Blog :: 2016

Homeowner's Net Worth Is 45x Greater Than A Renter's

Homeowner’s Net Worth Is 45x Greater Than A Renter’s

Every three years, the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

In a Forbes article, the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun predicts that by the end of 2016, the net worth gap will widen even further to 45 times greater.

The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

Put Your Housing Cost to Work for You

As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

The latest National Housing Pulse Survey from NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:

“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”

Bottom Line

If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, let’s get together and evaluate your ability to buy today!

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    Whether You Rent or Buy: Either Way You're Paying a Mortgage

    Whether You Rent or Buy: Either Way You’re Paying a Mortgage

    There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either yours or your landlord’s.

    As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

    Are you ready to put your housing cost to work for you?

    Christina Boyle, Senior Vice President and Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

    “With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

    Bottom Line

    This holiday season, why not give yourself the gift of homeownership? Lock in your housing costs for the next 30 years and guarantee you are the one building wealth.

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      Building Your Family's Wealth Over the Next 5 Years

      Building Your Family’s Wealth Over the Next 5 Years

      Over the next five years, home prices are expected to appreciate 3.24% per year on average and to grow by 21.4% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

      So, what does this mean for homeowners and their equity position?

      As an example, let’s assume a young couple purchases and closes on a $250,000 home in January. If we look at only the projected increase in the price of that home, how much equity will they earn over the next 5 years?

      Since the experts predict that home prices will increase by 4.0% this year alone, the young homeowners will have gained over $10,000 in equity in just one year.

      Over a five-year period, their equity will increase by over $43,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.

      Bottom Line

      Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, let’s get together to find out if you are able to, today!

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        The #1 Reason to Sell Now… Not Next Spring

        The #1 Reason to Sell Now… Not Next Spring

        he price of any item (including residential real estate) is determined by ‘supply and demand’. If many people are looking to buy an item and the supply of that item is limited, the price of that item increases.

        According to the National Association of Realtors (NAR), the supply of homes for sale dramatically increases every spring. As an example, here is what happened to housing inventory at the beginning of 2016:

        Putting your home on the market now instead of waiting for increased competition in the spring might make a lot of sense.

        Bottom Line

        Buyers in the market during the winter months are truly motivated purchasers. They want to buy now. With limited inventory currently available in most markets, sellers are in a great position to negotiate.

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          5 Reasons to Hire a Real Estate Professional When Buying & Selling!

          Whether you are buying or selling a home, it can be quite an adventurous journey; you need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

          The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but rather have been strengthened, due to the projections of higher mortgage interest rates & home prices as the market continues to pick up steam. 

          1. What do you do with all this paperwork?

          Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

          2. Ok, so you found your dream house, now what?

          According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to make sure that you acquire your dream? 

          3. Are you a good negotiator?

          So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process. 

          4. What is the home you’re buying/selling really worth?

          It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $185,000 compared to $245,000 among agent-assisted home sales.”

          Get the most out of your transaction by hiring a professional.

          5. Do you know what’s really going on in the market?

          There is so much information out there on the news and the internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a lowball offer?

          Dave Ramsey, the financial guru, advises:

          “When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

          Hiring an agent who has their finger on the pulse of the market will make your buying or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

          Bottom Line

          You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of the most important financial decisions of your life without hiring a Real Estate Professional?

           

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            Waiting until after the holidays to sell your home probably doesn't make sense.

            Every year at this time, many homeowners decide to wait until after the holidays to put their homes on the market for the first time, while others who already have their homes on the market decide to take them off until after the holidays. Here are six great reasons not to wait:

            1. Relocation buyers are out there. Companies are not concerned with holiday time and if the buyers have kids, they want them to get into school after the holidays. 
            1. Purchasers that are looking for a home during the holidays are serious buyers and are ready to buy.
            1. You can restrict the showings on your home to the times you want it shown. You will remain in control.
            1. Homes show better when decorated for the holidays. 
            1. There is less competition for you as a seller right now. Let’s take a look at listing inventory as compared to the same time last year                   
            2. The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will continue to surge reaching new heights in 2017, which will lessen the demand for your house.
            3. Bottom Line

              Waiting until after the holidays to sell your home probably doesn't make sense.

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