interesting considerations...from realtor.com
If you’re in the throes of house hunting, chances are you’re excited—whether it’s your first home or your fifth. It’s an emotional roller-coaster ride!
Seeing something you love (or hate) can often cause you to blurt all kinds of things, some of which you might regret. Because while you can (and should) always be upfront with your Realtor®, you might not want to be quite so candid around the sellers (or the listing agent working for them). The reason? Just like in “Law & Order,” what you say can—and will—be used against you.
So before you step into a home and stick your foot in your mouth, heed these top things never to say to sellers or their agents when you’re shopping for new digs.
‘This is my dream house!’
You ever play poker? Well then you should know that if you want to maintain a strong negotiating position, never tip your hand, advises Ryan Gibbons. Interested parties who express their unbridled passion for a home are shooting themselves.
“These are the kind of things that can help the sellers snag more money out of the buyers, because they really know how much this house means to them,” he notes. “All discussions about the house and any negotiating strategies are best left in private.” Not that you shouldn’t say a few nice things—just don’t gush. Gushing = bad.
‘That couch is hideous’
“Don’t tell the sellers—or any agent present—that they have poor taste in decor or furniture,” says Naveed Shah, a Realtor with Keller Williams. “Their style might not suit yours, but that’s no reason to insult them. If they hear you bad-mouthing their rug or curtains, then they might just pick another buyer.”
‘I can afford to spend X’
While it’s certainly a good idea for prospective buyers to find out just how much they can afford, they should keep that intel strictly between them and their Realtor.
“A prospective home buyer should never address with a seller or seller’s agent anything concerning their financing or ability to pay a full-price offer,” says Maryjo Shockley, a Realtor with Keller Williams. “This hampers the ability to negotiate the fairest price for the property.” If asked, just say, “Finding a fairly priced home is what matters to us more than the amount we can afford.” It works!
‘I can’t wait to get rid of that’
Even if you’re thinking, “This place will be perfect once I get my hands on it,” don’t let on, notes Betsy Bingle an associate broker with LintonBingle Associate Brokers.
“If the new buyers are going to renovate a home in which someone raised a family and has truckloads of memories, a buyer should never say ‘I can’t wait to rip that swingset out’ or ‘That wall color is horrible—can’t wait to repaint this place,'” she says
“The seller can easily reject their offer or come back asking for more money upon hearing that someone wants to totally remake the place where they made lifelong memories,” she adds.
‘Why are you selling?’
Yes, you may very well be curious to find out why sellers have put their home on the market. Keep it to yourself! It’s considered poor taste to ask, and it may open a can of worms.
“Never ask the sellers why they are selling,” explains Realtor Klara Madlin of Klara Madlin Real Estate. “There may be personal reasons like divorce or job relocation or something worse—none of it your business.” Opening up a possibly uncomfortable situation will not help you down the road should a bidding war emerge.
‘What’s it really like to live here?’
Sure, you want the inside scoop, but that doesn’t mean you get to interrogate the townsfolk.
“Don’t ask the neighbors intrusive questions. By all means, talk to them and give them a chance to open up, but don’t push if they’re not talkative,” Shah says. If you do wind up moving into the neighborhood, do you really want your first impression to be that of a pest or a spy?
‘You’ll never get that price!’
Though you might be thinking “I wouldn’t give them X amount for that house,” as a buyer it’s best for you to keep your thoughts and opinions to yourself, notes Cara Ameer, a Realtor with Coldwell Banker. Even if a buyer thinks a home is priced on the high side, it could very well be within range of comparables in the neighborhood. Which leads to our next point…
‘I’ll give you [an extremely lowball offer] for this house, whaddaya say?’
“Don’t ask your agent to submit multiple lowball offers,” says Shah. “Take your agent’s advice when it comes to pricing”— because it’s never wise to insult the person whose home you’re trying to buy and you don’t want to appear as a not-so-serious buyer. Please, don’t insult the seller.
Monday, July 18, 2016
What Is a Rent-Back Agreement? A Godsend to Home Sellers Not Ready to Move
from realtor.com
What is a rent-back agreement? You’ll definitely want to know if you’re buying a new home while selling the one you’re currently living in. As you might imagine, this double transaction can require some really good luck, timingwise, to get just right. After all, if you sell your home and have to move out before you’ve closed on your new home or even found a place to live, that means you’ll have to either couch surf or pay to stay in hotel limbo. Either way, you’ll have to endure the hell of moving twice.
Not so with a rent-back agreement, which gives the sellers extra time to live in the home after closing, essentially letting them become the new buyer’s temporary tenants. It doesn’t last for long—there are usually time limits—but it will give sellers a chance to close on their new home and pack up for the big move.
For the buyer, offering a rent-back agreement can have a couple of big bonuses. For one, if it’s a competitive market, an offer that’s flexible on move-out dates might very well have an edge. And the rent that the seller would pay the buyer could help recoup those hefty closing costs.
Done right, it can benefit everyone, but there are some things to consider before you jump on board.
How rent-back agreements work
Like the name implies, rent-back agreements are legally binding agreements made in writing between the buyer and the seller. Both parties need to decide on a couple of issues, namely how long the seller will need to stay in the house after closing and how much rent the seller will pay to be there. To figure out what rent would be fair, check out realtor.com/rentals in your area, then do the math.
To play it safe, the buyer may also charge a refundable deposit, just like any landlord would.
“There’s always the chance that damages could occur while the seller is living there. That’s why it’s a good idea to have a holdback deposit of anywhere between $5,000 to $10,000,” says Emily Beaven, a Realtor® with Coldwell Banker in San Francisco.
Once everyone agrees, the buyer will close on the house, at which point the buyer will officially take possession and pay any upfront costs like a normal closing. In addition, the seller will pay any security deposits or upfront rent and remain in the house.
What rent-back agreements mean for the seller
Getting more time to buy your next dream home can be a lifesaver, but don’t dawdle—a rent-back agreement won’t buy you much time.
“Typically, lenders won’t accept anything longer [than] 60 days,” Beaven says.
While you’re still at the property, there’s one more potential downside to deal with: It isn’t really yours anymore. You technically have a landlord now, which means if you cause any damages, you may not get your security deposit back.
What rent-back agreements mean for the buyer
If you’re not in a rush to move in, offering a rent-back agreement can help you get your dream home.
“It really can make your offer stronger,” Beaven says, but don’t take it too lightly. Since you’re the new owner (and the new landlord), you might run into a few new problems.
“The buyer, like a landlord, is now responsible for making any repairs should, say, your water heater break,” Beaven says. Plus you may have to make those repairs immediately.
Buyers will also have to worry about the sellers actually moving out on time. It’s rare that they drag their feet, but it can happen. If so, you will have to go through the usual process landlords do to evict your tenants, which is rarely pleasant. Still, odds are all will go fine, and your sellers will be grateful they won’t have to move twice.
What is a rent-back agreement? You’ll definitely want to know if you’re buying a new home while selling the one you’re currently living in. As you might imagine, this double transaction can require some really good luck, timingwise, to get just right. After all, if you sell your home and have to move out before you’ve closed on your new home or even found a place to live, that means you’ll have to either couch surf or pay to stay in hotel limbo. Either way, you’ll have to endure the hell of moving twice.
Not so with a rent-back agreement, which gives the sellers extra time to live in the home after closing, essentially letting them become the new buyer’s temporary tenants. It doesn’t last for long—there are usually time limits—but it will give sellers a chance to close on their new home and pack up for the big move.
For the buyer, offering a rent-back agreement can have a couple of big bonuses. For one, if it’s a competitive market, an offer that’s flexible on move-out dates might very well have an edge. And the rent that the seller would pay the buyer could help recoup those hefty closing costs.
Done right, it can benefit everyone, but there are some things to consider before you jump on board.
How rent-back agreements work
Like the name implies, rent-back agreements are legally binding agreements made in writing between the buyer and the seller. Both parties need to decide on a couple of issues, namely how long the seller will need to stay in the house after closing and how much rent the seller will pay to be there. To figure out what rent would be fair, check out realtor.com/rentals in your area, then do the math.
To play it safe, the buyer may also charge a refundable deposit, just like any landlord would.
“There’s always the chance that damages could occur while the seller is living there. That’s why it’s a good idea to have a holdback deposit of anywhere between $5,000 to $10,000,” says Emily Beaven, a Realtor® with Coldwell Banker in San Francisco.
Once everyone agrees, the buyer will close on the house, at which point the buyer will officially take possession and pay any upfront costs like a normal closing. In addition, the seller will pay any security deposits or upfront rent and remain in the house.
What rent-back agreements mean for the seller
Getting more time to buy your next dream home can be a lifesaver, but don’t dawdle—a rent-back agreement won’t buy you much time.
“Typically, lenders won’t accept anything longer [than] 60 days,” Beaven says.
While you’re still at the property, there’s one more potential downside to deal with: It isn’t really yours anymore. You technically have a landlord now, which means if you cause any damages, you may not get your security deposit back.
What rent-back agreements mean for the buyer
If you’re not in a rush to move in, offering a rent-back agreement can help you get your dream home.
“It really can make your offer stronger,” Beaven says, but don’t take it too lightly. Since you’re the new owner (and the new landlord), you might run into a few new problems.
“The buyer, like a landlord, is now responsible for making any repairs should, say, your water heater break,” Beaven says. Plus you may have to make those repairs immediately.
Buyers will also have to worry about the sellers actually moving out on time. It’s rare that they drag their feet, but it can happen. If so, you will have to go through the usual process landlords do to evict your tenants, which is rarely pleasant. Still, odds are all will go fine, and your sellers will be grateful they won’t have to move twice.
Lots in 2015 are Smallest on Record
interesting, but of course, expected trend in real estate development. From eyeonhousing.org
The median lot size of a new single-family detached home sold in 2015 dropped under 8,600 square feet for the first time since Census Bureau’s Survey of Construction (SOC) started tracking the series.
An acre is 43,560 square feet, so the current median lot size is just under one-fifth of an acre. In 2014, Paul Emrath used a football field analogy to help visualize the median lot size that proved to be very popular. So using a football field as a measuring stick, 5.6 median lots would fit between the goal lines of a football field in 2015.
While nation’s lots are getting smaller on average, the regional differences in lot sizes persist. Looking at single-family (attached and detached) speculatively built (or spec) homes started in 2015, the median lot size in New England exceeds half an acre. This is 2.6 times larger than the national median lot.
New England is known for strict local zoning regulations that often require very low densities. Therefore, it is not surprising that more than half of single-family spec homes started in New England are built on some of the largest lots in the nation, with more than half of the lots exceeding half an acre.
The East South Central Division comes as a distant second with the median lot occupying less than a third of an acre. The Pacific division where densities are high and developed land is scarce has the smallest lots, with half of the lots being under 0.15 acres. The neighboring Mountain and West South Central Divisions also report typical lots smaller than a national median, 0.17 and 0.16 acres, respectively.
The analysis above was limited to single-family speculatively built homes. Custom homes built on owner’s land with either the owner or a builder acting as the general contractor do not involve the work of a professional land developer subdividing a property. Therefore, in case of custom homes, lots refer to owner’s land area rather than lots in conventional sense. Nevertheless, the SOC reports lot sizes for custom homes and shows that they tend to have larger lots. The median lot size for custom single-family homes started in 2015 was exactly one acre.
For this analysis, the median lot size was chosen over average since averages tend to be heavily influenced by extreme outliers. In addition, the Census Bureau often masks extreme lot sizes and values on the public use SOC dataset making it difficult to calculate averages precisely but medians remain unaffected by these procedures.
The median lot size of a new single-family detached home sold in 2015 dropped under 8,600 square feet for the first time since Census Bureau’s Survey of Construction (SOC) started tracking the series.
An acre is 43,560 square feet, so the current median lot size is just under one-fifth of an acre. In 2014, Paul Emrath used a football field analogy to help visualize the median lot size that proved to be very popular. So using a football field as a measuring stick, 5.6 median lots would fit between the goal lines of a football field in 2015.
While nation’s lots are getting smaller on average, the regional differences in lot sizes persist. Looking at single-family (attached and detached) speculatively built (or spec) homes started in 2015, the median lot size in New England exceeds half an acre. This is 2.6 times larger than the national median lot.
New England is known for strict local zoning regulations that often require very low densities. Therefore, it is not surprising that more than half of single-family spec homes started in New England are built on some of the largest lots in the nation, with more than half of the lots exceeding half an acre.
The East South Central Division comes as a distant second with the median lot occupying less than a third of an acre. The Pacific division where densities are high and developed land is scarce has the smallest lots, with half of the lots being under 0.15 acres. The neighboring Mountain and West South Central Divisions also report typical lots smaller than a national median, 0.17 and 0.16 acres, respectively.
The analysis above was limited to single-family speculatively built homes. Custom homes built on owner’s land with either the owner or a builder acting as the general contractor do not involve the work of a professional land developer subdividing a property. Therefore, in case of custom homes, lots refer to owner’s land area rather than lots in conventional sense. Nevertheless, the SOC reports lot sizes for custom homes and shows that they tend to have larger lots. The median lot size for custom single-family homes started in 2015 was exactly one acre.
For this analysis, the median lot size was chosen over average since averages tend to be heavily influenced by extreme outliers. In addition, the Census Bureau often masks extreme lot sizes and values on the public use SOC dataset making it difficult to calculate averages precisely but medians remain unaffected by these procedures.
Metro Denver sees a big jump in the inventory of homes for sale in June
from DenverPost.com, same trends I'm seeing....
New home listings rose in June in metro Denver, but the pace of sales softened, boosting the number of properties available on the market.
There were 6,796 homes and condos available for sale at the end of June, which was 24.4 percent more than the count of active listings at the end of May, according to a report Wednesday from the Denver Metro Association of Realtors.
“We are starting to see signs of a much needed market correction and a market plateau may be on the horizon,” suggested Anthony Rael, chairman of DMAR Market Trends Committee, in the monthly update.
June, July and August are the months when the inventory of homes available for sale are most likely to hit a peak. And the number of active listings are under half the historical average, meaning buyers still face a limited selection.
But the 24.4 percent jump was a huge one. Since 2005, the typical increase between the inventory in May and June has averaged closer to 4.4 percent, Rael said.
June saw 7,615 new listings come on the market, 12.2 percent more than in May. Buyers closed on 5,324 homes and condos during the month, a 2.9 percent increase from May, but a 13.1 percent decrease from June 2015.
Randy Hay, a residential broker with Keller Williams Realty Downtown in Denver, said he recently listed a home for $348,000. It is the kind of property that earlier this year would have had multiple showings a day and a quick sale.
“Now it can go days without a showing,” he said. On the flip side, Hay said he can once again show buyers three or four homes in a day without them feeling pressure to make an immediate decision.
“I would love to see a more balanced market. We are pricing so many people out of the market if this continues,” he said of metro Denver’s continued run of double-digit home price gains.
Despite the extra inventory, home prices continued to rise and the average number of days that listings are spending on market dropped to 26 from 30 in May.
The median price of a single-family home rose 0.25 percent in June from May to $396,000, a 10.7 percent increase from May 2015, while the average price rose 2.9 percent month-over-month to $466,288, a 9.7 percent increase year-over-year.
The median price for a condo rose 0.41 percent to $246,000, and is up 13.9 percent year-over-year. The average price of a condo sold dropped 2.3 percent to $291,554 month-over-month, but remains up 12.4 percent on the year.
Interest rates dropped unexpectedly in late June following the Brexit vote, which may have caused some buyers to pause so they could obtain a better deal on their mortgages, the report said.
Hay said he doesn’t see Brexit as that big a factor. Buyers, either correctly or incorrectly, may perceive they have been priced out of the market. But a larger inventory could also bring out home seekers frustrated by the limited selection available earlier this year.
New home listings rose in June in metro Denver, but the pace of sales softened, boosting the number of properties available on the market.
There were 6,796 homes and condos available for sale at the end of June, which was 24.4 percent more than the count of active listings at the end of May, according to a report Wednesday from the Denver Metro Association of Realtors.
“We are starting to see signs of a much needed market correction and a market plateau may be on the horizon,” suggested Anthony Rael, chairman of DMAR Market Trends Committee, in the monthly update.
June, July and August are the months when the inventory of homes available for sale are most likely to hit a peak. And the number of active listings are under half the historical average, meaning buyers still face a limited selection.
But the 24.4 percent jump was a huge one. Since 2005, the typical increase between the inventory in May and June has averaged closer to 4.4 percent, Rael said.
June saw 7,615 new listings come on the market, 12.2 percent more than in May. Buyers closed on 5,324 homes and condos during the month, a 2.9 percent increase from May, but a 13.1 percent decrease from June 2015.
Randy Hay, a residential broker with Keller Williams Realty Downtown in Denver, said he recently listed a home for $348,000. It is the kind of property that earlier this year would have had multiple showings a day and a quick sale.
“Now it can go days without a showing,” he said. On the flip side, Hay said he can once again show buyers three or four homes in a day without them feeling pressure to make an immediate decision.
“I would love to see a more balanced market. We are pricing so many people out of the market if this continues,” he said of metro Denver’s continued run of double-digit home price gains.
Despite the extra inventory, home prices continued to rise and the average number of days that listings are spending on market dropped to 26 from 30 in May.
The median price of a single-family home rose 0.25 percent in June from May to $396,000, a 10.7 percent increase from May 2015, while the average price rose 2.9 percent month-over-month to $466,288, a 9.7 percent increase year-over-year.
The median price for a condo rose 0.41 percent to $246,000, and is up 13.9 percent year-over-year. The average price of a condo sold dropped 2.3 percent to $291,554 month-over-month, but remains up 12.4 percent on the year.
Interest rates dropped unexpectedly in late June following the Brexit vote, which may have caused some buyers to pause so they could obtain a better deal on their mortgages, the report said.
Hay said he doesn’t see Brexit as that big a factor. Buyers, either correctly or incorrectly, may perceive they have been priced out of the market. But a larger inventory could also bring out home seekers frustrated by the limited selection available earlier this year.
Brexit Vote Drives down Mortgage Rates, Results Show
silver lining news from RISMedia
Slow growth in China and the Brexit vote in the U.K. have played a major role in driving down mortgage rates, according to Freddie Mac’s recently released monthly Outlook for July. In the most recent Primary Mortgage Market Survey, the 30-year fixed-rate mortgage fell to 3.41 percent, just slightly above the all-time record low. This is likely to result in a boost in housing activity, particularly refinance, as homeowners take advantage of the current low rates.
“With the U.K.’s decision to exit from the European Union, global risks increased substantially, leading us to revise our views for the remainder of 2016 and all of 2017,” says Sean Becketti, chief economist, Freddie Mac. “Nonetheless, the turbulence abroad should continue to create demand for U.S. Treasuries and keep mortgage rates near historic lows; thereby, allowing home sales to have their best year in a decade, along with a boost in refinance activity.”
Results lead experts to expect growth rebound in the remaining quarters of 2016 to show GDP at 1.9 and 2.2 percent in 2016 and 2017. In light of recent global pressures, the 30-year, fixed-rate mortgage forecast has been revised down for both 2016 (by 30 basis points) and 2017 (by 50 basis points) to 3.6 percent and 4.0 percent, respectively.
Based on these low mortgage rates, expect the refinance share of originations to rise to 49 percent for 2016, 8 percentage points above last month’s forecast. This translates to about $100 billion more in originations, bringing the total for 2016 to $1,825 billion.
With June’s much-improved employment report over May’s release, expect unemployment to average 4.9 percent in 2016 and 4.8 percent in 2017.
The house price appreciation forecast for 2016 remains at 5.0 percent, and in 2017, 4.0 percent.
Slow growth in China and the Brexit vote in the U.K. have played a major role in driving down mortgage rates, according to Freddie Mac’s recently released monthly Outlook for July. In the most recent Primary Mortgage Market Survey, the 30-year fixed-rate mortgage fell to 3.41 percent, just slightly above the all-time record low. This is likely to result in a boost in housing activity, particularly refinance, as homeowners take advantage of the current low rates.
“With the U.K.’s decision to exit from the European Union, global risks increased substantially, leading us to revise our views for the remainder of 2016 and all of 2017,” says Sean Becketti, chief economist, Freddie Mac. “Nonetheless, the turbulence abroad should continue to create demand for U.S. Treasuries and keep mortgage rates near historic lows; thereby, allowing home sales to have their best year in a decade, along with a boost in refinance activity.”
Results lead experts to expect growth rebound in the remaining quarters of 2016 to show GDP at 1.9 and 2.2 percent in 2016 and 2017. In light of recent global pressures, the 30-year, fixed-rate mortgage forecast has been revised down for both 2016 (by 30 basis points) and 2017 (by 50 basis points) to 3.6 percent and 4.0 percent, respectively.
Based on these low mortgage rates, expect the refinance share of originations to rise to 49 percent for 2016, 8 percentage points above last month’s forecast. This translates to about $100 billion more in originations, bringing the total for 2016 to $1,825 billion.
With June’s much-improved employment report over May’s release, expect unemployment to average 4.9 percent in 2016 and 4.8 percent in 2017.
The house price appreciation forecast for 2016 remains at 5.0 percent, and in 2017, 4.0 percent.
A house is being built inside a cliff...
A house is being built inside a cliff, thanks to the internet
making the most of space...from cnn.com
A madcap proposal for a concrete house inside a cliff went viral last year -- and now it's set to be built, thanks to the internet.
Dutch practice OPA designed a home wedged in a mountaintop, topped by an infinity pool that doubles as a skylight for the underground lair.
In the wake of the media interest, a client who wanted to make the concept a reality came forward and the project will now be realized 1,600 meters (5249 feet) above sea level on a cliff in Lebanon.
making the most of space...from cnn.com
A madcap proposal for a concrete house inside a cliff went viral last year -- and now it's set to be built, thanks to the internet.
Dutch practice OPA designed a home wedged in a mountaintop, topped by an infinity pool that doubles as a skylight for the underground lair.
In the wake of the media interest, a client who wanted to make the concept a reality came forward and the project will now be realized 1,600 meters (5249 feet) above sea level on a cliff in Lebanon.
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