Home Selling • December 14, 2023

Why FSBOs Say They Regret Not Using a Real Estate Agent

by Rob Hurt

Home sellers reveal why they decided to bypass professional representation—and the mistakes they made without a trusted adviser.

Homeowners who decline to use a real estate agent to sell their property are twice as likely to say they weren’t satisfied with the selling experience, according to a new survey from Clever Real Estate(link is external) of 1,000 home sellers in 2022 and 2023. Survey respondents say they realize they likely made less money on their home sale and faced more stress by not having a professional representative.

Those who didn’t use a real estate agent said before their transaction that they think pros are overpaid for what they do and are not more knowledgeable about the homeselling process than the average seller. However, when these respondents reflected on their experience after the transaction, they admitted that they made some mistakes without the help of a pro.

More than a third of non-agent sellers, such as FSBOs or those selling to an iBuyer, said the process was more difficult than they expected. What’s more, these sellers admitted:

Buyers distrusted them because they didn’t have an agent (43%).
They struggled to understand their contract (40%).
They made legal mistakes because they didn’t use an agent (36%).

The survey also found other consequences of going it alone as a seller:

Lower sales price: Homeowners who sold without a real estate agent are three times more likely to say they lost money on their home sale. The Clever Real Estate survey found that those who sold their home with an agent tended to earn $46,603 more in average profits than those who sold without an agent in 2022 and 2023. About half of unrepresented sellers say they wish they had priced their home differently, and nearly half now believe their home would have sold for more if they would have used an agent.
Longer selling process: Home sellers without an agent are nearly twice as likely to say they didn’t accept an offer for at least three months; 53% of sellers who used an agent say they accepted an offer within a month of listing their home. Ironically, many homeowners who didn’t use an agent said the primary reason for going it alone was to sell faster.
More stress: Half of home sellers who did not use an agent admit to crying at some point in the process. Fifty-two percent of unrepresented home sellers said they felt overwhelmed by the entire sales process. On the flip side, homeowners who hired an agent were more likely to say they felt good about their sale and expressed less stress.

To be fair, home sellers who used an agent also had some gripes about their experience, albeit much fewer. But those who were unhappy with their agent experience expressed feelings like their agent was only looking to make a sale and didn’t care about their interests, their agent “annoyed” them, or they thought the agent pressured them into decisions, the survey found. That said, 77% of respondents who used an agent say they were satisfied, and 72% say they would use their agent again.

Even as the vast majority of home searches start online, most consumers still use real estate agents to buy or sell a home. Indeed, the National Association of REALTORS®’ 2023 Profile of Home Buyers and Sellers found that 89% of buyers and sellers in the last year used a real estate agent, up from the previous year.

Only 7% of homeowners sold as a FSBO over the last year—which matches the all-time low recorded in 2021, according to NAR data. FSBOs continue to not fare as well in the market as professionally represented homes: FSBOs sold at a median price of $310,000 in the last year, compared to $405,000 for listed homes, NAR’s data shows.

“Having a REALTOR® help you navigate the homebuying and selling process provides peace of mind, especially in a challenging market with high prices, elevated mortgage rates and limited inventory,” says NAR President Tracy Kasper.

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This is not original material. See note/link below.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may find it here.

Home Ownership • Home Ownership • December 4, 2023

Experts Project Home Prices Will Rise over the Next 5 Years

by Rob Hurt

Article by Keeping Current Matters.

Even with so much data showing home prices are actually rising in most of the country, there are still a lot of people who worry there will be another price crash in the immediate future. In fact, a recent survey from Fannie Mae shows that 23% of consumers think prices will fall over the next 12 months. That’s nearly one in four people who are dealing with that fear – maybe you’re one of them.

To help ease that concern, here’s what the experts say will happen with home prices not just next year, but over the next five years.

Experts Project Ongoing Appreciation

While seeing a small handful of expert opinions may not be enough to change your mind, hopefully, a larger group of experts will reassure you. Here’s that larger group.

The Home Price Expectation Survey (HPES) from Pulsenomics is a great resource to show what experts forecast for home prices over a five-year period. It includes projections from over 100 economists, investment strategists, and housing market analysts. And the results from the latest quarterly release show home prices are expected to go up every year through 2027 (see graph below):

And while the projected increase in 2024 isn’t as large as 2023, remember home price appreciation is cumulative. In other words, if these experts are correct after your home’s value rises by 3.32% this year, it should go up by another 2.17% next year.

If you’re worried home prices are going to fall, here’s the big takeaway. Even though prices vary by local area, experts project they’ll continue to rise across the country for years to come at a pace that’s more normal for the market.

What Does This Mean for You?

If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using the expert projections from the HPES. Check out the graph below:

In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

Bottom Line

If you’re someone who’s worried home prices are going to fall, rest assured a lot of experts say it’s just the opposite – nationally, home prices will continue to climb not just next year, but for years to come. If you have any questions or concerns about what’s next for home prices in your local area, connect with a real estate agent.

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This is not original material.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may click on the link at the beginning of this article.

Home Maintenance • December 4, 2023

Interior Painting Tips – Brighten and Modernize on a Budget

by Rob Hurt

Looking to update the interior of your home? Check this article from the National Association of Realtors.

The 60-30-10 Way to Add Color Without Going Overboard
(link to original article)

There’s a formula that can help guide you in bringing more color to warm up a space, while also staying cohesive.

All-white or all-gray interiors are becoming forgettable. More homeowners are adding color with pinks, greens, blues and yellows. But all that color from room to room can make a home feel disjointed and overwhelming.

So how do you add more color while still making it feel cohesive? Designers like to break it down into a formula: 60-30-10. Here’s how it works:

60% of the room should be one color. Consider this your main base color, like using a soft gray or white for your walls. Make this color dominate your space on walls and in larger accents, like an area rug. But you don’t have to use the same hue with everything. Use variations of the color, like a soft or dark gray.

30% should be a complementary color. This should support your main color, but it can still be different enough to add some contrast. Use it for draperies, chairs, accent walls or furniture.
10% should be your accent color. Embrace the latest bright hues, like Pantone’s “Viva Magenta” or Benjamin Moore’s “Raspberry Blush,” a fiery red-orange hue. You don’t have to go bold, however. Your accent color could be black or a natural material, like wood or metal. The main idea is to provide a contrast to your dominant and secondary colors. Weave in your accent color for throw pillows, ottoman, artwork or small decorative accessories.

Moving.com provided a couple of examples for how to use this formula:

Dominant color: White
Secondary color: Gray
Accent: Red

Or:

Dominant color: Gray
Secondary color: White
Accent: Pink

By following a formula, you can embrace color trends while still making a space feel cohesive. The formula helps to strike a balance with color but should be merely used as a guide.

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This is not original material. See link above.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, click the link in the title of this article.

Home Ownership • Home Ownership • Home Ownership • Home Ownership • Home Ownership • Home Ownership • October 18, 2023

$60,000 Property Tax Cut

by Rob Hurt

If you are a homeowner in Texas, hopefully you are taking advantage of your Homestead Exemption. Did you know this election cycle (Election Day November 7) you will have a chance to vote YES on Proposition 4 which will make this provisional tax bill official? By doing this, you will be decreasing your property tax liability by $60,000! How does that work?

Currently, your Homestead Exemption deducts $40,000 from the assessed value of your home. So, if you owned a home assessed at $350,000, you would only be taxed on $310,000 under the current $40,000 Homestead Exemption. If you vote to make Texas Senate Bill 2 official, the deduction amount will become $100,000 meaning on your same $350,000 home, you would only be taxed on $250,000.

Here’s an overview of the changes that would be applied to 2023 tax bills due in January.

School Tax Compression: Abut $7.1 billion would be sent to Texas school districts in order to lower the taxes they levy on property owners.
Homestead Exemption Increases: From $40,000 to $100,000 as explained above.
Texas Homeowners 65+ or with Disabilities: Both groups would be eligible for a total exemption of $110,000.
Temporary 20% Appraisal Cap: For appraisals on commercial, mineral and residential properties valued under $5 million which do not have a homestead exemption.
Franchise Tax Exemptions: The amount of money a business can make before it’s required to pay the state’s franchise tax (levied on larger entities doing business in Texas) would double.
Elected Appraisal Officials: 3 new positions will be created in each appraisal district’s board of directors for position elected by voters.

So, would you like a $60,000 property tax cut? If so, you need to vote. Early voting is October 23 to November 3. Election Day is November 7. You will need to bring ID to vote, and here are the 7 types of valid ID Texas has for voters:

Texas driver’s license
Texas personal identification card
Election identification certificate
Texas license to carry a handgun
US military ID card with photo
Us citizenship certificate with photo
US passport

Links for more information:

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Proposition 4 Ballot Language:

“The constitutional amendment to authorize the legislature to establish a temporary limit on the maximum appraised value of real property other than a residence homestead for ad valorem tax purposes; to increase the amount of the exemption from ad valorem taxation by a school district applicable to residence homesteads from $40,000 to $100,000; to adjust the amount of the limitation on school district ad valorem taxes imposed on the residence homesteads of the elderly or disabled to reflect increases in certain exemption amounts; to except certain appropriations to pay for ad valorem tax relief from the constitutional limitation on the rate of growth of appropriations; and to authorize the legislature to provide for a four-year term of office for a member of the board of directors of certain appraisal districts.”

First Time Home Buyers • October 2, 2023

Rent-To-Own New Construction Home Program

by Rob Hurt

Current Market • First Time Home Buyers • September 12, 2023

With these interest rates, is it a good time to buy my first house?

by Rob Hurt

Hey, this is Rob, Your Realtor, and today I want to address the question, “With these interest rates, is it a good time to buy my first house?” The short answer is YES and I’m about to tell you why.

Today’s interest rate (September 12) of 7.12% for a 30-year, fixed rate mortgage and this has some people holding off or at least hesitating on making that new home purchase believing, as the experts predict, interest rates will drop towards the end of the year and into next year. But if you are ready to move (especially if you are renting), is this the best option? It is the best option, and here’s why.

Historically speaking, we are still below the 50-year interest rate average (see chart above). Still, 7+% interest may feel high, especially after the pandemic market, but have you considered that, as a renter, you are paying 100% interest? Zero percent of your monthly payment is going toward premium on your home and building equity. Every month that you continue to pay rent, you are losing equity that you could be building in your home.

You may look at that and say, “OK, but if rates may drop, shouldn’t I wait?” If rates could drop, the question becomes, “How can I purchase now to begin building equity in my own home and benefit if/when rates drop?” That’s a GREAT question, and a solution that might work for you is buying down the rate. You may be familiar with rate buy-downs, but the one I am talking about specifically is the 2-1 buy down. The way this works is, you “buy” this rate reduction and pay for it up front at closing. For the first year of your loan, you get a 2% interest rate reduction on your house payments. In the second year, you get a 1% interest rate reduction. The third year, you are paying the interest rate you got with your loan BUT…if interest rates have dropped by this time, you can refinance to the lower rate, and you will have been building equity for yourself/your family because you own a home and are not paying rent on someone else’s home.

In another video I will tell you about the incredible buy-down deal another client of mine got moving into their new-construction home. AND, I’ll talk about a strategy we could use to get the seller to pay YOUR rate buy down. I’m Rob, your Realtor and my passion as an agent is helping renters become homeowners. Let’s have a conversation to see how I might be able to help YOU move into your own home. You can reach out through any of my social media platforms, or all my contact information may be found on my website rob-hurt.com. I would love to join you on your home ownership journey, let’s talk!

Home Ownership • August 24, 2023

People Want Less Expensive Homes – And Builders Are Responding

by Rob Hurt

In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory. To overcome those challenges, many people are working with their agents to find less expensive homes. And with newly built homes making up a historically large percentage of the total available inventory today, that search often includes brand new homes.

People Are Spending Less on Newly Built Homes

The graph below uses the latest information from the Census to show, in June, more of the newly built home sales in this country were in lower price ranges than in 2022:Last year, only 58% of newly built home sales were less than $500,000. This June, that number was up to 65%. This means more people are buying less expensive newly built homes right now while affordability remains a challenge.

Builders Are Offering Lower-Cost Options

Builders have picked up on this trend and are reacting accordingly. George Ratiu, Chief Economist at Keeping Current Matters, explains:

“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . .”

New data from the Census further confirms this pattern – it shows the median sales price of newly built homes has dipped down in recent months (see graph below):And as Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, says, the builders who are most responsive to this trend are forming pathways to homeownership:

“. . . it is creating opportunities for people to be able to afford an entry-level home in an area. . . . if you get that size down, that automatically will make it a more affordable home. The [builders] that are decreasing [size] the most are probably the ones that try to build more of an affordable product.”

How an Agent Can Help

Builders producing smaller, less expensive newly built homes give you more affordable options at a time when that’s really needed. If you’re hoping to buy a home soon, partner with a local real estate agent to find out what’s available in your area. An agent can help you look at newly built homes or ones under construction nearby.

Bottom Line

If you’re having a hard time finding a home you like in your budget, connect with a real estate professional. You need an agent who knows all about the latest inventory in your area, including homes still under construction or just built. That way you have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the homebuying process.

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This is not original material. See note/link below.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may find it here.

First Time Home Buyers • August 2, 2023

How To Know If You’re Ready to Buy a Home

by Rob Hurt

If you’re trying to decide if you’re ready to buy a home, there’s probably a lot on your mind. You’re thinking about your finances, today’s mortgage rates and home prices, the limited supply of homes for sale, and more. And, you’re juggling how all of those things will impact the choice you’ll make.

While housing market conditions are definitely a factor in your decision, your own life and your finances may be even more important. As an article from NerdWallet says:

“Housing market trends give important context. But whether this is a good time to buy a house also depends on your financial situation, life goals and readiness to become a homeowner.”

Instead of trying to time the market, it may help to focus on what you can control. Here are a few questions that can give you clarity on whether you’re ready to make your move.

1. Do You Have a Stable Job?

One thing to consider is how stable you feel your employment is. Buying a home is a big purchase, and you’re going to sign a home loan stating you’re going to pay that loan back. That can feel like a big obligation. Knowing you have a reliable job and income coming in can help put your mind at ease. As NerdWallet explains:

“A mortgage is a big commitment . . . Wait until your employment is stable before thinking about buying a house.”

2. Have You Figured Out What You Can Afford?

To make sure you have a good idea of what you’ll need to save and what you can expect to spend on your monthly payment, talk to a trusted lender. They’ll be able to tell you about the pre-approval process and what you can borrow, current mortgage rates and approximate monthly payments, closing costs to anticipate, what percent of the purchase price of the home you’ll need for a down payment, and more.

The best part is you may find out you’re closer to your goals than you realized. You don’t necessarily need to put 20% down, unless it’s specified by your lender or loan type. As Down Payment Resource says:

“A 20% down payment on a home is great, but . . . Many mortgages require no more than 3% to 5% of the purchase price as a down payment. Plus, there are loans and grants that may help cover these costs. Search for down payment assistance in your area, and discuss your results with your mortgage lender . . .”

3. How Long Do You Plan to Live There?

Another important thing to think about is how long you plan to stay put. It takes time to build equity in your home through paying down your loan and home price appreciation. If you plan to move too soon, you may not recoup your investment. For example, if you’re looking to sell and move again in a year, it might not make sense to buy right now. As a recent article from CNET says:

“Buying a home is a good idea if you’re planning to stay put for at least three years. Home values typically increase between 2% and 5% annually, so you could end up paying more in closing costs than you’d earn in proceeds if you sell after only a year or two.”

So, think about your future. If you plan to transfer to a new city with the upcoming promotion you’re working toward or you anticipate your loved ones will need you to move closer to take care of them, that’s something to factor in.

Above all else, the most important question to answer is: do you have a team of real estate professionals in place? If not, finding a trusted local agent and a lender is a good first step.

Bottom Line

If you’re trying to decide if you’re ready to buy a home, these questions can help. But ultimately, your best and more reliable resource is the help of trusted real estate professionals.

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This is not original material. See note/link below.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may find it here.

Current Market • First Time Home Buyers • Home Buying • July 24, 2023

Explaining Today’s Mortgage Rates

by Rob Hurt

If you’re following mortgage rates because you know they impact your borrowing costs, you may be wondering what the future holds for them. Unfortunately, there’s no easy way to answer that question because mortgage rates are notoriously hard to forecast.

But, there’s one thing that’s historically a good indicator of what’ll happen with rates, and that’s the relationship between the 30-Year Mortgage Rate and the 10-Year Treasury Yield. Here’s a graph showing those two metrics since Freddie Mac started keeping mortgage rate records in 1972:

As the graph shows, historically, the average spread between the two over the last 50 years was 1.72 percentage points (also commonly referred to as 172 basis points). If you look at the trend line you can see when the Treasury Yield trends up, mortgage rates will usually respond. And, when the Yield drops, mortgage rates tend to follow. While they typically move in sync like this, the gap between the two has remained about 1.72 percentage points for quite some time. But, what’s crucial to notice is that spread is widening far beyond the norm lately (see graph below):

If you’re asking yourself: what’s pushing the spread beyond its typical average? It’s primarily because of uncertainty in the financial markets. Factors such as inflation, other economic drivers, and the policy and decisions from the Federal Reserve (The Fed) are all influencing mortgage rates and a widening spread.

Why Does This Matter for You?

This may feel overly technical and granular, but here’s why homebuyers like you should understand the spread. It means, based on the normal historical gap between the two, there’s room for mortgage rates to improve today.

And, experts think that’s what lies ahead as long as inflation continues to cool. As Odeta Kushi, Deputy Chief Economist at First American, explains:

“It’s reasonable to assume that the spread and, therefore, mortgage rates will retreat in the second half of the year if the Fed takes its foot off the monetary tightening pedal . . . However, it’s unlikely that the spread will return to its historical average of 170 basis points, as some risks are here to stay.”

Similarly, an article from Forbes says:

“Though housing market watchers expect mortgage rates to remain elevated amid ongoing economic uncertainty and the Federal Reserve’s rate-hiking war on inflation, they believe rates peaked last fall and will decline—to some degree—later this year, barring any unforeseen surprises.”

Bottom Line

If you’re either a first-time home buyer or a current homeowner thinking of moving into a home that better fits your current needs, keep on top of what’s happening with mortgage rates and what experts think will happen in the coming months.

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This is not original material. See note/link below.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may find it here.

Current Market • Home Buying • July 17, 2023

How Changing Mortgage Rates Can Affect You

by Rob Hurt

The 30-year fixed mortgage rate has been bouncing between 6% and 7% this year. If you’ve been on the fence about whether to buy a home or not, it’s helpful to know exactly how a 1%, or even a 0.5%, mortgage rate shift affects your purchasing power.

The chart below helps show the general relationship between mortgage rates and a typical monthly mortgage payment:

Even a 0.5% change can have a big impact on your monthly payment. And since rates have been moving between 6% and 7% for a while now, you can see how it impacts your purchasing power as rates go down.

What This Means for You

You may be tempted to put your homebuying plans on hold in hopes that rates will fall. But that can be risky. No one knows for sure where rates will go from here, and trying to time them for your benefit is tough. Lisa Sturtevant, Housing Economist at Bright MLS, explains:

“It is typically a fool’s errand for a homebuyer to try to time rates in this market . . . But volatility in mortgage rates right now can have a real impact on buyers’ monthly payments.”

That’s why it’s critical to lean on your expert real estate advisors to explore your mortgage options, understand what impacts mortgage rates, and plan your homebuying budget around today’s volatility. They’ll also be able to offer advice tailored to your specific situation and goals, so you have what you need to make an informed decision.

Bottom Line

Your ability to buy a home could be impacted by changing mortgage rates. If you’re thinking about making a move, partner with a trusted real estate agent and lender so you have a strong plan in place.

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NOTES

I am a partner with Mayra Avalos from Cardinal Financial. Mayra works hard to help clients get the best rates, find downpayment assistance and find the plan that works best for each situation. Mayra and would love to help you navigate the path towards home ownership.
This is not original material. See note/link below.
When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may find it here.

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Experts Project Ongoing Appreciation

What Does This Mean for You?

Bottom Line

Looking to update the interior of your home? Check this article from the National Association of Realtors. The 60-30-10 Way to Add Color Without Going Overboard (link to original article)

People Are Spending Less on Newly Built Homes

Builders Are Offering Lower-Cost Options

How an Agent Can Help

Bottom Line

1. Do You Have a Stable Job?

2. Have You Figured Out What You Can Afford?

3. How Long Do You Plan to Live There?

Bottom Line

Why Does This Matter for You?

Bottom Line

What This Means for You

Bottom Line

Looking to update the interior of your home? Check this article from the National Association of Realtors.

The 60-30-10 Way to Add Color Without Going Overboard
(link to original article)