The #1 Reason To List Your House Today!

Many people believe that selling their house during “the spring buyers’ market” is the best thing to do. Their reasoning is that there will be more buyers than there are during the winter months and, therefore, their house will sell quicker and for a higher price.

Historically, this made sense. However, today’s real estate market is not following the rules of the past.

The National Association of Realtors (NAR) measures buyer “foot traffic” each month. It receives data on the number of properties shown to a prospective purchaser by a Realtor® (based on the number of lockboxes used). The data reveals the number of buyers out actively looking for a home, not just window shopping on the internet. NAR explains:

"Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future."

According to the latest Foot Traffic Report, buyer traffic is greater now than it was during this year’s spring market and there are more buyers out now than at any other time in the last five years (March of 2012).

The chart below shows that buyer activity over the last three months (blue bars) was greater than it was during this past spring market (green bars).

Bottom Line: If you are waiting for next spring to list your home because you think that’s when the buyers will be out in force, perhaps you should reconsider. Buyers are out right now!

Keeping Current Matters

Bitcoin is finally buying into US real estate

Buy a home with bitcoin? Here's how one buyer did it...

Bitcoin is already in retail and restaurants — so it was only a matter of time before the cryptocurrency took on real estate. That time is now. Bitcoin is slowly making its way into closings on everything from Lake Tahoe land in California to Manhattan condos to single-family homes in the heart of Texas.

"Our buyer has evolved, they've moved from mom and pops to young people who want to pay with various forms of payment," said Ben Shaoul, president of Magnum Real Estate Group. "Cryptocurrency is something that has been asked of us — 'Can you take cryptocurrency? Can we pay that way?' — and of course when somebody wants to pay you with a different form of payment, you're going to try to work with them and give them what they want, especially in a very busy real estate market."

Shaoul is redeveloping a building on Manhattan's Lower East Side, turning it into condominiums priced between $700,000 and $1.5 million. He admits that there is currently a lot of inventory in the market, and therefore having an edge over his competitors is especially key. Bitcoin, he hopes, will be that edge.

"I think the demographic of the crypto user is a younger millennial, but, that being said, you have a lot of people come over from other countries, who are buyers from different places, who like to trade in different types of currency. Not everyone wants to trade in dollars or yen or euros," Shaoul said.

He intends to hold the bitcoins, rather than convert them to dollars. As an investor in the art market, where bitcoin is also increasingly present, he sees an opportunity to make even more money. Bitcoin has also been appreciating at lightning speed lately.

Others, however, are not as comfortable with the relatively new currency. The first ever single-family home sale in Texas involving bitcoin was announced last month. The buyer, who works in the tech industry, purchased the newly built home in Austin using bitcoin, but the seller, a custom homebuilder, wanted the currency converted to dollars during the transaction.

"Austin is a really technologically advanced city, I'd say, so I was surprised we hadn't heard anybody wanting to do this before," said J Kuper at Sotheby's International Realty, which brokered the deal. "But, candidly, we didn't know how to do it. It was a quick challenge and scramble to figure out all the moving parts, but we were instantly excited about the opportunity to figure that out."

They used BitPay, a global bitcoin payment service provider headquartered in Atlanta. It converted the bitcoins into dollars for the buyer. Given that bitcoin's value is a moving target day to day, the risk was all on the buyer side. The seller agreed to a fixed price in dollars.

"We found that on the day of the closing, we were kind of watching it [bitcoin's value] through the day," said Kuper. "The timing actually ended up perfect for the exchange, very well for our client, so there was really no hesitation, no need to postpone."

Kuper said the client got a "very fair" exchange rate, though he could imagine how it could've been more volatile. He says bitcoin has proven to be a bit more stable in the past six months.

There is, however, still a lot of nervousness for newcomers to the currency. Neither the buyer nor the seller in the Austin deal would talk about the transaction. Much of the concern may be around the lack of regulation so far in cryptocurrency and the lack of understanding as to how gains in bitcoin are taxed. The Internal Revenue Service issued some guidance on bitcoin and cryptocurrencies in 2014.

"What they said in that guidance is if you hold bitcoin or ethereum or one of these other convertible digital currencies as a capital asset, when you use that bitcoin to purchase goods or services — so for example, if I were to take $1 million in bitcoin to buy an apartment building or something — to the extent that bitcoin has appreciated since I acquired it, any of that gain, that built-in gain, would be taxed when I used the bitcoin to buy the building," said Jeremy Naylor, a tax attorney and partner at the firm Cooley.

He added that whether people are voluntarily paying that tax might be a separate question, but from a technical, legal perspective, it would be similar to selling stock to generate the cash to buy an apartment. In a direct transaction, buyers simply skip the part where they convert the bitcoin into dollars. Using BitPay, the buyers are 'selling' the bitcoin, and therefore any appreciation is taxable.

The complicated nature of real estate may be why bitcoin has been slow to move into the market. One of the first deals in the U.S. involved a $1.6 million sale of land — a home site — in Lake Tahoe in 2014. Martis Camp Realty President Brian Hull, who brokered that deal, said his firm has not received any other inquiries from buyers interested in using bitcoin.

International buyers seem more comfortable with the currency. Last month British entrepreneurs Michelle Mone and Doug Barrowman launched a bitcoin-priced real estate development in Dubai.

The U.S. market has been slower to buy into bitcoin for real estate. All of the deals so far have been done without a mortgage, and Shaoul said the bulk of those inquiring about his Manhattan condos are foreign buyers.

"This industry of real estate is notorious for lagging behind in technology, and innovation," he said. "Now we are starting to innovate, so we're very far behind. Bitcoin and payments with bitcoin have been around for years. Why it hasn't touched down in real estate in the sale of an apartment is odd, quite frankly."

— CNBC, Diana Olick

5 Mistakes That Make House Flipping a Flop

House flipping has become the day trading of the first decades of the 2000s. But in the rush to make a profit, far too many would-be real estate moguls overlook the basics and end up failing. In this article, we'll look at the five biggest mistakes investors make in this market and how to avoid them.

1. Not Enough Money

Dabbling in real estate is an expensive proposition. The first expense is the property acquisition cost. While low/no money down financing claims abound, finding these deals from a legitimate vendor is easier said than done. Also, if you're financing the acquisition, that means you're paying interest. Although the interest on borrowed money is tax-deductible, it is not a 100% deduction. Every dollar spent on interest adds to the amount you will need to earn on the sale just to break even. Research your financing options extensively to determine which mortgage type best suits your needs and find a lender that offers low interest rates. An easy way to research a prospective property's total cost is by using a mortgage calculator. This tool will also allow you to compare the interest rates offered by various lenders.

Paying cash eliminates the interest, but even then there are property holding costs, such as taxes and utilities. Renovation costs must also be factored in. If you plan to fix the house up and sell it for a profit, the sale price must exceed the combined cost of acquisition, the cost of holding the property and the cost of renovations. Even if you manage to overcome these hurdles, don't forget about capital gains taxes, which will chip away at your profit.

2. Not Enough Time

Renovating and flipping houses is a time-consuming business venture. It can take months to find and buy the right property. Once you own the house, you'll need to invest time to fix it up. Before you can sell it, you'll need to schedule inspections to make sure the property complies with applicable building codes. If it doesn't, you need to spend more time and money to bring it up to par. Next, you'll need to invest time to sell the property.

If you show it to prospective buyers yourself, you'll spend plenty of time commuting to and from the property and meeting with potential buyers. If you can make a 10% profit on a house that cost $50,000, you'll make a $5,000 profit. For many people, it might make more sense to get a good job, where they can earn that kind of money in a few weeks or months via a steady paycheck – with no risk and a very consistent time commitment.

3. Not Enough Skills

Professional builders and skilled professionals, such as carpenters and plumbers, often flip houses as a sideline to their regular jobs. They have the knowledge, skills, and experience to find and fix a house. Some of them also have union jobs that provide unemployment checks all winter long while they work on their side projects.

The real money in house flipping comes from sweat equity. If you're handy with a hammer, enjoy laying carpet, can hang drywall, roof a house and install a kitchen sink, you've got the skills to flip a house. On the other hand, if you've got to pay a professional to do all of this work, the odds of making a profit on your investment will be dramatically reduced.

4. Not Enough Knowledge

To be successful, you need to be able to pick the right property, in the right location, at the right price. In a neighborhood of $100,000 homes, do you really expect to buy at $60,000 and sell at $200,000? The market is far too efficient for that to occur on a frequent basis.

Even if you get the deal of a lifetime, you need to know which renovations to make and which to skip. You also need to understand the applicable tax laws and know when to cut your losses and get out before your project becomes a money pit.

5. Not Enough Patience

Professionals take their time and wait for the right property. Novices rush out and hire the first contractor that makes a bid to address work they can't do themselves. Professionals either do the work themselves or rely on a network of pre-arranged, reliable contractors.

Novices hire a realtor to help sell the house. Professionals rely on "for sale by owner" efforts to minimize their costs and maximize profits. Novices expect to rush through the process, slap on a coat of paint and earn a fortune. Professionals understand that buying and selling houses takes time and that the profit margins are sometimes slim.

The Bottom Line:

Before you get involved in flipping houses, do your research. Like any other business venture, flipping requires time, money, patience, skill, and it will likely wind up being harder than you imagined.

Lisa Smith - Investopedia

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7 Tips for Improving Your Credit Score

An important step to finding a home, whether you’re renting or buying, is ensuring that you have a good credit history. The American Bankers Association suggests the following tips to improve your credit score.

Request a copy of your credit score report – and make sure it is correct
Your credit report illustrates your credit performance, and it needs to be accurate so that you can apply for other loans – such as a mortgage. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies, but you must go through the Federal Trade Commission’s website at www.annualcreditreport.com​, or call 1-877-322-8228. Note that you may have to pay for the numerical credit score itself.​

Set up automatic bill pay
Payment history makes up 32 percent of your VantageScore credit score and 35 percent of your FICO credit score. The longer you pay your bills on time, the better your score. Avoid missed payments by setting as many of your bills to automatic pay as possible.

Build credit through renting
VantageScore’s scoring model, created by the three major credit bureaus, will now weigh rent and utility payment records. This will allow it to score as many as 35 million people who previously couldn’t get a credit score.

Keep balances low on credit cards and revolving credit 
Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30 percent or less of a card's limit.

Apply for and open new credit accounts only as needed
Keep this in mind the next time a retailer offers you 10 percent off if you open an account. However, if you need a new line of credit, don’t jump at the first appealing offer; compare rates and fees offered through mail solicitation, on the Internet or at your local bank.

Don’t close old, paid off accounts
According to FICO, closing accounts can never help your score and can in fact damage it.

Talk to credit counselors if you’re in trouble
Using legitimate, non-profit credit counseling can help you manage your debt and won’t hurt your credit score. For more information on debt management, contact the National Foundation for Consumer Credit (www.nfcc.org).

American Bankers Association

What happens at a real estate closing?

Closing is the final step of purchasing a home. You meet with various legal representatives to sign your mortgage and other documents and receive the keys to your new property. It’s a good idea to review what happens ahead of time so you know what to expect.

Who attends? 
The number of people at your closing depends on many factors, including the property’s location, the property type and the nature of the sale, such as an all-cash purchase versus a traditional mortgage. Here’s who might be present:

• Your attorney (if you have one) 
• The seller’s attorney (if they have one) 
• A lender’s representative 
• The seller’s representative 
• Your real estate professional 
• The seller’s real estate professional 
• The closing agent (usually a title company representative) 
• A notary public 

What you do at closing: 
Usually, closings are held at the offices of one of the representatives involved: the title company’s, an attorney’s or the lender’s.

Here’s what happens: 
You review and sign all your loan documents. Make sure you understand the terms of each document. If something is different from what you expected or agreed to, don’t sign until you resolve the issue. You provide documentation of homeowners insurance and inspections (if applicable). You give a certified or cashier’s check to cover the down payment (if applicable), closing costs, prepaid interest, taxes and insurance. You could also send these funds in advance via wire transfer. Your lender distributes the funds covering your home loan amount to the closing agent. Depending on your loan terms, you may also be required to set up an escrow (or impound) account to cover property taxes and homeowners insurance in addition to your monthly mortgage payment.

A note about closing costs: 
Closing costs are costs associated with your loan, and it’s important to budget for them. Closing costs may include discount points, recording fees, loan origination fees, appraisal charges, notary fees, attorney fees, title insurance and more. They usually total between 2 and 5 percent of your home’s purchase price. You can use Bank of America’s Closing Costs Calculator to estimate what your costs might be.

You should get a sense of how much your closing costs will be when your lender provides you with an initial Loan Estimate. You receive this estimate within three days of submitting your mortgage application. When your loan is approved, you receive a Closing Disclosure, which lists your finalized closing costs.

You may pay some fees noted in your Loan Estimate and Closing Disclosure before closing, such as those associated with credit reports. For the rest, ask your closing agent what payment methods are acceptable.

What you sign at closing: 
A deed of trust or mortgage is a document that puts a lien on your property as collateral for your loan. The promissory note is a legal agreement to pay the lender, including when you will make your payments and where you will send them. A Closing Disclosure (CD) is an itemized list of your final credits and charges, based on the terms of the contract. You should receive a copy of the CD for your review at least three days prior to the closing.

Homeowner tip: 
Don’t sign your Closing Disclosure if it’s significantly higher than your Loan Estimate or if you see a different rate on your loan than you agreed to. In many cases it’s easy to resolve such discrepancies, but be sure you’re satisfied and understand your loan terms before signing.

How long does a closing take? 
Closing on a home can be time-consuming, so be sure to set aside several hours for it. Knowing what’s expected of you can make the process go faster and make you more confident during this final step in the journey to homeownership.

Bank of America

Orlando airport's land sale sets stage for thousands of new homes!

Airport Authority to sell land to Tavistock Development Company Orlando International Airport plans to sell 782 acres to Tavistock Development Company for real estate development. Orlando International Airport’s long-anticipated sale of vacant land could lead to thousands of new homes in southeast Orlando.

Among provisions, the monumental deal turns over about 780 acres to Tavistock Development Company LLC, creator of nearby Lake Nona real estate. In return, the Greater Orlando Aviation Authority is pocketing at least $60.8 million and a Tavistock agreement that nobody will make a stink about jets roaring over backyard pools.

We also want a clear acknowledgement that there is an airport next door — Airport director Phil Brown. “We want something compatible,” airport director Phil Brown said of a lucrative sale structured for what had become surplus land. “We also want a clear acknowledgment that there is an airport next door.”

The authority’s unprecedented transaction may provide significant lift for the city’s growth around the airport and beyond; that southeast sector of Orlando is expected to swell by mid-century to nearly 50,000 residents, or as many as now in Orange County’s second biggest city, Apopka.

The Greater Orlando Aviation Authority approved the sale last month without comment.

That was nearly a technicality as momentum for a transaction had been emerging publicly in various stages for years. There are still hundreds of acres of additional surplus property to be sold or undertaken as a commercial venture by the aviation authority.

The sale to Tavistock involves land bought nearly three decades ago for airport growth. In 1989, the aviation authority acquired 2,098 acres for $12.4 million from the Poitras family. The acreage borders Osceola County a few miles south of the airport’s campus.

The aviation authority had two needs for the Poitras property. It would mine thousands of tons of dirt and sand there to build the airport’s fourth runway.

The authority also would designate some of the Poitras acreage for permanent environmental protection as compensation for hundreds of acres of wetlands destroyed by runway construction.

Even then, however, some environmentalists were dubious about the conservation value of Poitras property; it appeared increasingly as a remnant of nature amid urban encroachment.

They were really limited on what they could do as a developer themselves — Orlando chief planner Elisaeth Dang on GOAA's development attempt. In the late 1990s, the city annexed the tract, nearly 15 miles southeast of downtown, labeling it for urban use.

The land has never been given a zoning designation but was marked by the city as within a noisy route of aircraft. About a decade ago, the aviation authority went to city officials, with plans to pursue Poitras acreage for residential and commercial enterprises.

But the authority found progress would be difficult because of federal rules for airport property. “They were really limited on what they could do as a developer themselves,” the city of Orlando’s chief planner Elisabeth Dang said.

The authority dropped its efforts as the recession took hold, Deng said.

Last year, the authority signaled that it would resume its quest for Poitras property by selling it, but rather than setting a price, the authority first went in search of a buyer.

Two suitors responded to a request for qualifications, Tavistock and Crescent Communities LLC of Charlotte, N.C. The aviation authority chose Tavistock because of its previous enterprises in the area and “their development of the Lake Nona Medical Center.”

Tavistock Development intends to combine the Lake Nona and Poitras Property. Orlando’s VA Medical Center and the UCF College of Medicine are about a mile from the land being bought by Tavistock.

The pricing ultimately was based on appraisals.

Documents filed by the company with the city and aviation authority give some sign of what’s to come: 3,196 homes, with many gated and styled after Lake Nona housing. “Tavistock Development intends to combine the Lake Nona and Poitras Property,” states a Tavistock letter, “to further maximizes synergies between the properties.”

Many regulatory steps are ahead for Tavistock and GOAA, the aviation authority. Among them, environmental protections for part of the Poitras parcel remain in place, prohibiting development and enforced by state authorities.

An aerial photo taken June 16, 2009 shows the UCF Medical School Campus and the infant stages of Medical City. Poitras property is in upper left.  Some restrictions previously were lifted, a result of the aviation authority paying millions of dollars for environment enhancements and protections elsewhere.

But there are development prohibitions on approximately 380 acres that Tavistock is buying in addition to the 780 acres for nearly $61 million. If those restrictions are lifted, Tavistock will pay $85,000 per acre, or nearly as much as for the 780 acres. If they aren’t, the price could be $3,500.

Tavistock appears before the city’s Municipal Planning Board next month as part of seeking zoning and project approvals.

“If Tavistock and GOAA are ready to move, we could do all of this in six months,” said Dang, the city’s chief planner. “A lot of this depends on their timing, more so than ours.”

Kevin Spear - Orlando Sentinel

Millennial homebuyers want space for the dog

Young people are more motivated to buy a home to have a yard for their dog than they are by an upcoming marriage or the birth of a child, according to a new survey done for SunTrust Banks Inc.

In the survey, conducted online by Harris Poll on behalf of SunTrust Mortgage, a third of millennials who purchased their first home said they wanted better space for a dog or a back yard.

That was the third most popular answer from the group, aged 18 to 36. Wanting more living space was No. 1 at 66 percent, and the opportunity to build equity, was second at 36 percent.

A marriage or upcoming marriage was cited by 25 percent of survey respondents, while the birth of a child or expected birth was cited by 19 percent.

“Millennials have strong bonds with their dogs, so it makes sense that their furry family members are driving home-buying decisions,” said Dorinda Smith, SunTrust Mortgage President and CEO. “For those with dogs, renting can be more expensive and a hassle; home ownership takes some of the stress off by providing a better living situation.”

Among millennials who don’t own a house, 42 percent say that their dog — or the desire to get a dog — is a key factor in their desire to buy a home in the future.

Mark Meltzer, Executive Editor - Atlanta Business Chronicle
Orlando Business Journal

Can you flip a house for profit in this market?

If flipping a house in today's real estate market seems riskier than trekking with a ragtag band of hobbits to Mordor, take heart: Home flippers can still find plenty of opportunities, though they're not entirely without risk.

It may seem counterintuitive to invest in real estate when the housing market is in its darkest hour. But in fact, it may prove to be the most optimal time for such a venture.

According to RealtyTrac, a seller of mortgage default data, the foreclosure rate reached its highest level in 50 years in 2007, and rose to even higher numbers in 2008. Real estate investors are finding bargains everywhere, particularly in formerly hot housing markets such as Florida, Nevada and California.

Angie Hicks, founder of Angieslist.com, a compendium of consumer-service reviews, says a Fall 2008 informal poll of list members found that of those who had purchased a home in foreclosure, 29 percent of respondents had done so within the last six months. Of those, 95 percent said their purchases were profitable.

Do your research

"The key ... is doing your research and knowing what you're getting into," says Hicks. "Know the area you're buying, the market, how the price compares to the neighborhood."

The horizon is flush with opportunity for those with the money and know-how to snap up a bargain and flip it, but to make it pay you first must understand how the rules of the game have changed.

Stick with familiar territory. Charlotte, N.C., resident Emma Allen, CEO of Emma Allen Enterprises and an experienced flipper, says there's lots of inventory on the market.

"The prices that were recently so outrageous are down again, so those with capital or access to credit will find it's a very good time to pick up bargains in the marketplace," says Allen, who finds those bargains mostly in neighborhoods where she would like to live. Areas undergoing urban renewal present good investment opportunities.

Check your capital

It seems elementary, but in the recent past many flippers found themselves in trouble because they had not correctly calculated the amount of money it takes to finish a flip and market it. Allen says investors should figure out how much money they'll need right upfront, and not just the purchase price. It translates to being realistic about renovation costs and the hidden expense of carrying costs that gets so many in trouble.

"You may have carrying costs on the books longer than you think," Allen says. "The days of the 60-day flip are gone." Carrying costs, or house payments you must make until you sell the property, can subtract thousands from the bottom line. And even though you are technically chipping away at the debt incurred when you purchased the property, the interest you're paying at the top of the flip probably won't be earned back in the sale. Those payments come right out of your potential profit.

Financing your flip

What about financing in general? While it's certainly more difficult to obtain a bank loan, it still can be done. But having a stash of cash is still important. Veteran Southern California flipper and interior designer Nicole Sassaman advises would-be flippers looking for a loan to "be sure to have 25 percent down and 18 months of reserves in the bank."

Cut your costs creatively. Flipping in an economy that's not terribly user-friendly takes guts and creativity. Home flipper and Internet entrepreneur Scott Patterson says he increases his chances for success by breaking as many rules as possible, including making aggressive "low-ball offers" on potential flips.

"(I) offered $80,000 on a house I would have offered $100,000 (on) a year earlier," Patterson says. His strategy worked and he sold the renovated home for a tidy $160,000 a few months later.

Patterson also hopes to cut the middleman by obtaining his real estate license, letting him pocket the commission he would normally pay to sell his flips. He actively seeks capital via Internet and e-mail lists, marrying projects to the right investors.

"The stock market tanking has more people thinking that real estate is looking good right now," Patterson says.

Consider it a long-term investment. Real estate consultant and mortgage broker Todd Huettner of Huettner Capital says changing markets have forced his clients to alter their business practices. Huettner says that while a quick flip is possible, investors should be prepared to hold the property for several years as a rental.

Carole Moore, Orlando Sentinel

U.S. Needs 4.6 Million New Apartments by 2030

Growing Demand Due to Aging Population, Immigration, Delayed Home Purchases

According to a new study commissioned by the National Multifamily Housing Council and the National Apartment Association, delayed marriages, an aging population and international immigration are increasing a pressing need for new apartments in the U.S., to the tune of 4.6 million by 2030. It's important to note that:

• Currently, nearly 39 million people live in apartments, and the apartment industry is quickly exceeding capacity; 
• In the past five years, an average of one million new renter households were formed every year, which is a record amount; and, 
• It will take building an average of at least 325,000 new apartment homes every year to meet demand; yet, on average, just 244,000 apartments were delivered from 2012 through 2016.

Based on research conducted by Hoyt Advisory Services and commissioned by NAA and NMHC, the data includes an estimate of the future demand for apartments in the United States, the 50 states and 50 metro areas, including the District of Columbia. For the purposes of this study, apartments are defined as rental apartments in buildings with five or more units.

The increased demand for apartments is due in large part to:

• Delayed house purchases
  Life events such as marriage and children are the biggest drivers of home ownership. In 1960, 44 percent of all households in the U.S. were married couples with children. Today, it's less than one in five (19 percent), and this trend is expected to continue.
• The aging population
  People ages 65-plus will account for a large part of population growth going forward across all states. The research shows older renters are helping to drive future apartment demand, particularly in the northeast, where renters ages 55-plus will account for more than 30 percent of rental households.
• Immigration
  International immigration is assumed to account for approximately half (51 percent) of all new population growth in the U.S., with higher growth expected in the nation's border states. This population increase will contribute to the rising demand for apartments. Research has shown that immigrants have a higher propensity to rent and typically rent for longer periods of time. 

"We're experiencing fundamental shifts in our housing dynamics, as more people are moving away from buying houses and choosing apartments instead. More than 75 million people between 18 and 34 years old are entering the housing market, primarily as renters," said Dr. Norm Miller, Principle at Hoyt Advisory Services and Professor of Real Estate at the University of San Diego. "But renting is not just for the younger generations anymore. Increasingly, Baby Boomers and other empty nesters are trading single-family houses for the convenience of rental apartments. In fact, more than half of the net increase in renter households over the past decade came from the 45-plus demographic."

"Apartment rentals are on the rise, and this trend is expected to continue at least through 2030, which means we'll need millions of new apartments in the U.S. to meet the increased demand. The western U.S. as well as states such as Texas, Florida and North Carolina are expected to have the greatest need for new apartment housing through 2030, although all states will need more apartment housing moving forward," said NAA Chair Cindy Clare, CPM. "The need is for all types of apartments and at all price points."

There will also be a growing need for renovations and improvements on existing apartment buildings, which will provide a boost in jobs (and the economy) nationwide. Hoyt's research found that 51 percent of the apartment stock was built before 1980, which translates into 11.7 million units that could need upgrading by 2030. The older stock is highly concentrated in the northeast.

"The growing demand for apartments - combined with the need to renovate thousands of apartment buildings across the country - will make a significant and positive impact on our nation's economy for years to come," explained NMHC Chair Bob DeWitt. "For frame of reference, apartments and their 39 million residents contribute $1.3 trillion to the national economy. As the industry continues to grow, so will this tremendous economic contribution."

Other highlights from the report include:

Demand is expected to be especially significant in Raleigh, N.C., with a 69.1 percent increase in new apartment units between now and 2030, Orlando, Fla. (56.7 percent), and Austin, Texas (48.7 percent). Also notable, the demand in the New York City metro area will call for an additional 278,634 apartment units, Dallas-Ft. Worth, Texas (266,296 new units), and Houston, Texas (214,176 new units). Propensity to rent is higher in high-growth and high-cost states.

Hundreds of thousands of new rental units will be needed by 2030 in states such as California, Georgia, Arizona, Florida, North Carolina, Nevada, New York, Texas, Virginia and Washington.

By Monsef Rachid - World Property Journal 

The difference between your interest rate and the APR

Understanding the difference between annual percentage rate, or APR, and interest rate could save you thousands of dollars on your mortgage. But if you're like most homebuyers, you probably don't know that the interest rate and the APR measure 2 important, but different, costs associated with your home loan.

"I regularly work with clients who don't understand the APR," says Todd Huettner of Huettner Capital in Denver. "If they don't have questions about the APR or the Truth in Lending disclosure, where the APR is calculated, I know they simply didn't read it."

Interest rate and APR
The interest rate is the cost of borrowing the principal loan amount. It can be variable or fixed, but it's always expressed as a percentage.

The APR is a broader measure of the cost of your mortgage because it reflects the interest rate, as well as other costs such as broker fees, discount points and some closing costs. The APR is also expressed as a percentage.

Why have both?
"The main difference is that the interest rate calculates what your actual monthly payment will be," says Sean O. McGeehan, a mortgage sales manager in Chicago. "The APR calculates the total cost of the loan. A consumer can use one or both to make apples-to-apples comparisons when shopping for loans."

For example, a loan with a 4% rate will have a lower monthly payment than a loan with a 6% rate, assuming both are fixed for the same term. Likewise, the total cost of a loan with a 4% APR will be less than one with a 6% APR.

Where it gets tricky
Separately, the interest rate and the APR have their limits. But together, borrowers should be able to use both figures to determine their monthly payments, as well as their total costs. The trick, says McGeehan, is to understand the interplay between the 2 figures.

"If a consumer is only focused on getting the lowest monthly payment, they should focus on the interest rate," says McGeehan. "But if the consumer is focused on the total cost of the loan, then they can use the APR as a tool to compare the total cost of 2 loans."

This chart shows the interest rate, APR and total costs over time for a $200,000 mortgage in which 1.5 discount points cut the interest rate by one-quarter of a percentage point, and another 1.5 discount points cut the interest rate by a further quarter of a percentage point.

Time horizon matters
If you plan to stay in your home for 30 years or more, it probably makes sense to go with a loan that has the lowest APR because it means you'll end up paying the lowest amount possible for your house. But if your time horizon isn't that long, it may make sense to pay fewer upfront fees and get a higher rate -- and a higher APR -- because the total costs will be less over the first few years.

"Because APR spreads the fees over the course of the entire loan, its value is optimized only if a borrower plans to stay in the home throughout the entire mortgage," says Gloria Shulman, founder of CenTek Capital Group in Beverly Hills, California. "The key for looking at APR, as it is for many loan decisions, is time horizon. It's the most important question borrowers need to ask themselves before looking for a home and the mortgage that best fits their current and projected financial and family situations."

Figure the break-even point
If you're planning to stay in your home for a shorter period, Huettner says, you need to do the math and figure out where your break-even point is. Bankrate's mortgage point adviser calculator will help.

For example, if you chose a 0.25% lower rate for an additional 1.5 points because of the lower APR, but you moved in 5 years, you lost money, he says. Your break-even on the points was 7 years.

Unfortunately, those calculations can often be confusing for most homeowners, which is why it's crucial to pick the right lender.

"Interest rate and APR are important, but you should worry more about finding the right lender to explain your options and help you understand how they meet your specific needs," Huettner says.

By Michael Estrin • Bankrate.com

Pre-Approved vs. Pre-Qualified: What Mortgage Shoppers Need to Know

Getting approval on a mortgage is a process with no shortage of moving parts. That's why residential mortgage consumers need to leave no stone unturned in figuring out where tripwires lie on the mortgage-approval landscape. One area where home buyers run into problems is failing to understand the difference between being pre-qualified for a mortgage and being pre-approved for one.

Before the Great Recession, mortgage approvals were like ice cream flavors at Baskin-Robbins—numerous and easy to get. But in the last five years mortgage lenders have significantly restricted their offerings, and borrowers need to be prepared for the tougher requirements or risk being turned down by banks and other lenders.

Just because you are pre-qualified for a mortgage doesn't mean you will get one. But when you are pre-approved your chances for a green light from a lender are greatly increased.

What your mortgage lender looks at
"In general, a lender who prequalifies a buyer discusses a buyer's credit, income and assets with them," said Michael Minervini, a real estate agent for Re/Max in Red Bank, NJ. "A lender who pre-approves a buyer runs their actual credit and verifies their income and assets. That's a major difference since agents and sellers view a pre-approval as a more firm start to the home-buying process."

Cal Haupt, president and chief executive officer at Southeast Mortgage, explained what the pre-approval process means to homebuyers once it starts rolling.

"Your loan would be submitted for preliminary underwriting, which normally takes no longer than 24 hours," Haupt said. "Your mortgage consultant would then provide you with a pre-approval letter that defines the loan amount you are approved to receive."

"Pre-approvals are normally good for a 120-day period, so it's important to begin your home search with your real estate professional as soon as possible after receiving your pre-approval letter," he said.

The difference between mortgage pre-qualification and pre-approval
According to David Hall, president of Michigan-based Shore Mortgage, a mortgage pre-qualification is an initial assessment of a potential buyer, and often it's not worth the paper it's written on.

But a pre-approval goes deeper and involves a more thorough look into your income and expenses, including a look at your credit score.

"Let's think in terms of the view from a plane," Hall said. "The pre-qualification is a 250,000-foot view, and a pre-approval is a closer-up, 30,000-foot assessment of the eligibility of a client to secure a loan."

To help you land your dream home, try a pre-approval service like the one featured on the Realtor.com individual listings pages. By checking the box that says, “I want to get pre-approved by a lender”, you’ll be connected with up to three lenders right away.

The importance of mortgage pre-approval
There's no harm in getting pre-qualified—it's a good gateway to buying a home. But to lock down that home, focus on getting pre-approved, Minervini said.

"Buyers should always get pre-approved only," he said, "And here's why: First, a buyer can confirm the sample monthly payment that they may own when they close, and they can get an idea of the home's price range. Then, they can determine if there are any potential unknown credit issues that may need to be addressed prior to purchasing."

Why you should know the difference
Getting square on pre-qualified versus pre-approved streamlines the entire home-purchase process.

"If all parties involved are aware of the distinction, it helps everyone play their role to the best of their ability," said Ted Rood, a senior mortgage consultant with Wintrust Mortgage and a contributor to Mortgage News Daily. "The listing agent who calls the mortgage originator to ask if the buyer's income and asset docs have been examined clearly understands the differences between pre-qualifications and pre-approvals."

On the other hand, the mortgage loan originator who deals with the real estate agent has a better grip on the entire process, by providing clarity on the firm's pre-qualification or pre-approval process, he said.

Even homebuyers can leverage the distinction between the two processes to help their own cause.

"Clients armed with this information can request a thorough pre-approval rather than a cursory pre-qualification, and play a role in ensuring the best possible handling of their transaction," Rood said.

The takeaway for homebuyers? Know the difference between being prequalified and pre approved, and focus your energy on accepting the former, but aggressively seeking the latter.

Do that and you've taken a huge step in buying the home of your dreams.

Realtor.com

Real estate CEO: Record-low housing inventory is 'freaking us out'

Housing inventory continues to drop amid tight credit and a growing tendency toward becoming a landlord. Homes in April sold the fastest since Redfin began tracking the market in 2010.

The number of homes for sale in America has been falling steadily for the past year, but the situation is apparently getting much worse as spring demand heats up.

"The inventory is reaching historic lows. It's never declined faster than it did last month. It's freaking us out — it's affecting our business; it's limiting our sales," said Glenn Kelman, CEO of Seattle-based Redfin, a real estate firm. "We're going to be fine in terms of market share, but I think the overall industry for the first time is seeing sales volume really limited by the inventory crunch."

Kelman started Redfin more as a technology company and touts his ability to track closely the more than 80 metropolitan markets it covers. He blames the lack of inventory on a new dynamic in housing.

"It's a new landlord nation where everybody is renting out their basement. When somebody moves up they don't sell their old place, they rent it out to somebody else, and it's because they want to keep that 30-year mortgage for 30 years, and it's because they can easily find somebody on Airbnb who will take the place," Kelman said.

Homes in April sold the fastest since Redfin began tracking the market in 2010. The typical home went under contract in just 40 days, 10 days faster than April 2016. As a result, 1 in 4 homes sold above their list price, which is the highest percentage Redfin has recorded.

Home prices continue to move higher as well, but, "It's not a bubble," said Kelman emphatically, who cites tight credit as keeping the bubble at bay.

Inventory of homes for sale fell about 7 percent nationally in March, compared with a year ago, according to the National Association of Realtors. Like most, Kelman blames the problem on a lack of new construction. On the single-family side, homebuilders are still putting up 18 percent fewer homes than the 25-year average.

"Cranes fill the sky in every town, but they're building office buildings," he said, noting that while employment is going up, there's no commensurate increase in the number of houses. In fact, he added, when people do construct housing, they're opting to build apartment complexes because tight credit is keeping many would-be buyers out of the market. "There is so much demand in terms of rent that it doesn't make sense to build properties for sale."

Diana Olick - CNBC

More buyers snap up homes before possible interest rate increase

Buyers continue to gobble up Florida’s declining single-family home inventory.

Here in Orlando, sales of single-family homes increased by 10.6 percent, going higher than the statewide average. Condo sales increased 18.4 percent, as previously reported by Orlando Business Journal.

Sales of single-family homes statewide totaled 25,921 last month. Of that amount, 2,707 were in Orlando.

Florida Realtors President Maria Wells attributes the strong sales to higher demand and motivated buyers taking action before interest rates can rise higher. The interest rate for a 30-year fixed-rate mortgage averaged 4.2 percent in March 2017, up from 3.69 percent a year ago, according to Freddie Mac.

The statewide median sales price for single-family existing homes last month was $231,900, up 10.4 percent from the previous year, according to the Florida Realtors.

Orlando’s overall median home price is $217,000, 11.3 percent above the March 2016 median price of $195,000, about $15,000 below the national average.

Sarah Aslam, Staff Writer - Orlando Business Journal

5 Ways Trump’s Presidency Affects the Real Estate Market

It’s no secret that the real estate market has been on a tear in the early part of 2017. But does President Trump have anything to do with it?

First, let’s take a look at the numbers. The supply of homes on the market is incredibly lean, according to Realtor.com, which has forced home prices higher. In February, homes sold 5% faster than they did in the same month a year ago, and five days faster than they did in January. The median list price remains at $250,000 – 9% higher than one year ago.

Although demand is higher, interest rates are rising. During the final week of February, the average contract rate for a 30-year fixed mortgage with conforming loan balances below $424,100 sat at 4.3% – still a bargain when compared to historical rates over time, but significantly higher than February 2016, when rates averaged 3.66%.

Against this landscape, experts say that Trump's presidency has already had an effect and will continue to influence real estate markets. Here is a look at five ways in which the president's influence is being felt – for good and for bad.

1. Higher Interest Rates
President Trump has made it clear that he’s not a fan of the Federal Reserve’s decision to keep interest rates low. The Fed has indicated that rates will continue to rise as the economy strengthens. Higher interest rates are great for investors, but for home buyers it means larger mortgage payments, and that will almost certainly slow the growth of the housing market. (For more, read: Can President Donald Trump Impact Mortgage Interest Rates?)

Thanks to a drop in interest rates during the last week of February, mortgage applications rose 5.8%, but that is expected to be short lived, say economists. And although the housing market is full-speed-ahead, the number of mortgage applications is still 45% lower now than it was at this time last year. There’s no doubt that as interest rates rise, mortgage applications fall.

2. Not Enough Workers
The demand for new homes is high, in part, because the nation’s home builders can’t find enough workers. Trump’s crackdown on undocumented immigrants could be making the problem worse. That’s because the construction industry has a large number of undocumented workers, according to Lawrence Yun, chief economist of the National Association of Realtors.

As the border tightens, the problem may only get worse, unless America can quickly train people with these construction skills.

3. Less Immigrant Demand
It may be surprising to learn that a 2013 study estimates that immigrants will account for 32.2% of household growth and 35.7% of growth in homeowners. What happens if the borders tighten and the immigrant population is smaller? Some experts believe that while this is a long-term effect, removing even a portion of this market could have a negative effect on home prices.

4. Freer Market – Higher Demand 
If President Trump gets his way, Americans will pay less in taxes. That’s a lofty goal and one that could come in any number of forms. But if it were to happen, that would certainly create higher demand in the housing market. Paying less in taxes means more discretionary income and more money to commit to a mortgage payment.

Although every personal finance guru will beg consumers to save and invest the extra money, the housing market will be a large beneficiary of it.

5. A Rising Stock Market Equals Higher Demand 
There’s no doubt that Trump has had a giant-size effect on the stock market, which has experienced more than double-digit percentage gains since the election. Most investors would be happy to see a fraction of that in a given year. Along with a rising stock market comes rising optimism. And that can translate to increased home buying. Whether the stock market is an accurate barometer of economic health has been the subject of a host of financial talk show debates. Either way, consumers may feel (what may turn out to be) a false sense of security while the bull market rages on. What goes up on Wall Street will eventually correct itself, potentially leaving some consumers overextended.

The Bottom Line
Since taking office, President Trump has made a lot of people a lot of money, and the real estate market can count itself as one of the recipients. But experts believe that some of his policies might serve to slow that market over time.

No stock market can keep up this growth pace forever. Whether it is President Trump, Clinton, Bush or anybody else, the Wall Street bull market will eventually come to an end, and solely blaming the person occupying the White House wouldn’t be fair or accurate.

By Tim Parker, Investopedia

Zillow ranks U.S. cities where people want to live - or leave

Residents of Washington, D.C., Miami, Detroit, Columbus, & Cincinnati want out — and not many house-hunters want in.

Meanwhile, Seattle, Tampa and Portland are popular targets for homebuyers who live elsewhere as well as residents who already live in those cities.

That's according to Seattle-based Zillow, which has analyzed searches from house-hunters to figure out which U.S. cities residents want to leave and where they want to stay.

By comparing the locations of its users with the cities that they're searching, Zillow has charted cities based on popularity with outsiders and popularity with current residents.

Here in Orlando, the study shows that more than 55 percent of Zillow page views from the metro area are for homes within the local market, according to the data. Explore the map below.

"Florida markets including West Palm Beach, Orlando, and Tampa are popular not only for searchers from Florida, but also from the Northeastern part of the country, likely because Florida is a common retirement destination for people in the Northeast," the report said.

Housing markets in Minneapolis and New York City show faint interest from outsiders but a strong majority of Zillow traffic coming from inside the city limits, showing residents want to stay in town with their next home purchase.

Casey Coombs, Staff Writer - Business Journal

Orlando among top cities for millennials

Orlando is one of the top three cities for millennials, according to a new report from Realtor.com.

The average share of the 25- to 34-year-old population in the U.S. is 13 percent, but in the top markets, the average share is 14 percent. Salt Lake City came in at No. 1 on the list, followed by Miami and Orlando. No other Florida metros made the top 10.

“High job growth in markets such as Orlando, Seattle and Miami, and the power of affordability in places like Albany and Buffalo are making these markets magnets for millennials,” said Javier Vivas, manager of economic research for Realtor.com. "But what really stands out is that all these markets already have large numbers of millennials, which translates into strong populations of millennial home buyers.”

Here's what Realtor.com had to say about Orlando:

The draw: Downtown Orlando is becoming a hot area and offers easy access to public transportation, shopping and dining, as well as a proximity to many jobs.

Millennial hotspots: Thornton Park, located just east of downtown has also become popular among millennials who are looking to live in a unique historic neighborhood with cobbled streets and lined with bungalows.

The stats: Millennials account for 14.6 percent of the total population in Orlando. Homes are affordable here and only require 34 percent of income. The unemployment rate is below the national average at 4.4 percent. To come up with its rankings, Realtor.com analyzed the 60 largest markets in the U.S. and compared the share of millennial page views in each area to the national average. Markets were ranked based on their comparison to the national average. Page view data included in this analysis covers the period from August 2016 to February 2017.

Here are the top 10 markets:

Salt Lake City
Miami
Orlando
Seattle
Houston
Los Angeles
Buffalo, N.Y.
Albany, N.Y.
San Francisco
San Jose

Cindy Barth - Editor, Orlando Business Journal

Pending Home Sales in U.S. Spike 5.5 Percent in February

According to the National Association of Realtors, pending home sales rebounded sharply in February to their highest level in nearly a year and second-highest level in over a decade. All major regions saw a notable hike in contract activity last month.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, jumped 5.5 percent to 112.3 in February 2017 from 106.4 in January 2017. Last month's index reading is 2.6 percent above a year ago, is the highest since last April (113.6) and the second highest since May 2006 (112.5).

Lawrence Yun, NAR chief economist, says February's convincing bump in pending sales is proof that demand is rising with spring on the doorstep. "Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country," he said. "The stock market's continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year."

Added Yun, "Last month being the warmest February in decades also played a role in kick-starting prospective buyers' house hunt."

Looking ahead to the busy spring months, Yun expects to see continued ebbs and flows in activity as new supply struggles to replace listings that are going under contract at a very quick pace. This is especially the case at the lower- and mid-market price ranges, where choices are minimal and prices are being bid higher by multiple offers.

"The homes most buyers are in the market for are unfortunately the most difficult to find and ultimately buy," said Yun. "The country's healthy labor market is translating to greater job security, but affordability is not improving because home prices in some areas are still outpacing incomes by three times or more because of tight supply. How much new and existing inventory there is on the market this spring will determine if sales can reach their full potential and finally start reversing the nation's low homeownership rate."

Existing-home sales are forecast to be around 5.57 million this year, an increase of 2.3 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 4 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

The PHSI in the Northeast rose 3.4 percent to 102.1 in February, and is now 6.6 percent above a year ago. In the Midwest the index jumped 11.4 percent to 110.8 in February, but is still 0.6 percent lower than February 2016.

Pending home sales in the South climbed 4.3 percent to an index of 127.8 in February and are now 4.2 percent above last February. The index in the West increased 3.1 percent in February to 97.5, but is still 0.2 percent higher than a year ago.

Monsef Rachid - World Property Journal

3 Crucial Reasons You Should Buy a Home Before 2017 Ends

Buying a house in 2017 will feel kind of like you’ve jumped onto the subway just as the doors were closing. Your heart’s pounding and you’re winded from the race, but you made it—just in time.

OK, so maybe that’s a little exaggerated. But here’s the thing: Interest rates have begun to rise and will likely climb higher. Inventory is low and could shrink more. And home prices? Well, home prices are increasing—and they’re not predicted to fall any time soon.

If you don’t jump aboard the real estate train now, you might be too late.

“It’s tough to buy a home today in most places in the country because there are so few homes for sale,” says Jonathan Smoke, chief economist for realtor.com®. “But if you wait to buy, then you’re gambling that the market will be better for you to purchase in the future.”

And that’s not a smart gamble, our real estate experts say. If you’ve been toying with the idea of buying, or you anticipate a life change that might force you to move—such as a new baby or a job transfer—you should be “buying as urgently and as soon as possible,” Smoke says.

So finish reading this, then start looking for a house. Here’s why.

1. Rates are rising

In 1981, when mortgage rates hit 18% and seemed to rise every day, single-digit rates seemed like an impossible dream.

Last August, however, rates on 30-year mortgages bottomed out at 3.55%. Now that the Federal Reserve finally decided to raise its key interest rate, mortgage rates have been climbing slowly. Today, the average rate is just above 4%; by 2019 or 2020, rates could easily climb to 6%.

“All signs point to this trend continuing,” says Richard DeNapoli, managing director for Coral Gables Trust and a former Florida real estate commissioner.

Before you freak out, take heart: Rising rates aren’t necessarily a deal breaker for buyers. The National Association of Realtors® (NAR) calculated that a rise from 4.2% to 5% would increase average monthly mortgage payments by $90—not nothing, but not a catastrophe, either. And if you take the long view, those higher rates are still historically low.

“For buyers there still is opportunity,” says Danielle Hale, managing director of housing research for the NAR. “For those who are still able to get into the market, these low rates continue to be helpful.”

Another upside: When rates go up, competition and prices often go down.

“I’d tell buyers not to panic, because higher mortgage rates eventually cause sellers to be more flexible on pricing,” DeNapoli says.

2. Inventory is shrinking

In November 2016, there were only 1.85 million homes for sale. That’s a nearly 10% drop from the year before. And it continues a trend of steady decline since just before the housing crash, when inventory peaked.

Real estate experts predict that inventory will continue to shrink, at least for the foreseeable future. That means that in most areas of the country, buyers have more homes to choose from today than they will next year.

Or even next month. If you get moving now (during the winter, which is largely considered to be real estate’s off-season), you’ll have less competition for those homes than you will in the peak spring and summer months.

Bottom line: Every day you wait to start looking for a new home, you face stiffer competition for fewer homes.

“If you think it’s bad right now, wait until April to August,” Smoke says.

3. Home prices are still rising

The bad news for buyers is that home prices now stand higher than before the 2007 crash, increasing 5% from 2015 to 2016. And housing experts expect an additional 2% to 3% jump in 2017, DeNapoli says.

“Prices continue to go up; we have yet to see that ceiling,” says Trevor Levin, a real estate agent with Nourmand & Associates in Los Angeles. “I think they have room to grow.”

How high prices will rise and how long they’ll remain high is anyone’s guess. Rising mortgage rates and the new Trump administration have introduced “uncertainty” into the real estate market, Levin says.

“And uncertainty is never ideal,” he says.

The good news? If you jump into the market pronto, you just might make it before those doors close.

Lisa Kaplan Gordon - Realtor.com

4 Signs Now’s the Right Time to Sell Your Home

Not sure when to sell your house? If you’ve been on the fence, we’ve got good news: It’s a great market for sellers! Limited inventory continues to drive home prices up, and the latest data from the National Association of Realtors shows that half of recently sold properties were on the market for just 39 days.

Of course, the decision of when to sell your home isn’t solely based on market conditions. You have to take your personal situation into account—and that’s where expert advice comes in handy.

We asked Linda Domis, a Los Angeles-area real estate Endorsed Local Provider (ELP) with 38 years of experience, to share her advice.

“Now is a great time to sell,” she says. “Longer days during daylight saving time mean more hours for buyers to look at property. With less stress, buyers can think about a move more comfortably.”

Here are a few other things to keep in mind before planting a For Sale sign in your yard.

You’re Out of Debt With Cash in the Bank

If you didn’t have all your financial ducks in a row your first time around the home-buying block, you probably learned a few things the hard way. Like the fact that Murphy can smell broke from miles away. If it can go wrong, it will! Put those lessons to good use and be a money-smart home buyer the next go-round!

Start by taking a hard look at your finances. If you’ve paid off all your nonmortgage debt and have three to six months of expenses in your emergency fund, that’s a good sign you’re financially mature enough to purchase a home again.

You’ve Got Equity on Your Side

When the housing bubble burst, home values plummeted, sending many mortgages underwater. Thankfully, the tide has turned: According to CoreLogic, only 8% of homes with a mortgage had negative equity at the beginning of 2016. If you’re not sure where your equity stands, ask an experienced real estate agent to run a free comparative market analysis (CMA) to determine an approximate value for your home.

Linda says it’s worth the sale “if your home has recovered enough value to provide at least 20% equity for your next purchase.” Why is 20% the magic number? Because putting 20% or more down on a home keeps private mortgage insurance (PMI) at bay. That could save you hundreds of dollars each year!

Your Home No Longer Fits Your Lifestyle

Another factor to consider is how well your home meets your everyday needs. Perhaps you could use another bedroom (or even two) to accommodate your growing family. Or maybe your kids have all moved out and you’re ready to downsize.

“Empty nesters can really benefit from selling now while rates are low,” Linda says. “It’s very freeing to sell a large home, pay cash for a smaller one, and invest the rest in your retirement.”

Whether you’re sizing up or down, make sure your mortgage fits your budget. Dave recommends keeping your monthly payment to 25% or less of your take-home pay on a 15-year fixed-rate mortgage.

You Can Actually Afford the Move

Don’t get so carried away by the excitement of your next home that you forget to account for the cost of leaving your current one. Hiring professional movers? Save up cash to cover the cost of packing up and hauling your stuff away.

You should also invest a little to get your current place ready for prime time. Linda recommends focusing your home-improvement dollars on these areas:

Paint: “Paint is the number-one investment when upgrading,” she says. “Buyers love the look—and smell—of fresh paint.” Curb appeal: You only get one chance to make a first impression. Linda suggests a three-pronged approach:
“Plant flowers, trim shrubs, and paint the trim.” Kitchen and bath: “You don’t need expensive appliances or countertops, but new faucets and fixtures go a long way,” she says. Want a bonus tip that doesn’t cost a dime? Clear out the clutter. “Neat closets and tidy shelves make your home look larger!” Linda adds.

Make the Right Choice for You

There’s no single formula for determining when to sell your house. Partner with a pro you can trust to provide honest advice so you can do what’s best for you and your budget. A good agent puts service before sales—but knows how to get things done when it’s time to sell.

Original Article - DaveRamsey.com