AUGUST 2016
DID YOU KNOW MILLENNIALS MAKE UP THE LARGEST SHARE OF
HOMEBUYERS? PERCENTAGE OF HOME BUYERS
According to the latest National Association of REALTORS® Home Buyer and Seller Generational Trends report for 2016, Generation Y, AKA Millennials (buyers 18 to 35), make up the largest share of homebuyers at 35% of all buyers. In fact, Millennials have made up the largest share of buyers according to the report for the past three years, consistently growing over the past four. Despite setbacks from the market crash of 2008 and recession, Millennials are becoming more traditional in their buying habits.
PERCENTAGE OF HOME BUYERS LOCATION OF HOME PURCHASED
This year’s report saw an increased share who purchased in suburban locations and who purchased detached single-family homes. Fortyfive percent of Gen Y buyers now have children under the age of 18 in their home, 64% are married couples, and 12% are unmarried couples (the largest share of all generations). Millennials, along with every other generational group, prefer the suburbs. It’s easy to understand why Millennials love the suburbs when we
ANDRE & ANGELA ONG
THE A TEAM | REALTORS® your real estate advocates CalBRE# 01956341
951-447-6356
angelaong@firstteam.com
take a look at the factors influencing neighborhood choice. The top three factors influencing choice of neighborhood for Millennials includes the quality of neighborhood (63%), convenient for job (60%) and overall affordability of homes (50%).
SO WHAT? If you plan to sell your home in the near future, it’s important to get in the mindset of your audience – the homebuyer. Millennials make up most buyers and that’s one explanation for why 92% of buyers start the search for their next home online. That means your online home marketing strategy and digital presentation needs to be tighter than ever. For more tips and strategies on how to reach a wider range of buyers, chat with a First Team agent about a marketing plan. We stand by our New Rules of Real Estate that allow us to ensure your success, regardless of market conditions.
HOW TO GET
FAIR MARKET VALUE FOR YOUR HOME
USE A REALTOR®
The economy is constantly in flux and changing but when you stick to the New Rules of Real Estate, the results of your home sale will always be the same. With 40 years of business under our belt here at First Team, we know what works when it comes to getting the right price for your home. If you’re considering putting your home on the market, here are some helpful tips.
START SELLING EARLY
A lot goes into selling a house. It will surprise you how long it will take to get the house ready for showing, find the right realtor, negotiate, close the deal, and move. The earlier you start, the less pressure you will feel. This will prevent you from signing a deal lower than you want, and it will prevent you from rushing important financial paperwork.
Many people think that they can sell their home on their own. Unless you have extensive experience in real estate sales, this is a large deal that is best left to the professionals. Furthermore, if the house is a for-sale-by-owner (FSBO) property, you can expect an automatic reduction in the sales price of about 6%- the typical commission cost of a realtor. Another important reason that you will want a realtor is their knowledge of real estate law and the liabilities you take on as a seller. Save yourself the hassle and legal troubles and talk about your responsibilities as a seller with a First Team agent.
GET YOUR HOME INSPECTED
you to accurately include the cost of repairs into the budget for the entire sale.
BE WILLING TO NEGOTIATE
Negotiation is the key to any business, and it’s no different in real estate. Some people may give you an offer that insults you. Don’t necessarily stop negotiating with that person. Respond with your counter-offer and go from there. The more open you are to negotiations, the better your offers will become.
REMOVE YOUR BELONGINGS
Removing your belongings is one of the first steps toward staging your home so you can get top dollar. Seriously, did you know staging your home can increase the value of your home by as much as 15%?
Getting your home inspected will allow you to understand exactly what will need to be done to get your home ready to sell for the new owners. A simple inspection that will only cost a couple hundred of dollars can make you aware of expensive repairs. This inspection will allow
Give buyers a blank slate to view when the time comes to view your home. This means you want to get rid of pictures and other personal items and leave it to the basic furniture. Removing your personal items allows the possible sellers to put their personal items in the home.
Perhaps one of the most complicated and complex aspects of homeownership is a real estate lien. If you are a property owner, then you need to be aware of the various kinds of real estate liens that could become a problem for the title of your property during your home sale.
construction liens or tax liens. Tax liens are often imposed by the government upon property taxes that are due as well as owing to a particular parcel. Not only can these have a serious negative impact on your credit report, but they will also hinder your ability to sell a property until you pay them off completely.
BEGINNER’S GUIDE TO
R E A L E S TAT E
LIENS
&M O R E
WHAT IS A LIEN?
It is essentially a claim against any property made by someone with the intention of securing debt payments. A lien makes the property itself collateral against services owed to another entity. Selling your home is a lengthy process, and before you give over title to a new owner, you will need to take care of - or simply be aware of - any outstanding liens. Collateral will always be an asset that is pledged by the recipient of a given loan as a security. If the recipient of the loan cannot pay it back, the lender will take the collateral as a source of payment for the debt itself.
TYPES OF REAL ESTATE LIENS: VOLUNTARY & INVOLUNTARY
There are two main types of liens you will see in the real estate industry: voluntary and involuntary. Voluntary liens are made as a contract between the debtor and creditor. The most common kind we see is the mortgage; essentially a bank loan given to secure the property. Banks will give sums of money to homebuyers in exchange for paying it back with interest over a specified period of time. Banks of course will retain the ultimate legal ownership until the buyer pays off the debt. Voluntary liens work much like mortgages, easily quantified and found and are most likely to be agreed upon. Involuntary liens on the other hand tend to be a problem, specifically because the homeowners did not create them. A lot of them are either
Construction liens are often the result of unpaid renovations on your property. Here’s an example. Imagine a contractor was hired to work on the landscape of your yard. You give a sum of money and hiring additional subcontractors completes the job. But what happens when your general contractor fails to pay the suppliers and subcontractors? In most cases, these will not be in the contact with you as the owner, meaning they will not be able to sue for breach of contract in such cases. They can however file a lien on your property in a local county office. This could also cause a dispute between you and the general contractor over who
UNPERFECTED & PERFECTED LIENS Liens may be perfected or unperfected. Perfected are those that have been recorded with a legal authority in respect to any third party creditors. Perfection is accomplished by following the law to give any third party creditors notice of the lien in question. An unperfected lien is a lien that a lender has not filed with the correct legal authority. As a result other creditors can make claims on the property. Situations such as these where the property happens to remain in the hands of the debtor call for a different set of steps, such as a notice of the property’s security interest. that this lien is a stain on your title. Other less common cases of involuntary liens will include judgment liens, which can be imposed to secure payment for a court judgment, child support liens and so forth.
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Dear Andrew, Here are some new listings for you. 1234 Main St. has a pool, a large backyard and it’s only 6 minutes from your work. 1234 Main St. has a lot of natural light, is near the harbor and is on a corner lot. Please let me know what you think.
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Buying a home is usually the biggest investment a person will make during their lifetime. The process is quite technical, and there are many things to consider. You shouldn’t start the process without the proper knowledge. Something you should know a lot about before buying a home is your credit. If you’re a true beginner, start with the basics of FICO scores, credit reports and mortgages The health of your credit as transcribed through your credit score can certainly help or hurt your search for a home.
1. YOUR CREDIT WILL DETERMINE IF YOU GET APPROVED
Above all else, a credit score will determine whether or not you are approved for a mortgage. Unless you are independently wealthy and can buy property without a loan, the ability to obtain a mortgage will determine whether or not you will be able to own a home. If your credit score is poor enough, the lender could flat out refuse you. Alternatively, a healthy credit score can result in instant approval.
Nov 2015 Dec 2015 Jan 2016
Before you ever look for a home, take steps to get your finances and debt under control to improve your credit score. It may also be a good idea to try to get pre-approved for a mortgage to save yourself from the hassle of being denied after you have picked a home to buy.
Feb 2016 Mar 2016
2. YOUR CREDIT WILL AFFECT THE INTEREST RATE
Apr 2016 May 2016 June 2016 July 2016
MARKET ACTIVITY INDEX** 1.0
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ACTIVE vs PENDING vs SOLD** All Property Types Riverside County, CA 8/1/2015 - 7/31/2016
result in you only being able to afford much less house or being denied the loan because it would be more than about a third of your monthly income.
3. IT DETERMINES HOW MUCH HOME YOU CAN AFFORD
As just mentioned, your credit score determines the interest rate you are offered by the bank. The interest rate in turn determines how much home you can afford. With a higher interest rate, you will be forced to purchase a smaller and more modest home. With a lower interest rate, you could conceivably buy a larger and more upscale home. Even if you are approved for a mortgage with a high interest rate for a large home by the bank, it may not be a good idea to agree to the loan. If you default, you could go into foreclosure and lose your home to the bank. According to Forbes, there were 1.12 million foreclosures in the United States in 2014.
4. IT CAN DETERMINE WHETHER OR NOT YOU CAN GET A GOVERNMENT BACKED MORTGAGE
Many homebuyers take advantage of the mortgages offered by different government programs. For example, “Fannie Mae” and “Fannie Mac” mortgages can allow you to obtain a home loan with a very reasonable interest rate backed by the federal government. However, to obtain such a loan, you will need a FICO score of above 620.
The interest rate you will pay on your mortgage is certainly something you should consider when shopping for a home. The interest rate will ultimately determine how expensive it will be for you to purchase a house. If the interest rate is too high, you may not be able to afford the monthly expense.
While many people are able to raise their credit score on their own, there could also be errors and inaccuracies in the records of the credit reporting agencies that could be holding your credit score down unfairly. If that is the case, you should consider obtaining legal services from a firm like Lexington Law Reviews that specializes in helping clients challenge unfair credit scores.
With a healthy FICO score, you could possibly obtain a mortgage with an interest rate as low as four percent. However, with a worse credit score, that could balloon up to six percent. Typically, a lender will only approve a mortgage that will result in you paying 28 percent of your monthly income towards mortgage payments. Poor credit could
The most important thing to do is check out your credit score and keep a close watch on it if you are getting ready to buy. Any improvements you can make could save you thousands in the long run of your mortgage loan. Chat with a First Team agent about everything you can do to prepare for your home purchase from your credit score to negotiation tactics and more.
Buyer
ANDRE & ANGELA ONG THE A TEAM | REALTORS® your real estate advocates CalBRE# 01956341
951-447-6356
angelaong@firstteam.com *All reports are published January 2015 based on data available from 01/01/2014 – 12/31/2014 for Orange County, CA, Los Angeles County, CA, Riverside County, CA, and San Bernardino County, CA. Copyright © Trendgraphix Inc. **This representation is based on information from California Regional Multiple Listing Service/Association of REALTORS®, published July 2016, for the period 07/01/2015 through 06/30/2016 for All Properties sold in Orange County. Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS. The Broker/Agent providing the information contained herein may or may not have been the Listing and/or Selling Agent. © First Team® Real Estate. All rights reserved. This is not intended to solicit a listed property. If your property is currently listed for sale with a broker, please disregard. 25860