Nov 24, 2015 | Uncategorized
Make sure all of your clients are protected
You’re a real estate agent, so you know that buying a home can be overwhelming for many of your clients. Homebuyers can easily feel confused and frustrated by the mounds of paperwork they have to sign. Plus, all the fees associated with closing can sometimes be a surprise even to an experienced buyer.
Owner’s title insurance is one of those items often misunderstood by homebuyers at closing, yet its value is tremendous. As an important advisor to your clients, you are in the position to help them understand the value of owner’s title insurance and the dangers that can be incurred without it.
What is title insurance?
Owner’s title insurance is a policy that protects homebuyers’ property rights. For the same reasons that the bank requires a lender’s insurance policy, a homebuyer obtains owner’s title insurance to protect their legal claims to the property.
How it protects your clients
Say, for example, your client recently purchased a new home from a builder, but the builder failed to pay the roofer. Wanting to be paid, the roofer filed a lien against the property. Without owner’s title insurance, your client would be responsible for paying this existing debt—meaning they’d be paying the roofer out of pocket instead of purchasing something nice for their new home, like new living room furniture. This is just one example of how owner’s title insurance protects homebuyers’ from various significant risks. With owner’s title insurance, your client would be protected from certain legal or financial responsibilities.
Enduring value
The good news is that owner’s title insurance protects homebuyers financially, as long as they or their heirs* own the home. For a low, one-time fee (average of 0.5% of purchase price), homebuyers can rest assured, knowing they are protected from inheriting existing debts or claims to their property.
State regulations and CFPB
Each state government regulates its own title insurance costs. In addition, the Consumer Financial Protection Bureau (CFPB) regulates closing and settlement practices which can impact title insurance. Keep in mind that title insurance industry practices vary due to differences in state laws and local real estate customs. The party that pays for the owner’s title insurance policy varies from state to state, and sometimes even within a state. For more information about title insurance, or to find a company approved to issue an owner’s policy, please direct your homebuyer clients to www.homeclosing101.org.
Free resources for Realtors®
Together, real estate agents, land title insurance professionals and other stakeholders involved in real estate transactions can protect homebuyers and provide them with the peace of mind they deserve during the home closing process.
For more information about title insurance, and to get free resources for real estate agents, visit www.alta.org/realtor.
Nov 24, 2015 | Market Outlook
Sales of previously owned homes reached 5.36 million sales on a seasonally adjusted annual basis and fell by 3.40 percent in October according to the National Association of Realtors®. Rising home prices and a shortage of available homes strained housing markets. Concerns over potentially higher mortgage rates may have sidelined home buyers as concerns over an anticipated rate hike by the Federal Reserve persisted. Many analysts expect the Federal Reserve to raise rates at its December meeting of the Federal Open Market Committee, which oversees the Fed’s monetary policy. Raising the target federal funds rate would cause consumer interest rates and mortgage rates to increase as well.
Shortage of Available Homes Could Lead to “Inventory Crunch” Next Spring
Lawrence Yun, Chief Economist for the National Association of Realtors®, cited concerns over the shortage of homes for sale. He said that a persisting shortage of available homes could lead to an inventory crunch during next spring’s peak selling season.
Home prices increased by 5.80 percent year over year to an average of $219.600. Rising home prices impacted decreasing sales in the West and South while home sales held steady in the Northeast, where home price growth was the slowest.
First-time Home Buyers Lag in Home Purchase Numbers
Although first-time buyers represented 31 percent of home buyers in October, which was a two percent increase over September’s participation, first-time home buyers usually represent approximately 40 percent of buyers of existing homes. First-time buyers are important to housing markets as they generate sales of homes by homeowners wishing to move up or relocate.
First-time buyers can be adversely affected by home prices and mortgage rates; a shortage of first-time buyers could create further slowdowns in home sales. There is good news due to steady job growth, which is important to those who are considering buying a home. Strict mortgage credit requirements are showing signs of relaxing and home builders are encouraged by current and future housing market conditions.
The National Association of Realtors® forecasts that 2015 sales of pre-owned homes at a level of 5.3 million sales, which would be the highest sales rate since 2007. Sales of existing homes are expected to rise by 3 percent in 2016, but mortgage rates and affordability will continue to influence actual sales and overall health of housing markets in the New Year.
Nov 23, 2015 | Market Outlook
Last week’s economic events included reports the National Association of Home Builders Housing Market Index, Housing Starts and the release of minutes for the most recent meeting of the Fed’s Federal Open Market Committee. The details:
NAHB: Builder Confidence in Housing Markets Dips
The National Association of Home Builders reported that builder confidence dropped to a reading of 62 as compared to October’s revised reading of 65. Any NAHB reading above 50 indicates that more builders are positive about market conditions than not. NAHB’s assessment of housing market conditions is based on readings for three aspects of current and future market conditions. November’s reading of 67 for current housing market conditions was three points lower than October’s reading of 70. Expectations for market conditions for sales of single family homes over the next six months fell by five points in November to a reading of 70. Builders’ sentiment about prospective buyer foot traffic in new single family developments rose by one point to 48.
Home builders started more new homes than at any time since September 2007; analysts cited wage growth and low unemployment figures along with high demand for homes as driving builder confidence in housing markets. Demand for homes continued to exceed homes available for purchase, which is a driving force for builder confidence.
NAHB Regional Builder Confidence Readings
Regional readings provide a snapshot of regional housing market conditions on a month-to-month bases and on a three month rolling average. The monthly readings for November were lower except for the Western region, which gained one point for a reading of 77. The Northeastern region held steady with a reading of 52; the Midwest’s reading also decreased by one point to 59 and builder confidence in the Southern region fell by five points to 62.
Monthly regional readings for home builder confidence can be volatile due to regional economic conditions; the NAHB provides a three-month rolling average for its four U.S. regions. In November, the Northeast region reported a reading of 50 which was three points higher than October’s reading. The Midwest region was unchanged from October’s reading of 60; the South also reported no change from its October reading of 65. The Western region posted an increase of 69 to 73 over the three months between August and November.
Housing Starts Lowest Since Spring Floods
According to the Commerce Department, housing starts fell by 11 percent to an annualized reading of 1.06 million in October. This was the lowest reading since last spring, when construction was adversely impacted by flooding. September’s reading was adjusted to 1.19 million starts. Meanwhile, building permits issued rose by 4.10 percent to an annual rate of 1.15 million starts in October.
While housing starts fell by 18.60 percent in the South, permits issued rose to their highest level since 2007. The South is the most active region for home construction and accounts for half of all new home construction in the U.S.
Mortgage Rates, New Jobless Claims Lower
Mortgage rates fell across the board last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage fell by one basis point to 3.97 percent; the average rate for a 15-year fixed rate mortgage fell two basis points to 3.18 percent and the average rate for a 5/1 adjustable rate mortgage was five basis points lower at 3.03 percent. Discount points averaged 0.60 percent for a 30-year fixed rate mortgage and 0.50 percent for 15-year fixed rate mortgages and 5/1 adjustable rate mortgages.
New jobless claims also fell last week to a reading of 271,000 new claims filed as compared to expectations of 270,000 new claims filed and the prior week’s reading of 276,000 new claims filed. Lower jobless claims indicate further strengthening of labor markets, but seasonal hiring may have positively impacted the reading for new jobless claims.
What’s Ahead
Next week’s scheduled economic news releases include several housing reports. Existing Home Sales, the S&P Case-Shiller Housing Market Index, FHFA House Prices and New Home Sales will be posted along with regularly scheduled reports on mortgage rates and new jobless claims. There will be no economic reports released on Thursday or Friday due to the Thanksgiving holiday.
Nov 20, 2015 | Home Buyer Tips
How Do I Know If I Am Ready To Buy A Home?
As you’ll see in this video, you can find out by asking yourself some questions:
- Do I have a steady source of income (usually a job)?
- Have I been employed on a regular basis for the last 2-3 years?
- Is my current income reliable?
- Do I have a good record of paying my bills?
- Do I have few outstanding long-term debts, like car payments?
- Do I have money saved for a down payment?
- Do I have the ability to pay a mortgage every month, plus additional costs?
If you can answer “yes” to these questions, you are probably ready to buy your own home.
Nov 19, 2015 | Around The Home
Whether you’re readying to put your home on the market or you haven’t updated your space in a while and want to modernize, approaching renovations can be a struggle. With so many things to fix up, both large and small, it can seem overwhelming to prioritize, set the money aside and get to work. If you’re having trouble figuring out where to begin with budget, here are some tips for how to properly prioritize so you can maximize your renovation expenditures.
Determine What Is Most Important
Whether it’s the tile floor in your bathroom or the outdated kitchen sink, if the need for an upgrade in a certain part of your home has been staring you in the face for a while, you’ll want to begin there. By determining your first priority and the no-frills cost assessment of completing it, you can arrive at the cost of what renovating the item will mean. Once you’re in the ballpark, you can then move on to any additional features or accessories that may perk up your basic renovation.
Add A Little Extra To The Budget
The downside of any budget is that costs will always come along that were not predicted, and they can entirely break the bank and your original projections. Instead of hoping for the best, add some extra money to the outline of total expenses for your renovation so you can be prepared for some of the hiccups that will come along. This will ensure that you have the financial wherewithal to complete the renovation and won’t be disappointed in the final outcome for your finances.
Consider Where You Can Cutback
Whether you’ve been dreaming of a new living room set for a while or replacing the flooring in the kitchen, you can update the area of your choice while still economizing in other ways. For example, if you’re going for modern eclectic in your living room, you may want to splurge on an updated couch, but you may be able to save by purchasing a retro coffee table online or a unique side chair that’s secondhand to go along with it. This may provide a unique upgrade, without all the expense of in-store purchases.
It can be hard to know where to begin when it comes to revamping your house, but it’s important to start with what you really can’t live without and move outward from there. If you’re curious about home renovations and how they can improve the market value of your home, you may want to contact your local real estate professional for more tips.
You’re a real estate agent, so you know that buying a home can be overwhelming for many of your clients. Homebuyers can easily feel confused and frustrated by the mounds of paperwork they have to sign. Plus, all the fees associated with closing can sometimes be a surprise even to an experienced buyer.