As the new year unfolds, we are still committed to providing our readers with up-to-date information about the real estate market. The historically low-interest rates continue to aid people in buying homes while the rise of inflation is starting to impact both sellers and buyers.
In this month’s collage of information, we have a section for people looking to buy a home within the coming months. There are various tips aimed at helping people save money and assisting people in avoiding unnecessary costs like mortgage insurance.
There is a section for home sellers too.
With the current demand for houses exceeding the existing supply of properties in many locations, it is common for a seller to see multiple offers. This leads to negotiations, and there are many things other than the price of the home that can be discussed between sellers and buyers.
We also added two more sections to help a broader range of readers. First, there is the section for current homeowners. We realize that not all people who come to this blog are looking to buy or sell a home right now.
So, we have included some tips for helping people keep their homes in good shape and avoid any significant damages.
Next, we have a section for real estate investors. Investors face a different set of circumstances and criteria when it comes to either buying or selling a property, and we want to be a source of knowledge for this demographic as well.
Fixes to Be Made After a Home Inspection
One of the questions that many buyers and sellers ask about home inspections is what repairs must be made. For a seller, there are no mandatory fixes after a buyer’s home inspection.
A seller can never be forced to make repairs to their house. The story for the buyer may be a lot different unless they are paying cash.
When buyers are financing a property, and there are significant problems, they may be forced to correct the issue. Without dealing with the situation, the lender may not fund the property.
Bill Gassett does an excellent job at Maximum Real Estate Exposure, explaining some of the significant home inspection items that might need to be addressed.
Take a look at this informative article if you’re buying your first home.
High Priced Homes
Luke Skar from Madison Mortgage Guys shares this timely article about tips for identifying a home that is priced too high.
There are several ways to investigate a property and determine if the price seems unusually higher than its counterparts. With some of these tactics, you can complete yourself with nothing more than an internet browser. Some other methods may involve help from your chosen real estate agent.
The goal is to help potential buyers avoid the trap of paying too much for a home and getting into a difficult financial position with their house.
By using these tactics, you can either place a lower bid on a home to get a price that matches the current market, or you can steer clear of that home and place an offer on another property.
Property insurance and Mortgage insurance
Although this topic has been around for a long time, it still comes up as a question from potential home buyers: what is the difference between mortgage insurance and homeowner’s insurance?
This article from Springs Homes does an excellent job of answering the question. This article goes into depth to explain why a soon-to-be homeowner would need mortgage insurance and why homeowner’s insurance is required.
Even better, the article has advice on strategies to avoid paying mortgage insurance altogether. Keep in mind that one of these strategies will take a bit of time and planning on your part, while other strategies will require a discussion with your mortgage lender to see if the options are available to you.
Be sure to pay attention to the section that breaks down mortgage insurance based on the type of mortgage you are pursuing. Some mortgages require mortgage insurance for all buyers.
HOA Special Assessment
If you plan to purchase a condo or a home that is governed by a Homeowner’s Association (also referred to as HOA), this article from Bill Gassett about special assessments could be very eye-opening to you.
If you have ever dealt with an HOA in the past, you are likely familiar with how the fund is set up and what type of things are paid for. You should also know the fund’s strategy for handling unforeseen costs.
You are also likely aware that not every neighborhood or condo association has an adequately funded HOA managed with the owner’s best interest in mind.
Unfortunately, a Special Assessment is a bit different from the typical HOA. It comes separately from the monthly or yearly HOA fees.
Before buying a home in a neighborhood with an HOA, or any condo, you will want to be familiar with this type of transaction and learn as much as you can before buying your next home. This one factor could decide whether or not you purchase a particular property or choose something in an entirely different location.
The majority of home transactions will involve some type of loan. This means that the lender will want to see an up-to-date home appraisal.
An appraisal is a report completed by an unbiased 3rd party. The report indicates the price of the home in relation to similar homes that have sold in the area within a recent time period, usually 3 to 6 months.
There are many factors used to determine a home’s current worth. One of those factors is called the principle of substitution, and Tom Horn explains it at Birmingham Appraisal Blog in his recent blog post.
Tom explains how this method is used when an appraiser compares various homes to calculate how much a home is worth. This is also aligned with other factors that he details in the blog post.
Although it may sound similar to a car title or a boat title, they are pretty different from a property title for a house.
The property title is very detailed, and it spells out who is the rightful owner of a property. It also lists who, if anyone, has any monetary interest in the property.
This article from Bill Gassett goes into detail to explain a property title. It then provides more information about possible issues that can either hinder or entirely prevent a person from selling a home to a new buyer.
In most home transactions, the current mortgage holder is the first lienholder on the title. This loan will need to be paid off in order to transfer the ownership rights from the existing owner to the new owner.
Although a new home buyer does not have to fully understand all of the minor details involved with a property title search, it is a good idea to be familiar with the topic in case something pops up and delays the closing while the seller remedies the problem.
Selling Before Foreclosure
If you find yourself in a challenging financial situation that may lead to a foreclosure, there is still a bit of hope available. It is possible to sell the home before the lender completes the foreclosure process.
Justin Becker has put together a fantastic piece covering the basics of selling a home just before a foreclosure.
The first part of the article offers tips on taking photos of the home and staging the property before the pictures to attract more interest. Making the home look clutter-free, spacious, and inviting will gather much more attention, regardless of which website or social media platform you use.
More importantly, the article discusses pricing the home correctly and aggressively. The goal is to get the home sold as fast as possible. Although there can be a lifetime of memories stored up in a home, those memories cannot get in the way of allowing you to price the house in such a manner that people are willing to make a quick offer.
There is also a section that goes over some perks that a seller can offer to entice a buyer to sign a contract.
Negotiating Sales Contract
There is a bit of misinformation in the real estate world that the highest sales offer will win the contract. This is not always the case.
For sellers receiving more than one offer on their home, several items can, and should, be negotiated.
Scott Russell has a new article outlining some of the items to negotiate when selling a home.
Scott first breaks down things to consider if a home receives multiple offers. He then details which items, other than the asking price, should be negotiated to assist the seller in picking the best offer for their needs.
Scott also has a bonus section to help the reader with other common questions about selling a home.
Getting a Building Permit
Vicki Moore has a really informative article discussing building permits for remodeling or other construction projects.
In this article, Vicki covers multiple valid reasons you need a permit for different projects. There is also a section covering some of the top DIY chores that will not usually require any permit to complete.
Before tackling a new project, you need to determine if the work will require some type of permit. You do not want to put the value of your home in jeopardy or violate one of the requirements of the lender’s mortgage agreement.
There is another section that advises on how to apply for a permit in your local area.
In January and February, many places in the northern parts of the USA will experience multiple days with snowfall and freezing temperatures. These conditions can lead to ice damming on the roof, which can lead to injury as well as damages.
Kevin Vitali has written an in-depth post about ice damming. His research starts with understanding an ice dam and the weather conditions that lead to this phenomenon. Thankfully, the article gives numerous tips for dealing with this problem and preventing it from repeating in the future.
Impact of Inflation on Real Estate
Because inflation has reached its highest rate in more than four decades, many people may be unsure what to do in these troubled times and how to best prepare for it.
Paul Sian has a very timely piece about the impact of inflation on the real estate market. This article is helpful for people who are considering buying a home shortly and the effect of inflation on people who wish to sell their home soon.
An added section also discusses how inflation affects the portfolios of investors and aspiring real estate investors.
Real Estate Investor
DSCR Loan For Investors
If you are considering the purchase of a piece of property as an investor, you may want to learn about a DSCR loan.
Steelman Mortgage provides some insight into these special mortgages intended for investors.
The mortgage loan does not use tax returns or pay stubs for the borrower to determine if they have enough income to qualify for the loan. However, the loan does require a significant down payment, generally between 20% and 25% of the asking price.
This can be an excellent way to invest in a property for people who need a quick closing and fewer qualifications to meet, provided you have the funds for a down payment.
And with that last article, this month’s best-of roundup has come to a close. We hope you found some value in this post, and we look forward to providing you with timely information about real estate trends and best practices.
Previous Best of Real Estate Articles
- Best Real Estate articles November 2021 – see some of the best real estate articles November had to offer from top real estate bloggers.
- Best Real Estate articles October 2021 – get more of the top articles published in October 2021 to provide buyers and sellers with great info to make intelligent decisions.
About the author: This real estate roundup for January 2022 was written by Luke Skar, a 19+ year veteran of the mortgage industry. He strives to stay up to date with the latest changes and trends in mortgage lending and real estate.
Through his mortgage blog, websites, and social media accounts, his goal is to help the community with as much factual knowledge as possible that benefits all parties in real estate transactions.