Scared to Buy Solo? 4 Tips for Single House Hunters

You’re single and ready to buy. Right now, house hunting might feel a bit daunting, even downright scary. But it’s also one of the smartest decisions you can make, especially if you’re secure in your job and committed to your location.

If you’re able to overcome your fear of commitment and head into homeownership on your own, here are a few key points that should make the hunt a little easier:

Dream within your budget.

Buying a home on your own is exciting! Plus, it’s great investment in your financial future. But make sure you are looking at homes you can afford, especially if you have any hiccups in your financial profile. Life changes like sudden unemployment or serious health issues are impossible to predict.

Buying a home is one of the smartest decisions you can make, especially if you’re secure in your job and committed to your location.

The reality is that there are many financial hazards that could affect your ability to cover your monthly mortgage. So before you commit to a lifestyle you might not be able to afford, consider what it would take to make the additional monthly nut if you didn’t have a steady source of income.

Pay attention to safety.

Not to fear monger, but when you’re buying alone it’s important to remember you won’t be home all of the time. As a single homeowner, it’s unlikely that someone will be at the house during the day — or even every night. That’s why you should consider

safety and security issues when you tour open houses. Of course, you want to look for a house in a low-crime neighborhood, but there are other factors to consider when you preview your new pad. Are there locks on the windows? Is the street or driveway well lit at night? Does the home come equipped with a security system? Although they aren’t necessarily as enticing as stainless-steel appliances or skylights, these types of safety considerations will help you sleep better at night.

Are you a weekend warrior?

Sure, you have the benefit of enjoying your alone time in your spacious new home. But guess what? You’re still alone when the faucet leaks, when ants take over the kitchen, and when the windows need washing. Oh, and did we mention that the grass is now a foot high and the driveway needs to be repaved? If you find the idea of maintaining a single family home overwhelming, then you might want to consider a condominium or townhouse. Condo association fees go toward maintaining the overall property, and that means you’ll never have to worry about hauling out that rusty old lawnmower on a sunny Saturday.

Think resale from day one.

Purchasing a home is a long-term investment. But that doesn’t mean you won’t be ready to move one day — and there’s always the possibility that day may come sooner than you think. There are many reasons to move, including relocating for a job or unexpected family obligations. (And there’s always the chance that you fall for someone that lives across the country.) So even if you’re rooted in your community, it’s important to think about the resale value of your potential home during the search. Consider properties that have a spare bedroom, even if it’s not space that you need today. If it’s affordable, extra square footage is always worth the investment.

6 Real Estate mistakes that can cost you

In real estate transactions, the stakes are high and even a small mistake can end up costing you thousands of dollars. Whether you’re looking to buy or sell, here are some common mistakes to watch out for. 

Not Getting the Price Right

One of the toughest pieces of any real estate puzzle is setting the right price. If you price it too low, you potentially leave money on the table. Price it too high, and it will sit on the market for too long, causing buyers to will wait until you’re desperate and then make you a cut-rate offer. The mistake many sellers make is to simply look around at the price of other homes in the neighborhood without thinking carefully about whether those home are comparable. So if you’re in the market to sell, your first step should be to hire a home appraiser. It might cost a few hundred dollars, but it’s an expense that can save you thousands down the road.

Not Fixing It Up

While hurrying through the process of selling a home, many sellers fail to take care of all of the little things, like a door that’s coming off the hinges, an overgrown backyard, or a chipped and peeling paint job. While these problems might seem minor, they add up and can cause buyers to view your home more as a fixer-upper than a dream home. Before you put it on the market, spend a few weekends making sure your home is looking its best.

Hiding Problems From the Buyer

Some sellers think they can conveniently “forget” to disclose problems to a buyer. While a buyer might not discover the problems during the inspection or walk-through, they are bound to eventually. And if those problems are severe enough, you could be in for some costly litigation. Don’t try to pull a fast one on buyers. Make sure they are informed in writing about any issues so that there is no cause for dispute after the sale goes through.

Wrecking Your Credit At the Last Minute

The home-buying process can be long and drawn out, which provides ample time for buyers to make some big financial mistakes. Many buyers fail to realize that a pre-approval is not a guarantee that you will land a loan. If you do something to change your credit status during that time — such as buying a new car, or missing a few credit card payments — the pre-approval numbers you were quoted can disappear in an instant. The bank might stick you with a higher interest rate, or lower the total loan amount, jeopardizing your chances of landing your dream home.

Getting Into a Bidding War

During a heated bidding war, emotions run high, which can cost you dearly. If you have your heart set on a house and want to go above the asking price, make sure you have someone to do the negotiating for you. Many novice buyers, looking to save a few bucks, will venture into the housing market without a buyer’s agent at their side. But a good buyer’s agent will be an advocate on your behalf and will be a shrewd negotiator  during the process.

Not Taking the Inspection Seriously

Most lenders will insist on a inspection before they sign off on the deal to ensure that the home isn’t about to collapse in on itself. Unfortunately, buyers often treat this as just another step in the process and fail to take advantage of the inspection. Follow along with the inspector and take detailed notes to get a sense of potential problems. Armed with information about a home’s faults, you can use the inspection as leverage to drive down the price.

Fannie Mae Expects Slow But Sure Housing Growth in 2015

Author: Brian Honea October 23, 2014 Share on facebookShare on twitteron emailShare on pinterest_shareMore Sharing Services6

Where the U.S. housing market is concerned,Fannie Mae chief economist Doug Duncan said he is anticipating overall weaker home sales in 2014 than in 2013. But he expects that overall home sales in 2015 will post their best performance since 2007 despite seeing only moderate growth for the year.

The forecast on the state of the nation's housing market and on the overall economy were included in the Fannie Mae Economic & Strategic Research Group's October 2014 Economic Outlook, published on Thursday.

"We lowered our expectation for housing starts just slightly to one million units for 2014, but our view of mortgage originations has not changed," Duncan said. "Our estimate for 2013 was in line with the recent release of 2013 data under the Home Mortgage Disclosure Act, and our projection of total production in 2014 is little changed at approximately $1.1 trillion. For 2015, we are cautiously optimistic that ongoing labor market improvements, low mortgage rates, rising inventories, and some easing of lending standards will boost home sales by roughly 5.0 percent. However, we still believe housing will continue along its upward grind rather than have the breakout year some are expecting."

Economic growth has been slow on a global scale this year, but that has not dimmed the outlook for the U.S. economy, according to the findings of Fannie Mae's ESR Group. Real economic growth in the U.S. seems poised to exceed 3.0 percent for the second half of 2014, which is expected to provide a solid basis for continued growth into 2015.The slow global economic growth may prevent the Federal Reserve Board from making any interest rate policy changes until Q3 2014, it has not prevented a positive outlook for the economy in the U.S.

"Given the expected strengthening economic activity in the U.S. in the second half of the year, we continue to expect to finish just above 2 percent growth for all of 2014," Duncan said. "The risks are tilted to the downside due to current geopolitical events in Russia, Ukraine, Hong Kong, and the Middle East, as well as the economic slowdown in the Eurozone, China, and Japan. However, recent data suggest these factors have not significantly swayed American consumers. Real consumer spending is poised to pick up in the second half of 2014 from the first half, due in large part to improving labor market conditions, continued declines in gasoline prices, and a subdued pace of inflation."

Existing Home Sales Hit One-Year High in September

Published October 21, 2014

Reuters

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  REUTERS

U.S. home resales jumped to their highest level in a year in September, the latest indication that the housing market recovery is gradually getting back on track.

The National Association of Realtors said on Tuesday existing home sales rose 2.4 percent to an annual rate of 5.17 million units, the strongest reading since September of last year.

Economists polled by Reuters had forecast sales rising to a 5.10 million unit pace last month from August's 5.05 million unit pace. Sales, however, were down 1.7 percent compared to September of last year.

Data last week showed a rebound in home building in September. Housing is slowly regaining its footing after activity stalled in the second half of 2013 in the aftermath of a run-up in mortgage rates.

U.S. stocks were trading higher, with the PHLX housing sector index <.HGX> up more than 1 percent. Prices for U.S. Treasury debt fell, while the dollar rose against a basket of currencies.

The housing sector, however, continues to be hobbled by sluggish wage growth, which has lagged an acceleration in house prices. That has sidelined first-time buyers, a critical component for a sustainable housing market recovery.

Much of the recovery has been driven by investors who have been buying distressed properties and converting them into rental units. But investors are withdrawing from the market and accounted for only 14 percent of transactions last month.

That compared to 19 percent in September of last year.

"The overall momentum in the housing market recovery remains relatively weak. That said, with buying conditions still conducive and the labor market recovery continuing to progress, the outlook for the housing sector remains favorable," said Millan Mulraine, deputy chief economist at TD Securities in New York.

While investors' retreat from the market means fewer bidding wars and increased opportunities for ordinary buyers, first-time buyers are yet to step up. They accounted for 29 percent of sales for a third straight month.

That share remains below the 40 percent to 45 percent that is considered ideal by economists and real estate agents.

Last month, the inventory of unsold homes on the market increased 6 percent from a year ago to 2.30 million. At September's sales pace, it would take 5.3 months to clear houses from the market, down from 5.5. months in August.

A six months' supply is viewed as a healthy balance between supply and demand.

With supply improving, house price gains continue to moderate. The median home price of $209,700 last month represented a 5.6 percent increase from a year ago but a drop from the double-digit growth seen for much of 2013.

All-cash sales made up 24 percent of transactions in September, down from 33 percent in September of last year. Distressed properties - foreclosures and short-sales - accounted for 10 percent of sales, up from 8 percent in August.

Housing Market Cools Off as Inventory Slows

Author: Tory Barringer October 20, 2014Share on facebookShare on twitterShare on emailShare on pinterest_shareMore Sharing Services11

Housing indicators cooled off slightly in September, marking the annual start of what is typically a slower season for the market, according to a report from listings site Realtor.com.

At the national level, Realtor.com reported the median age of September's housing stock was 90 days, four days longer than August's median age as home shoppers back off for the season. Compared to last year, however, September's median inventory age was down three days, indicating demand is still there.

The number of listings last month was approximately 1.87 million, down 2.7 percent annually and 7.9 percent monthly. The decline compares to Redfin's latest analysis, which showed an unexpected bump in inventory from new listings. Redfin's data measures a narrower list of markets nationwide.

As other market indicators have seen steady improvement, inventory has remained a consistent problem, with shortages across the country limiting buyers' options and pushing prices beyond affordability in some areas. According to the National Association of Realtors' latest existing-home sales report, the nation's housing stock sat at a 5.5-month supply in August, short of the six- to seven-month supply considered to be a balanced market. New homes were in even shorter supply at nearly five months.

"To truly relieve the inventory shortage on a sustained basis, new home construction needs to rise by at least 50 percent from the current levels," said Lawrence Yun, chief economist for the National Association of Realtors.

Though the market's pace has slowed nationally, Realtor.com found 12 major metros are still selling quickly, with each one seeing a median inventory age of less than two months. Those markets include a number of California metros—Oakland, San Jose, San Francisco, San Diego, and Los Angeles-Long Beach—as well as a handful of others around the country, including Denver, Seattle, Houston, Austin, Omaha, Melbourne, and Washington, D.C.

Though largely spaced out geographically, those markets have a number of factors in common that are helping to drive their local housing markets: Notably, they feature the best opportunities for math and science professionals, and they're home to large baby boomer populations.

As Realtor.com explains in its report, the first group tends to pull in a higher median income and brings enhanced buying power, while the second group is rapidly coming to an age when they have to make retirement-related housing decisions.

"When we see homes moving quickly in a particular market, we expect the trend to be supported by signs of local health like growth in economic production and employment," said Jonathan Smoke, chief economist for Realtor.com. "This month, we also observed more out of the ordinary trends including high proportions of math and science professionals, as well as baby boomers in each of the fast moving markets. As the technology industry grows and aging baby boomers decide to make housing moves to support their retirement, we'll continue to see strong housing demand associated with these factors."

What Type of Mortgage Is Best for You?

Tired of paying rent and ready to become a homeowner? Good news! According to our recent Rent vs Buy report, mortgage payments remain a cheaper option than renting, thanks to low interest rates and fast-rising rents. And, even better news, you’ve taken a step in the right direction when it comes to saving money.

As part of the quarterly report, Trulia Chief Economist Jed Kolko crunched the numbers, finding that buying can be nearly 40% cheaper than renting. But before you start picking out curtains and furniture for that new home, there are some financing decisions that need to be made. Determining what type of mortgage is best for you and your family may seem intimidating, but there is one out there that’s right for you.

We’ve outlined some common scenarios that buyers encounter, and offer a few helpful suggestions to help demystify the different types of mortgages.

I want a low monthly payment. What type of mortgage should I look for?

The standard 20% down, 30-year fixed rate loan will help keep your payment low. For example, if you plunk down 20% — or $50,000 — on a $250,000 property, your monthly payment would be $990. Other mortgage options, while possibly helping you build equity faster, could add more than $450 to your monthly payment on that home.

I don’t have enough money for a 20% down payment. Am I stuck renting forever?

Let’s face it — not all of us have a 20% down payment socked away in the bank. But there are mortgage options that require less cash upfront and can help you become a homeowner.

A 10% down payment loan with private mortgage insurance or a Federal Housing Administration (FHA) loan require less money from the buyer upfront. But it does mean you’ll have a higher loan balance and will be forking over more money each month. It also means you’ll have less equity in the home when you’re ready to sell because you’ve also been paying mortgage insurance premiums.

However, if you can handle the higher monthly payment, but just don’t have the money saved for a large down payment, these options could be right for you.

I’ve got two toddlers and want to pay off my mortgage before they head to college. How can I do that?

A 15-year fixed-rate loan could help you reach that goal. With this type of mortgage you’re paying off your loan principal faster and gaining equity in your home more quickly. On the flip side, you’ll have a much higher monthly payment.

It’s a great way to gain equity. That is, if your budget can handle it. The trade-off is you’ll have less cash on hand for other expenses as they come up. (And with small children, unexpected expenditures are almost a guarantee.)

I’m downsizing to a smaller, less expensive home. Do I still need a mortgage?

Good for you! One of the smartest things you can do is commit to a home that meets (and doesn’t exceed) your needs. You can avoid monthly payments and interest altogether by paying for your home outright. Bonus: you’re building equity as your home’s value increases over time.

I’m not sure how long I’ll live in my current city. Does it still make sense to buy?

How long you stay in a home is an important consideration when deciding to purchase a home and take out a mortgage. As we’ve outlined before, it might be five years before you recoup the initial costs of purchasing a home.

If you’re certain you won’t be staying put much longer than five years, options that get you the most equity in your home — such as a 15-year or 30-year mortgage — are good ways to go.

What else should I be thinking about when considering buying a home and taking out a mortgage?

Most real estate professionals recommend shopping around, obtaining information from several lenders to ensure you’re getting the best price. You can also work with a mortgage broker to find a lender. Securing a loan can take anywhere from a few weeks to a few months, so it pays to do your homework.

Most Fed Districts Report ‘Modest’ to ‘Moderate’ Economic Growth

Author: Brian Honea October 15, 2014 Share on facebookShare on twitteron emailShare on pinterest_shareMore Sharing Services5

Modest to moderate economic growth was reported in 11 of the 12 Federal Reserve Districts in theOctober 2014 Current Economic Conditions Beige Book released on Wednesday.

Districts that reported moderate growth were Cleveland, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco, while Districts that reported modest growth were New York, Philadelphia, Richmond, Atlanta, and Kansas City. The only Fed District that did not report modest or moderate growth was Boston, which painted a "mixed picture" of economic conditions. The overall economic growth reported in this month's Beige Book was similar to what was reported last month.

Several Fed Districts reported that contacts were generally optimistic about future economic growth. Meanwhile, consumer spending growth ranged from slight to moderate in the 12 districts at a pace similar to the consumer spending growth reported in last month's Beige Book. While merchandise retailers in New York reported weaker sales since last month's Beige Book, this month's report indicated that most retailers were relatively optimistic about sales for the rest of the year.

Residential construction and real estate activity was mixed since last month's Beige Book. Single-family construction was sluggish in some areas of the New York District, but multi-family construction was up. Philadelphia experienced only slight home construction growth. Single-family construction starts reached their highest level of the year in Cleveland in August, though the year-to-date numbers are slightly behind last year's pace. Both single- and multi-family construction expanded in Chicago even though that district reported lower home sales and slower growth in prices. In Atlanta, which reported multi-family construction growth in much of the District, existing home sales and prices were ahead of last year's levels. San Francisco reported stable sales of single-family homes since the last Beige Book was issued in September.

Banking conditions have shown continued improvement since the last Beige Book, according to Fed. Consumer loan demand was mixed, however, with Districts citing a reduced demand for refinancing as the reason for the mixed demand in consumer loans. Credit quality remained relatively unchanged since last month's Beige Book.

Overall, employment growth was about the same as it was in last month's Beige Book, although most districts reported that employers were having trouble finding workers who were qualified for certain positions. Most Districts reported wage growth as modest, with upward wage pressures reported for some industries and/or occupations.

6 Things Preventing Your Home Sale

Nothing’s more frustrating for a seller than having your home sit on the market. And sit… and sit… and sit some more.

Maybe buyers are touring your house, but not making offers. Or maybe buyers aren’t visiting your home at all. Either way, you’re starting to feel rejected, like the last kid to be picked in dodge ball.

Have no fear. Often, the reason a home sits on the market for longer than expected boils down to a few easy-to-fix issues. Here are six of the big ones.

1. You’ve priced it too high.

No matter what you feel your home should be worth, the truth is it’s only worth what people are willing to pay for it. Get a feel for what the comps — or comparable homes in your area — are going for and listen to buyer feedback. If people are consistently telling you the price is an issue, it’s time to pay attention.

Trust your real estate agent to inform you about a fair price for the current market, and if you’re truly dead-set on getting your ideal asking price, take an honest look at whether you need to make upgrades to your home or wait for a market uptick.

2. No one knows it’s for sale.

Simply sticking a “for sale” sign in the lawn won’t cut it. Today’s buyers do the majority of their home searching online, which means you need to get your home listed on major real estate sites (like Trulia) and on the MLS, or the multiple listing service, used by realtors and brokers. You’ll also want to make sure your online listing includes plenty of high-quality, well-staged photos.

3. It’s got glaring issues.

It could be a big issue (like a failing roof or wonky foundation), or it could be a small but obnoxious issue that buyers just can’t get past (like your beloved wall-to-wall pink carpeting). Either way, the fact that your home isn’t selling means buyers are consistently finding something wrong with it. Ask potential buyers for feedback after you conduct showings; their answers may help clue you in to the problem.

Some buyers are willing to accept a a lower price or a closing credit for a home with a sticking-point issue, but others are turned off from the start and figure it’s not worth the hassle of fixing it themselves or trying to negotiate a concession.

4. It doesn’t show well.

Make sure that when prospective buyers tour your home, there’s nothing stopping them from falling in love with it.

Open those blinds and curtains to let the natural light in and put lamps in areas that are especially dim. Remove any bulky furniture that makes the rooms hard to navigate. Take care of those small items you’ve been putting off, like fixing sticky drawer pulls or that leaky faucet. Small updates like these could be turning off buyers.

5. Buyers can’t picture themselves living there.

The more you enable buyers to picture their own life in your house, the more likely they’ll be to make an offer.

Clean and remove clutter and get rid of overly personal items like those family photos along the stairway and your kids’ artwork on the fridge. If your home is currently empty, near-empty, or your furnishings aren’t to most buyers’ tastes, you may want to consider hiring someone to professionally stage your rooms.

6. You’ve neglected the curb appeal.

More than one buyer has pulled up to a house whose listing they liked, taken one look at the exterior, and driven away. It doesn’t matter how gorgeous your home is on the inside; if buyers aren’t willing to step in the door, then you’ve lost them.

A few simple fixes can make your curb appeal irresistible. Weed and mulch the flowerbeds, trim the hedges, clear the walkways, and repaint any flaking siding. Consider adding some “homey” touches like a wreath on the door or a bench on the porch. You don’t need to spend a ton on landscaping; just making the outside look presentable and welcoming can make all the difference.

Paula Pant

Paula Pant is an award-winning jour­nal­ist spe­cial­iz­ing in per­sonal finance, investing, real estate and entre­pre­neur­ship. She's a former Deputy News Editor of the Colorado Daily (EW Scripps).