Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Sept. 19, 2020

Teams Models in Real Estate

When you begin looking for a real estate agent, you generally find agents that work independently under a brokerage. They often run their business independently, for the most part. Their brokerage holds their license, pays their errors & omissions insurance, provides branded marketing material, and holds meetings for all their agents to touch base from time to time. These agents perform in the real estate industry as their clients need. For example, they may operate as a buyer’s agent one day and a seller’s agent the next. They may have a wide range of experience from selling fixer-uppers to mansions. 

An agent that is part of a team model works closely with their brokerage to hone in on their preferred area of expertise. This means that each agent has a specialty. Novum Realty operates on a team model, so we have agents that are designated as buyer representation specialists and agents that are designated to act as seller’s representatives. In addition to specific buyer and seller representation, we also support our agents in their unique interests, so that when a client presents their wants and needs, we have an agent with a passion and specialty to match.

 

Buyer’s Representative Specialist

As a buyer, a client comes with the need to find a new home, perhaps their first. Agents that specialize in buyer representation have a passion for working on the buyer’s side of the transaction. Our buyer’s representation specialists have studied well beyond their obligatory 90 hours of licensing to learn every articulating point of the transaction from the buyer’s point of view. Many independent contractors in real estate learn one or a handful of ways to write a purchase agreement, but with low industry standards, these leave a lot of stones unturned in the process. An agent that works on a team not only has specialized skills to work with you and protect your best interest, they also have a team of dedicated professionals that work alongside them, not against them. In a team model, we understand that the success and failures of one are a lesson for all. So, even if you’re buyer’s representation specialist has a new experience during your transaction, they can rely on the cumulative experiences of their team to offer unique solutions.

Seller’s Representative Specialist

In a market like this, there’s a good chance your home will have multiple offers written on it. Your agent must present them to you, but do you understand what each offer entails? Contingencies, time periods, financing terms, addendums, and amendments are all things you must filter through and choose the highest and best based on the merit of each offer. This can get complicated and stressful, and when you get into negotiations, having an agent that specializes in the selling side of a transaction is priceless. An agent that works closely in a team with other agents has access to the minds of other specialists who are there to support them when they need it. Our selling agents are also trained well beyond the industry standard required for licensing. We go through best practices for showings and practices for marketing the home which has become increasingly important with respect to the pandemic, and we learn continuously from one another’s transactions what is and is not working. 

Mandatory Designated Agency

If you have been through a real estate transaction before, you may remember hearing about Dual Agency. This is when a single brokerage is representing both sides of the transaction. For agents that do not specialize in buying or selling, you may end up buying your home from your agent, who is also the listing agent for that property. Your agent will owe fiduciary duties to the sellers in addition to you, which means they have to protect both parties’ best interests. As you can imagine, this can get complicated especially when negotiations take place. At the end of the transaction, that agent will receive all of the commission from the transaction as opposed to splitting with another agent.

At Novum Realty, we employ what we call Mandatory Designated Agency. This means that in a scenario where Novum Realty is the buyer’s broker and the seller’s broker in one transaction, an agent will be appointed to represent each party. This makes transactions clean and negotiations much less frustrating. It also means that you have a single agent that is acting in only your best interest and owes fiduciary duties to only you.

 

Of course, there are talented and qualified agents out there who work independently, but we believe that the best service comes from an agent that has team support and

Sept. 11, 2020

Market Update: September 2020

Supply & Demand Highlights

Many people look for new market trends as the season changes, so now is a perfect time to take an in-depth look at our local market for the Twin Cities. Supply has continued to decrease month-over-month leading to an increase in home prices far above typical rates of 3%. The current median sales price for a home in the Twin Cities is $315,000. To increase our supply of homes, new homes must be either listed or constructed, however, a dramatic increase of 160% in lumber costs has seriously affected the rate of inventory replacement in the affordable range. This hike in prices has increased building costs to roughly $16,000 per home.

As far as demand goes, we have experienced an increased number of showings as buyer demand remained strong, outpacing the rate of new listings. Extremely low interest rates have influenced the demand of consumers to “right-size”. The market is expected to stay strong through more of the fall, leading many people to wonder if this fall will be the new spring market.

Showings

Daily showings have decreased, however, it is common to see a drop in showings around Labor Day. Most families are on vacation or taking time off from work, so we generally see a drop in showings during this time of the year. Although there has been a drop, daily showings are still higher than this time last year in 2019. Last year, activity continued to drop through the end of the year, bottoming out at just over 1,000 showings in the metro area in late December.

If we look at showing activity by price range, we can see that the middle market and luxury buyer demands have remained strong week-over-week. There are consistent gains in the showings of homes that are $250,000 and up. Luxury homes have increased gains as well and have actually remained far stronger than previous years. Roughly 60% of showing activity is in homes that are between $200,000-$500,000. We can see a big decrease in buyer activity in homes $199K and below.

Listings

The Twin Cities metro area is down 19.7% as a whole for new listings. Almost all segments of the market had a substantial pullback due to the holiday weekend, however, the middle market has had the greatest increase in new listings that is now starting to match buyer demand. New listings decreased substantially over the weekend due to the holiday, which is normal. New listings have remained above previous years and follow a similar trend. With that, we can expect new listings to pick up for the next week and then drop off slowly towards the end of the year as we get into colder weather.

Pending Sales

Pending sales demonstrate the quantity of buyers that commit to a purchase. For the entire region, this is up 31.4% compared to last year, which is significant. We believe that pending sales have remained steadily higher than in previous years due to the late market start because of COVID-19. According to annual trends, pending sales will eventually trend downwards, but as of right now show no indication of decreasing.

Pending sales have increased most dramatically in the middle and luxury markets. The highest increase is between the $500K-$750K range. Affordable homes have suffered from lower buyer demand, which has resulted in the greatest pullback in pending sale activity.

Summary

 

The market has continued on the trend of low housing inventory and high buyer demand. In the past week, pending sales have increased by 31.4% in the local market due to increased buyer demand. Along with an increase in demand, we also see the driving up of the median home price. The average number of days a listed home is on the market has decreased to about 15 days. This combined with a decrease in the month’s supply of homes leads to our current intensely competitive market.

Posted in Market Updates
Sept. 3, 2020

Are Personal Offer Letters a Good Idea?

A personal offer letter is a piece of writing from home buyers to sellers as a way of introducing themselves when putting in an offer on a home. These letters generally contain a short bio of the buyers, why they love the home, and why their offer should be chosen. Some buyers also choose to attach a photo of themselves. Buyers believe their offer will have a better chance of being accepted if they can add personality or a story to the number they submit. Letters to sellers have been up for debate because of the role they play in Fair Housing Laws.

 

Adding Vulnerability

The goal of these letters is to be able to submit stories and photos along with offers as a way to personify the transaction and hopefully appeal to the seller on a personal level. Hopefully, the seller would read your story, fall in love with it, relate to you, and choose your offer, however, we can’t guarantee that this will be the scenario that takes place. The real estate transaction is usually an emotional one, especially when we’re working with residential purchases. Sellers are leaving a home they have memories attached to and buyers are usually making the biggest investment of their lives. This emotion can be taxing enough on both parties without the addition of the vulnerability that accompanies personal offer letters. When you put your personal information up for debate, you are taking another risk. 

Fair Housing Laws

A personal letter could disqualify you for reasons that are uncomfortable to consider. If you give information about your family, life goals, occupation, what you look like, etc. you may be giving away other details such as your familial status, sex, race, sexual orientation, religion, ethnicity, marital status, and more. Unfortunately, this information can lead to your offer not being chosen due to the personal biases of the seller.

 

 

It is against Fair Housing Laws to pick or reject a buyer based on their race, color, creed, religion, national origin, sex, marital status, disability, public assistance, sexual orientation, or familial status. By writing a letter that gives away these details, a seller may use them to make their decision. Ideally, a seller will review offers and choose the best one without considering the personal identifying factors of the buyer, such as those above.

A buyer wouldn’t have to worry about violating Fair Housing Laws by submitting a letter because they are the ones choosing to buy, but these “love letters” can put sellers in an uncomfortable position because they can be in violation of Fair Housing Laws when using personal information to decide on which offer to choose. Even though they may want to choose an offer regardless of the information enclosed in a letter, they may feel uncomfortable choosing that offer given the risk involved when details about that buyer’s membership or non-membership to a protected class have become available. For example, Sam and Sarah put in an offer with a letter to Jim, who is selling the property. Jim reads the letter and finds out Sam and Sarah are members or non-members of a protected class. Jim receives a similar offer without a letter from Mark and Mary. Since Mark and Mary’s offer has come without a letter, Jim knows nothing of their status in relation to protected classes and feels more comfortable moving forward with their offer, as his agent has educated him on Fair Housing Laws and he is afraid of being sued for choosing Sam and Sarah given their membership to a protected class or lack thereof.

 

Protect Your Best Interest

Some sellers see a personal letter as a “show of hand”. Telling your story might lead to a seller believing you have less power should your transaction move into negotiations. There is a belief that even if a letter gets you accepted, it can weaken your position to negotiate when it comes to price and inspection. What you share in your letter may be intended to win the heart of the seller and appeal to their sympathetic side, but could end up giving you the short end of the stick come negotiations. A letter can reveal information about your occupation, familial status, marital status, and other factors that may inform the seller of your financial situation. Make sure you are considering how the information you share could be used against you down the road. 

There is a safety risk in sharing too much information with a seller. Just like how we practice safety online, we must be mindful of the details we give and the risks involved with making you/your family identifiable. We don’t know the seller personally and while we want to see them as good people who will protect our information, that is not a guarantee. Make sure you are considering your best interest if you are writing a letter. Can the information you’re providing be used against you? 

 

Sometimes writing a personal offer letter can be a good way to add personality to an offer and be appealing to sellers, however, there are risks involved that should be considered before submission. Make sure you understand all of the above information and talk with your Realtor if you have any questions.

Aug. 27, 2020

Don’t Stress Over Not Having a 20% Down Payment

A down payment is the upfront money you pay for your home loan. Some mortgages require a greater down payment, such as uninsured conventional loans. However, most home buyers over the last couple decades haven’t been paying the 20% down payment that we hear about over and over again. In fact, most lenders require only 3-3.5% of the sale price.

 

 

 

How does a down payment work?

Down payments do have an impact on your monthly payment. The more money you put down, the smaller your monthly payments. This may have been favorable in the past, but as time goes on, more and more buyers choose to put less than 20% down on their mortgage to keep more money in their bank account. There is no right or wrong way to take out your mortgage besides borrowing too much. It all depends on the individual’s unique financial circumstances and their priorities. 

Let’s say we have a couple looking to purchase a $250,000 home and move out of their $2,000/month (after rent + utilities + parking) apartment in downtown St. Paul. In this ideal circumstance, they have a pre-approval letter from their lender and they’ve done the math and decided that a $250,000 home is affordable and attainable. If this couple puts 20% down on a conventional 30-year mortgage, they would need to put down $50,000 to their lender in order to obtain this loan. Their principal and interest payment would be $926.23 and their closing costs (assuming they are 2% of the loan amount) would be $4,000. They pay a smaller monthly payment because the down payment was larger.

Now let’s say that this couple, like most first-time home buyers, does not have $50,000 on-hand to spend on a down payment. They can put just 3% down on an insured conventional 30-year loan. In doing this, they can keep the savings they do have for a safety net, which gives them both greater peace of mind. This couple would pay $7,500 in their down payment and have a monthly payment of $1,249.36 including their private mortgage insurance (PMI). Their closing costs would be $4,850 (assuming they are 2% of the loan amount). This is still a monthly savings compared to their rent payment at the apartment and it lets the buyers save cash on hand while building equity in their new home. 

 

Private Mortgage Insurance

  Since the second loan option is being obtained with a down payment of less than 20%, lenders require private mortgage insurance to be added to the monthly payment. This payment is to protect the lender in case the borrower defaults on the loan. At first glance, it may seem like a substantial amount, but remember, a borrower only has to pay PMI until they have 20% equity in the property. Most lenders will also automatically remove the PMI once the borrower is at a loan-to-value (LTV) ratio of 78%. This is comparable to the 20% equity buyers get when they put down 20% at the start of the mortgage. Of course, the more you put down, the greater your starting equity. 

A Low Down Payment isn’t Rare

If you can’t afford a 20% down payment, you are not alone. You are not “poor” or “failing” if you cannot afford a substantial down payment. Most first-time buyers do not have 20% of the purchase price to put down on their home. In fact, according to the National Association of Realtors report, the median down payment for first-time home buyers is just 6% of the purchase price.

Conventional loans have been accepting 5% or less down payments since the 1990s and the FHA has been providing them since the 1980s. It’s nothing new that home buyers don’t want to put 20% down on their first home. There are plenty of reasons why, but most first-time home buyers just don’t have the cash on-hand to put down 20%, and this has been the common circumstance for decades. 

 

Conclusion

Most first-time home buyers do not put down 20%. As we learned, the average is only about 6%. Now, whether or not to put down a large or small down payment depends on the unique financial situation and priorities of the individual buyer, however, there are many pros to using a smaller down payment that aren’t common knowledge. Over half of all first-time buyers think they must put down at least 20% before they can buy a home. This shared belief puts a massive road-block in the way for new buyers who think they can’t afford to buy a home. If you have more questions about low down payment loans and financial assistance programs offered here in Minnesota, please reach out to your Novum team. We would be happy to provide further education and share your options with you.

Posted in Affordable Housing
Aug. 20, 2020

Types of Mortgage Loans

A mortgage is something held as collateral when an individual uses a loan from a bank to purchase real estate. Along with a promissory note, which serves as the contractual obligation to repay the bank, a mortgage allows a person to purchase a home and pay the balance over time. In this post, we will go through a few of the most common mortgage options.

 

Federal Housing Administration (FHA) Loan

A loan that is insured by the FHA is available to all home buyers that qualify. Qualification is based on income and credit history. Although there is a limit on the size of the loan, most FHA-insured loans are enough to buy a moderate-priced home anywhere in the country.  Mortgages that are insured by the FHA allow buyers to put down as little as 3.5% of the purchase price in a down payment. This makes it an appealing loan option for home buyers that do not have a lot of money available to use on their down payment.

A requirement for securing this type of financing is that there must be mortgage insurance premiums paid by the borrower attached to the loan. These payments are added to the monthly payment which already includes the principal, interest, tax and insurance of the mortgage. This is something to consider when you are budgeting for your monthly payment on your new home.

The purchase agreement on a home being paid for with FHA financing must include an escape clause. This clause cancels the purchase if the buyer cannot obtain an FHA loan, and assures the return of all earnest money to the buyer. Since you generally begin viewing homes after obtaining a pre-approval letter, there are some scenarios where a buyer puts in an offer on a home and then does not qualify for the loan after further inspection by the lender.

Department of Veteran Affairs (DVA or VA) Loan

This type of loan is available to U.S. military veterans. A DVA loan does require that the veteran live within the home being purchased with this mortgage. DVA loans are made by an approved lender and are guaranteed by the Department of Veteran Affairs. For this loan, there is no down payment or mortgage insurance premium (MIP) required. There is no MIP because the loan is not insured, it is guaranteed by the DVA. 

Veterans must have a Certificate of Eligibility issued after their discharge of service or proof of active service and meet VA rules for time and length of service to qualify for a DVA loan.

DVA loans require a Certificate of Reasonable Value which adds an additional step to the purchasing process. Essentially, there will be two appraisals done on the property, one for the lender and one for the VA.

Similarly to a FHA loan, DVA loans must contain an escape clause in the purchase agreement that cancels the purchase if the buyer cannot obtain the DVA loan. If this scenario takes place, all earnest money is refunded to the buyer per this clause.

Conventional Loan

If a loan is not FHA insured or guaranteed by the Va, it is considered a conventional loan. These loans generally require more money down, but have less stipulations than DVA or FHA loans. There are a myriad of different types of conventional loans that buyers can consider. The following are the most common options:

  • Package Mortgage: A package mortgage includes personal property along with the real estate. For example, if someone purchased a furnished vacation home, they would obtain a package mortgage to combine the purchases of the home and the furniture.
  • Blanket Mortgage: this is used when a single mortgage covers two or more pieces of real estate. In these types of loans, one parcel can be sold later without retiring the mortgage.These types of loans are commonly used by real estate developers and investors. 
  • Open-end Mortgage: This type of mortgage allows the buyer to borrow more money down the road. There is usually a set dollar limit that the loan can go up to and a draw period of when funds can be added.The amount owed is open-ended depending on how much the borrower adds.
  • Purchase Money Mortgage: In this scenario, the buyer borrows money from the seller instead of a bank. The title transfers to the buyer, but the seller has a lien on the property. This is different from a contract-for-deed because in the deed is transferred in a purchase money mortgage, in a contract-for-deed it does not. 

 

Insured Conventional Loan

Conventional loans require a higher down payment of around 20%, but for buyers who are unable to pay higher down payments they can get insured conventional loans with down payments as low as 3%. Insured conventional loans require the borrower to pay private mortgage insurance to protect the lender if the buyer defaults.

Adjustable Rate Mortgage (ARM) Loan

An ARM loan is one where the interest rate changes at predetermined times. The adjustments are made according to an economic index/indicator. The terms of the loan will stipulate the “cap” at which the interest rate cannot exceed. 

Budget Mortgage

This type of loan is when the buyer pays the mortgage payment plus tax and insurance to the lender each month. The lender then places the tax and insurance funds into an escrow account, from which the lender pays the annual insurance premium and real estate taxes on behalf of the owner. This arrangement is favorable by lenders because it makes them responsible for the insurance coverage on the home, which is their collateral for the loan. Since the lender makes payments on behalf of the borrower, they don’t have to worry that the property could be foreclosed on by a local government for not paying taxes.

Aug. 13, 2020

Trump Administration Rescinds the AFFH Rule

AFFH is the acronym for Affirmatively Furthering Fair Housing. This provision of the Fair Housing Act was created in 2015 by the Obama administration. This clause required cities and townships to perform assessments to find patterns of racial bias in their communities’ housing and come up with solutions to reverse it. The AFFH regulation also provided data-driven tools for jurisdictions to use when conducting these assessments as a way to further ensure that no personal biases got in the way of U.S. housing.This was accomplished by enforcing communities receiving federal housing funds to assess what patterns of housing discrimination they have and then come up with a plan to confront and resolve them.  Prior to the AFFH rule, there was no way to hold Housing & Urban Development (HUD) grantees accountable for fair housing practices. 

 

AFFH Criticisms 

In 2017, HUD secretary Ben Carson first criticized the AFFH rule and stated that it was an overreach of the federal government. Many people attacked Carson for his stance, saying that his views were against fair housing and anti-integration. Carson defended himself by saying

“I don’t have any problem with affirmative action or integration, I have no problem with that at all. But I do have a problem with people on high dictating it when they have no idea what’s going on in an area.”

Carson criticized the rule as an overstep of the federal government and nothing more, but given the context of the AFFH rule and what it stands for, this brought a lot of discomfort to Fair Housing advocates.

 

What did the AFFH Rule do for Communities?

Unfortunately, we do not have a lot of data for the success of the AFFH Rule because it was only in effect for less than three years under the Obama administration before the Trump administration weakened it in 2018 by telling cities they no longer had to use the AFFH tool and that they would have an extended time period of 2 years before they would need to submit their assessments. Despite Trump acknowledging that he would rescind the AFFH rule in 2020, this rule was actually already suspended by HUD in January of 2018. 4 months later in May, the AFFH Assessment tool was withdrawn.

Due to this early gutting of the AFFH, we can only speak to the goal of this regulation and why it was important. The goal of AFFH was to put the federal government in charge of affirmatively furthering fair housing by requiring jurisdictions to confront and act against racially biased housing practices in their area. The reason the federal government was given power in this clause was to act as an enforcer for the smaller communities to act in the direction of building inclusive neighborhoods that would create equal access to opportunity. In providing data-based tools for these communities to use, the AFFH rule helped reduce the likelihood of personal bias within city legislature infecting the assessments. It also helped HUD grantees weave together the elements of a successful neighborhood, such as well-funded parks and schools, environmental and infrastructure protection policies, and favorable housing stock in a way that fostered equal opportunity and inclusivity, so that all Americans had access to safe, clean, affordable housing near high performing schools, reliable transportation choices and access to workforce opportunities. (NPR, Danielle Kurtzleben)

 

Conclusion

The AFFH clause held communities accountable for dismantling segregation. The rescindication of this rule may lead to further harm to the historically marginalized Black and brown communities of the United States that were supposed to be protected and supported in victories of the AFFH rule across the nation. It is important to work together and provide community-based strategies to combat racism within the U.S. housing system. Many fair housing advocates and legislative leaders have made an attempt to share their thoughts with Congress and implored for the use of the Congressional Review Act to reject this motion and hold Secretary Carson accountable for his responsibilities.



At Novum Realty, in providing excellent real estate service and education to all individuals and by following fair housing practices, we actively work against racist housing in our industry and stand with the furthering of opportunities for advancement within low-income neighborhoods. We believe access to decent, safe, and affordable housing is a human right.

 

 

Posted in Affordable Housing
Aug. 6, 2020

Purchasing a Foreclosed Home

Why do people want to purchase foreclosed properties?

Some home buyers enter the real estate market looking for a new home, but are set on waiting to find a house that has been foreclosed on so they can get a good deal. Unfortunately, not enough people are aware of how much work goes into foreclosed homes, what conditions the sale will be under, or how rigid negotiations will be. In this blog post, we will try to outline some considerations, so that you can make the best decision.

Condition of the Home

When you know a property has been foreclosed on, you know this meant that the previous homeowner could not make the payments on their mortgage. That being said, we can make a general assumption that this owner was unlikely to have been able to afford the maintenance of this property as well. There may be neglected water damage, defective appliances, or overgrown grounds. Among these common concerns, the previous owner may have left behind personal property when they were told to evacuate. Once again, this individual could not afford their mortgage, so we can draw a simple conclusion that it may have been unlikely they were able to afford to move large furniture with a moving company or by renting a truck. You may be responsible for disposing of these items when you become the owner. 

In addition to obvious damage, you will lose the seller’s disclosure that you would normally receive in a traditional transaction. The bank may not know of damage or defective elements of the home because they have not lived in the property and the previous owners will not leave a disclosure behind. You will most likely uncover existing problems as you go.

 

Purchase Problems

Despite the physical condition of the home, you may still be interested in a foreclosed property. Many individuals believe that the transaction will be much simpler since they will be buying the home from a bank directly. Unfortunately, that is not often the case.

The average time to foreclose is longer than ever. According to a study by ATTOM Data Solutions, in the past few months, the average time for a foreclosure process to be completed from beginning to end was 841 days. How long are you willing to wait for your next property? Along with this, overall foreclosures are going down, so it’s unlikely you will have a handful to choose from. 

You would think that banks would want to get rid of their real estate ownerships (REOs) as quickly as possible, but many banks drag their heels when considering offers and will rarely make deals under the listing price because as a business, they will be needing to profit as much as possible. Foreclosure processes cost banks money in addition to lost mortgage payments. Assume the price you see is the bare minimum they are willing to go. 

 

2020: Foreclosures are Little to None

If you are looking for a foreclosure in 2020, you may have to wait until next year, or longer before you will find a desirable foreclosed property. The FHA Foreclosure and Eviction Moratorium has been extended to August 31st, 2020 and can still be extended after that. With unemployment rising in tandem with Coronavirus cases in the United States, the FHA has made foreclosures on FHA-insured single family homes impossible for 60-day periods beginning in April of 2020.

 

Conclusions

Foreclosures can still be a good option for investment opportunities in the future as inventory may increase in coming years, but buyers seeking foreclosure properties should take careful consideration when making decisions. If buying a well-maintained property with wiggle room for negotiations is important to you, consider purchasing under a traditional real estate sale. Still, there are individuals that understand the work and patience required for purchasing a foreclosure property that are willing to put in the time and effort. Always make sure you understand your options.

July 30, 2020

The Real Estate Transaction

The typical real estate transaction has many moving parts. When people think of buying a home, they think of meeting an agent, looking at homes, putting in an offer, closing, and moving in. We wish it was this simple, but the typical real estate transaction is made up of many small pieces and requires multiple parties, not just the buyer, seller, and their agents.

 

Initial Consultation to Offer Acceptance

Once you have entered into a buyer representation contract with a real estate agent and explained your desired home, neighborhood, price, and any other important variables, they will begin to search for homes you may be interested in. It is important to note that an agent will need your loan pre-approval letter before they show you any properties. Not only is the letter necessary for making an offer, but the agent wants to show you homes that you can realistically purchase. If you end up liking a home that is more expensive than your loan is approved for, you will be heartbroken. It is in your best interest to spend your time looking at homes you can afford comfortably. When you fall in love with a home that your agent shows you, you will put in an offer.

After your offer has been sent along with any addendum, contingencies, and earnest money, the listing agent will respond, after communicating with their seller, and either accept or decline the offer. If the offer is accepted, it may be accepted and returned with addendum/contingencies. You will look these over with your agent and enter into a negotiation. Negotiations usually have to do with personal property (chattel), repairs, or price. If the negotiation is about price, this is called a counter-offer. For example, if the home is listed at $350,000 and your initial offer is for $340,000, the seller may counter-offer with asking for $345,000. After each party reaches an agreement, the purchase agreement along with any addendum is signed by both parties. Now the offer is considered accepted.

 

Offer Acceptance to Loan Approval

After the offer has been accepted, your agent will coordinate that a property inspection is ordered and completed, deficiencies in the property are negotiated, and repairs are made if necessary. Simultaneously, your agent will oversee the coordinations made by your lender. These steps include a formal loan application (different from pre-approval letter) followed by the verification of income, assets, and debt. After that, both an appraisal and final credit report will be ordered and homeowner’s insurance will be secured. While your lender completes these steps, your agent will also be overseeing the efforts of your chosen title company. Your agent may suggest a few options for title companies to work with, but the decision is yours. The title company will coordinate the transferring of utilities and order a title commitment. After that, they will perform a title search.

Once all of these tasks are completed, the loan package will be assembled. After the loan is assembled, it is submitted to an underwriter who will then approve the loan.

 

Loan Approval to Moving In

After the loan is approved, all loan documents go to the title company. After a final walk-through, on the day of closing, all parties within the transaction will attend and sign the necessary documents. Once everything is signed, a new deed in addition to the mortgage gets formally recorded. Then the mortgage becomes funded, the seller gets paid and the property is considered sold! 


While it may seem like a simple process, buying a home has many steps that can be complicated to navigate. Your agent is with you along the way to assist not only with finding you the best home, but coordinating and overseeing all aspects of the transaction to maintain your best interest and explain all options that are available to you.

July 23, 2020

No-Mow Movement: Are grass lawns on their way out?

How are current lawns created and maintained?

Everyone is familiar with today’s most common lawn. It’s lush and green, uniform and beautifully edged. When a home gets built, the land around it is usually torn up and remains as dirt until the construction of the house is complete. When it’s time for the lawn, there are two options. You can either seed the area or sod it. Seeding is when topsoil is laid out and grass seeds are planted in the lawn. Sodding is when mature grass is transplanted onto an area with no grass. Sodding is used primarily by companies trying to sell a property because you can achieve a complete and healthy-looking lawn almost immediately- which buyers want. When seeding to grow a lawn, germination can take anywhere from 7-30 days before you start to see blades of grass pop through the soil, but this option is less expensive than sodding. This makes it a more popular choice of homeowners who are okay with waiting for a full lawn and looking to save money. The cost of seeding is about $20 per 1,000 square feet while sodding is roughly $350 per 1,000 square feet. 

 

Why wouldn’t people want grass lawns?

As the world continues to confront environmental issues, we learn more about how our own choices impact the wildlife around us. Every year, grass lawns use about 3 trillion gallons of water, 200 million gallons of gas (used during mowing), and 70 million pounds of pesticides. Grass lawns also do not offer a beneficial habitat for pollinators or other animals that require a diverse ecosystem in order to survive. Additionally, pesticides and herbicides contaminate rainfall runoff that can harm the wildlife within lakes, streams and rivers. Not only are there many environmental impacts of maintaining a lawn, but they can also be frustrating for homeowners. If you want your lawn to look nice, you must mow it frequently, water it, and mitigate weed growth consistently. These practices are time consuming and physically demanding, so homeowners are looking for alternatives.

 

What options do I have other than a grass lawn?

There are generally four categories of no-mow landscapes.

  1. Wild Turf Grass: this type of landscape is achieved when turf grass is left to grow naturally, without mowing it at all. If you live within city limits or within an association, you may not be allowed to grow your lawn out and may face a fine or penalty for letting your lawn reach a certain length. Make sure you research what landscape options are approved for your yard.

  2. Low-Growing Turf or Creeping Perennials: this landscape uses a specific breed of plant that doesn’t grow to a long height, so it doesn’t require mowing. This is a good option for homeowners that cannot grow long grasses due to city or association regulations. Common choices for this landscape are creeping charlie, clover, red creeping thyme, and moss. The right choice for your property may be dependent on your local climate, so make sure to double check before you purchase seed.

  1. Native Landscape: this option requires a bit of research or can be planned for you by a landscaping company. It utilizes the plants that grow in your area naturally, such as grasses, ferns, flowers and other non-invasive plants that thrive in local conditions. This option is extremely beneficial for the pollinators in your neighborhood, like bees, birds and butterflies! This option can be used alongside traditional turf to lessen the workload of maintenance. A good example of this would be a lawn that has half or a third of its area used for a decoration of native tall grasses, rocks, and flowers.

  2. Garden: this category is great for people who would like to grow fruits and vegetables in their free space. This landscape would be challenging as a novice gardener, but someone with a green thumb or who is willing to learn how to grow and maintain a garden would enjoy it.

How do I go from a traditional lawn to a no-mow landscape?

If you are interested in converting your lawn into a no-mow landscape, you should consider asking for professional advice from a landscaping company that has experience with lawn conversions. Some companies will offer advice over the phone or come to your property for a consultation. 

 

Another thing to consider would be researching incentives and restrictions in your area. Your local office may offer rebates, some up to $500 per square yard. Incentives are popular in dry areas that struggle with drought since the use of water for grass watering is especially wasteful. On the other hand, some cities will fine individuals who remove their traditional lawns, so before you make the move, make sure it is allowed in your area.

 

July 16, 2020

Rent Strikes in the U.S.

The Coronavirus pandemic has dragged the bottom out of the U.S. economy, and the working class is now plunging into the debt hole with many losing their jobs. As a result, millions of Americans lack the savings to cover their expenses during an emergency.

Since mid-March when the stay at home order was announced, over 26.5 million people have filed for unemployment in the United States. Also, many people have been unable to file for advantages as the state unemployment agencies are unable to keep up with the demands. A survey carried out by the Economic Policy Institute showed that between 8.9 million and 13.9 million people who qualified for the needed benefits didn’t have access to any. Meanwhile, many others have had their hourly work reduced, have been furloughed, and/or have spent a lot as they instead take care of the sick and vulnerable. 

 

 

Some economists and analysts have predicted that this year's unemployment rates will rival or even exceed the Great Depression figures. The $2.2 trillion COVID-19 relief package counteracting the huge, unexpected financial disaster includes substantial support for homeowners, letting individuals with mortgages backed by the government to skip payments for up to one year, rather than adding them to the mortgage balance. However, this vital economic balm (coronavirus relief package) has no counterpart for tenants. Tenants are still expected to pay their rents. 

When the COVID-19 outbreak got bad, the fallout in the United States was instant. Everything was at a standstill. People hid in their homes, businesses shuttered and everyone waited for authorities to announce regulations and opening dates. It changed our way of life and rendered many jobless, especially those who live from paycheck to paycheck. With this, Americans living off of their essentials have not been able to make payments to their landlord in full or on time as their savings are slim to none given that most Americans have to work full-time just to cover their expenses and rarely have much leftover. If they can’t work and still have these bills, there’s no way they can make payments. Even $1,200 stimulus checks were only temporary relief. Some went towards curing past debt that had already accrued after businesses shut down and cut hours. 

 

 

As the unemployment rate increased, the calls to cancel rents became louder. Even before the crisis, housing was not affordable for many. For most people, 70% of their income went to their rent. So, as a response to job losses and economic damage from the outbreak, there are rent strikes across the country. Many Americans are moving for rent to be stopped until the economy stabilizes and jobs return. The rent strikes began on the 1st of May. These actions started with just a few but today, there are over 200,000 tenants from across the country who have stopped paying rent and are voicing their demands for rent forgiveness to the media, landlords, and politicians. These actions are meant to spur the state to provide relief to renters and to halt evictions until the economy stabilizes. It is likely to be the biggest rent strike in American history.

 


Today, landlords are warning that a rent strike could ripple through the economy. The circumstances around all of these are disastrous that both parties are appealing for massive government bailouts – with striking tenants asking for bailouts that relieve them of that responsibility (paying rent), and landlords advocating for bailouts that replenish their losses during this time.

Posted in Affordable Housing