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Real Estate News – April 2019

#CallOnChristine

April 2019
REAL ESTATE NEWS
Brought to you by Christine Kalmbach  Logo
Down Payment Dilemma: How Do You Know How Much to Put Down On A Home?
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Down PaymentFor many prospective home buyers, the down payment is the most daunting hurdle in the race to buy a home. Even for people with decent credit and a healthy paycheck, the down payment can be the great homeownership killer.

The big question for all prospective buyers is: how much should my down payment be? Most lenders will tell you that 20 percent is the standard, but is that really necessary?

The short answer is no, but of course, there are some caveats.

“It’s a myth that all homebuyers must have a 20 percent down payment to buy a home,” says Nancy Herrera-Siples, a Riverside, CA, branch manager at Primary Residential Mortgage. So why all the fuss over having 20 percent to put down? “Because if you don’t, it usually means you’ll have to shell out money for either private mortgage insurance (PMI) or government insurance, which is usually financed by the Federal Housing Administration,” according to Herrera-Siples.

Still, when a low down-payment is your only option to buy a home, PMI might literally be a small price to pay. Remember that PMI goes away eventually when your loan balance is 80 percent or less of the home’s value. If you’re in an area where homes are rising in value, this could happen sooner than you think.

Still confused about the ins and outs of down payments? Here are a few reasons to go high… or low.

When to make a substantial down payment:

  • When you’re looking to keep your monthly payment as low as possible and have the cash to spare.
  • When you’re approaching retirement age and can envision a reverse mortgage sometime down the line.
  • When the interest rate is lower with a higher down payment. “The more you put down, the better position you are in for negotiating a lower interest rate,” says Credit.com.
  • If you’re worried about being underwater. If the market should drop in your area, you run the risk of owing more than your home is worth.

When to go low:

  • When you don’t have the funds for a higher down payment and can’t earn or borrow them quickly enough.
  • When the rate on your FHA or Fannie or Freddie loan is comparable to that you’d get with a higher down payment.
  • When you need to escape a high-rent situation and the monthly payment on a house is lower than what you’re currently paying, even with the PMI factored in.
  • When you’re confident your home will appreciate quickly, allowing you to refinance and get rid of PMI quickly.
Should You Buy a Home Warranty?
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“I’m buying a house. Should I buy a home warranty?” Seems like a relatively tame question, right? But post it on Facebook or Nextdoor and watch the impassioned responses roll in. You might as well ask, “What political party should I belong to?”

Broken Pipe

Everyone has their own experience, so expect to hear a few people call them “a scam” or at the very least a waste of money. Others will regale you with their tale of how having a warranty saved them from a freezing winter because they couldn’t afford to fix their furnace without it.

In the end, the decision is personal and largely based on how comfortable you are paying out of pocket if one of the more expensive items in your home, like the furnace or hot water heater, needs to be replaced. Here are some things to consider when making your decision.

Know the cost

“A basic home warranty costs about $350 to $500 a year or more,” says Money Talks News. A warranty typically covers plumbing, hot water heaters, and heating/electrical system components. More expensive, ‘enhanced’ plans can provide added coverage for things like your washer/dryer, air conditioning system, refrigerator, septic tank, and garage door openers.

You can typically break down the annual cost into more manageable monthly payments, but the cost of the warranty itself isn’t the only thing you’re responsible for paying. Most home warranties include either a service call fee or a deductible, so it’s important to consider those factors in addition to the home warranty plan itself.

Consider your peace of mind

Many homeowners opt for a home warranty for major “just-in-case” scenarios. Just in case the air conditioning unit crashes and burns. Just in case the hot water heater dies. With the cost of some of these items running into the thousands—the average cost for a new air conditioning unit and installation, per HomeAdvisor, is $5,413!—the peace of mind factor is huge.

“For a homeowner who doesn’t have an emergency fund, or who wants to protect their emergency fund, a home warranty can act as a buffer,” says Investopedia. Home warranties also make sense for people who aren’t handy or don’t want to deal with finding a contractor.

Understand that not everything is covered

There’s always a chance that the item you need to be repaired is not covered under your warranty for one reason or another. Some problems simply won’t be covered by a warranty, and most home warranties won’t cover components that haven’t been properly maintained.” The lesson here: Read the fine print, so you’re prepared.

QUESTIONS? VISIT ChristineKalmbach.kwrealty.com
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Christine Kalmbach REALTOR

Keller Williams Realty Platinum

832-755-2954
281-856-0808

Click here to download my mobile app!
christinekalmbach@kwrealty.com
ChristineKalmbach.kwrealty.com
Copyright 2019 Keller Williams® Realty, Inc. If you have a brokerage relationship with another agency, this is not intended as a solicitation. All information deemed reliable but not guaranteed. Equal Opportunity Housing Provider. Each office is independently owned and operated. 

This Month in Real Estate – March 2019 Market Update

This Month in Real Estate
March 2019 Market Update
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Monthly VideoAccording to the National Association of REALTORS®, existing home sales experienced a third consecutive month of declines in January. While the supply of homes is rising, a growing share of those homes may still be out of reach for some buyers.
Interest Rates
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Interest RatesAccording to Freddie Mac, 30-year fixed rates decreased to 4.35 percent in January from 4.45 percent in December. This rate remains well below the historical average of 8.90 percent.
Home Sales
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Home Sales Graph
The National Association of REALTORS® reported home sales at a seasonally adjusted annual rate of 4.94 million in January, down from 5.0 million in December, and 8.5 percent below the 5.4 million sales pace from a year ago.
Home Prices
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Home Price Graph
The median home price decreased to $247,500 in January, down 2.8 percent from December. The median home price has increased by approximately $6,700 in the past year alone.
Inventory
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Inventory Graph
There was a 3.9-month supply of housing inventory in January 2018, up 5.4 percent from December. The total number of available homes for sale has increased by 14.7 percent compared to January of last year.
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Brought to you by KW Research. For additional graphs and details, please see the This Month in Real Estate PowerPoint Report.The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed on This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve some degree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.
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Christine Kalmbach REALTOR

Keller Williams Realty Platinum

832-755-2954
281-856-0808

Click here to download my mobile app!
christinekalmbach@kwrealty.com
ChristineKalmbach.kwrealty.com
Copyright 2019 Keller Williams® Realty, Inc. If you have a brokerage relationship with another agency, this is not intended as a solicitation. All information deemed reliable but not guaranteed. Equal Opportunity Housing Provider. Each office is independently owned and operated. 
Keller Williams Realty Platinum | 19708 Northwest Fwy Ste 2800 | Houston | TX | 77065-5628
#callonchristine #realtorck4u

Six Myths about Selling Your Home

Selling a house can create all kinds of fears and concerns. Learn the difference between the myths and truths to alleviate some of those worries!


Myth #1: You should always price your home high and then negotiate down.

Truth: It is difficult to obtain a reasonable offer on an overpriced property.

If you list too high, you’ll miss out on buyers (as many as up to 60%) looking in the price range where your home should be. Offers may not even come in, because buyers who are interested in your home are scared off by the price and won’t even take the time to look at it or they have been researching homes online and see the price discrepancy and move on. By the time you correct the price and list your home at its fair market value, you will have lost that window of opportunity when your home draws the most attention from the public and real estate agents — the first 2-4 weeks it is on the market. The longer a house “sits on the market”, it is like the Kiss of Death, doomed to attract fewer and fewer buyers every day making it harder and harder to sell. To obtain proper market exposure, it is an absolute necessity to be competitive in price, terms, and condition with similar properties that are selling in the area as soon as you put it on the market. If you are serious about selling your home, price your property at market value and attract serious buyers. You will stand a much better chance of getting full-market value and your property will sell much more quickly.

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Photo by Alturas Homes on Pexels.com

Myth #2: Minor repairs can wait until later. There are more important things to be done.

Truth: Minor repairs make your house more marketable, allowing you to maximize your return (or minimize loss) on the sale.

Most buyers are looking for homes that are turnkey or move in ready. They do not want to have to do a lot of work on a new home (at least “new” to them). If you have repairs that are obviously needed, a potential buyer will think of repairs with the 2/3rds rule. For example, if you have a hole in the wall that would cost $100 to repair in a day, a buyer will think it will take twice as long to repair and cost threes times as much. So your $100 hole of “deferred maintenance” becomes a two-day repair costing $300. A buyer will go through your home adding up all the “little things” that are wrong with it. If your home happens to attract a buyer who is willing to make repairs, they will begin asking for repair allowances that come out of your asking price. The amount of an allowance that you have to offer a buyer is usually more than what it would cost for you to make the repair (or hire someone to make the repair). Also, remember that the home inspections will point out every defect and safety issue which also will potentially cost you even more. Remember, buyers are comparing your home to other homes that are currently on the market. Your home should be maintained, safe and inviting so that everyone who looks at it can see themselves living there.

Myth #3: Once potential buyers see the inside of your home, curb appeal won’t matter.

Truth: Buyers probably won’t make it to the inside of the home if the outside of your home does not appeal to them.

Buyers and their agents often do drive-bys before deciding whether a home is worth their time to look inside. Usually, every dollar you spent on landscaping nets you a 100% return! So make sure your yard looks in top shape with trimmed bushes, some pretty flowers, a well-manicured lawn, and a welcoming entry. Your home’s exterior must make a good first impression so that buyers are compelled to stop and come inside!

Myth #4: Your home must be every buyer’s dream home.

Truth: If you get carried away with repairs and replacements to your home, you may end up over-improving the house.

There is a point where improving your home doesn’t pay off. The key is to consider what competing properties feature and look like. Improvements in the kitchen and bathrooms often yield excellent results! I will go through your home with you in detail and determine what it makes sense to repair and replace and what doesn’t. You also have the option to use my Stager to maximize your home to showroom condition! I’ll also show you competing properties so you’ll know what you’re up against!

Myth #5: When you receive an offer, you should make the buyer wait. This gives you a better negotiating position.

Truth: You should reply in a timely manner to an offer (and remain flexible)!

When a buyer makes an offer, at that moment in time, they are ready to buy your home. Moods can change and you don’t want to lose the sale because you have stalled in replying and you lose your only offer. Occasionally there are strategic reasons to delay for a short time — when receiving multiple offers for example. Let’s work hard to make this a win-win for you and your buyer and work together! I will walk you through every step of the process to help determine the best strategy for achieving your real estate goals!

Myth #6: You are better off selling your home on your own and saving money on the commission you would have paid to a real estate agent.

Truth: Statistically, many sellers who attempt to sell their homes on their own cannot complete the sale without the service of a professional real estate agent, or they inadvertently sell it for less than full market value.

Homeowners who succeed in selling their home by themselves (usually net 6-13% less) than if they had a real estate agent working for them. The National Association of Realtors surveys consumers every year, including homeowners who succeeded in selling their home without a real estate agent. Over 70% of these homeowners say that they would never do it again. You visit a doctor when you’re sick and take your car to a mechanic when it needs repairs. It makes sense to contact a real estate professional when you are preparing to sell your biggest asset!

Whether you are looking to buy, sell, invest or lease real estate, I can help you achieve your real estate goals, contact me today!

Christine Kalmbach, Professional Realtor® Keller Williams Platinum
 832.755.2954 realtorck4u@gmail.com * realtorck4u.com

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