Posts Categorised: Tips
Bolder color schemes and more usage of brass were among some of the latest home design trends—which focused particularly on the kitchen and bathroom—featured on the expo floor at last week’s 2019 International Builders’ Show in Las Vegas. Hosted jointly by the National Association of Home Builders and the Kitchen & Bath Association, the trade show brought together more than 80,000 builders and architects who offered forecasts for the new-home construction, remodeling, and home design industries. Here’s a look at some of the hottest design trends that were on display.
1. Striking Cabinetry
Bolder hues were gracing kitchen and bathroom cabinetry, walls, and even sinks. Kohler delivered a colorful punch with a bathroom design that included a purple sink, purple claw-foot bathtub, blue sinks, and a black toilet.
Homeowners are starting to branch away from neutral grays, and wider color choices are expected to dress up interiors in 2019 and 2020, says Sue Wadden, director of color marketing at Sherwin Williams. That’s why the company chose Cavern Clay as its 2019 Color of the Year, a terra-cotta color and nod to the popularity of the American Southwest aesthetic. Clay can serve as a neutral color but with a pop, Wadden says.
Explore REALTOR® Magazine’s 2019 IBS coverage, including the latest home features to gain prominence and the effect of affordability on new construction.
“I think as we near 2020 and the start to a whole new decade, consumers are getting excited to get back to more color, especially in the kitchen,” Wadden says. Indeed, bold kitchen colors were a dominant force at IBS 2019, with cabinets in greens, blues, and reds.
Five years ago, espresso-stained cabinetry was the top kitchen trend. Now, the top choices are paint colors: white, gray, black, and navy, which is quickly becoming a rising star, Wadden says.
2. Brass and Bronze Accents
Brass hardware, lighting, and faucets made appearances in many kitchen and bathroom spaces on the expo floor. This is not the same shiny brass from the 1980s; it’s less polished. It’s also being placed alongside other metals, such as chrome or brushed nickel, matted black, or bronze.
CAFÉ, part of the GE Appliances brand, introduced customized hardware options in various metals, such as brushed bronze, brushed stainless, or brushed black. Homeowners can dress up appliance handles with the different finishes to their stainless steel, matted white, or matted black refrigerator or stove. For example, soft brushed copper hardware handles can be added to a matted white refrigerator for a more contemporary vibe.
3. Geometric Shapes
Particularly when it comes to lighting fixtures, geometric shapes are another star in home design trends. Square and circular fixtures that expose Edison bulbs—which are becoming focal points in a kitchen space—make for artistic pendants over a kitchen island. “We’re seeing a lot of mid-century modern and geographic shapes,” says designer Julianna Dykstra of Distinctive Bathroom & Kitchen Inc., in Ottawa. “We’re seeing the Edison bulbs along with mixed metals in faucets and hardware. It’s adding a little more bling in the kitchen.” Geometric shapes are also showing up in tiles on bathroom shower walls and kitchen backsplashes.
4. The Standalone Tub
Homeowners recently have traded bathtubs for large, luxurious showers. But while that’s still on trend, Todd Hallett, president of TK Design and Associates, says bathtubs are reclaiming their place in the bathroom and becoming the new focal point. “When you walk in, you look directly ahead to see the tub and the shower behind it,” Hallett says. “It becomes a dramatic space.” Showrooms on the expo floor at IBS 2019 featured standalone bathtubs as the centerpiece of the bathroom, accented with a chandelier above and overlooking a fireplace.
5. All-Glass Sliding Wall Panels
Extending the living space to the outdoors has been a hot home trend for the last few years, but all-glass sliding wall panels and pocket doors are making the transition from the inside to outside more seamless. These doors disappear inside walls, hiding away to expose the outdoors. This eases the transition into an outdoor kitchen, fire pit, pool, or lounging space.
Surveys conducted by home design website Houzz show that opening indoor space to the outdoors is a home remodeling trend that is growing in popularity. “Folding doors or sliding doors that open the kitchen to the outdoors has mostly been in the luxury segment,” says Nino Sitchinava, principal economist at Houzz. But she says other price points are starting to makeover their spaces, such as replacing a single door to the backyard with double doors or replacing double doors with triple doors.
Pocket windows, which were featured in the 2019 New American Home, slid away entire sections of windows to expose an outdoor wet bar area to the indoor kitchen. Innovations in sliding wall panels have made them more energy efficient so, when closed, they better retain the indoor heating and cooling. Also at IBS 2019, companies showed off innovations in the shape and size of the glass, including rounded sliding wall panels.
More builders are outfitting newly constructed homes with smart-home technology, and many buyers say they’ll pay extra for it, according to research from John Burns Real Estate Consulting. Sixty percent of home shoppers say they’d spend more on a home with a smart thermostat, the consulting firm’s survey of more than 23,000 shows. Slightly more—67 percent—say they’d pay extra for an oversized kitchen.
More than 60 percent of new-home buyers also say they’d pay more for an exterior security camera and smart locks.
In a separate John Burns survey of more than 300 home builders, 53 percent say they incorporate smart-home technology into new construction. Even so, 42 percent of buyers say they would purchase additional technology.
John Burns Real Estate Consulting found some differences among certain segments of buyers regarding which smart-home tech they find most attractive, including:
- Young singles and couples: most likely to choose smart thermostats.
- Families: most likely to choose a smart garage that is responsive to app controls and voice commands.
- Older buyers: most likely to pay extra to have smart locks.
Below, watch a presentation of Todd Tomalak, senior vice president of research at John Burns Real Estate Consulting, sharing more insights into the survey findings on the popularity of smart home tech.
“This article was originally posted and written by John Burns Real Estate Consulting and can be found on The New Building Product Manufacturers“
With the increase in ride-sharing and walkable developments, garages may not be at the top of every buyer’s wish list, and some homes are constructed without them. Know how to make a garageless listing appeal to the widest possible audience.
Garages haven’t always been part of the American home. In fact, it wasn’t until Ford Motor Co. started mass-producing the Model T in 1913 that small detached sheds were built on properties that had enough land to protect these new contraptions, according to Scott Sidler, licensed contractor and author of The Craftsman Blog. As the size and number of cars increased, so did the sheds. Eventually, these structures were integrated into the home-construction process, in part to make access easier.
In the 1980s, garages grew larger to keep in scale with emerging McMansions. Some were finished with heating, painted floors, windows, and storage. And in the most extreme cases, they were converted into living space, which meant cars again had to be parked elsewhere.
Now demand for a garage is decreasing with an emphasis on dense infill developments, walkable neighborhoods, and more car- and ride-sharing options. Chicago sales representative Jennifer Ames Lazarre with Coldwell Residential Brokerage recently listed and sold two high-end city homes without garages, each priced over $2 million.
Other priorities will sometimes trump demand, too. Recent research from realtor.com® pointed out that for parents of school-age children, high-performing educational institutions win out over a garage.
However, it’s still rare to find buyers who completely eschew them, though the data is scant. A recent poll conducted by Houzz found that only one in 10 respondents said they don’t need a garage. A few years earlier, the National Association of REALTORS®’ 2013 Home Features Survey found that 78 percent of homeowners had a garage and that the feature is more popular among buyers of new homes and suburban and Midwestern homeowners.
Sales associate Katie Horch, ABR, SFR, with Keller Williams Realty in Medford, N.J., thinks the importance of a garage depends on an area’s inventory and buyer motivation. “Some are fine without it,” she says. Others “don’t even use it for their cars but as a space to store things.”
On the flip side, there are plenty of buyers who will avoid a listing without a garage, even if the location, price, and everything else about the house meets their approval. “They think, ‘Uh oh, no garage’ and move it to the bottom or off their list,” says Libbe Pavony, a real estate salesperson with Houlihan Lawrence in suburban Briarcliff Manor, N.Y.
Real estate salesperson Steve Kempton with RE/MAX Community in Williamstown, N.J., is still looking for a buyer for a house he listed more than 70 days ago that has a garage that was converted to a recreation room. “It’s hard even to get buyers in. But there’s not much we can do since the seller feels the garage is an improvement rather than deterrent and doesn’t want to convert it back,” he says.
Similarly, Jennifer Roach, salesperson with Premier Sotheby’s International Realty in Sarasota, Fla., has a $1.2 million listing in her city’s historic district that she says probably hasn’t sold because its detached garage was converted to a guest cottage. The house has been listed since the end of March. She cautions homeowners that such an improvement represents a “gamble.”
Whether you’re selling a historic home that never had a garage, one on a tight lot where there isn’t room, or one where the space has been converted, you can use a multistep marketing approach to help widen the buyer pool. Here’s how to proceed:
Study the neighborhood to find out how prevalent garages are. In areas where garages are less common, salespeople can play up that fact. Few homes in the two historic areas near downtown Salem, Mass., have garages, and most lots are too small to build them, says Ryan Guilmartin, SRS, salesman with Keller Williams Realty in nearby Beverly. “About 95 percent of the houses don’t have garages, and the few that do are much more expensive, so we emphasize the savings,” he says.
In Albuquerque, N.M., the small houses in the walkable downtown area were built in the 1920s. Often, the original one-car garages have been converted to living space through the intervening years, says Jessica Beecher, owner of RE/MAX Select in Albuquerque. She says buyers familiar with this neighborhood, or urban areas in general, are typically not bothered by the situation. “For many relocating from bigger, not more expensive, cities, it’s usually not an issue since many are accustomed to not having a garage and parking on a street or paying for a parking garage,” she says. However, buyers not familiar with this part of town are disheartened by the difficult search for even a one-car garage. Beecher says they usually end up buying in another neighborhood where they can find a house with an attached two-car garage.
Price the listing competitively. Be sure to compare apples to apples—if you look at comparable houses without garages, you’ll get a lower listing price and appraised value than those with garages. How much less depends on the importance of this feature in the area. In Roach’s Sarasota neighborhood, most homes are built with garages since buyers want to protect their cars from the sun and oxidizing salt, have a place to store their beach gear, and protect their possessions from vandals if they head north for an extended period. Therefore, she says the absence of a garage can decrease the appraised value by as much as 20 percent. But those who’ve been priced out of certain neighborhoods may find the savings appealing.
Research street, lot, and covered parking. Some communities have strict street parking rules, require permits, or limit parking hours. Sometimes permits are available free or at a reduced cost for residents, another important fact to nail down. In the suburban township of Millburn, N.J., cars aren’t allowed on a street overnight, says Coldwell Banker Residential sales representative Stephanie Mallios. In Roach’s area, streets are narrow, making parking difficult. Nearby public lots and garages are often an option but charge monthly or yearly, another fact to have clarified.
Fees vary widely. In the Millburn area, there is a 24-hour annual resident parking fee of $300 for some buildings and in certain municipal lots if you don’t have a driveway and garage, Mallios says. In Salem, Mass., garages charge an average of $50 a month, while in Chicago the monthly costs generally range from $200 to $250 in the Lincoln Park neighborhood to $300 to $400 in the Gold Coast. Lazarre found a public garage a half-block from one client’s home that has staff who would also wash the car and warm it up before needed on cold days. “The key is to have a [parking] solution less than a block away since few want to walk” farther than that, she says.
Emphasize other, non-vehicular storage options. Many buyers put almost as much stock in a garage for storing possessions as they do for parking their cars. If a seller’s home doesn’t have a garage, ask what other storage exists within the house—in a basement, attic, or closets—and tout these in your marketing. For houses that don’t have impressive storage options, you may want to research nearby off-site storage facilities.
Find out about other transportation options. Some buyers happily hop on a bus or take a subway, especially if a stop is near their home. Others will rent a Zipcar or take an Uber, Lyft, or taxi. Make sure you fully understand what’s available on a regular basis and the average costs to use each service to help buyers gauge all expenses versus owning, insuring, and parking their own car. And just because the neighborhood is dense doesn’t mean you should assume these options exist. Downtown Albuquerque may be walkable, but Beecher says there are few car-sharing options and a lack of reliable public transportation.
Find out if it’s possible to construct a garage. This may be the most appealing scenario for buyers who value parking their own car in an enclosed structure. Obtain setback, variance, and permit requirements from the local building and planning department so you can help buyers estimate what kind of garage can be built, if any, and how long the approval process takes. In her downtown Albuquerque area, Beecher says small one-car garages can be constructed in alleys behind the houses for approximately $10,000 to $12,000, typically taking 30 to 45 days to complete, depending how busy the city and contractors are with other projects. In Sarasota, Roach says the county code and FEMA requirements demand that structures withstand natural disasters such as flooding, wind, and hurricanes. That’s why approval for a permit and construction for a new garage can take up to four months. Chicago’s code requires the digging of a four-foot-deep foundation for any garage so it’s below the frost line, says Michael B. Klein, CEO of The Airoom Companies, architects, builders, and remodelers in Lincolnwood, Ill.
Help buyers visualize what a garage might look like. A motivated seller may be willing to pay a design professional to draw a detailed plan of a new garage with several elevations, says Horch. Klein, whose firm regularly designs garages, charges $2,500 to $5,000 for most construction documents, with the fee dependent on complexity. It may be tempting to go with a generic plan, but Kingston, N.Y.-based appraiser Gregory Dodge says it’s important to offer a one in sync with the home’s size and value rather than one that overimproves the house. “You’d suggest something very different for a $200,000 versus $700,000 house,” he says. Pavony likes to include a digital version of the plan in her online marketing as well.
Get an estimate so buyers can weigh the expense. Garage prices vary according to the size, style, materials, foundation required, storage options, types of doors, and who does the work—an architect, design-build firm, or contractor. A “typical” 20-by-20-foot, two-car, detached garage with vinyl siding and shingle roof usually ranges between $20,000 and $38,000, says Uday Khedkar, president of Danley’s Garages in Northbrook, Ill. Popular improvements such as panelized wall and ceiling systems and snap-together floor tiles could add close to $10,000, says Skip Barrett, head of GarageTek in Plainview, N.Y. But prices can go much higher, even approaching median home prices. Chicago architect Allan J. Grant is currently designing a three-car, 30-by-20-foot freestanding garage with cedar shake siding, a concrete slab floor, heating, electrical outlets, and special doors on a North Shore suburban lot to match an Arts & Crafts style home. The contractor’s estimate came in at $250,000, Grant says. “We were all surprised,” he says.
“This article was originally posted and written by Barbara Ballinger and can be found on https://magazine.realtor/home-and-design/feature/article/2018/08/how-to-market-a-house-without-a-garage“
So you found the home you’d like to buy, but is it the RIGHT home? Are there any little (or big) problems on the horizon that you didn’t see on the tour? Maybe. That’s why it’s important to learn more about home inspections – why you need one, what it includes, and how it works.
1. Are inspections “automatically” part of every home purchase?
No. As a buyer, you must include a home inspection clause in your purchase agreement, which will let you back out of the contract if the inspector discovers unexpected problems with the house.
If you still want the house, an inspection clause allows you to renegotiate with the seller in light of any issues discovered—either requesting a price adjustment, or asking the seller to make necessary repairs prior to completing the sale.
Home inspection clauses aren’t “automatic,” but they’re highly recommended by buyer’s agents and almost always added to standard real estate contracts.
2. What IS a home inspection?
A home inspection is a comprehensive review of the systems, structure and general “health” of a home, conducted by a qualified, objective inspector. If there are any issues that may degrade the value of the home, or require immediate/near-term repairs, they should be revealed by a professional home inspector.
What is included will depend on the individual inspector, the local municipal codes, and the type of inspection(s) you request.
Basic home inspections should include visual inspections of the:
- Foundation/framing (including wood rot)
- Plumbing systems
- Electrical systems
- HVAC (heating and cooling) systems
- Interiors (doors, paint, floorings, ceilings, walls, windows, etc.)
- Exteriors (siding, windows, doors, etc.)
Additional inspections may be done for:
- Septic systems
- The presence of radon, asbestos, lead, mold, or pests
- Dangers from flood, earthquake, landslide, or other natural disasters, based on location
3. How do I select an inspector?
You can ask your buyer’s agent to recommend a good, qualified, local inspector. You can also find one on your own. Either way, you should consider the inspector’s qualifications, confirm if they are bonded and insured, and if they meet the requirements to be licensed in your state.
You may also want to ask how long they have been in the business and request references from past clients. There are a number of state/national/international professional home inspector organizations; ask your potential inspector if they are a member of any of these groups.
Realize that not all states require licensing, or even specialized training, to become a home inspector, so do your own due diligence.
4. Can I be there during the inspection?
Yes, you can and should be. Your buyer’s agent can handle it for you, but you’ll get a much better feel for your new house if you attend the inspection. If the inspector finds any problems, you’ll be able to ask questions, on the spot, and get the answers you need.
Inspectors can also offer guidance on how to properly maintain a home’s systems, which is always helpful for a new buyer. Be sure to take notes to review later, and to potentially share with the seller, so you will be able to get accurate estimates on the needed repairs.
5. What if the house I want fails inspection?
An inspection is an evaluation, not a test, which means houses can’t “fail” inspection. It’s a way to reveal any issues, or potential issues, that may negatively impact a buyer prior to completing a sale. It’s also intended to ensure both the buyer and seller are in informed agreement regarding the condition of the property that is changing hands.
“This article was originally posted and written by REBAC Staff and can be found on https://homebuying.realtor/content/top-5-things-buyers-should-ask-about-home-inspections“
If you have a green thumb, you want to let it show. After all, it’s not only your personal passion, but it’s also a skill most people envy because so few of us have one! Having a beautiful yard full of landscaping and color is a good thing, right? It improves the value of your home as well as the beauty of the neighborhood, right?
Perhaps, but not always. Home improvements, including landscaping projects, are generally a good idea, but only if the next buyer views them as an added benefit. A yard that requires hours and hours every week to maintain—pruning, weeding, mulching, and keeping up with other chores—may actually be a turn-off to potential buyers.
Here are six ways to enjoy your yard—and your gardening hobby—while also keeping your landscaping efforts focused on resale value:
1. Create color with shrubs – Think beyond green. Many shrubs have foliage that adds visual interest by pulling in shades of yellow, white, red, or purple throughout summer, plus pops of autumn color. You can also add seasonal color by selecting a few flowering shrubs. Certain varieties of evergreens offer year-round shades of green-leaning toward yellow and blue.
2. Supplement with annuals – Adding annuals to existing beds of shrubs and trees inserts a temporary pop of color without creating a year-after-year commitment. Just be sure the beds will look neat if the spaces for annuals are later filled in with mulch or rocks.
3. Container gardening – A beautiful large pot on either side of your entry, overflowing with color and textures, is an easy way to show off your green thumb, while also adding drama and curb appeal. Container plantings can also be strategically placed in other parts of the yard.
4. Make yourself a backyard vegetable and/or herb garden – This will provide a bounty of fresh fruits, vegetables, and herbs for your cooking and can be easily re-seeded with grass should you decide you want to sell your home (or easily re-seeded later by the next owner).
5. Create outdoor rooms – In terms of big-ticket landscaping items, decks and patios that accommodate cooking, eating, or gathering around a fire pit are almost always a worthwhile investment. Include a few planter boxes too! Enjoy these spaces now, with the knowledge that future buyers will also welcome them.
6. Add fencing – If you live on a busy street and/or in a neighborhood that attracts young families, a fence can be a welcome yard feature that may integrate well with other landscaping projects. It can also be a great way to create privacy. Dog owners will light up too, knowing a fenced-in yard will give their “best friend” outdoor exercise and take a little pressure off dog-walking obligations.
Remember, the idea of preparing your home to sell is to make it as attractive as possible to the greatest number of buyers. Your potential buyers need to be able to imagine THEIR life in YOUR house.
“This article was originally posted and written by REBAC Staff and can be found on https://homebuying.realtor/content/landscaping-striking-right-balance-resale-value“
Buyers who aren’t paying cash for a house aren’t necessarily out of luck. Here’s how you can gain an edge over cash buyers.
Buyers making a cash offer on a house are active in many markets, and they can strike fear in new buyers who are bidding on a home. Cash home buyers can perform and close quickly and provide sellers with a sense of comfort.
But does this mean a solid buyer putting down 20 percent or more shouldn’t attempt to compete with cash home buyers? Absolutely not.
What if you can’t make a cash offer on a house?
The truth is, a buyer getting a mortgage can still compete against cash home buyers and win.
These are the questions that can make the difference:
- Do you have a 20-percent down payment?
- Are you well employed?
- Do you have cash reserves in addition to your down payment?
- Do you have very little debt?
- Do you have good credit?
If you answered yes to most or all of these questions, your purchase should be as bulletproof as a cash home buyer’s.
How can you compete against cash home buyers?
- Be up front about your finances. Make your competitive offer as strong as cash by providing the seller the confidence they need to accept your offer. In addition to a pre-approval letter from your lender, be open to allowing your agent or lender to provide financial information with your offer. Tell them what you make, and how much money you have in the bank. Show bank statements and even a copy of your credit report. Overload the seller to show them that you’re as solid as the cash buyer.
- Ask your lender to get a head start on the mortgage. See if your mortgage professional can move the process along sooner. Send the lender a copy of the preliminary title report, if available. If you’re buying a condo, find out if a condo questionnaire is available and give it to your lender. If you take any of these steps, let the seller know. Of course, if you have not already, provide the necessary financial documentation to your lender right away.
- Shorten the loan and appraisal contingencies. Ask your lender how quickly they can send an appraiser to the property, and how long the loan would take to turn around. In some parts of the country, loans are being approved in less than 14 days — sometimes even 10.
- Pre-order an appraisal. This may not be as easy with a bigger bank. But smaller banks, direct lenders or mortgage brokers can line up the appraisal in advance. At the time your offer is written, tell the seller the appraisal has already been ordered. If you can get the appraiser out within 24-48 hours of coming to terms with the seller, it’s half the battle.
- Inspect quickly. Along with the quick appraisal and loan contingencies, get your inspector in and out. Shelling out a few hundred dollars and getting the inspections done within days of having your offer accepted shows the seller you mean business. It also gives them comfort that they’ll get over the biggest hurdle quickly.
- Overpay. Cash buyers nearly always expect a discount from the seller simply because they’re offering cash and are a sure thing. As a result, the cash buyer will often make a lower offer. To increase your chances, top the cash offer, even if means paying a little more than you think the home is worth. If a seller is faced with a few thousand dollars’ difference, the seller probably wouldn’t risk it. But what if your offer is five percent higher than the cash buyer’s? The seller, perhaps wanting the best of both worlds, may ask the cash buyer to raise his or her offer. Some cash buyers will offer more, but not always enough to match. If you plan to live in the house for many years and it’s the home of your dreams, paying a little more to get the deal might only translate into $20 per month over the course of a long-term mortgage.
- Make yourself known to the seller. Some buyers write “love letters” to sellers, hoping to appeal to their personal side. Does this work? Sometimes! If you’re competing with a cash buyer, particularly an investor who plans to rent the home out, it can’t hurt to get a little personal with your real estate offer letter. The seller almost always wants to know more about the potential buyer. Ask your agent to write a cover letter and an introduction. Let the seller know who you are, why you like the home and what your intentions are.
Do the best you can and be realistic. Make sure your financial “‘house” is in order. Work with a good local real estate agent, and start working with a local mortgage professional well in advance. Structure your offer to show that you’re ready to roll.
“This article was originally posted and written by Brendon DeSimone and can be found https://www.zillow.com/blog/compete-with-cash-buyer-138674/“
The servicing industry has historically been about call centers and collections. Companies staff up or staff down depending on the market condition and overlook the most important factor in all of the changes — the people.
It’s time we change the conversation and recognize that people matter. Talented, happy team members create happy customers. And, when this focus is partnered with the right technology, the industry will finally be able to see some real change.
Reflecting on this week’s Mortgage Bankers Association’s Mortgage Servicing Conference in Dallas and the panel I spoke on, “Staffing Your Servicing Shop to Optimize Efficiencies,” we’re really at an inflection point.
Team members act as the front line of a company. The tide has shifted, and servicing companies should no longer be the bad guy in the mortgage process. They should be champions of home ownership. But, company culture has to drive this mindset and team members need to feel they are empowered to celebrate borrower successes, such as on time payments and providing real help when borrower payments go off track. Technology plays a key role in this since servicing innovation was previously nonexistent.
During the panel session, Marina Walsh, vice president of industry analysis with the MBA and panel moderator, asked the panel how their companies handle their biggest staffing challenges.
The solution to the challenges came down to two main parts: talent and technology.
The foundation of a company and its culture is grounded in its people and the investments it makes in them. From ping pong tables in the office to work from home options, try to think of ways to instill team member happiness. When combined with a strong set of core values, it will drive the type of behaviors that lead to happy customers.
Training is also a key ingredient in ensuring team members are happy and feel invested in for the long haul. When investing in training resources, companies should adopt a structured approach to how they enable cross-departmental job transitions. For example, call centers provide a great training ground for many associates since it exposes them to a broad spectrum of servicing matters. Requiring team members to spend a required amount of time in their role allows companies to mitigate early internal turnover while providing opportunities for growth. And, it allows for flexibility when staffing needs at the company need to increase or decrease.
Once the culture is set, team members need the right tools to do their job. From celebrating borrower successes when they do make payments on time to knowing in real-time when they need help, technology needs to be aiding in this process. For example, after the natural disasters this past year, it was important for servicers to be able to get a real-time status update on their borrowers to see if they were at risk of missing a payment. The right technology can help a servicer know a borrower’s contact and payment history, along with the overall health of their servicing portfolio.
While this industry has long been on the back burner, servicing technology and people are the forefront of each conversation. This conference made it very clear that people are starting to take notice and focus on what this industry needs. And similar to how automation and innovation became major buzzwords in mortgage originations, it’s happening in servicing now too. It needed to happen.
“This article was originally posted and written by Joseph DeStasio and can be found https://www.housingwire.com/blogs/1-rewired/post/42503-its-time-to-redefine-service-in-the-mortgage-servicing-industry“
A house will likely be the biggest purchase you make in your lifetime — so you don’t want to mess it up.
The idea of buying a home can be intimidating if you aren’t familiar the housing market or simply don’t know a thing about what the process entails.
But don’t let the unfamiliarity scare you. With the right information and guidance, you can make a smart and confident decision that’s right for you, your family and your finances.
So with that in mind, here are some mistakes you’ll want to avoid when it comes time to start thinking about becoming a homeowner.
9 mortgage mistakes to avoid
1. Failing to review your credit score & credit reports first
Before you even consider buying a home, it’s important to review your credit and make sure everything is in order. It’s crucial to know where you stand in the eyes of lenders so you know what to expect when you start the process. Plus, if there are errors in your report or you need to improve your score, you’ll be able to take the necessary steps before going to potential lenders.
Go to myFICO.com to get your true credit score (services like CreditKarma are good for frequently checking in on your credit score, but they don’t give provide your FICO score, which is most important). If you and a partner or spouse want to buy a home together, you may want to try to qualify for mortgage underwriting on just the income of the person who has a better credit score; most lenders will base your rate on the lower score if you’re a couple. Either way, make sure this is something you consider at the beginning of the process.
Next, go to AnnualCreditReport.com and request copies of your credit report. You can get a copy from each of the three main credit bureaus for free every year. Review the reports and pay off any delinquent bills as soon as you can — before you go to qualify for a mortgage. If you see any errors, dispute them immediately. Here’s how to do that.
If your credit isn’t in the best shape, follow this guide to start improving your score ASAP.
2. Not pre-qualifying
It’s very important to pre-qualify for a mortgage before you start the formal shopping process. By doing this, you can get an idea of what kind of home you can afford and what the monthly payment will look like.
Getting pre-approved takes this a step further. It’s good to get an idea of the loan you can get, and when your credit is in order and you’re ready to start the process, getting pre-approved will give you a much more accurate estimate of how much the bank will actually lend you. Here’s more on getting pre-approved for a mortgage.
Some lenders will only give you a pre-approval until you’re ready to buy a home, so it’s important to look into that. Also, keep in mind that the amount the bank will lend you may not be exactly aligned with what you can afford.
3. Getting only one mortgage quote
Most people only get one mortgage quote. That’s the wrong way to go about it.
You’ll want to get quotes from multiple lenders in order to make sure you’re getting the best bang for your buck. Check with a local bank, as well as a credit union, and then also get an online quote or two.
In general, credit unions typically offer the best mortgage rates, but it really depends on your situation.
Important note: Each time a lender pulls your credit to give you a quote for a mortgage interest rate, it will ding your file. You can minimize the damage by getting all quotes within a 14-day period, so it doesn’t look you’re applying for multiple loans from multiple lenders each time. That will minimize any potential damage to your credit score.
4. Failing to negotiate junk fees
When you apply for a mortgage, you’ll face a variety of junk fees. Many of them can be negotiated down or away altogether, but the key is knowing what to expect so you can take action!
Here are a few examples of ‘junk fees’ to watch out for:
- Application fee
- Sign-up fee
- Broker fee
- Document preparation fee
- Messenger fee
- Loan origination fee
- Underwriting fee
5. Not having enough cash for a down payment
Depending on how much house you plan to buy, and where you plan to buy it, you may need a solid chunk of cash for a down payment. You will typically need a down payment of between 5% and 20% to get a conventional loan. And according to Bankrate, if you put down less than 20%, you will very likely have to buy mortgage insurance — which means another monthly bill on top of your mortgage payment.
Making sure you have enough cash to cover a down payment is key to ensuring a smooth home-buying process. Otherwise, you may have to put it off for a while.
6. Making yourself house poor
There are two parts to this:
- When you go to make a down payment on a house, you don’t want to use everything you have in savings. So while it’s crucial to save enough for that big cash payment, you really want to have more in savings than you plan to spend on the down payment.
- On top of that, what the bank says you can afford (based on how much they’ll lend you) may not actually be what you can afford. Committing too much of your monthly income to mortgage payments is risky — and it’s a bad idea. You only want to spend up to one-third of your monthly income on housing costs, which include mortgage payments, insurance fees and any homeowner’s association fees.
So when you’re figuring out how much house you can afford, make sure to factor in other important expenses besides just bills — things like saving for retirement, emergency expenses (medical, car repairs etc.) and even the cost of furnishing your brand new home. You probably won’t be very excited about your decision if you’re stuck in an empty house for two years because you can’t afford to buy anything to put in it.
7. Not budgeting for the costs of actual homeownership
If you’re going from renting to owning a house, the cost of homeownership can be quite a shocker. There’s no more calling the leasing office or the landlord to fix things — it’s you who’s on the hook now and you need to understand what all that entails.
Many first-time homeowners are surprised by all the expenses associated with owning a home, so it’s crucial that you are prepared — both mentally and financially.
You’ve probably already thought about the more ‘fun’ expenses, like buying furniture, but don’t forget about all those other not-so-glamorous costs — such as replacing the water heater, hiring a plumber, hiring a landscaper, property taxes and so on. Then there are the even pricier expenses like replacing the roof. Plus, if the house is in an area that may flood, you will likely have to pay for flood insurance.
People do it every day, you just need to make sure you are prepared when it’s time to transition to being a homeowner.
Read more: 9 home expenses you should budget for
8. Not understanding the terms of your mortgage
Don’t just sign the dotted line and don’t just trust the word of the guy (or gal) who told you where to sign. You did all that hard work to make sure you got the best deal and prepared yourself in every possible way, so make sure you know exactly what you’re signing up for.
By this point, you’ll know what your monthly payments are, but that’s not enough. You also need to know if the interest rate on your mortgage can change, and if it can, you need to know when and by how much. And you need to see all this in writing. Don’t just take someone’s word for it. If you don’t quite understand the documents you’re about to sign, ask a lawyer, or even family member or friend, to review the terms of the loan with you. You can do this ahead of time, but even if you get to the actual moment of signing and still don’t understand something, don’t sign it.
9. Not shopping around for the right home
You should look at a ton of homes! You can do a lot of the preliminary search online, but then go look in person. Get familiar with the area so you know what’s a good deal and what’s not.
Also, start to understand more about the neighborhood where you’re considering buying. Does it have all the qualities you’re looking for? Have you driven around (or even walked around) the area at night?
You don’t want to buy a house and then realize you’re stuck in an area you aren’t comfortable with — and this goes for everyone in the family.
“This article was originally posted and written by Alex Thomas Sadler and can be found https://clark.com/homes-real-estate/first-time-homebuyer-mortgage-mistakes-to-avoid/“