home on a Saturday, wanting to write an offer, and hoping that you will still be eligible – and comfortable – with higher figures.
 2.       Have a Pre-Approval Letter - Ensure your lender is available to provide a pre-approval letter to submit with your offer. If possible, have the lender obtain full underwriting approval on you and make the financing only subject to the property qualifying.  Some lenders offer an added benefit of ‘guaranteed on-time closing’ which is an attractive feature for sellers as it ensures there won’t be any unnecessary delays in completing the sale due to lender processes.
  3.       Set Your Expectations – I’ve begun to mention to my buyers in our initial conversations that finding the right home will require patience and that it may take submitting 2, 3 or even 7 – 8 offers on various homes before a seller accepts their offer.  If an offer is not chosen, just check one off the countdown and move on.  There will be another home that will be just as good – possibly better – that will become available.
 4.       Make a Good Impression – if you attend an open house, introduce yourself and let the agent know you are working with a Realtor. Avoid bring pets/strollers/etc. inside, without first asking. Don’t sit on the furniture.  Watch what you say during your time inside the home – don’t point out issues with the home, needed updates, unique furnishings – with today’s abundance of electronic devices in homes, you never know what information will get back to the seller.
 5.       Make Your Offer Stand Out – While sale price is one factor to make an attractive offer, it isn’t the only thing sellers look for when reviewing multiple offers.  Other key factors include the amount of earnest money and down payment, limited risks (inspections/repairs, appraisals*), additional possession for the seller after the close date, and your commitment to perform (i.e. you won’t be pulling out due to having to make a hasty decision).  Consider including terms such as putting a cap on any inspection repairs requested, offering to pay for a home warranty that covers both the seller and the buyer, or offering the seller possession after close – possibly free of rent back for a period of time.
 6.       Write a Clean, Uncomplicated Offer – neatness counts.  The offer should be legible, all boxes completed, clearly understandable terms, all spaces initialed or signed as needed.  Prevent the need for the Seller’s agent to follow up with clarifying questions or counter offers.  Keep the terms simple – don’t include the wicker patio furniture unless it is indicated as being included in the listing information.
 7.       Include a Letter to the Seller – these often make a difference to sellers, particularly if this is where their family was raised and the sellers have an emotional attachment to the home. Tell the sellers a little about who you are, what you loved most about the property, and how well you will continue to care for it.  During your house tour, look for a detail that connects your family with the previous owners and gear a portion of your letter to helping them feel comfortable about you becoming the new owner of the home.

When considering submitting an offer on a home, ask yourself ‘how badly do I want this home.’  Then, if you put your best foot forward and don’t get the home, you can feel great about doing your best.

 * Ensure your Realtor informs you of the pros/cons of removing any inspection or appraisal contingency before you include those terms in the offer.

Homework Series - March 2018

The official date of spring is March 20th and winter is slowly losing its bite. For homeowners in the Portland metro area, March may provide time for stepping out into the yard, inspecting the property for winter damage, and preparing for spring.  It may also be a time to watch for flooding as warmer temperatures slowly thaw snow on the mountains, filling rivers and streams.  

Regardless of the climate and temperature, here are some maintenance and preventative tips every homeowner should be aware of this month. In addition to those listed above, 

1. Prepare for potential floors: elevate electrical items, plug all electronics into surge protectors to prepare for lightning storms, inspect basement and attic for any dampness, check your sump pump for proper operation.
2. Check/replace air conditioning filters and have your HVAC system inspected.
3. Clean under heavy appliancees (refrigerator, dishwasher, etc.).
4. Take down sotrm windows and install original screens.
5. Put out water, seeds, and suet for birds.
6. Clean gutters: clear any blockages, leaves or branches.
7. Call a chimney sweep for maintenance after the winter season.

The Cost of Waiting - The Impact of Projected Interest Rate Increases

Some Highlights:

• Interest rates are projected to increase steadily heading into 2019.
• The higher your interest rate, the more money you end up paying for your home and the higher your monthly payment will be.
• Rates are still low right now. Don’t wait until rates hit 5% to start searching for your dream home!

February 2018 Real Estate Market Statistics

The following is the latest Real Estate Market Statistics for February 2018.
Click here for the full report

• Sales:   1,806 in February 2018 vs 1,669 last February  8.2 %

• Pending Sales:   2,337 in February 2018 vs 2,369 last February:  -1.4%

• New Listings:   2,530 in February 2018 vs 2,521 last February:  0.4%

• Average Sales Price:   $432,200 in February 2018 vs $402,000 last February:  7.5%

• Total Market Time: 69 days in February 2018 vs 62 days last February:  1.1%

• Inventory in Months: 1.9 months in February 2018 vs 1.9 months last February

Inventory by Area:

• NW Washington County   1.71 months
• Beaverton/Aloha               0.79 months
• Hillsboro/Forest Grove     1.49 months

Moving up Is MORE Affordable Now Than Almost Any Other Time in 40 Years

If you are considering selling your current home, to either move up to a larger home or into a home in an area that better suits your current family needs, great news was just revealed.
Last week, Trulia posted a blog, Not Your Father’s Housing Market, which examined home affordability over the last 40+ years (1975-2016). Their research revealed that:

“Nationally, homes are just about the most affordable they’ve been in the last 40 years… the median household could afford a home 1.5 times more expensive than the median home price. In 1980, the median household could only afford about 3/4 of the median home price.
 
Despite relatively stagnant incomes, affordability has grown due to the sharp drop in mortgage rates over the last 30 years – from a high of over 16% in the 1980s to under 4% by 2016.

Of the nation’s 100 largest metros, only Miami became unaffordable between 1990 and 2016. Meanwhile, 22 metros have flipped from being unaffordable to becoming affordable in that same time frame.”

Here is a graph showing the Affordability Index compared to the 40-year average:
 
The graph shows that housing affordability is better now than at any other time in the last forty years, except during the housing crash last decade.

(Remember that during the crash you could purchase distressed properties – foreclosures and short sales – at 20-50% discounts.)

There is no doubt that with home prices and mortgage rates on the rise, the affordability index will continue to fall. That is why if you are thinking of moving up, you probably shouldn’t wait.

Bottom Line

If you have held off on moving up to your family’s dream home because you were hoping to time the market, that time has come.                                                                     KeepingCurrentMatters.com 3/15/2018

9 Areas You're Forgetting to Clean

In preparing your home for sale, a deep thorough cleaning will help your home shine in the eyes of the buyers.  Most homeowners know to wash windows, mop floors, vacuum rugs and make their beds.  Here is a list of areas often forgotten - but noticeable to someone who doesn't regularly live in your home.

• Top of the refrigerator and the inside shelves

• Skylights - remove those cobwebs in the skylight well

• Trim above the doors

• Vents and Return Air Vents - vacuum or dust the grills on the vents and air returns

• Bookcase shelves

• Picture frames

• Hood Ranges and surrounding cabinets - remove spattered grease, dust and food particles

• Light fixture globes - how did those bugs get in there!

• Ceiling fan blades - especially dust the top of the blades

The most cost efficient way to spruce up a home is to clean it thoroughly.