Right time to buy or sell

Many clients ask me if now is the best time to buy or sell? My answer to them, it depends? It’s not the ideal answer but it’s an honest answer. When clients ask me this question I have to tell them – what is it you need?

When they figure this part out, we will know if it is a good time to buy or sell. It’s true there are market trends and if timed right a buyer or seller could do financially well. However, the opposite could occur if your needs are not addressed.

At the end of the day, the best way to figure this part out is to sit with a real estate professional and do a consultation. A good realtor will have the resources, professional contacts, tools, broker guidance as well as support. Always remember at the end of the day this person must be there for you! 

Seller Safety Tips

If you are selling your home, use this safety chart to keep you and others safe. Follow the tips below to get you started on securing your personal info, valuables, and how to handle showings. Remember never let anyone in your home, unless they have scheduled it with your realtor. Your realtor should have a sign with copies of a property description displayed and his/her contact information.

Safety First

Homeowner exemption notice

The Realtor Association of Maui reports, the Real Property Assessment Division is mailing out disallowance to homeowners who claimed a home exemption but have not filed a Hawaiʻi resident income tax return. If this is you, be sure to contact the Real Property Assessment Division and have your documentation on hand. Maui county has strict income tax filing requirements, be sure you check on your status to ensure you are eligible. Visit mauipropertytax.com or call (808) 270-7297 for more information.

Buying in 2018

If you’re interested in buying a home in 2018 use these last few months of the year to help jumpstart your house buying process using these 5 simple steps: 

  1. Do a credit check – Your FICO score can range from 300-850 and a higher score can lead to lower interest rates when borrowing money. When you apply this to a mortgage, a loan with a 1-2% lower interest rate can save you thousands over the years. When doing a credit check, thoroughly go through each item listed and ensure accuracy, correcting errors as needed. It is important to remember it will take some time for corrections and paid off bills to reflect on your credit report. The sooner you do this the better and sign up for a free credit monitoring system that will help you track your credit. Lastly, do not open any new credit accounts or use more than 30% of your total available credit line for each account or credit card.
  2. Pay off bills and save – Whether you have done step one or not, start paying off debt immediately. A debit to income ratio (DTI) helps lenders determine your loan qualifications. A low percentage of debt puts borrowers in a strong position when getting a loan. If your debt to income ratio is too high it could jeopardize your ability to get a loan. In addition, start saving and keep saving. You will need a down payment as well as extra money for closing costs which does not include any home improvements you would like to do. Start thinking about resources available to you that could help you with this such as monetary gifts or a second job.
  3. Find a lender and get prequalified – I highly recommend before you start doing anything, get prequalified. Many times, clients will begin with looking at homes first, then realtors, credit, etc. In doing this, disappointment can set in and give clients a false sense of what they can afford. Save yourself the time by letting your lender telling you what you can afford. Remember there are many different lending institutions that are out there, interview more than one. If one place doesn’t work for you, check with another. Do not stop after the first no and make sure your needs come before your lender’s needs.
  4. Interview real estate agents – Realtors like lenders should have your needs come before their own. When interviewing a realtor check for experience, area knowledge, work ethic, and response time. Weigh each one, as every realtor will have their pros and cons. For example, a realtor with a lot of experience could be complacent and have poor work ethics, taking too long to respond or give vague answers to your questions. On the other hand, a realtor with less experience might be willing to go the extra mile to ensure understanding and trust, focusing on establishing a professional relationship with you. Taking these aspects into consideration will help you find someone that will work for you.
  5. Start looking into potential areas and homes – Most first time homebuyers assume a realtor should have all the answers and possess the ability to find that perfect home. In truth, the needs of a buyer can change and often do. To help the buying process run smoothly, start your research in what you want in a home. Take into consideration school district, bedrooms, baths, square footage, neighborhood, etc. Along with completing steps above it will allow your realtor to narrow down your search and weed out unnecessary homes that will not fit your description. Get started by attending open houses, it’s a great way to get a feel for what is out on the market.

 

 

 

Understanding real estate markets

The real estate market is a trend of supply and demand that sets the price of a home. There are a number of determining factors that help do this but one that should be considered is what buyers are willing to offer and competing sellers are accepting based on recently sold properties. Real estate markets will generally favor either a seller’s market or a buyer’s market.

A seller’s market means there is typically less than a 6 months supply of inventory and there are more buyers than properties for sale. During this time sellers may ask for more than the market price, leaving buyers with fewer choices and the need to act quickly on paying a high price for the home. However, in a buyer’s market there is typically more than a 6 months supply of inventory. This means there are more homes for sale than there are buyers, buying them. In this market, buyers have more control and sellers may find themselves negotiating a lower sale price than they anticipated in order to sell the home.

Overall, research on the internet may give you a national trend of whether it is a seller’s or buyer’s market. It is important to remember, despite this national trend the market fluctuates from neighborhood, city, and state. As of today, national research has shown we are in a seller’s market. However, I would challenge that concept and look within your area to see if that holds true. By working with a licensed realtor she will be able to pull up a market analysis and see whether your area of interest is a buying or selling market.

3 Ways to Have Fun at Home – Without Electricity!

3 Ways to Have Fun at Home – Without Electricity!

A few weeks ago the world celebrated Earth Day, and it got us thinking about ways to help the earth and save energy while having fun with your family. Here are three ideas for a night of fun without electricity:

Take it Outside. Have you ever had a backyard camping trip with your family? Give it a try! Pitch the tent while the kids are at school, and when they get home have them leave their electronics at the door. All you’ll need til the morning is fire wood, s’mores supplies, and games. Which brings us to…

Kick it Old School. Some of the most treasured American games began with a simple board and some dice. Grab flashlights or some candles and introduce your family to your favorite childhood games for a little nostalgia and a lot of new memories – no outlets required.

Create Your Own Music. Challenge each family member to find a household object to turn into an instrument! The person who gets the most creative with their music-maker gets to choose the next game.

What’s your go-to activity sans-electricity? Tell us Here!

Housing’s new worry: Repeat foreclosures return

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After the worst national housing crash in history, the picture of distress continues to improve, but now with one worrisome aberration. For the first time in more than two years, the number of repeat foreclosures took a U-turn and was higher in January compared to a year ago.

Repeat foreclosures are when a home has been in the foreclosure process once, was somehow saved by either a loan modification or payment program, but then goes back into foreclosure. This can happen when the borrower either can’t or won’t keep up with the new payments. New repeat foreclosures rose 11 percent in January from December and accounted for more than half of all new foreclosures, according to Black Knight Financial Services.

The problem is worst in states where a judge is required in the foreclosure process. These so-called “judicial” states have a far longer time horizon for processing foreclosures and therefore have huge backlogs of troubled loans in limbo.

Analysts at Black Knight say they are unsure what’s driving the numbers. They point to some seasonal factors and do not believe the problem is due to the government’s mortgage bailout program (the Home Affordable Modification Program), which has a five-year term. Some of those first modifications from 2009 are turning into pumpkins. As such, they do report a slight uptick in resets under the program but say those would not materialize into new foreclosures until May at the earliest. The problem may in fact be far more basic.

“It’s not surprising because so much tinkering was done with defaulted borrowers over the last five or six years. It’s not surprising they’re running into problems again,” said Guy Cecala, CEO and publisher of Inside Mortgage Finance.

 

 

During the worst of the crisis, banks were put under increased pressure to modify loans even outside the government bailout program. They lowered interest rates, but in the end, many of their borrowers simply didn’t have the basic cash flow to pay, whatever the rate. Re-default rates were expected to be high, with some calling even 40 percent conservative.

In the meantime, completed foreclosures have been decreasing more rapidly than the backlog of seriously delinquent loans. The hope had been for the opposite and a quick return to a more normal level of distress. There are still more than twice as many troubled loans than normal, despite rising home values and an improving economy. In other words, the mortgage mess isn’t all cleaned up just yet.

3% down payments being used at lowest level in 10 years

Fewer people bought a house with just a 3% down payment in 2014 than in any of the previous 10 years. That might sound like a positive thing because it means the purchaser owns more of the house and the bank owns less, but experts say it suggests that first-time buyers are not fueling the housing recovery.

Only 25% of house purchasers taking out all residential house loans (conventional or Federal Housing Administration loans) put less than 3% down when purchasing a home, versus 27% in 2013, according to new analysis by real estate data firm RealtyTrac of nearly 20 million loans for single-family homes and condos nationwide over the last 10 years. That’s the lowest level in a decade. First-time buyers are among the most likely candidates for these loans. “It may seem like a lot but the average over the past 11 years has been 33%,” says Daren Blomquist, vice president at RealtyTrac.

The government has been promoting these low down-payment loans in an effort to encourage more first-time buyers get a leg on the property market, Blomquist says. The FHA has offered a 3.5% down payment loan, and many can be below 3% due to down payment assistance programs, he adds. The government-backed lending enterprises Fannie Mae and Freddie Mac recently introduced the 3% down payment loan program, and the U.S. Department of Housing and Urban Development also lowered the insurance premiums that low down payment borrowers have to pay, which Blomquist says would save the average house buyer $917 a year.

“If you don’t have a lot of money for a down payment, you may be out of luck in this housing market,” Blomquist says. “A lot of first-time home buyers don’t have a lot of money to put down or else they would be participating in this market more,” he adds. “If first-time home buyers don’t return to the market in greater numbers, it signifies a shift where a primary avenue of building wealth for middle-class Americans — homeownership — is no longer as readily available.”

Buyers can get a 97% loan-to-value mortgage through an FHA loan paired with a down payment assistance program that provides a second loan to cover all or part of the down payment, an FHA loan where the closing costs are rolled into the mortgage and/or a purchase-and-rehabilitation loan where the borrower is able to borrow based on the “after-repair” value of the property rather than the current value, which is typically lower since this is mostly used with distressed properties, Blomquist says. In the latter case, he adds, the bank may determine the value of the home post-repair will be actually greater than the actual mortgage.

There’s a downside to 3% down payments for those who qualify. Because the low down payment loans are considered higher risk, they come with mortgage insurance, which represents extra cost on the monthly housing payment and also represents another layer of qualification that the borrower has to go through to get the loan, Blomquist says.

There was an unusual bump in 2009 when down payments of 3% or less peaked at 46%. After subprime lenders exited the market in the wake of the 2008 financial crash, “the FHA stepped in to fill the gap,” Blomquist says. The FHA loans are disproportionately low down payment loans so those became a bigger share of the market. In addition, around the same time there was a first-time home buyer tax credit that was introduced that spurred more purchases by first time home buyers making low down payments.

The lower the average sale price, the lower the down payment. For purchases with no down payment — where the combined loan was actually more than the purchase price — the average sale price was $154,214 last year. But for those homes that cost more than $502,213, the average down payment was more than 50% of the average purchase price. “This shows that those who do have cash and feel optimistic about the job market are buying,” says Don Ganguly, CEO of HomeUnion, an online platform that helps investors buy and sell single-family homes. “It’s a little bit of the story of the haves and have-nots.”

The bad news: It could take an average of 12.5 years to save up for a 20% down payment — a common requirement by banks — with a personal savings rate of 5.6%, according to separate research by RealtyTrac released last November. RealtyTrac’s figures are based on current house prices — and don’t take into account possible further rises in home prices. However, if the down payment for a conventional loan was lowered to 3% from the traditional 20% — as was recently suggested by Melvin Watt, director of the Federal Housing Finance Agency — it would take less than two years.