The decision to rent or buy a home depends on a number of factors. The speed at which home prices and rents rise and the length of time you anticipate remaining in your home or rental are key considerations. Costs are also something to strongly consider when making the decision to rent or buy. Read about the four types of costs you should take into consideration and what they mean.
Purchase costs
When buying a home, these costs are the costs you incur when closing. These include the down payment and closing costs, which can go toward the principle balance you owe on your home. When renting, these costs can be the deposit and/or broker’s fees, which you may or may not ever see again.
Yearly costs
As a homeowner, these include mortgage payments, association fees, renovations, maintenance, taxes and insurance. For a renter, these include rent and insurance. Although the yearly costs of homeownership can be substantially higher, these costs could be considered an investment, as the money you put in to your home could potentially be returned to you, or even grow, upon a sale.
Lost opportunity costs
For the homeowner, these are tracked for the yearly costs and the initial purchase costs. The latter can give the homeowner insight into how much could have been made had the down payment been invested instead of used towards the purchase of the home.
Selling costs
For the homeowner, these costs are incurred once the closing process begins. This includes fees and brokers’ commissions, as well as the remaining principal balance still owed. For the renter, these do not come into play, although there is no guarantee that all earnest deposit money will be returned.
Selling your home can be a complex process. How will you get the correct paperwork taken care of? Who will handle showings to potential buyers? A professional real estate agent can help ease your burden, and solve the majority of challenges you might face. However, when hiring an agent, it is important that you find a good match, and work with someone who will fit best with your unique situation. As a good rule of thumb, the following are four things you should feel comfortable expressing to your agent.
Negotiations
It is extremely important that your agent be equipped to handle any and all challenges that may come your way. The ability to negotiate is crucial. Let your agent know that you expect he or she to be aggressive and firm when negotiating with potential buyers or their agents.
Relocation
Your agent should be able and willing to help you with the moving process. Being without a roof over your head is not acceptable, and paying two mortgages may not be either. Ensuring that your agent can coordinate the closing of your current home with the closing of your new home simultaneously is key. Mel Foster Co. has an award-winning relocation department that can support your agent and provide you with the tools to make a smooth transition to your new city.
Timetable
Will your move into a new home revolve around the start of a new job or school year? Planning a move this structured can be mentally and emotionally draining. It is imperative your agent understands your time constraints and can work within your needed parameters. Be up front about your timing concerns and share this information with your agent before you agree to go under contract.
Sell My House!
You hired your agent to sell your home so you can focus on the changes you are undergoing, which prompted your move in the first place. It is ok to remind your agent of these motivations. Set your expectations with your agent appropriately and this could be one of the best working relationships you will ever encounter.
A number of factors come into play when considering a home purchase, especially among millennials, who represent a significant niche in today’s real estate market. The following are a number of considerations a buyer may find important when making their purchase decision. How does your home stack up and how appealing is your home to younger buyers?
The Neighborhood
Although neighborhood choice is strongly dependent on household composition, most buyers take the surrounding neighborhood into strong consideration when deciding on the purchase of a home. Younger buyers like to walk to shops and restaurants, especially in larger urban areas where parking or even owning a car may be prohibitive.
Affordability
With the current unstable job market and rising higher education costs, housing costs need to be kept low, experts suggest no more than one third of a buyers pre-tax income.
Proximity to Work
Homes that are close to places of business or work enhance work-life balance, a growing priority for many. A shortened commute can make a buying decision much easier and can make your home more attractive to buyers. Biking or walking to work is a desire of many millennials.
Schools
In a recent Realtor.com survey, it was shown that almost 45 percent of buyers are willing to spend more to ensure their children live in a quality school district.
An Open Floor Plan
More space for entertaining may mean more quality time with friends and family, which is quite important to the millennials.
Technology
Millennials value technology, in many instances, above all else. Having a home that allows for technological control can make it that much more marketable.
Energy Efficiency
In a recent study by the National Association of Homebuilders, it was found that energy efficiency topped the list of items most important to buyers interested in new home construction. Things like energy-star rated appliances, energy-star rated windows, and ceiling fans topped the list of “must-haves.”
With housing prices and mortgage rates on the decline, now may be the best time to consider purchasing your new home. It may seem like a hassle to consider a major purchase and a move, especially during this year’s exceptionally brutal winter, however there are several reasons why waiting it out might not be in your best interest.
Rising Interest Rates
According to Freddie Mac, Fannie Mae, the National Association of Realtors, and the Mortgage Bankers Association, 30-year mortgage interest rates are projected to be over 5% by February 2015. This increase brings interest rates almost an entire percentage point higher than current market rates.
Dwindling Supply
Inventory in many regions is on the decline. Buyers in markets nationwide are beginning to find that their choices are becoming ever smaller, as the once large assortment of homes continues to decrease.
An Increase in Prices
Homebuyers will find that they are going to pay both a higher price and incur a higher interest rate if they wait until spring. In the long run, higher sales prices and interest rates could mean hundreds of dollars more in a monthly mortgage payment.
Home Ownership Creates Wealth
In a recent study, it was found that the net worth of an average homeowner was 30 times greater than the net worth of a renter. Whether you rent or own, you pay a mortgage. Would you rather pay down your own mortgage or your landlord’s?
Many Americans saw their dream of owning a home shatter, once they had a foreclosure or short sale on their record. But the dream is alive again thanks to changes in Federal Housing Administration guidelines and updates in the Fannie Mae loan approval system.
Homeowners used to have to wait seven years to be cleared of a foreclosure. Now that period has been dramatically reduced to just one year. More homeowners are now eligible for a mortgage sooner, so they can return to living in a home they own.
To be eligible, a borrower must have suffered a specific financial event during the recession that, through no fault of their own, caused them to lose their home. Borrowers must also have a good credit rating with only the foreclosure or short sale affecting the score. People who were upside down on their home and simply walked away won’t qualify for a mortgage.
The best way to find out if you are eligible under these new guidelines is to make an appointment with a lender. Experts also advise buyers to be more cautious with a new mortgage, taking on payments that are comfortable and affordable. Those who have been out of the market for a few years may be surprised at how home prices have risen in some markets. Working closely with an agent from Mel Foster Co. will help you find a home with a mortgage you can afford and get you back to living your American dream.
Mel Foster Co. has been awarded the Website Quality Certification (WQC) from Leading Real Estate Companies of the World®, a global network of 500+ real estate firms which presents the certification to member companies that demonstrate best practices in website design and Internet communications.
Mel Foster Co.’s website, www.melfosterco.com , earned the certification after achieving high marks on a range of criteria, including usability and performance, design and content, interactivity, customer service and Internet lead management, search engine optimization and mobile.
Created by LeadingRE in 2009 to recognize member websites that combine high standards for design, technology and service, the criteria for the WQC are updated annually to reflect the latest in internet marketing strategies. The WQC is an optional program available only to firms affiliated with Leading Real Estate Companies of the World® and requires re-certification every two years.
“We are pleased to present the WQC to 124 members this year and commend these firms for creating websites that effectively engage today’s home buyers and sellers by providing relevant information in a compelling way, with the perspective only a local firm can offer,” said Leading Real Estate Companies of the World® President/CEO Pam O’Connor.
“We have received this certification since its inception and it just confirms that we continue to be a real estate leader in using “best practices” in website design and internet communications. Our new site was rolled out in the fall. Our website users are experiencing superior results and an excellent customer service experience on our site,” said Mel Foster Co. Lynsey Engels, President Mel Foster Co. Brokerage.
For more information about Mel Foster Co., please visit www.melfosterco.com.
Fick Family announcing their biggest year in company history
Mel Foster Co. held its annual awards reception last night at the Waterfront Convention Center in Bettendorf, Iowa. Lynsey Engels, President Real Estate Brokerage and Marc Engels, President of Mel Foster Insurance presented awards to 122 agents that were recognized for achieving membership in the company’s different sales club levels including Chairman, Executive, President and Honor. Top honors were awarded to:
Thad DenHartog – Commercial Top Sales
Diana Franks – Residential Illinois Top Sales
Geri Doyle – Residential Iowa Top Sales
Joe Ertel – Insurance Top Personal Lines
Mike Smith – Insurance Commercial Top Producer
Mike Kessel – Insurance Top Employee Benefits
Combining all three divisions of Mel Foster Co. Inc., the total sales volume increased by 9.21 percent from 2012, surpassing the total sales of 2005, when the market was at its peak, and making it the biggest year in the history of the 93 year old company. Rob Fick attributed Mel Foster Co.’s success to dedicated staff and agents, who continue to build and maintain relationships within their teams and outside of the company. Fick also attributed the increase as a reflection of a strengthening economy and higher consumer confidence in 2013. “I am very proud of what the company accomplished this year. I know Mel Foster Jr. would be equally proud to see us continuing his vision of forward progress and leadership in this community. We’re starting 2014 with great optimism and a stronger economy than in years past, and I anticipate 2014 to be another year of growth for Mel Foster Co. We were fortunate in 2013 to welcome 39 new agents and staff, and 28 individuals are currently enrolled in our pre-license classes,” commented Fick.
Mel Foster Co.’s residential real estate sales increased by nearly 8 percent from 2012. The average sale price for Mel Foster Co. residential real estate was $148,278, a 1.18 percent increase from last year.
New construction sales are predicted to be strong in 2014. Lynsey Engels said, “We are expecting the real estate market as a whole to continue moving forward, with new home construction heavily influencing home sales volume. We are positioned to meet demand for new construction in our area and are pleased to announce that we will be launching four new subdivisions in 2014 coupled with the four that were launched in 2013. We closed 85 new residential lots last year and will have another 146 lots available in 2014.”
Mel Foster Commercial relocated to the Elmore Office Park in the spring of 2013. Engels reported that agents in the commercial division closed an average of over six million dollars per agent. After having their best year last year since 2005, Mel Foster Commercial still had a one percent increase in sales from the previous year.
Mel Foster Insurance had the biggest year in the history of the company. Marc Engels commented, “We have introduced a lot of new processes throughout the division and our agents and staff have done a great job adapting to the ever-changing insurance markets. Much of our growth can be attributed to our strong carrier representation which has allowed us to secure new business relationships in the Quad City market.” Direct written premiums were up 44.8 percent since 2009 and the insurance division has been able to more than double its employee benefits department. Engels added, “To continue to build each year is a testament to our team’s ability to meet the expectations of our Quad Cities and surrounding area clients.” In 2013, the personal insurance lines department’s sales grew 8.1 percent and the commercial department was up 15.4 percent. Engels also said, “I think individuals and business owners in this market appreciate the consistency, integrity, and professional competence our team brings to the insurance experience.”
Mel Foster Co. invested in multiple technology enhancements in 2013 to help buyers and sellers search for homes more easily. The new website was launched in fall 2013 and a new app was recently rolled out. Internally, agents benefitted from IT upgrades, a more robust intranet site, paperless transactions and enhanced consumer reports with greater details for homebuyers and sellers. Lynsey Engels stated, “We want to make sure that our agents have every tool they need to successfully meet their clients’ needs. We continually invest in technology upgrades and stay current on new features that we can integrate into our systems. With over 90% of people searching for a home online, it’s crucial for our agents to have top of the line technology.”
Mel Foster Co. congratulates REALTOR®/Builder Pat Condon as recipient of a prominent award from the Quad Cities Home Builders & Remodelers Association. Mr. Condon received the Allen V. Seitz Builder of the Year Award.
Mr. Condon is a REALTOR®/Builder at Mel Foster Co.’s Bettendorf office and was recognized for his dedication and passion to the Association. Pat owns J.P. Condon Inc. and is licensed in Iowa. He is the outgoing President for the Quad Cities Home Builders & Remodelers Association Board of Directors, a member of the National Association of REALTORS®, the Iowa Association of Realtors ®, and the Quad City Area REALTOR® Association.
Summer is the season for moving and your kids probably don’t want to leave their friends at the height of their summer vacation. But settling into your new home before the school year begins will help your kids make a smoother transition.
Follow these five tips to make moving easier on your kids and you:
1. Communicate. Let kids know what is happening now and what will happen next. Stay positive and repeat often the advantages of moving.
2. Introduce your child to their new community online and show them as much as you can about their new neighborhood, school, parks and home. If your new city is close, make an event of driving there and spending time exploring as a family.
3. Keep to a normal routine as much as possible. This will help the kids feel secure and safe.
4. Keep children occupied by letting them pack a box or two of their special things. Give them input on a new paint color and décor for their new bedroom.
5. Most kids will want to take part in busy moving day activities, and you should allow them to do so. Your preparedness will go a long way in reassuring your children that their needs are being considered, even while big changes are happening around them.
Need more help making the move smooth for your family? Mel Foster Co. Relocation has children in mind with special customized kits for your children whatever their age. Request your free kit at relocation@melfosterco.com.
