Real Estate Weekly: November 11, 2022

Now could be the time to sell a new home and earn a slice of the real estate pie.

Record-low interest rates is renewing interest in the housing market for many people.

“When sellers are interviewing real estate agents to market their homes, their primary focus is usually on the advertising that the agent will offer them,” says Jessica Goodbody of Weichert Realtors.

Let us help you meet your marketing goals by advertising your listings in Real Estate Weekly.

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What to know before purchasing a home with a non-married partner

By Erik J. Martin CTW Features

Matrimony certainly isn’t the be-all, end-all concept it used to be. Based on U.S. Census Bureau data, consider that, in 1970, 28% of Americans 18 and older were unmarried versus over 48% today.

Furthermore, ponder that the number of cohabitating unmarried adults rose 29% from 2007 to 2016.

Put another way, if you’re

in the market to purchase a home, there’s a pretty good chance you may end up claiming one with a partner you’re not legally wedded to. And that can have its pros and cons.

“In recent years, there’s been a major shift in the way that people view mar riage and relationships,” says Boyd Rudy, associate broker with Dwellings Michigan in Plymouth, Michigan. “While getting married used to be seen as

an essential part of adult hood, many people now view it as unnecessary or unattainable. As a result, more people are choosing to purchase homes with their non-married part ners.”

Boyd cites a recent study that reveals 34% of mil lennial buyers indicate they would be willing to buy a residence with a partner they’re not mar ried to compared to only 18% of baby boomers.

There are no restrictions on purchasing a home with an unmarried part ner. But it can be more challenging to get mort gage loan financing under this arrangement.

“One advantage is that you’ll be able to pool your resources and qualify for a larger loan than you would as single buy ers. On the other hand, you may have difficulty securing financing if one partner has a poor credit

history,” cautions Rudy. Additionally, ponder that mortgages are long-term loans, “and if you haven’t committed to your partner long-term, it could put you in a financial posi tion that is difficult to get out of and may cause even more tension during a breakup,” adds Jordan Heatherly, a Nashvillebased home loan specialist with Churchill Mortgage. Ideally, both parties will be jointly responsible for repaying the debt on the mortgage loan. But if only one partner is listed on the loan, the other may not be legally liable to pay back the debt. And if one party is listed on the deed, he or she may shortchange the other by choosing to sell and pocketing all profits. For these and other reasons, it’s best to put all expectations and responsibilities in writing and have an attorney make it legally binding – even if one party will not be listed on the mortgage and/or deed.

“A legally binding con tract would be the gold standard here in terms of legal and financial se curity, especially if both party’s names won’t be on the mortgage and the deed. This would ensure that both parties remain responsible for paying off the mortgage and both are entitled to proceeds in the event of the sale of the home,” explains Martin Orefice, founder of Rent to Own Labs. “If a couple wants to choose a different arrangement – such as if only one partner is finan cially responsible for the home – they can stipulate who owes and keeps what within a contract they

both sign.”

Heatherly agrees. “There are no protections for non-married persons if the relationship doesn’t last. So, you will need to agree on how to split the equity in the house and who will live in the house after the split. If the split is not amicable, this could be a long and drawn-out process, costing you time and money,” says Heath erly.

Rudy recommends several best practices.

“Consider your finan cial situations carefully. Can you both afford the monthly mortgage pay ments? What will happen if one of you wants to sell the property down the line?” he asks. “You may want to enter into a prenuptial agreement, too, which can help protect both parties financially in the event of separation or divorce.”

Additionally, bear in mind that some states have community property statutes. Let’s say you are single, purchase a home by yourself, but later get married (with your spouse not listed on the mortgage loan and/or deed). In this scenario, “your spouse will have interest ownership in the property if you live in Arizona, California, Idaho, Louisiana, Ne vada, New Mexico, Texas, Washington, and Wiscon sin,” Heatherly continues.

Lastly, note that purchasing and cohabitating a residence with an unmar ried partner means you may pay more in taxes, consult with an experi enced tax professional to learn more.

Buying without mortgage insurance costs

Question:

We would like to purchase with enough down to avoid mortgage insurance. We know that can happen with 20% down, but that’s a lot more than the 10% we can actually pay as first-time purchasers. How can we buy without mortgage insurance costs?

Answer:

Ten percent down is a hefty amount. In 2021, according to the National Association of Realtors, first-time purchasers typically bought with 7% upfront plus closing costs.

Mortgage insurance premiums can also be hefty. Finance $350,000 at 6.5% with an FHA mortgage and 3.5% down and the monthly cost for principal and interest will be about $2,160.

The FHA program is really a form of insurance and there are premiums involved.

First, in this example, there will be an upfront mortgage premium of almost $6,000. This cost is usually added to the loan amount.

Second, there will be an annual mortgage

insurance premium of about $250. That’s $3,000 in cash each year.

Borrowers need to buy with 20% down to avoid mortgage insurance. That can be done with a big down payment, but that’s financially impractical for most borrowers. The more logical alternative in many cases is 80/10/10 financing – a so-called “piggyback” loan.

A piggyback lender puts up 80% of the purchase price in the form of a first mortgage with such financing. The borrower contributes 10% and then gets a second – or “junior” loan equal to another 10% of the purchase price.

Where does the borrower get the second loan? One likely source is the lender originating the first mortgage.

“In this scenario,” explains the Consumer Financial Protection Bureau (CFPB), “the borrower is still borrowing 90 percent of the value of the home, but the main mortgage is only 80 percent. The ‘piggyback’ second mortgage typically carries a higher interest rate, which is also often adjustable.”

According to Matt Hatch, a Kansas City

ASK OUR BROKER

By Peter G. Miller

mortgage loan officer and team leader with Old National Bank, rates for junior mortgages depend on such factors as property type (single-family, condo, etc.), occupancy (owneroccupied or investor-owned), credit score, and location (state).

From the lender’s perspective, it has no need to ask for mortgage insurance coverage with piggyback financing. If something goes wrong and the property is foreclosed, the first lien must be paid in full before money from the sale can be used to pay other mortgage debt. It is very unlikely that with appreciation, monthly mortgage payments, down payment equity, and a junior loan that the holder of the first mortgage has much risk.

Another benefit for the lender is the first mortgage can be readily re-sold in the secondary market, the electronic arena where such financing is bought and sold.

For specifics in your market, speak with mortgage lenders before house hunting.  Email your real estate questions to Mr. Miller at peter@ctwfeatures.com.

Slower sales spur staging

By Marilyn Kennedy Melia CTW Features

A home sale slowdown is good for business for one type of real estate professional: Home stagers.

“We have not used professional staging in the past two years because of the hot real estate market for sellers,” says John Myers, of real estate brokerage Myers & Myers. Although in his Albu querque, NM market, homes are “still selling so fast and in any condition,” Myers says he expects to start recommending professional staging soon.

Widen appeal

Professional stagers remove and replace an owner’s furniture and décor. The aim is to en hance the use of space, as well as to “incorporate the right furniture and decorations to impress a broader audience,” explains Jeff Tricoli, owner of Tricoli Team Keller Williams, Palm Beach County, FL.

With many buyers on the sidelines due to ris ing rates, agents are increasingly recommending professional staging to capture interest from a smaller buyer pool.

Worth it?

While no studies document whether profes sional staging shortens market time or boosts sale prices, a 2021 survey by the National Association of REALTORS found that 82 percent of buyers’ agents said staging makes it easier “for a buyer to visualize the property as a future home.”

The cost of professional staging can vary con siderably, depending on the size and price tier of a home, and if the homeowner rents an alternate home during the time it’s on the market. Tricoli estimates a range from $650 to $6,000 or more, depending on the length of furniture rental.

In some cases, an agent pays for some or all of staging, says Tricoli. Often, though, sellers pay.

Although Barry Jenkins, agent with Better Homes and Gardens Real Estate, Virginia Beach, VA, observes, that the need for staging “is grow ing dramatically,” he still sees value in simple cleaning and de-cluttering.

“When presented in a clean and tidy way,” says Jenkins, owners own furniture décor can “add a homey feel to the house that attracts buyers,” he says.

CLASSIFIEDS RE-Weekly

REAL ESTATE FOR SALE

Open Houses

NE W TODA Y

NE W TODA Y

600 N Reed St #3

Sedro-Woolley

PRICE IMPROVED $174,500

OPEN HOUSE

Sat., Nov. 12th 12-2pm

Great location all age park! New roof, exterior paint & decks! Open concept living area with Hunter Douglas electric blinds. Nice open kitchen with eat-in bar area & large walk-in pantry. Private Master bedroom at opposite end of home with walk-in his & her closets & En Suite with larger soaker tub & sep arate shower. Main bath also has oversized soaker tub. Heat pump with A/C. Carpets have just been professionally cleaned. Yard is already fenced on 2 sides. Great location close to schools, restau rants & shopping, only 10 minutes to I-5. No rentals in this park.

MLS # 2005737

600 N Reed Street #28, Sedro-Woolley $189,500

OPEN HOUSE

SAT, Nov. 12th, 12-2pm

1783 sq ft home situated on large lot! 3 beds, 2 full baths, 5 piece primary En suite, with large soaker tub.

Vaulted ceilings, double sided wood burning fireplace, walk-in closets, large, updated kitchen with plenty of storage, Corian countertops, pantry & island. Wood wainscoting in family room. New front door, primary toilet, blinds, exterior paint & vinyl in kitchen & laundry room.

MLS # 2006288

Geri Cole, Realtor 360-391-1614

Windermere Real Estate/ Skagit Valley Windermereskagit.com

Geri Cole, Realtor 360-391-1614

Windermere Real Estate/ Skagit Valley Windermereskagit.com

1226 Alpine View DriVe, eAglemont $820,000

5 aCreS

Classic 1965, 4 bedroom/3.5 bath home one block east of Skagit Valley Hospital

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MLS#1981154

24443 wicker rD sp#49, seDro-woolley $75,000 Great oppor tunit y to buy an affordable three bedroom, 1 3/4 bath home in a 55+ park with reasonable space rent. Space rent includes water, septic (maintained by the Park), and garbage. Ramps at both front and rear entrances for ease of access. MLS#2015218 Carla Fischer (360) 982-0010

ne W P rice

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co MM er cial

This coz y 2 bedroom Burlington home needs some work but has lots of personality : beautiful pergola to welcome you home; ample cabinets and counter space in the step down kitchen, bath has a farmhouse style sink and plenty of room for a stacking washer/ dr yer; off-street parking and awesome trees and shrubs. Covered concrete patio. Private yet in town and close to Maiben Park MLS#2001713

708-8294

MLS#1995422 2121 M arke t Stree t, Mount Vernon $279,000 Danya Wolf (360) 708-8294

Wolf (360) 708-8294