It’s not just the temperatures that are rising this summer. The number of homes sold, as well as the prices they’re fetching, seemed to be shooting up higher than the mercury in June, according to a new report.

With mortgage interest rates hitting bargain-basement lows, buyers raced to the market undeterred by the record-breaking prices (or maybe in fear that they’d rise even further). Existing home sales shot up 11%, to 583,000, from May to June, according to a recent report from the National Association of Realtors®. Sales were also up 1.9% from the same time a year earlier.

The report only included existing homes, which are residences that aren’t newly constructed. And realtor.com just looked at the numbers that were not seasonally adjusted, meaning they weren’t smoothed out over a 12-month period to account for fluctuations.

June’s median existing-home price also rose 4.8% year-over-year, to $247,700—breaking May’s all-time high, according to the report. It was the 52nd straight month of year-over-year price increases.

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Whether your home is for financial investments, a place to live, or raise a family, Americans spend a majority of their income on housing costs, regardless of age or income. Here are some simple tips to help you save on your housing expenses without downgrading.

Make Sure Not To throw Your Money Away

Don’t spend any unnecessary money on heating or air conditioning for your house. There is a simple trick to cutting the cost of your gas bill. Weatherproofing your doors and windows can help you save up to 25% and cut your cost in half by 40 percent on your next gas bill. This means extra money in your pocket.

Double Your Monthly Principal

Ever wonder how to pay a mortgage loan fast? Well you are in luck! You can pay a mortgage rate fast without the pressure and risk of a mortgage payment every month. According to Buyer’s Edge Company’s vice president, John F. Sullivan, by paying your monthly payment as well as the principal of the following month’s payment you are able to save substantially on the interest paid and the flexibility to pay down the principal when it fits [a homeowner’s] budget. Sullivan was able to get ahead 53 months of his lender’s payment schedule as of last year. He does suggest to check with your lender to make sure there are no prepayment fees.

Talk to a Mortgage Banker

Look for a mortgage banker, not a broker, to discuss your current financial situation. A broker is great for the buying process, but once you have bought your home and are set up with a lender, there is not much more a broker can do. A banker will be able to sit down with you and discuss any areas of improvement or adjustments you can make to save money.

Schedule Monthly Maintenance

Schedule monthly maintenance check-ups so that down the road you don’t have any costly surprises. It’s easy to overlook small fixes, but eventually, those repairs could lead to a more disastrous problem. By doing this you will not only keep your home in tip-top shape, but you’ll also increase your home value.

The news has been all gloom and doom when it comes to millennials’ low rate of homeownership. Just last week, we wrote about how the fear of commitment of buying a home with a partner could be one of the reasons many younger folks don’t own the roof over their heads—along with rising prices, high student debt, and hard-to-get credit.

But that tide might be starting to turn. A recent Fannie Mae report analyzed U.S. Census data of 20- to 33-year-olds from 2006 to 2014. It followed different age groups through the boom (2006–08), bust (2008–12), and recovery years (2012–14).

Of the older millennials, ages 30 to 33, more have become homeowners than were before the crisis. Those ages 28 and 29 are almost back to the same level of homeownership that they had in 2006.

Let’s be clear: The report looked at cohorts, which are the same groups of individuals over time. When looking at general homeownership rates, instead of the same group of buyers over time, fewer younger folks owned homes in 2014 than they did eight years earlier.

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Moving is a lot of work, from the initial packing to organizing to cleaning. Whether you decide to hire professional help or bribe your friends, there are going to be some costs involved. Although your total moving costs depend on how much stuff you have and how far you’re moving, the American Moving & Storage Association averages about $1,170 if you’re moving within a state.

Use a moving calculator

There are many different online tools you can use that will help you estimate the cost of your next move. You start by adding your basic details like the number of rooms and the distance you’re moving. The more details you can add the more accurate your calculations will be, so when searching online, look for one that asks for the square footage of your home, date of your move, the number of movers, the number of flights of stairs, or anything else that will affect your move.  

Get a custom quote

Your next step will be to get a custom quote from a qualified professional. The most accurate quotes are in-home estimates, but you can also send an inventory list to your movers, so they can gauge the move.

Get competing quotes

Don’t stop once you get your first quote, get some from various movers. You can contact each mover individually or you can you sites like movingguru.com where you enter similar information and get competing quotes from various licensed moving companies. Either way, it’s best to get more than one estimate to compare prices and services.

Don’t forget the extras

Now that you have all your estimates, it is time to calculate some of the extra costs you may be unaware of. Packing will be an extra charge on top of your estimate. Here are few other costs that do add up:

• Assembly: When the movers have to disassemble and then reassemble furniture.
• Long carry: Some companies charge when they can’t park near the home and have to carry items a long distance.
• Lowering/hoisting: If you have extremely large furniture, such as a piano, that has to be lifted or hoisted.
• Redelivery: If you missed the truck and they have to redeliver your stuff.
• Specialty items: Often times there is an extra fee for items like pool tables, pianos, gun safes, exercise equipment, hot tubs, freezers, and antiques.

 

Pokemon Go gets into real estate game?  Thursday, 14 Jul 2016 | 8:16 AM ET|01:28

Maybe PMI Isn’t “Bad,” After All

Many new home buyers avoid mortgage insurance at any cost.

Some delay home buying because of it, but that could be a mistake.

Home prices are rising six percent per year, according to the National Association of REALTORS®. Wait to save a high downpayment, and you could be chasing home prices for a long time.

Mortgage insurance lets you buy at today’s prices and low mortgage rates. It eliminates risk of both skyrocketing in the future.

But that’s not the only benefit of private mortgage insurance (PMI).

In addition, PMI companies often offer valuable services most homebuyers don’t know about — partial claim advances and job loss insurance coverage.

Those “silent” benefits might prove very useful in your life as a homeowner.

The Partial Claim Advance: When You Can’t Pay Your Mortgage

Lenders typically require a 20 percent downpayment to remove the PMI requirement.

There’s a simple reason. If mortgage payments are not received, the lender must sell the property to recoup costs. Credit rating agency Standard and Poor’s (S&P) estimates that a lender receives about 20 percent less selling a foreclosed home than would in a regular sale.

The legal fees, real estate commissions, property taxes and maintenance typically come to an additional ten percent of the loan balance. Here’s how that shakes out on a $300,000 home purchase with 5% down:

• Gross foreclosure sale proceeds: $240,000
• Principal balance: $285,000
• Foreclosure costs: $28,500
• Loss: $73,500

That’s a potential loss of $73,500 for the mortgage insurer. The mortgage lender gets its money back, so it won’t hesitate to pursue foreclosure.

The PMI company, however, is on the hook for $73,500. At all costs, the PMI provider wants to prevent foreclosure.

If, for example, it can cover your missed payments and stop your foreclosure for $7,000, the insurer minimizes its losses – helping you while it helps itself.

What Is A Real Estate Closing?

Real estate closings go by different names, depending on where you live.

In some parts of the country, they’re known as “closings” and in others, they’re known as “settlements”.

In California, closings are known as “escrow” (which is not be to confused with this other escrow).

Regardless of where you live, however, the purpose of a closing is the same — to legally transfer ownership from seller to buyer; and, for homes financed with a mortgage, to sign the appropriate home loan documents.

Other documents are signed at closing, too, including certain disclosures and guarantees. Buyers can expect to sign and/or initial 150 times or more.

Shop Around For PMI

Lenders typically select your mortgage insurance for you.

They often work with two to four PMI companies. Each lender has its own policy for selecting PMI providers; some select at random. Sometimes, only one company will provide PMI based on your downpayment, credit score, or loan type.

However, as the consumer you can request that your lender select a specific PMI provider.

If job loss mortgage insurance is important to you, make sure, first, that your lender works with a mortgage insurer that offers this protection.

Then, request that every effort is made to get your application approved by this mortgage insurer.
Keep in mind, however, that the ability to shop for PMI can only be done when opting for a conventional loan that conforms to Fannie Mae and Freddie Mac rules. The typical U.S. lender offers these loans.

FHA and USDA mortgage insurance is provided by government agencies, not private companies. You can’t select different mortgage insurance when using these government-backed programs.

But conventional loan borrowers can and should research private mortgage insurance providers for the benefits that suit their needs.

As a future PMI-paying homeowner, you could have advantages over someone who makes a 20% downpayment. Maybe the expense of PMI isn’t as bad as everyone said it was.

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“Obviously, the charm and history are attractive, but there’s also a very strong lifestyle component to these historic neighborhoods,” says John Randolph, an associate broker  Long & Foster, which represents homes in Old Town Alexandria, Va.

“What’s old is new again. This is the revival of the town center in urban planning; the original town center.”

However, if you fall in love with a vintage charmer in a historic district, be careful: Your plans to remodel or expand your new old home could turn into a frustrating and costly experience.

“If you are going to restore the home or add onto it, it’s going to cost you more money than an equivalent home somewhere else in town because the guidelines you’re going to have to follow are more expensive,” says John Reynolds, an associate broker in Long Beach, Calif., who also lives in the historic district of Cal Heights.

“I will have people come to my open houses and they’ll be talking about the house and what they want to do and I say, ‘Folks, you are in the wrong neighborhood. I can show you neighborhoods in Long Beach where you can do that, but this is not one of them.'”

Preserving character

The goal of all historic districts is to preserve the character of their neighborhood, either through codes, covenants and restrictions; homeowner or preservation association guidelines; or both.

Most restrictions apply only to exterior changes to the house.

Some districts have municipal or county support for their restrictions, most often through the planning and zoning or building permit functions.

Other districts rely solely on community pressure.

“I find that having to live with their neighbors can be more fearsome,” says Beth Reiter, director of historic preservation for the Chatham County-Savannah Metropolitan Planning Commission, which oversees four historic districts in Savannah, Ga.

Historic district restrictions vary widely, and some exempt certain properties within their boundaries by age or other criteria.

For this reason, it’s important to check individual addresses for restrictions rather than just looking at local district rules advertisement. Historic districts, even those abutting each other, may differ in their restrictions or requirements. Old Town Alexandria, for instance, seeks to preserve truly historic homes. Owners cannot make exterior changes to any home that is more than 100 years old without getting approval from the City Council and Board of Architectural Review.

Meanwhile, Long Beach historic districts were formed to prevent overdevelopment in relatively new communities.

“The reason they were formed in Long Beach had very little to do with the historic value of the homes in the neighborhood,” says Reynolds. “It had to do with the City of Long Beach tearing down old homes back in the ’80s and building nine-unit apartment buildings on single-family residential lots and totally disrupting the culture of the neighborhood.”

Reynolds notes that in one Long Beach historic district, if a duplex burns down, the owner has to rebuild a single-family home.

If historic districts have a favorite foe, it would be the McMansion.

Reynolds says that even if a renegade homeowner managed to plop a 2,500-square-foot monstrosity down in a neighborhood of 800-square-foot bungalows, the homeowner would live to regret it.

“Where do you go for your 2,500-square-foot comparable within the same district?” he says. “It’s not there. The appraiser is going to look at it as nonconforming to the neighborhood and won’t appraise it for as much as they would if there were homes that conformed to it.”

Common rules

Although regulations vary from one historic district to another, some rules are more commonplace than others. Here are several areas where restrictions and extra expenses might impact homeowner life in a historic district:

1. Additions.  Adding square footage to a home in a historic district can be difficult, if not impossible.

“There have been instances where we have allowed additional stories, but generally probably not,” Reiter says.

When additions are approved, Reiter prefers they be slightly different rather than identical to the original structure.

“We don’t want to create a false sense of history,” she says.

2. Windows and shutters.   Nothing says vintage about a home like its windows and shutters. For that reason, most historic districts require homeowners to replace them in kind.

In Old Town Alexandria, that means custom-made, single-pane windows and working wooden shutters.

The same holds true for windows in Savannah districts, but they now allow PVC shutters due to the heat and humidity.

In Long Beach, it’s ever so costly to re-pane the original wooden windows.

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House hunting is challenging enough at any time; shopping during a seller’s market is a whole additional difficulty level—and that’s what would-be buyers are seeing across the country. The supply of homes is low, demand is high, and sellers are in control. If you’re not careful, you’ll be left drying your eyes with the broken shards of your rejected bid. Sound painful? It is.

So you’d best bring your A-game, or don’t bother showing up at all.

Check out the seller’s market survival tips below to stand out from the competition and get the edge.

Know the signs

Even though you may hear you’re in a seller’s market, where’s the proof? While the market varies based on where you live, you can watch for these two red flags:

• Houses are selling for more than asking price.
• Homes sell quickly, and inventory doesn’t hang around.

Look through our listings for your area. If the majority of houses have been sitting on the market for more than six months, it’s not a seller’s market. But if only those ultraluxe properties have been on the market for over a few months, that indicates houses are getting snatched up quickly.

Commit to being on call

To succeed in a seller’s market, you have to make house hunting a priority—not just something you fit in here and there on the weekends if you have nothing better to do.

“If you’re only looking now and then when it’s convenient, you’re probably wasting your time,” says James Malmberg, an agent in Sherman Oaks, CA. Treat house hunting as if you were job hunting: Scour listings regularly, and if someone calls about a viewing, head in at their earliest convenience—not your own—and follow up promptly if you feel it’s a fit.

 

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