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How Technology is Helping Buyers Navigate the Home Search Process [INFOGRAPHIC]
![How Technology is Helping Buyers Navigate the Home Search Process [INFOGRAPHIC] | MyKCM](https://desireestanley.com/files/2020/04/20200417-MEM-Eng-1046x1308.png)
![How Technology is Helping Buyers Navigate the Home Search Process [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2020/04/16133213/20200417-MEM-Eng-1046x1308.png)
Some Highlights:
- A recent realtor.com survey revealed that buyers are still considering moving forward with the home buying process, even if they can’t see the home in-person.
- While they still prefer to physically see a home, virtual home tours and accurate listing information top the list of tech specs buyers find most helpful in today’s process.
- Let’s connect today to determine how technology can help power your home search.
Two Big Myths in the Home buying Process
The 2020 Millennial Home Buyer Report shows how this generation is not really any different from previous ones when it comes to homeownership goals:
“The majority of millennials not only want to own a home, but 84% of millennials in 2019 considered it a major part of the American Dream.”
Unfortunately, the myths surrounding the barriers to homeownership – especially those related to down payments and FICO® scores – might be keeping many buyers out of the arena. The piece also reveals:
“Millennials have to navigate a lot of obstacles to be able to own a home. According to our 2020 survey, saving for a down payment is the biggest barrier for 50% of millennials.”
Millennial or not, unpacking two of the biggest myths that may be standing in the way of homeownership among all generations is a great place to start the debunking process.
Myth #1: “I Need a 20% Down Payment”
Many buyers often overestimate what they need to qualify for a home loan. According to the same article:
“A down payment of 20% for a home of that price [$210,000] would be about $42,000; only about 30% of the millennials in our survey have enough in savings to cover that, not to mention the additional closing costs.”
While many potential buyers still think they need to put at least 20% down for the home of their dreams, they often don’t realize how many assistance programs are available with as little as 3% down. With a bit of research, many renters may be able to enter the housing market sooner than they ever imagined.
Myth #2: “I Need a 780 FICO® Score or Higher”
In addition to down payments, buyers are also often confused about the FICO® score it takes to qualify for a mortgage, believing they need a credit score of 780 or higher.
Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans, shows the truth is, over 50% of approved loans were granted with a FICO® score below 750 (see graph below):
Even today, many of the myths of the home buying process are unfortunately keeping plenty of motivated buyers on the sidelines. In reality, it really doesn’t have to be that way.
Bottom Line
If you’re thinking of buying a home, you may have more options than you think. Let’s connect to answer your questions and help you determine your next steps.
2020 Home buying Checklist
Some Highlights:
- If you’re thinking of buying a home, plan ahead and stay on the right track, starting with pre-approval.
- Being proactive about the home buying process will help set you up for success in each step.
- Make sure to work with a trusted real estate professional along the way, to help guide you through the homebuying steps specific to your area.
Why You Shouldn’t “For Sale By Owner”
Rising home prices coupled with the current inventory in today’s market may cause some homeowners to consider selling their homes on their own (known in the industry as a For Sale By Owner). However, a FSBO might be hard to execute well for the vast majority of sellers.
Here are the top 5 reasons not to FSBO:
1. Online Strategy for Prospective Purchasers
Studies have shown that 93% of buyers search online for a home. That’s a pretty staggering number! Most real estate agents have an Internet strategy to promote the sale of your home. Do you?
2. Results Come from the Internet
According to NAR, here’s where buyers found the homes they actually purchased:
- 55% on the Internet
- 28% from a Real Estate Agent
- 10% Other
- 6% from a Yard Sign
- 1% from Newspapers
The days of selling your house by putting up a sign in your yard or placing an ad in the paper are long gone. Having a strong Internet strategy is crucial.
3. There Are Too Many People to Negotiate With
Here’s a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO:
- The buyer, who wants the best deal possible
- The buyer’s agent, who solely represents the best interest of the buyer
- The buyer’s attorney (in some parts of the country)
- The home inspection companies, which work for the buyer and will almost always find some problems with the house
- The appraiser, if there is a question of value
4. FSBOing Has Become Increasingly Difficult
The paperwork involved in buying or selling a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
5. You Net More Money When Using an Agent
Many homeowners believe they’ll save the real estate commission by selling on their own, but the seller and buyer can’t both save the commission.
A report by Zillow revealed that FSBOs are inclined to do so because they believe it will save money (46 percent cite this among their top three reasons), but they don’t actually save anything, and eventually end up listing with an agent.
The same report revealed that,
“While 36% of sellers that (at first) attempted to sell their homes on their own, only 11 percent of sellers—in other words, less than a third…actually sold without an agent.”
It appears working with a real estate professional is the best answer.
Bottom Line
Before you decide to take on the challenges of selling your house on your own, let’s get together to discuss your needs.
3 Mistakes to Avoid When Selling a Home in 2020
It’s exciting to put a house on the market and to think about making new memories in new spaces, but we can have deep sentimental attachments to the homes we’re leaving behind, too. Growing emotions can help or hinder a sale, depending on how we manage them.
When it comes to the bottom line, homeowners need to know what it takes to avoid costly mistakes. Being mindful of these things and prepared for the process can help you avoid some of the most common mishaps when selling your house.
1. Overpricing Your Home
When inventory is low, like it is in the current market, it’s common to think buyers will pay whatever we ask for when we price our homes. Believe it or not, that’s far from the truth. Don’t forget that the buyer’s bank will send an appraisal to determine the fair value for your home. The bank will not lend more than what the house is worth, so be mindful that you might need to renegotiate the price after the appraisal. A real estate professional will help you to set the true value of your home.
2. Letting Your Emotions Interfere with the Sale
Today, most homeowners have been living in their houses for an average of 10 years (as shown in the graph below):
This is several years longer than what used to be the norm since many homeowners have been recouping from negative equity situations over the past 10 years. The side effect, however, is when you live for so long in one place, you may get even more emotionally attached to your space. If it’s the first home you bought after you got married or the house where your children grew up, it very likely means something extra special to you. Every room has memories and it’s hard to detach from the sentimental value.
For some homeowners, that makes it even harder to negotiate, separating the emotional value of the home from the fair market price. That’s why you need a real estate professional to help you with the negotiations in the process.
3. Not Staging Your Home
We’re generally quite proud of our décor and how we’ve customized our houses to make them our own personalized homes, but not all buyers will feel the same way about your design. That’s why it’s so important to make sure you stage your home with the buyer in mind. Buyers want to envision themselves in the space, so it truly feels like their own. They need to see themselves in the space with their furniture and keepsakes – not your pictures and decorations. Stage and declutter your home so they can visualize their own dreams as they walk through your house. A real estate professional can help you with tips to get your home ready to stage and sell.
Bottom Line
Today’s seller’s market might be your best chance to make a move. If you’re considering selling your house, let’s get together to help you navigate through the process while avoiding common seller mistakes.
A 365 Day Difference in Homeownership
Over the past year, mortgage rates have fallen more than a full percentage point. This is a great driver for homeownership, as today’s low rates provide consumers with some significant benefits. Here’s a look at three of them:
- Refinance: If you already own a home, you may want to decide if you’re going to refinance. It’s one way to lock in a lower monthly payment and save substantially over time, but it also means paying upfront closing costs too. You have to answer the question: Should I refinance my home?
- Move-up or Downsize: Another option is to consider moving into a new home, putting the equity you’ve likely gained in your current house toward a down payment on a new one that better meets your needs – something that’s truly a perfect fit for your family.
- Become a First-Time Homebuyer: There are many financial and non-financial benefits to owning a home, and the most important thing is to first decide when the time is right for you. You have to determine that on your own, but know that now is a great time to buy if you’re considering it. Just take a look at the cost of renting vs. buying
Why 2019 Was a Great Year for Homeownership
Last year at this time, mortgage rates were 4.63% (substantially higher than they are today). If you’re one who waited for a better time to make a move, market conditions have improved significantly. Today’s low mortgage rates combined with increasing wages are making homes much more affordable than they were just one year ago, so it’s a great time to get more for your money and consider a new home.
The chart below shows how much you would save based on today’s rates, compared to what you would have paid if you purchased a house exactly one year ago, depending on how much you finance.
Bottom Line
If you’ve been waiting since last year to make your move into homeownership or to find a house that better meets your needs, today’s low mortgage rates may be just what you need to get the process going. Let’s get together to discuss how you can benefit from the current rates.
2 Myths Holding Back Home Buyers
In a recent article, First American shared how millennials are not really any different from previous generations when it comes to the goal of homeownership; it is still a huge part of their American Dream. The piece, however, also reveals,
“Saving for a down payment is one of the biggest obstacles faced by first-time home buyers. Dispelling the 20 percent down payment myth could open the path to homeownership for many more.”
Myth #1: “I Need a 20% Down Payment”
Buyers often overestimate how much they need to qualify for a home loan. According to the same article:
“Americans still overestimate the qualifications needed to get a mortgage, resulting in qualified potential buyers not even considering homeownership. Indeed, the Urban Institute report revealed that 16 percent of consumers believed that the minimum down payment required by lenders is 20 percent or more, and another 40 percent didn’t know at all.”
While many potential buyers still think they need to put at least 20% down for the home of their dreams, they often don’t realize how many assistance programs are available with as little as 3% down. With a little research, many renters may actually be able to enter the housing market sooner than they ever imagined.
Myth #2: “I Need a 780 FICO® Score or Higher”
In addition to down payments, buyers are also often confused about the FICO® score it takes to qualify for a mortgage, believing a ‘good’ credit score is 780 or higher.
To debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.
As indicated in the chart above, 50.23% of approved mortgages had a credit score of 500-749.
Bottom Line
Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Believe it or not – your dream home may already be within your reach.
What is Important to Boomers when Selling their House?
If you are a “baby boomer” (born between 1946 and 1964), you may be thinking about selling your current home. Your children may have finally moved out. Your large, four-bedroom house with three bathrooms no longer fits the bill. Taxes are too high. Utilities are too expensive. Cleaning and repair are too difficult. You may be ready to move into a home that better fits your current lifestyle. Many fellow boomers have already made the move you may be considering.
The National Association of Realtors recently released its 2019 Home Buyer and Seller Generational Report. The report revealed many interesting tidbits about both categories of baby boomers: younger boomers (ages 54 to 63) and older boomers (64 to72). Here are a few of the more interesting topics.
Percentage of Buyers who Looked Online First
- All Buyers: 44%
- Younger Boomers: 46%
- Older Boomers: 44%
Where Boomers Found the Home They Purchased
The two major ways buyers found the home they purchased:
- All buyers: 50% on the internet, 28% through a real estate agent
- Younger Boomers: 46% on the internet, 33% through a real estate agent
- Older Boomers: 36% on the internet, 35% through a real estate agent
Distance Seller Moved
The distance between the home they purchased and the home they recently sold was much greater for boomers than the average seller.
- All sellers: 20 miles
- Younger Boomers: 27 miles
- Older Boomers: 50 miles
Tenure in Previous Home of Seller
The percentage of older boomers who lived in their previous home for more than 20 years was almost twice the amount of the average seller.
- All sellers: 16%
- Younger Boomers: 20%
- Older Boomers: 31%
Primary Reason to Sell their Previous Home
- Want to move closer to friends or family
- Home too large
- Retirement
View of Homeownership as a Financial Investment
- 83% of Younger Boomers see homeownership as a good investment
- 82% of Older Boomers see homeownership as a good investment
Bottom Line
If you are a boomer and thinking about selling, now might be the time to contact an agent to help determine your options.
75 Years of VA Home Loan Benefits
Today, on Veterans Day, we salute those who have served our country in war or peace, and we thank them for their sacrifice.
This year marks the 75th anniversary of VA Home Loan Benefit offerings through the Servicemen’s Readjustment Act, also known as the GI Bill. Since 1944, this law has created opportunities for those who have served our country, ranging from vocational training to home loans.
Facts About VA Home Loans:
- Nearly 24 million home loans have been guaranteed by the Veterans Administration.
- Nearly 82% of VA home loans are made with no down payment.
- The VA also provides grants to help seriously disabled Veterans purchase, modify, or construct a home to meet their needs. Last year the VA provided 2,000 grants totaling $104 million.
Benefits of a VA Home Loan:
- No down payment
- No Private Mortgage Insurance*
- Lower credit score requirements
- Limitation on closing costs
- Lower average interest rates
*More information on VA Home Loan Fees
Bottom Line
The best thing you can do today to celebrate Veterans Day is to share this information with those who can benefit from these opportunities. For more information, or to find out how to qualify to use a VA Home Loan Benefit, let’s get together to navigate through the process. Thank you for your service!
62% of Buyers Are Wrong About Down Payment Needs
According to the ‘2019 Home Buyer Report’ conducted by Nerdwallet, many first-time buyers still believe they need a 20% down payment to buy a home in today’s market:
“More than 6 in 10 (62%) Americans believe you must put at least 20% down in order to purchase a home.”
When potential homebuyers think they need a 20% down payment to enter the market, they also tend to think they’ll have to wait several years (in some markets) to come up with the necessary funds to buy their dream homes. The report continues to say,
“The truth: 32% of current U.S. homeowners put 5% or less down on their home, according to census data.” (as shown below):
The lack of knowledge about the home-buying process is, unfortunately, keeping many motivated buyers on the sidelines.
Bottom Line
Don’t let a lack of understanding keep you and your family out of the housing market. Let’s get together to discuss your options today.
