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The Housing Market Right Now

The latest home-buying season is now in full swing! If you’re hoping to buy a house soon, listen up: The housing market changes on a dime, so if you want to succeed in today’s environment, you’ll want to take its temperature and act accordingly.

And buyers are in luck: By and large, this year’s home-buying season is a far better bet for buyers than in the past. So if you’re craving some intel on what to expect—and how to use this to your advantage—here’s the info you need to confidently buy a house right now.

The strong seller’s market is on the wane

In the recent past, you weren’t altogether wrong if it seemed like buyers were offering their firstborn child in order for their offer to get a fair look—and often for houses that you would have snubbed in less-sizzling markets. But now it’s OK to breathe—and even sleep on it.

As inventory begins to rise, the strong seller’s market that characterized last season’s home-buying season is fading fast. In fact, many say we’re back into what can be considered more of a buyer’s market, where the seller doesn’t hold all the cards,  that means you’re going to have some wiggle room to negotiate.

“While you still want to prepare a competitive offer, your time window is likely to expand—meaning you can think it over before rushing in with an offer.” “And you aren’t going to have to include some of the riskier elements, such as waiving financing or inspection contingencies, that were a hallmark of past years.”

But what you face still varies by the Big L

You’ve heard the adage “location, location, location,” but it will definitely be a huge factor in 2019’s home-buying season. Because while bidding wars are out in most markets, real estate is still very neighborhood-driven.

“While you might see a softening market in some areas, others may still be in a strong seller’s market”.

He says the key metric to look for is “days on market,” which means how long a property has been waiting to sell. If you’re hoping to buy in an area where days on market are staying low, you’ll have to be prepared to act a little faster. But in areas where this number has started creeping up, you might be able to look around a little more.

For an accurate pricing picture, look only at the latest comps

Both buyers and sellers rely on comparables, aka comps, when determining a fair price. But that can get tricky as the market starts to turn because sellers might be remembering a months-ago heyday and pricing accordingly.

Get A Free Comparative Market Analysis for your Area Home, Call (929) 778-3400 .

“Buyers should only consider the most recent comps, which means the last three months, because that is the most accurate reflection of where the market is.

But don’t forget that it’s still very easy to insult a seller

Yes, the house might have been on the market a few more days than it would have been last year and the comps might be sliding, but that doesn’t mean you can expect that anything goes when you’re buying a home in 2019.

“I am seeing far more buyers starting to make very aggressive lowball offers in an attempt to test sellers’ appetites, even if they’re totally serious about a given property,” says

You may be able to get a better interest rate than you think

Bottom line: Now is the time to lock in a great rate, since today’s appealing numbers might not last long.

Interest rates are predicted to rise in 2019 and 2020, so buyers would be wise to shop for and lock in their interest rate as soon as possible.

Increasing rates can make a huge difference, she points out, noting that the difference between a 5% interest rate and 5.5% interest rate is $93 a month on a $300,000 mortgage loan, which can easily derail a buyer’s budget.

So even if you are trying to improve your credit or save a few more bucks for the down payment, you might be better off just wading in and locking in the rate.

“You might work for three months to burnish your credit, and then find that the rate has risen so much that it doesn’t make a difference.”

Your credit score might be better than you thought

Two recent developments in credit scoring may help would-be buyers: One is the new UltraFICO, which takes into account how you manage your checking, savings, and money market accounts, in addition to your credit cards and consumer loans. And the second is Experian Boost, which adds your utility and cellphone bills into the mix.

But even if you have a stellar record in all those areas, there’s no guarantee these will be your golden ticket, cautions Lerner. That’s because it’s still early days for these initiatives: UltraFICO is currently available only in a pilot phase in certain areas, and Experian has yet to launch the booster product, although it is taking sign-ups. But as these products become more widely available throughout the year, home buyers may reap the benefits.

“A difference in 10 or 20 points to your credit score can make a difference between approval or denial—and can lower your rate, which can save thousands over the life of a mortgage,” Lerner points out. He also predicts that requirements will loosen a bit in 2019: “You might not think your credit is good enough for a mortgage, but it’s worth talking to a lender to see if there is a program out there that can help.”

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Luxury Home Buyer Guide

Tips for finding and purchasing high-end real estate. Generally, luxury homes start at approximately $1 million. There are currently over 1,00 listings for residential real estate in the Prescott area! If you are a luxury home buyer, read about the steps to search, compare, finance and purchase a luxury property.

Step 1: Learn the Search Process

Seek specific amenities and features in a luxury property. The best skyline view, direct water access for the 40-foot yacht or a secluded manor in the woods are all wishes the right property and location can fulfill.

“Buyers in the multimillion range usually have a lot more specifics they want and need and they’re less restricted on price,” says Steve Irwin, Designated Broker of Arizona Prime Real Estate.

While the majority of home buyers start their search on the Internet, many high-end properties aren’t officially listed on MLS or major search engines, so be prepared to expand your search.

Consider these search tips:

  • Tap into the network of a recommended Realtor or broker with a specialty in the local, high-end market. Find an agent with the credentials and experience in the local market that can advise on schools, nuances to neighborhoods as well as the property specifics. (Arizona Prime Real Estate has the luxury home buyers and sellers agents)
  • While firms like Christie’s, Sotheby’s and most high-end divisions of the nation’s top realty firms show exclusively listed properties, most agents will be able to show you a property. “If you have a good broker, they’ll have access to most properties. We all share. Get someone you like and trust as a professional that can steer you through the process.”
  • Zero in on your top picks by seeing properties in person because many sellers, protective of their privacy, refrain from putting extensive photos of their homes on the Internet.

Step 2: Evaluate Your Finds

Evaluating a luxury home is more complicated than a typical home. According to Realtors, elements such as the home’s distinctive features and recent remodeling bear a larger weight than lower-end homes.

Consider these tips as you work with your agent:

  • Schedule detailed property tours. Expect to take a couple of hours to see a larger home to review things like construction methods, architectural highlights, the neighborhood and how the security works, Veissi says. “It’s a much more detailed process and the Realtor is much more involved in the nuances of the property.”
  • Address required disclosures. “Each city and county may have its own special requirements for disclosures. While it’s easy to be an agent today, it’s very important they know the local market.”
  • Examine comparable properties. Obtain pricing information on comparable properties. Financing and making an appropriate offer on the home can hinge on having good data on comparables. See Step 4 for more information on comparables.

Step 3: Consider the Financing

Today’s tight lending restrictions haven’t affected the high-end market as greatly as the general market because most luxury buyers aren’t connected to the subprime market.

Large banks such as Wells Fargo, Bank of America and JPMorgan Chase are among large national banks that issue jumbo mortgages and so do regional lenders like Northern Trust. Lenders today require at least 15 to 20 percent down. In many cases, buyers are putting down far more on high-end homes. Realtors say 35 to 50 percent down is common today in the upscale market.

Consider this advice from the pros:

  • Be prepared with bank statements, W-2s, tax returns from the last couple of years and other financial statements. “Sellers of luxury homes will typically ask their Realtor to bring them only qualified buyers.” “This can be different than the typical mortgage prequalification process and could require showing asset statements and demonstrate which assets will go toward the purchase.”
  • Have your mortgage broker, loan officer or personal banker obtain your financing approval early on. The difference between a prequalify letter and a pre-approval letter, the latter which requires extensive documentation and verification. “With a pre-qualify letter, it just provides general information, whereas a pre-approval letter will say the amount you are already pre-approved for and includes much more rigorous financial information.”
  • Expect a longer financial approval process. Realtors say even if your financials are in good order, count on 45 to 60 days. The loan rate lock usually lasts 60 days too without it costing more.

Step 4: Make an Offer

Making the appropriate offer isn’t as easy as it looks. In some cases, sellers aren’t highly motivated to sell and have the financial wherewithal to hold on to a property to get the right price. Many hang on over time. Buyer prestige is also a plus: Proving the worth and value of the buyer can put a sale over the edge.

Avoid over-reliance on consumer-based property evaluation sites. Instead, have your agent research similar properties in the form of comparable prices for active, pending and sold properties in the last three months from MLS listings. “The comparable pricing data need to be drawn from industry MLS listings for the most accurate picture.” Use these figures as starting points in determining an offer figure.

Step 5: Don’t Forget the Details

The complexity and scale of luxury homes raise the stakes. Experts such as tax and financial planners, bankers and attorneys should be consulted up front and often these professionals will take a direct involvement in the transaction.

A few reminders:

  • Never skip the inspection process. From the potentially hazardous to the structural, you always want to know what it is you are buying. Make sure inspections and repairs are made in a timely manner.
  • While not required in every state or buying circumstance, a good local real estate attorney can save you a lot of headaches. In Manhattan, for example, real estate brokers can’t write purchase agreements so buyer and seller are required to have attorneys.
  • Be prepared for closing costs. Who pays for what varies by the customs of the given market. “It’s the Realtor’s job to tell the buyer what they need to cover, expenses at closing like transfer tax, attorney’s fees, title insurance, etc.,”
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Video tour

The Consumer Financial Protection Bureau announced on Wednesday a proposal to delay the effective date of the TILA-RESPA Integrated Disclosure rule until Oct. 1.

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Real Estate Roundup!

May new home sales gain 2.2% from April

Sales of new single-family houses in May 2015 were at a seasonally adjusted annual rate of 546,000, which is up 2.2% from April, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. — From Housing Wire

3 ways to tame student loan debt and afford a mortgage

It’s no secret that student loans can make buying a home a challenge. But what exactly is the problem, and how can buyers overcome it? The problem is that student loans can be included in the buyer’s debt-to-income ratio, or DTI. — From Bankrate

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We’re ready for the TRID rules!

At 5 p.m. EST June 17, the Consumer Financial Protection Bureau issued a statement that the effective date for the TILA-RESPA Integrated Disclosure (TRID) rules would be pushed back to Oct. 1, 2015.

CFPB Director Richard Cordray said in a prepared statement: “The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until Oct. 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”

Rainier Title has been working towards the TRID implementation for over a year and felt prepared for August 1st. However, with the proposed delay we will be taking this opportunity to continue our education and training of TRID. While we believe that we have been proactive and ready for this change, there are still so many unknowns that will have to be addressed at the time of implementation. The industry should still prepare for 45-60 days for transaction to close due to the new timing parameters of the forms.

We’re working hard to be ready for all changes!

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Real Estate Roundup

Active Home-Building Industry Will Lead to More Demand for Warehouse Space

Strong consumer spending and the rise in housing construction activity are currently the prime factors for the incredible rebound of the U.S. industrial real estate sector, and experts say as home buying continues to increase, so will demand for warehouse space. — From NRE Online

To Buy or Not to Buy: That Is the Developer’s Question

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