4 Tips for Effectively Making an Offer

4 Tips for Effectively Making an Offer | Keeping Current Matters

So, you’ve been searching for that perfect house to call a ‘home,’ and you finally found one! The price is right, and in such a competitive market, you want to make sure that you make a good offer so that you can guarantee that your dream of making this house yours comes true! Freddie Mac covered “4 Tips for Making an Offer” in their latest Executive Perspective. Here are the 4 tips they covered along with some additional information for your consideration:

1. Understand How Much You Can Afford

“While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”

This ‘tip’ or ‘step’ should really take place before you start your home search process. As we’ve mentioned before, getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and will allow you to make your offer with the confidence of knowing that you have already been approved for a mortgage for that amount. You will also need to know if you are prepared to make any repairs that may need to be made to the house (ex: new roof, new furnace).

2. Act Fast

“Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.”

According to the latest Existing Home Sales Report, the inventory of homes for sale is currently at a 3.7-month supply; this is well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream homes. Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as soon as possible.

3. Make a Solid Offer

Freddie Mac offers this advice to help make your offer the strongest it can be:

“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”

Talk with your agent to find out if there are any ways that you can make your offer stand out in this competitive market!

4. Be Prepared to Negotiate

“It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford. Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”

If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspector uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made with the seller, or cancel the contract.

Bottom Line

Whether you’re buying your first home or your fifth, having a local professional on your side who is an expert in their market is your best bet in making sure the process goes smoothly. Happy House Hunting!

#1 Answer to the Housing Shortage: New Construction

#1 Answer to the Housing Shortage: New Construction | Keeping Current Matters

The biggest challenge to today’s housing market is the shortage of housing inventory for sale. A normal market would see a six-month supply of homes for sale. Currently, that number is below four months. This is the major reason home prices have continued to appreciate at higher levels than historic averages. The good news is that builders are now starting to build more homes in lower price ranges.

Builder Confidence is Up

The Housing Market Index from the National Association of Home Builders (NAHB) reveals that builder confidence increased last month. HousingWire quoted NAHB Chief Economist Robert Dietz about the reason for the increase in confidence amongst builders.

“The HMI measure of future sales conditions reached its highest level since June 2005, a sign of growing consumer confidence in the new home market. Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward.”

Builders are Meeting the Needs of Today’s Purchaser

Builders are not only jumping into the market – they are doing a better job of matching current demand. The Wall Street Journal recently reported:

“In a shift, new households are overwhelmingly choosing to buy rather than rent. Some 854,000 new-owner households were formed during the first three months of the year, more than double the 365,000 new-renter households formed during the period, according to Census Bureau data.”

The WSJ article went on to say:

“Home builders are beginning to shift their focus away from luxury homes and toward homes at lower price points to cater to this burgeoning millennial clientele.”

The graph below compares 2016 to 2017 new construction sales by price point. As we can see, builders are slowly beginning to shift to prices more favorable to the first-time and non-luxury buyer. #1 Answer to the Housing Shortage: New Construction | Keeping Current Matters

Bottom Line

There is a drastic need for a larger supply of home inventory to meet the skyrocketing demand. Builders are finally doing their part to help rectify this situation.

Selling Your Home? Is Your Listing ‘Pet-Friendly’?

Selling Your Home? Is Your Listing ‘Pet-Friendly’? | Keeping Current Matters

One of the many benefits of owning your own home is the freedom to find your ‘furever’ friend. By pointing out the aspects of your home that make it ‘pet-friendly’ in your listing, you’ll attract these buyers rather than alienate the 61% of American households that have a pet! If you are one of the many homeowners looking to list your home for sale, how do you stand out to the millions of pet parents searching for their dream homes? Whether a dog person, a cat person, or someone who prefers the company of another pet species, 99% of pet owners say that they consider their animal to be family. When finding a home, 95% of animal owners believe it is important that a housing community allows animals. A recent study by the National Association of Realtors (NAR) revealed that there are many aspects of the home buying, selling and owning experience that have been greatly impacted by American’s love for their pets. This should come as no surprise as $66.75 billion was spent on pets in the U.S in 2016, with $70 billion projected for 2017. NAR’s President William E. Brown shed some light on the impact of pet owners and their home search,

“In 2016, 61 percent of U.S. households either have a pet or plan to get one in the future, so it is important to understand the unique needs and wants of animal owners when it comes to homeownership. REALTORS® understand that when someone buys a home, they are buying it with the needs of their whole family in mind; ask pet owners, and they will enthusiastically agree that their animals are part of their family.”

The Power of Pets When Choosing the Right Home

  • 89% of pet owners say they would not give up their pet due to a housing restriction
  • 81% of Americans say their pets play a role in their housing situation
  • 31% of animal owners have refused to put in an offer on a home because it wasn’t a good fit for their animals
  • 19% of Americans say they would consider moving for their pet
  • 12% percent have moved for their pet

New home builders have actually begun installing retractable pet gates that tuck away neatly inside door jams as a highly requested feature in new homes to attract pet-parents, according to Builder.com. So, if you are a homeowner looking to sell in today’s pet-friendly environment, point out the features of your home that will attract pet owners:

  • Fully fenced in backyard – (91% of pet owners ranked this as the most important feature of a home to accommodate their pet)
  • Locations of dog parks/walking paths/pet-friendly beaches in the area (71% ranked this as the top feature of any neighborhood they would consider)
  • Proximity to veterinarians/groomers/pet supply stores (31%)

Bottom Line

Americans love their pets and will look for pet-friendly features in the home they wish to buy, so take advantage of this knowledge by pointing out your home’s ability to meet their needs.

3 Charts That Shout, ‘List Your Home Today!’

3 Charts That Shout, ‘List Your Home Today!’ | Keeping Current Matters

In school, we all learned the theory of supply and demand. When the demand for an item is greater than the supply of that item, the price will surely rise.


The National Association of Realtors (NAR) recently reported that the inventory of homes for sale stands at a 3.8-month supply. This is considerably lower than the 6-month supply necessary for a normal market. 3 Charts That Shout, ‘List Your Home Today!’ | Keeping Current Matters


Every month NAR reports on the number of buyers out in the market looking for homes, which is also known as buyer traffic. As seen on the map below, buyer demand in March was strong or very strong in 42 out of 50 states nationwide, and Washington, DC. 3 Charts That Shout, ‘List Your Home Today!’ | Keeping Current Matters Many buyers are being confronted with a very competitive market in which they must compete with other buyers for their dream homes (if they are even able to find a home they wish to purchase). Listing your house for sale now will allow you to capitalize on the shortage of homes for sale in the market, which will translate into a better pricing situation.


Many homeowners underestimate the amount of equity they currently have in their homes. According to a recent Fannie Mae study, 37% of homeowners believe that they have more than 20% equity in their homes. In reality, CoreLogic’s latest Equity Report tells us that 78.9% actually do! 3 Charts That Shout, ‘List Your Home Today!’ | Keeping Current Matters Many homeowners who are undervaluing the equity they have in their homes may feel trapped, which may be contributing to the lack of inventory in the market.

Bottom Line

If you are debating selling your home this year, meet with a local real estate professional who can evaluate the equity you have in your home, as well as the opportunities available in your market.

How Fast Can You Save for a Down Payment?

iXu3-l4j7Vc41chE7Ab-l9W3KChSyPqtXAzjXAlWnwh-Vsa3m2CXlYtU4WP2HvxM9E12rLELE9JPDN7eGInLXcwX5weqGp-AqkpVgwsiIvKS8bVKEB6_eCnYhChENqNyry8lew742zuTQsCersDEj7mUteU=s0-d-e1-ft.jpgSaving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary. So, we set out to find out how long would it take you to save for a down payment in each state? Using data from the United States Census Bureau and Zillow, we determined how long it would take, nationwide, for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense. By determining the percentage of income spent renting a 2-bedroom apartment in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own. According to the data, residents in Iowa can save for a down payment the quickest in just under 2 years (1.99). Below is a map created using the data for each state: rWV8IOXbVD774Kuu-bawzRnmrGGQCprcqFyLyhJsIuLTQxJA5g8Y9mi-p-fXjXl2DyVwAuIEBjlbVNZDhksfzJPIrNXLfMZoOMPVD4GbdaRA2a4hNRLesmfMLf8Ama6rMLsInEo-_PlhNe07JdRO3zu1_A=s0-d-e1-ft.jpg

What if you only needed to save 3%?

What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3% down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years, but becomes attainable in a year or two in many states as shown in the map below.


Bottom Line

Whether you have just begun to save for a down payment, or have been saving for years, you may be closer to your dream home than you think! Meet with a local real estate professional who can help you evaluate your ability to buy today.

Upgrade Your Home Without Blowing Your Budget


Everyone wants to turn their house into their dream home, but that’s often easier said than done. Whether you’re upgrading your space or gearing up to sell, renovating your home is a big financial decision. After all, it’s not only the place you live—it’s most likely your largest investment.

“So how much does a home remodel cost?” you ask. If you have a home equity line of credit, or HELOC, you have a higher degree of flexibility. That’s because when you choose a HELOC to finance your upgrades, you’re embracing the financial fluidity of borrowing against your home’s available equity.

“With a home equity line, you have the access to the money you need to finance a remodel, plus the flexibility to re-utilize the line for other needs as they arise,” says Jon Giles, senior vice president in the home equity division at a major bank.

Clearly, it’s a popular option. According to a recent survey by the bank, 64 percent of people said they have or would use a HELOC for home renovations or improvements. You can borrow multiple times if you need to, or borrow any amount you want on a secured credit line with interest that’s typically tax deductible.

Here’s a tour of potential home improvements.

Liven Up the Landscape
Landscaping is among the three most effective home improvements you can do to generate the biggest return on your money. It creates curb appeal in spades, and also helps prevent expensive potential damage, like fallen tree limbs and mold. Think of it as a safety net mixed with some green marketing that can increase your house’s value by up to 5 percent.

Average Cost: You can put in some attractive curbing for a little over $1,000, or invest in the whole front-lawn package for about $3,400.

Revive the Driveway
Assessing your driveway nets you a double benefit. One, it’s a utilitarian feature that just about everyone needs to protect that other big investment: the car. Two, a cracked driveway tanks your curb appeal, and can even make way for unsightly weeds.

Average Cost: To repair a driveway, you’re looking at about $1,500, or a little over $3,800 for a new one.

Freshen Up Your Exterior Paint
If you’re like the 41 percent of survey respondents whose property value has stagnated over the last year, giving the exterior of your home a fresh look could make a world of difference.

You just can’t beat the cost effectiveness of exterior paint. Plus, it has a leg up on the limited color and texture options of siding—if you can imagine a paint color, it exists.

Average Cost: Heartier exterior paints exceed the cost of interior options, but not by much—the national average cost to paint a house is a little over $2,500, though you should account for about $1,500 more if you have a two-story.

Revitalize Your Roof
Whether you’re playing catch out front or just cruising by, it’s pretty hard to miss a roof. That could be why the National Association of REALTORS® named replacing a home’s roof as the home renovation with the single greatest cost recovery in 2015—this project usually recoups about 105 percent of its price tag.

Average Cost: About $7,600

Gear Up the Garage
The garage door probably isn’t the go-to improvement when you think about upping your curb appeal, but it does take up a whole lot of exterior visual space, and for that reason alone, it’s totally worth a slice of that HELOC. Replacing the often-neglected garage door can net you a nearly 93 percent return on investment, on average.

Average Cost: This upgrade usually only runs about $730 to $1,400.

Distributed by Tribune Content Agency, LLC

Mortgage Credit’s More Crunched Than in 2001—Here’s Why

Too many mortgage lenders played it fast and loose in the lead-up to the crash, then wound it up tight when the inevitable struck—and in roughly the decade since, too few have loosened their grip.

A research paper recently published by the Urban Institute classifies today’s credit environment as “extraordinarily tight”—so tight, in fact, that more than one million mortgages were lost in 2015, the majority of which would have gone to homebuyers with credit scores below 660.

“Mortgage lenders are taking less than half the credit risk they were taking in 2001, a period of reasonable lending standards,” writes author Laurie Goodman. “Tight credit means that in the future, fewer households will have the opportunity to build wealth by owning their home, contributing to growing economic inequality.”

The paper illustrates stark differences in the lending landscape between 2001 and 2015. Upwards of 5.7 million home sales occurred in 2001, while some 5.5 million occurred in 2015. In 2015, however, mortgages only totaled 3.5 million, compared to 4.6 million in 2001. The former is a 4 percent decline; the latter, 32 percent.

What’s more: In 2001, more than 30 percent of borrowers had credit scores lower than 660—a share that has dropped to less than half, at 14 percent in 2015. Access to credit has not only remained narrow, but has also become closed off completely to those with sub-par scores.

Why have lenders been reluctant to relax their standards? According to Goodman, “credit is very tight in large part because originators are putting credit overlays on top of the Fannie Mae, Freddie Mac, and FHA underwriting box”—in other words, imposing a second set of rules.

“Why would originators knowingly drive away business? Because they are concerned that the costs of producing and servicing mortgages that are less pristine are higher than what they can earn on the mortgages,” Goodman writes.

Lenders are apprehensive specifically about the cost of servicing—as well as the possibility of having to repurchase—delinquent mortgages, and liability, especially as it pertains to the False Claims Act.

To date, the Federal Housing Finance Agency (FHFA) and Fannie Mae and Freddie Mac have made more strides in alleviating those concerns than the Federal Housing Administration (FHA)—a problem, because lower-income homebuyers rely more on FHA-backed mortgages.

“The inability of the FHA to match the GSEs’ progress has a particular impact on access to mortgage credit for low- and moderate-income borrowers, most of whom cannot put down a large down payment,” writes Goodman. Though the FHA did lower mortgage insurance premiums in 2015, more action is needed.

“Until the FHA resolves the issues causing lender overlays, it is hard to see how the credit box can open considerably for such borrowers.”

Crunched credit has broader implications, as well. Minorities are set to overtake whites in household formation in the years ahead, led primarily by Asian and Hispanic populations—but minorities overall have lower credit scores and incomes.

“Given that the composition of new homeowners is skewed to Hispanics and nonwhites, who have lower credit scores and have less income and less wealth than their non-Hispanic white counterparts, the tight credit box will inhibit homeownership even more going forward than it has in the past, unless we do something to correct it,” writes Goodman.

“Homeownership is the traditional way that households build wealth; choking off this important wealth-building channel will likely contribute to growing economic inequality.”

Source: Urban Institute

Missing Inventory Squeezing Homebuyers

Inventory missing from the housing market will have a profound effect on home sales this spring—and through 2017—as homebuyers feel the squeeze, according to Freddie Mac’s recently released monthly Outlook for April 2017. The Outlook expects home sales to drop to 5.9 million this year, a setback from ground gained in 2016.

Supply has tightened unsustainably because sellers stay reluctant to leave the security of an affordable home and let go of lower-than-normal mortgage rates, per the Outlook.

“Tight housing inventory has been an important feature of the housing market at least since 2016,” said Sean Becketti, chief economist at Freddie Mac, in a statement on the Outlook. “For-sale housing inventory, especially of starter homes, is currently at its lowest level in over ten years. If inventory continues to remain tight, home sales will likely decline from their 2016 levels. As we enter the spring home-buying season, all eyes are on housing inventory and whether or not it will meet the high demand.”

Accelerating home prices against stalled wage growth and rising interest rates are also pinching homebuyers. Slow progress on the new-home construction front is another contributing factor—according to the Outlook, housing starts this year are expected to be below not only the historical average, but also what is necessary to meet current demand.

Source: Freddie Mac

More Homeowners Tackle Renovation Projects

Homeowners are sprucing up their properties and undertaking more remodeling and repair projects, according to a recent study.

The Leading Indicator of Remodeling Activity, released by the Joint Center for Housing Studies at Harvard University, shows an annual growth in home improvement and repair expenditure this year that will remain above its long-term trend of 5 percent. Index authors, however, foresee a steady decline from 7.3 percent in the first quarter to 6.1 percent by the first quarter of 2018.

“Homeowners are continuing to spend more on improvements as house prices strengthen in most parts of the country,” says Chris Herbert, managing director of the Joint Center for Housing Studies. “Yet, recent slowdowns in home sales activity and remodeling permitting suggests improvement spending gains will lose some steam over the course of the year.”

The National Association of Home Builders’ Remodeling Market Index also showed an increase in the first quarter of 2017, marking the highest reading in activity since 2015. The NAHB’s index shows that more remodelers are reporting that activity is higher now compared to the prior quarter. “A milder than usual winter has led to increased remodeling activity and a positive outlook for spring,” says Dan Bawden, the chairman of NAHB Remodelers. “Remodelers are seeing stronger market conditions with customers more willing to spend money on both small and large projects.”

Demand for major additions and alterations as well as for smaller remodeling projects and home maintenance and repair component all showed an uptick in the latest NAHB remodeling index reading.

Still, similar to the Joint Center for Housing Studies, NAHB remodelers are warning of a potential slowdown on the horizon as well.

“Remodelers will face challenges meeting the demand as the labor shortage continues and costs for materials, such as lumber, are rising,” says NAHB Chief Economist Robert Dietz.

Melissa Dittmann Tracey, REALTOR® Magazine

Home Sales Zoom to Highest Pace in Decade

This spring’s housing mantra: Going, going, gone! “Severe” housing shortages are prompting existing homes to sell significantly faster this year, propelling home sales to the highest pace in more than a decade, the National Association of REALTORS® reported Friday.

Strong sales gains in the Northeast and Midwest were behind most of the nationwide 4.4 percent month-over-month increase in existing-home sales in March. The West was the only major region of the U.S. to see a modest decline in sales activity last month.

“The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month,” says Lawrence Yun, NAR’s chief economist. “Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does.”

Total existing-home sales—which include completed transactions for single-family homes, townhomes, condos, and co-ops—reached a seasonally adjusted annual rate of 5.71 million in March. The sales pace is 5.9 percent above a year ago. Further, existing-home sales are now the strongest month of sales since February 2007 (5.79 million).

EHS Infographic #2.jpg

Here’s a closer look at some of the key indicators from NAR’s latest housing report, reflecting March housing numbers:

Home prices: The median existing-home price for all housing types was $236,400, up 6.8 percent from a year ago when it averaged $221,400.

Days on the market: Properties stayed on the market for an average of 34 days in March, down significantly from 47 days a year ago. Short sales took the longest to sell at a median of 90 days in March; foreclosures sold in 52 days; and non-distressed homes took a median of 32 days—which is the shortest length of time since NAR began tracking such data in May 2011. Forty-eight percent of homes sold in March were on the market for less than a month.

All-cash sales: All-cash transactions comprised 23 percent of sales in March, down from 25 percent a year ago. Individual investors make up the biggest bulk of cash sales. They purchased 15 percent of homes in March, up from 14 percent a year ago.

Distressed sales: Foreclosures and short sales made up 6 percent of existing-home sales in March, down from 8 percent a year ago. Broken out, 5 percent of sales in March were foreclosures and 1 percent were short sales. On average, foreclosures sold for a discount of 16 percent below market value; short sales were discounted an average of 14 percent.

Inventories: Housing inventory at the end of March rose 5.8 percent to 1.83 million existing homes available for sale. Inventory is 6.6 percent lower than a year ago (1.96 million). Unsold inventory is now at a 3.8-month supply at the current sales pace.

“Bolstered by strong consumer confidence and underlying demand, home sales are up convincingly from a year ago nationally and in all four major regions despite the fact that buying a home has gotten more expensive over the past year,” Yun says.

Source: National Association of REALTORS®