A Giving and Thankful Time of Year

I love what I do and I enjoy the opportunity to educate and guide buyers and sellers through the process (and sometimes stress) of buying or selling a home. If you worked with me this year, or bought or sold a home through Windermere Real Estate, you are part of the Windermere Foundation and you made a positive difference in the lives of our neighbors in need. With each buyer or seller we work with, Windermere brokers donate to the Windermere Foundation.

For the past 26 years the Windermere Foundation has donated a portion of each home sale toward supporting low-income and homeless families in our communities. Thank you for helping to raise over $20 million for those who need our help the most.

This is a busy time of year for everyone and hopefully you are planning on gathering with family and friends in your home. Windermere Foundation has made an effort to be sure many less fortunate families have that same opportunity.

Sweet joys are often found in simple places. Merry Christmas. Enjoy every moment of the New Year.

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Rising Interest Rates – No Need to Over React

11942855114_79a3d587dc_m (1)The Federal Reserve raised interest rates by 0.25 percent this week, causing concern that increasing mortgage interest rates will follow, which could have a negative impact on the housing market. Its unlikely we’ll see any significant increase in mortgage interest rates in the immediate future. Could they rise next year, possibly, but not enough to cause concern. The latest increase in interest rates will likely be felt first for revolving credit (credit cards and home equity loans). For non-revolving loans, like mortgages, there should be little, if any, immediate impact. Any increase in mortgage rates does make buying a home more expensive, but its the credit card debt, which may become more expensive, that could be of concern for buyers who want to purchase a home next year.

Here’s a little perspective . . . many years ago I worked in the mortgage banking industry in Washington, DC. Mortgage interest rates were in the low teens and people still bought and sold homes. After that experience, any interest rate under 10% looks great to me! With current interest rates still so favorable, any slight increase isn’t likely to have a negative impact on area home values.

Condos are Not Maintenance Free

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One of the advantages of a condo or townhouse lifestyle is the low maintenance. Homeowners aren’t generally responsible for maintaining the exterior of the structure, roof, landscaping, garage doors, etc. However, owning a condo or townhouse isn’t “maintenance free”.

Home repairs often come without warning – the hot water tank or an appliance fails, the plumbing leaks, etc. With a condominium, its important to know what elements of the home are the responsibility of the owner to maintain and which fall under the responsibility of the homeowner association.  (This information is disclosed in the Declarations, Covenants, Conditions & Restrictions – CC&Rs – which are part of the resale certificate every buyer receives.) There are ways you can avoid maintenance surprises:

  • Have a structural inspection. The inspector will provide information on whether a system or appliance is in good working order, is older and has a limited life span or is on its last legs. If an appliance, furnace, mechanical feature, etc. is not in working order, a buyer can request that the seller replace or repair the item prior to closing.
  • Purchase a home warranty. The annual cost is $400+- and like car insurance, there is a deductible, but if a major appliance or mechanical system fails a warranty may cover a large percentage of the repair or replacement bill.  Home warranties aren’t just for new purchases – a warranty can be purchased at any time by an existing owner.

Purchasing a home is expensive – the costs for the down payment, closing costs, moving expenses, etc. add up quickly. The last thing a new owner needs is an unexpected repair bill. Be aware of the expected lifespan of all the elements in the home and, if purchasing a condominium, know what elements the homeowner and the homeowner association are responsible for maintaining/replacing. Its wise to set aside a budgeted amount monthly for emergency home repairs or purchase a home warranty. Emergency home repairs are never convenient and are always more expensive than expected. Be prepared.

Buyer Closing Costs

house on moneyFirst time buyers, and even homeowners who haven’t purchased a home in quite some time, can be surprised when they learn there are closing costs in addition to their down payment required when purchasing a home. Early in the process, whether with your Realtor® or your lender, closing costs can be discussed to those costs don’t come as a surprise. Closing costs may include, but aren’t limited to:

 

  • loan origination fee
  • appraisal fee
  • pro-rated homeowner insurance
  • pre-paid condo HOA fees
  • pro-rated real estate taxes

Typical closing costs can be estimated at about 3% of the purchase price. In addition to closing costs add the down payment for the total funds needed to close on your home purchase. Loan programs with as little as 3% are available and there are some down payment assistance programs, so its definitely worth your time to explore financing options with your lender before beginning your home search.

If you plan to buy a home in 2016, now is the time to meet with your lender and Realtor® to start the home search and loan approval process. Locally the “spring”market swings into gear in late January. Stay ahead of the game (and other buyers) by having your loan approval finalized and start educating yourself on which communities best fit your budget, lifestyle, commute needs, etc.