Interest rates have jumped from under 3% to close to 8% in the past 2 years. We’ve all heard about it, and it’s causing many would-be buyers to postpone their dreams of buying their first homes or making a move they had been considering. I’m here to tell you why that might not be the best strategy.

The real estate market is a diverse and ever-changing landscape, and different real estate markets offer a wide range of advantages and challenges, making them beneficial for varying types of buyers. Just because interest rates are higher now than they have been in several years, they are still low from an historical perspective, and, especially if you fall into one of these categories, buying now may still be a lucrative opportunity.

First Time Homebuyers.  If you’re thinking of buying your first home, it could be a mistake to wait until rates are lower. When they do go down the market will likely be flooded with buyers who have been waiting. Given the low inventory levels of homes on the market, it could be tough competition again where buyers need to pay 10-20% more than the asking price and forego inspections to get an offer accepted. It might make sense to buy now, pay a more reasonable price, and have the benefit of a full inspection so you don’t get stuck with unexpected expenses and repairs. You’ can start to build equity through appreciation now and will still have the option to refinance when rates are lower.

Downsizers. It’s a great time to sell. Prices have continued to increase, so you’ll be able to cash in on the equity from your current home and put that equity into your purchase. If you’re buying something less expensive than you are selling, the impact of the higher interest rates should be minimal because you’ll be borrowing less than first time homebuyers or people “buying up.” You can also consider utilizing a rate buydown to reduce your monthly payments and then refinance when rates are lower.

Investors. Yes, interest rates are higher, but so are rents. According to an article in the Herald Review, asking rents surged 4.6% year over year in the Midwest. With rents and home prices continuing to increase, you should think about taking advantage of the current market.

Cash Buyers. Last but certainly not least — If  you are a cash buyer, what are you waiting for? Interest rates won’t affect your purchase or monthly expenses. The National Association of Realtors expects home prices to rise by 2.6% in 2024, so the longer you wait the more you will pay. In addition, buying now when rates are higher and fewer buyers are in the market, will mean less competition for prime properties.

The real estate market is not one-size-fits-all. Different markets cater to different buyer situations, needs, and investment strategies. It’s essential to understand the dynamics of our current market to make informed decisions and optimize your real estate experiences and outcomes. Let’s talk about what makes sense for you.

When interest rates are high, securing an affordable mortgage can be challenging. However, by making informed decisions and working with an experienced Realtor^® and lender, it is possible to minimize the impact of high interest rates on your monthly cash flow, even in a high-interest rate environment. Here are some of the strategies that can help home buyers navigate the challenges of high-interest rates.

1. Improve Your Credit Score. A higher credit score can help you secure better mortgage rates. Before applying for a mortgage, work on improving your credit score by paying bills on time, reducing outstanding debt, and addressing any errors on your credit report.
2. Shop for the Best Rates and Terms. The first step for home buyers is to shop around for the best mortgage rates and terms. Different lenders offer various packages, so it’s crucial to compare and negotiate effectively. Even during periods of high-interest rates, some lenders may offer more competitive deals than others.
3. Increase Your Down Payment. A larger down payment reduces the principal amount of your loan, potentially lowering your monthly payments and the overall interest paid over the life of the mortgage. Saving more upfront can have a substantial long-term impact.
4. Pay Down Higher-Interest Debt. If you have unsecured debt, you may want to consider putting down a smaller down-payment or rolling over less equity from your current home into your purchase. Using those funds to pay off high-interest debt could result in hundreds or even thousands of dollars of monthly savings.
5. Negotiate a Temporary Rate Buydown. A temporary rate buydown involves an upfront financial contribution, often made by the seller or builder at closing, to lower the interest rate on a mortgage loan for a predetermined period. This strategy can lower monthly payments for a temporary period significantly more than negotiating a lower purchase price. (More detail in this article.)
6. Shorten the Loan Term. Opting for a shorter loan term, such as a 15-year mortgage instead of a 30-year one, can result in higher monthly payments but significantly lower total interest costs. It’s an effective way to minimize the impact of high-interest rates and save money in the long run.

While high interest rate periods present affordability challenges for many potential home buyers, it is possible to keep mortgage payments manageable and affordable. Working with an experienced Realtor^® and lender can help you negotiate the best terms for your unique situation and achieve your home ownership goals.

(BPT) – Maintenance is an important part of home ownership, but many people delay tasks, thinking a few weeks or even months won’t do any harm. However, putting off home maintenance is risky because small issues that are simple to fix now can quickly lead to complex problems that are expensive to fix later.

Spring is the ideal time to give your home a once-over both inside and out to flag any issues and create a maintenance to-do list. According to the experts at State Farm, here are some top spring maintenance tasks to help protect your home:

Roof and gutters

Your roof provides fundamental protection of your home from the elements in all seasons. Inspect your roof at least once annually for damage, discoloration, loss of granules and missing, worn or curling shingles. If you have the skills, you can do this yourself, or, call a qualified contractor who can come and do an inspection.

Some additional things to keep in mind, especially during rainy spring months: Gutters and downspouts should be safely attached, clear of leaves and other debris, and have no leaks. Position downspouts to direct water away from the home so it doesn’t impact the foundation. Also, check that flashing is secure — the thin, metal material that’s around windows, vents and chimneys to direct water away.

HVAC systems

HVAC stands for your home’s heating, ventilation and air conditioning systems. These systems work together to keep your home comfortable throughout the seasons. Regular maintenance helps keep them working well today and extends their life in the future while also saving on energy costs.

Start by setting a reminder every few months to replace filters. Dirty filters can block airflow and make the HVAC system work harder, decreasing efficiency and increasing energy costs. Then, schedule a spring maintenance check with a local HVAC professional. Pros will often check the thermostat, clean or replace filters, lubricate moving parts, check refrigerant levels, inspect the condenser and coils, and investigate unusual noises.

Garage spaces

Garages can quickly become cluttered and certain items pose risks, such as fuel that can start a fire or items that can be attractive to pests. Embrace spring by planning a day to clean out the garage so it is organized and safe.

Smoke detectors

Get in the habit of checking your smoke alarms on a regular basis, such as at the start of every season. Do this by hitting the test button on each device. If you don’t already have them, make sure a smoke detector is located in every bedroom and living space. This small investment and maintenance step can help save lives.

Additionally, don’t wait until the alarms chirp at you to tell you batteries are low. Once a year, replace all the batteries in all the alarms to give you peace of mind that these critical devices are set up to work well in an emergency.

If you need assistance with any of these spring home maintenance tasks, consider hiring a qualified, insured contractor in your area. Reach out to your local State Farm agent for a list of trustworthy professionals who can help.

Copyright 2023 Brandpoint

There’s no denying the housing market is undergoing a shift this season, and that may leave you with some questions about whether it still makes sense to sell your house. Here are three of the top questions you may be asking – and the data that helps answer them – so you can make a confident decision.

1. Should I Wait To Sell?

Even though the supply of homes for sale has increased in 2022, inventory is still low overall. That means it’s still a sellers’ market. The graph below helps put the inventory growth into perspective. Using data from the National Association of Realtors (NAR), it shows just how far off we are from flipping to a buyers’ market.

While buyers have regained some negotiation power as inventory has grown, you haven’t missed your window to sell. Your house could still stand out since inventory is low, especially if you list now while other sellers hold off until after the holiday rush and the start of the new year.

2. Are Buyers Still Out There?

If you’re thinking of selling your house but are hesitant because you’re worried buyer demand has disappeared in the face of higher mortgage rates, know that isn’t the case for everyone. While demand has eased this year, millennials are still looking for homes. As an article in Forbes explains:

“At about 80 million strong, millennials currently make up the largest share of homebuyers (43%) in the U.S., according to a recent National Association of Realtors (NAR) report. Simply due to their numbers and eagerness to become homeowners, this cohort is quite literally shaping the next frontier of the homebuying process. Once known as the ‘rent generation,’ millennials have proven to be savvy buyers who are quite nimble in their quest to own real estate. In fact, I don’t think it’s a stretch to say they are the key to the overall health and stability of the current housing industry.”

While the millennial generation has been dubbed the renter generation, that namesake may not be appropriate anymore. Millennials, the largest generation, are actually a significant driving force for buyer demand in the housing market today. If you’re wondering if buyers are still out there, know that there are still people who are searching for a home to buy today. And your house may be exactly what they’re looking for.

3. Can I Afford To Buy My Next Home?

If current market conditions have you worried about how you’ll afford your next move, consider this: you may have more equity in your current home than you realize.

Homeowners have gained significant equity over the past few years and that equity can make a big difference in the affordability equation, especially with mortgage rates higher now than they were last year. According to Mark Fleming, Chief Economist at First American:

“. . . homeowners, in aggregate, have historically high levels of home equity. For some of those equity-rich homeowners, that means moving and taking on a higher mortgage rate isn’t a huge deal—especially if they are moving to a more affordable city.” 

Bottom Line

If you’re thinking about selling your house this season, let’s connect so you have the expert insight you need to make the best possible move today.

Preparing your home for sale may start with ideas for staging the house or spackling and painting over nail holes, however, it also requires a considerable amount of planning and organization. Before opening your home to tours, either virtual or in person, be aware of what buyers might notice.

“Getting your home ready for sale may seem like an overwhelming task, but it’s important to make your home as attractive as possible,” said Bonnie Lee, vice president of property claims at Mercury Insurance. “Not only does it give a favorable first impression, but it also shows that the home was well maintained and cared for. Most buyers expect to tour and eventually purchase a clean, well-cared for home.”

Walk through each room of your home and take note of what needs to be cleaned, repaired or replaced.

Eliminate clutter

For many homeowners the beginning of the home selling process is the chance to clear out any unwanted items. Take this time to throw away, donate or sell items that are no longer purposeful. Remember that potential buyers are likely to open closet doors and built-in cabinet drawers to determine the amount of storage space available, meaning you won’t be able to simply store unwanted items in a closet. Buyers want to visualize themselves and their belongings within the living space so depersonalize and remove any large visual distractions such as large, distinct artwork or family photos.

Bulkier items such as furniture can change the perceived size of a room. Make sure buyers are able to walk around living spaces without bumping into furniture. If you don’t plan to take certain large items with you, check if your local municipality will pick them up.

Deep clean your home

Before scheduling tours of your home, do a deep clean, especially in areas like the kitchen and bathrooms. Home buyers are savvy and can detect when candles or air fresheners are being used to mask unpleasant scents of a home.

“A home that hasn’t been cleaned can be perceived as needing a lot of work or has underlying serious problems like water or structural damage,” Lee said. “Keeping your home clean will boost that ever-important first impression and maximize the selling cost.”

Make small repairs

Wear and tear from everyday living is normal. However, fixing these small repairs before listing your home might be a slight inconvenience for you, but might be seen as part of a larger, underlying issue to a potential buyer. Thoroughly go through each room of your home and touch up any dings on baseboards or doors. Make any minor repairs like filling in and repainting any holes left in the walls from hanging items. Check for leaking faucets or running toilets and replace any worn or damaged caulking around sinks, showers, bathtubs or windows.

Curb appeal
Your home’s exterior is the first thing buyers see as they approach the house. Trim any trees or shrubs outside of your property, especially along walkways, for a well-manicured look. Inspect any trees around your home to make sure they aren’t scraping shingles off of your roof or blocking gutters. Keep walkways and driveways free of clutter such as gardening tools or children’s toys. Replace or repair any damaged screens or windows and make sure that any house numbers are visible.

“A well maintained outdoor area that has been properly cared for is not only aesthetically pleasing but can also be a reflection of how well the home was cared for overall,” Lee said.

Get a CLUE

A Comprehensive Loss Underwriting Exchange (CLUE) report provides a detailed history of any insurance claims that may have been filed on the house within the last seven years. While this report is extremely useful to buyers, it can be equally important to sellers. “Sellers whose homes have had no insurance claims within the last seven years can use a CLUE report as a selling tool. It gives potential buyers the assurance that they are not buying a home with a history of problems and increase a seller’s chance of selling their home quickly,” Lee said.

Under the federal Fair Credit Reporting Act, you can request a copy of your CLUE report from LexisNexis by calling 1-866-312-8076 or by visiting consumer.risk.lexisnexis.com.

Copyright 2022, Brandpoint