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Displaying blog entries 1-10 of 27

What is the Cost of Waiting Until Next Year to Buy?

by Melissa Thompson

We recently shared that over the course of the last 12 months, home prices have appreciated by 7.0%. Over the same amount of time, interest rates have remained historically low which has allowed many buyers to enter the market.

As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 4.7% over the next 12 months.

What Does This Mean as a Buyer?

If home prices appreciate by 4.7% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

Bottom Line

If buying a home is in your plan for 2018, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

Call at 901-756-8900 or visit my website to discover your new home!

By: KCM Crew

Debunking Real Estate Myths

by Melissa Thompson

Whether you are buying or selling a home for the first time or you are a seasoned veteran of buying/selling real estate, chances are you think you have the knowledge needed to navigate the process based on what you have read or heard from friends and family. Unfortunately there are a plethora of myths circulating about buying and selling houses that have become prevalent, but just aren’t true.  The pitfall of believing everything you hear or read is that real estate myths can hurt you where it counts…in the wallet.  Here are eight common ones that can cause home buyers/sellers to make unnecessary mistakes:

  • Set your home price higher than what you expect to get. Setting your asking price too high may net you a lower price.  That’s because many shoppers and their real estate agents will not look at houses that are priced above market value. While it’s true that you can lower your price if you have not gotten offers in the first few weeks, “Buyers are highly suspicious of houses that have sat on the market for more than three weeks,” says Nela Richardson, chief economist for the brokerage Redfin.
     
  • You can get a better deal as a buyer if you don’t use a real estate agent.

This is a false assumption. When a house is listed with an agent, the total sales commission is already built into the price.  If the buyer doesn’t use and agent, that just means the selling agent will get the entire commission.

  • You can save money selling your home yourself.

While it is possible to successfully sell your home on your own, there is a great deal of work that goes into it. You must know how to get the home listed online, market it to prospective buyers, negotiate the contract and deal with any issues that arise during the inspection or loan application phases.  In addition, buyers will expect a significant discount, so what you might save on real estate commission may not be as much as you thought it would be.

  • The market will only go up.

Over the years, homebuyers and sellers have experienced a time of increasing home values, then a sharp decline due to the economy and then an upturn where values increase again.  But many people believe the market only goes up.  You need to be aware that prices can fall dramatically.

  • You should renovate your kitchen and bathroom before you sell.

If your kitchen and bathroom are in working order, an extensive remodel could be a mistake. Potential buyers might not like what you’ve done with the place, but they don’t want to change something that has just been renovated.  You are better off adjusting your price accordingly.

  • You’ll earn back what you spend on renovations.

Repairing things like your heating system, air conditioner or roof may help your home to sell faster, but you probably will not recoup what you spend. Per Remodeling Magazine’s 2017 cost-vs-value report, the only renovation that is likely to net you as much as you spent is adding fiberglass attic insulation. You will likely only get back 65.3% on a full kitchen renovation. And redoing your bathroom might get you 59.1%.

  • All the properties listed in the multiple listing service show up online.

Your agent must choose to let the listings show up online. Most do, but it’s a good idea to verify that yours will.

  • Open houses sell properties.

Homes rarely sell to buyers who have visited them during open houses.  Agents like to have open houses because it helps them to find additional potential customers.  If you and your agent opt not to have an open house, it probably won’t hurt the chances of selling.  On the other hand, having a broker’s open house for other agents might be worthwhile.

 

http://www.yourkeytomemphis.com/Blog/Buying-a-Home-Can-Be-Scary-Unless-You-Know-the-Facts

http://www.yourkeytomemphis.com/Blog/Should-I-Sell-or-Should-I-Rent

http://www.yourkeytomemphis.com/Blog/Steps-to-Take-Before-Buying-a-Home-A-Guide-for-First-Time-Homebuyers

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Bubble Alert! Is it Getting Too Easy to Get a Mortgage?

by Melissa Thompson

There is little doubt that it is easier to get a home mortgage today than it was last year. The Mortgage Credit Availability Index (MCAI), published by the Mortgage Bankers Association, shows that mortgage credit has become more available in each of the last several years. In fact, in just the last year:

  • More buyers are putting less than 20% down to purchase a home
  • The average credit score on closed mortgages is lower
  • More low-down-payment programs have been introduced

This has some people worrying that we are returning to the lax lending standards which led to the boom and bust that real estate experienced ten years ago. Let’s alleviate some of that concern.

The graph below shows the MCAI going back to the boom years of 2004-2005. The higher the graph line, the easier it was to get a mortgage.

As you can see, lending standards were much more lenient from 2004 to 2007. Though it has gradually become easier to get a mortgage since 2011, we are nowhere near the lenient standards during the boom.

The Urban Institute also publishes a Home Credit Availability Index (HCAI). According to the Institute, the HCAI:

“Measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates … it is easier to get a loan.”

Here is a graph showing their findings:


Again, today’s lending standards are nowhere near the levels of the boom years. As a matter of fact, they are more stringent than they were even before the boom.

Bottom Line

It is getting easier to gain financing for a home purchase. However, we are not seeing the irresponsible lending that caused the housing crisis.

Let’s get together and find out how much house you can afford! 901-729-9526 or Melissa@YourKeyTomemphis.com

BY: KCM Crew

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Buying a Home Can Be Scary... Unless You Know the Facts

by Melissa Thompson

Some Highlights:

Many potential homebuyers believe that they need a 20% down payment and a 780 FICO® score to qualify to buy a home, which stops many of them from even trying! Here are some facts:

  • 40% of millennials who purchased homes this year have put down less than 10%.
  • 76.4% of loan applications were approved last month.
  • The average credit score of approved loans was 724 in September.

Let the experts at The Melissa Thompson Team help you decide if now is the right time for you to purchase a home! 901-729-9526 or Melissa@YourKeyTomemphis.com.

By: KCM Crew

View our Video Blog

The Cost of Renting vs. Buying a Home

by Melissa Thompson

Some Highlights:

  • Historically, the choice between renting or buying a home has been a tough decision.
  • Looking at the percentage of income needed to rent a median-priced home today (29.2%) vs. the percentage needed to buy a median-priced home (15.8%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!

Let the experts at The Melissa Thompson Team help you decide if now is the right time for you to purchase a home! 901-729-9526 or Melissa@YourKeyTomemphis.com.

By: KCM Crew

The Mortgage Process: What You Need to Know

by Melissa Thompson

Some Highlights:

  • Many buyers are purchasing a home with a down payment as little as 3%.
  • You may already qualify for a loan, even if you don't have perfect credit.
  • Take advantage of the knowledge of your local professionals who are there to help you determine how much you can afford.

Let the experts at The Melissa Thompson Team help you decide if now is the right time for you to purchase a home! 901-729-9526 or Melissa@YourKeyTomemphis.com.

View our Video Blog

By: KCM Crew

Should I Buy a Home Now? Or Wait Until Next Year?

by Melissa Thompson

Some Highlights:

  • The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
  • Freddie Mac predicts interest rates to rise to 4.4% by next year.
  • CoreLogic predicts home prices to appreciate by 5.0% over the next 12 months.
  • If you are ready and willing to buy your dream home, find out if you are able to!

Let the experts at The Melissa Thompson Team help you decide if now is the right time for you to purchase a home! 901-729-9526 or Melissa@YourKeyTomemphis.com

View our Video Blog

Steps to Take Before Buying a Home - A Guide for First Time Homebuyers

by Melissa Thompson

Buying your first home is a huge endeavor and the decision to do so should not be made lightly.  In fact, it is likely to be the largest financial decision you will ever make.  So, be smart and be prepared. Do your research before you even start looking at houses and make sure you know what you are getting into.  Here are some important steps to take before buying your first home:

  1. Make sure being a homeowner is right for you.  While the idea of owning a home is exciting, there is a lot that goes into it.  If you’ve been paying rent, you might find that a mortgage payment is less than what you’ve been paying.  That is a positive thing for sure. But you need to consider that as the homeowner it will now be your responsibility to handle the maintenance and upkeep of your home.  If something breaks, you won’t have a landlord or management company to call to fix it.  You will have to fix it yourself or hire someone to do so…and pay for it.  Investing in a home can be financially rewarding if you work within an appropriate budget  that will allow you to meet all your needs.
     
  2. Consider financing.  How do you plan to pay for your new house?  This is an important step in determining how much you can afford to spend on a house.  Do your homework and avoid being in the middle of the home-buying process and discovering that you don’t have the funds you need to complete the purchase. Check out loan programs for firs time home-buyers and if you haven’t already, start setting aside cash for a down payment.  Order a free credit report and give yourself time to clean up your credit if need be. I highly recommend getting pre-approved for a loan before starting your home search. This lets sellers know that you are serious about buying and gives you a leg up over buyers who haven’t been pre-approved when making an offer.
     
  3. Figure out what you want.  Before you start looking at properties, create a list of what you want in a home.  Are you looking to live in the suburbs or would you prefer city living?  Is the school district you live in a top priority?  Are you looking for a spacious home with a big yard, or a cozy home with a small yard?  Think about your lifestyle and what kind of house goes along with it.  Once you have a good idea of what you want, narrowing down your search will be easier and you won’t waste your time looking at properties that don’t suit your needs.
     
  4. Enlist the aid of a buyer's agent.  The expert guidance of an experienced Realtor is invaluable.  A buyer’s agent represents you and has a fiduciary responsibility to look out for your best interests.  You will appreciate the knowledge that a local realtor will have about the area where you are looking.  Once provided with a list of your wants and needs, a Realtor can save you time by searching listings to find homes that meet your criteria. Your agent can advise you on neighborhoods, school districts and much, much more.  Take advantage of your Realtor’s expertise and your home-buying experience much less overwhelming and stressful.

If you are thinking about purchasing a house, contact Melissa Thompson at yourkeytomemphis.com and let her help you get started on your journey to home-ownership!

http://www.yourkeytomemphis.com/Blog/Happily-Ever-Homeowner

http://www.yourkeytomemphis.com/Blog/The-5-Greatest-Benefits-of-Homeownership

http://www.yourkeytomemphis.com/Blog/The-Cost-of-Renting-vs-Buying-in-the-US

View our Video Blog

Happily Ever Homeowner

by Melissa Thompson

Married couples once again dominated the first-time homebuyer statistics last year at 66% of all buyers, according to the most recent Profile of Home Buyers & Sellers. It is no surprise that having two incomes to save for down payments and contribute to monthly housing costs makes buying a home more attainable.

Many couples are deciding to use what would otherwise be their wedding fund as a down payment on their first home, as unmarried couples made up 8% of all first-time buyers last year. If you’re single, don’t fret; you can still buy your dream home! Single women made up 17% of first-time buyers in 2016, while single men accounted for 7% of buyers.

According to a survey by the Wedding Report, the average cost of a wedding in the United States at the start of the year was $25,961, which equates to a 10% down payment on a median priced home.

A recent article from the New York Times found that many singles are now asking their parents to allow them to use the money they’ve saved up for their wedding day to instead buy a home.

In the case of Carrie Graham, a Protestant minister from Austin, TX, her parents had saved a ‘five-figure sum’ for her wedding and were more than willing to give her that money as a down payment on her dream home. Graham told The New York Times,

“Buying the home wasn’t me saying, ‘I’m never going to get married’ or I am going to get married.’ My own home had way more than equity benefits. It was a real gift to have a home in an extremely desirable neighborhood in a city that I love. It’s brought me joy.”

Bottom Line

More and more first-time homebuyers are finding a way to purchase their dream homes, even if that means delaying their dream weddings.

Contact your local expert’s at The Melissa Thompson Team at 901-729-9526 or Melissa@YourKeyTomemphis.com to find your dream home! 

BY: KCM Crew

Top 5 A+ Reasons to Hire a Real Estate Pro

by Melissa Thompson

Some Highlights:

  • Hiring a real estate professional to buy your dream home, or sell your current house, is one of the most 'educated' decisions you can make!
  • A real estate professional has the experience needed to help you through the entire process.
  • Make sure that you hire someone who knows current market conditions & can simply and effectively explain them to you and your family!

​​Contact your local expert’s at The Melissa Thompson Team at 901-729-9526 or Melissa@YourKeyTomemphis.com.

​​By: KCM Crew 

Displaying blog entries 1-10 of 27

Contact Information

Photo of Melissa Thompson Real Estate
Melissa Thompson
Crye-Leike Realtors
6525 N Quail Hollow Road
Memphis TN 38120
(901) 729-9526
(901) 756-8900
Fax: (901) 435-0620