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Is it cheaper to buy or rent in this market?

Is it cheaper to buy or rent in this market?

There are many reason to buy a house, but one of the best reasons to buy a home in the Raleigh (Triangle) area is the recovery we are seeing. According to the financial website, SmartAsset,  Raleigh ranks as the 6th strongest in housing recovery among 100 largest metro areas in the country…one slot better than Charlotte. But that’s not enough to encourage one to purchase a home at this time.

The prediction from several sources expect mortgage interest rates to start to rise throughout 2015. When or if this happens is anyone’s guess, but to err on the side of caution, it would be best to buy now when money is still relatively cheap. The average rates in 2012 was 3.66% and it has risen steadily in the following years. if this trend continues, expect 2015 to be higher still. This is important because the higher the interest rates, the less buying power a first time homebuyers will have…and the less home that can be purchased.

Housing values have begun to recover and with that, higher prices. Zillow reports that the medium housing values has gone up 4.2% last year and are predicting better than 3.5% increase by the end of this year. As with interest rates, the higher the housing values, the less buying power and size of home you can purchase. For many people, waiting may mean they will not be able to purchase the type of home they want or in the area that prefer.

Finally, rental rates are going up in the Triangle. The Triangle Business Journal reported that Raleigh is among the cities with the highest rental increases in 2014. The national average was a 3.6% increase, but Raleigh saw a 4.8% increase in 2014. The average lease in Raleigh was over $1,100 a month, the highest since Reis, Inc began tracking it in 1980. Raleigh was ranked at the 9th highest increase and 4th on the East Coast.

In short, now is the time to buy before it’s too late. Inventory is down in the Triangle Multiple Listing Service, which is only adding to the higher prices in the marketplace. If you have been thinking and waiting for the right time to buy, I would warn you not to wait too much longer. The market has not fully recovered from the downturn, but we are heading in that direction.

To learn more or to start your home buying process, contact me at Steven@BackNineHomes.com and let’s see what your money can buy. Don’t put off for tomorrow what you can do today!

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Home inspections can be a great use of your money, but it is not perfect!

Home inspections can be a great use of your money, but it is not perfect!

This is a question that most of my first-time homebuyers ask me and there is a simple answer…yes! A home inspection is worth every penny spent and all of the effort to have it done. A home inspection can help you find major issues with the home that may actually make you change your mind about purchasing that home. This has never happened with me with one of my buyers, but other agents I know have had this happen. With that said, a home inspection is not the panacea for all potential issues with a home. There are limits to the extent that a home inspection can find and add to it, no home inspector is perfect and they can all miss something.

A home inspection can detect many malfunctions with a home. This will allow the buyer to get quotes for repairs or to request the seller to make the needed repairs to the home. A home inspection will consist of checking everything that can be checked without causing damage to the house. For instance, a home inspector cannot punch a hole in the wall to see if there is an electrical or water issue that cannot be easily determined by a visual examination. In North Carolina, an inspector can only do a visual inspection of the roof from the ground so there is a chance they may miss something on the roof if it is out of their sight line.

A home inspection can also point out certain features of the home and the maintenance of the home. Most buyers are present for the inspection and the inspector typically shows them where the electrical panel is and water heater, etc. The inspector can answer questions a buyer has about the property while pointing out potential future issues. I have had inspectors mention to my buyers that the HVAC is working, but may not last very long so they can prepare financially for the outlay of that major expense.

Even if you are purchasing a new construction, I would still encourage you to have a home improvement. Contractors are human and can make errors when they are constructing your home. A home inspector can find these issues and make sure it is corrected before you close on the home.

A home inspector can also point out certain potential issues that may lead you to other inspections. For instance, I had a home inspector point out a foundation issue and so the buyers brought in a foundation expert to further inspect it. The result was a major foundation repair required to ensure the integrity of the structure. On another occasion, an inspector pointed out the presence of mold in the crawl space, which lead to a mold inspector and remediation being done prior to closing.

The downside of an inspection is that it will not catch everything. If a seller is trying to cover up an issue, such as a water leak with paint, the inspector may not find this issue. If a seller wants to cover up an issue, it is easy enough to do and will be difficult for anyone to find the issues. You have seen some of these home improvement shows where they find major water damage once they removed the plaster to redesign a room. It happens and North Carolina is a ‘buyer beware’ state when it comes to home purchases. If you find this to be intentional by the sellers, you may have legal recourse, but would need to consult an attorney.

The key to having a home inspection is to have an inspector who is honest and thorough and willing to give the truth about the condition of the house, despite the potential objection of the agent. The inspector I tend to use has told me that some agents have complained about how thorough his inspections are as they feared it might impact their buyer’s willingness to continue with the purchase of that house. To me, this is ridiculous since a thorough home inspection protects me and my clients. It is all about the buyers and their confidence in that home.

If you are looking for a quality home inspector in North Carolina and specifically the Triangle, my inspector is very effective. I would be happy to share his contact information with you.

Do you want to love it...or hate it? Making sure you keep your emotions in check when purchasing your first home!

Do you want to love it…or hate it? Making sure you keep your emotions in check when purchasing your first home!

As first-time homebuyers, the most difficult obstacle can be your emotions. Many buyers, even seasoned buyers, purchase a home based solely on emotions. They fall in love with a home or a community or the idea of owning a home that they lose the capacity for reason. You can never take out all of the emotion when buying or selling a home, but it should be tempered to avoid some major drawbacks. Here are 7 side-effects to making emotional decision in the home buying process.

1. Pay too much! No one wants to pay too much for a house…so why does it happen and why? When you get emotionally attached to a house, you are more likely to pay too much for that house. This is not describing a few thousand dollars that will not have a large impact of the life of the mortgage or your time in the house, but rather paying several thousand more than the home’s value. This is where you will have difficulty selling for more down the road. Added to this issue, you cannot predict the future so if you have to sell it within a couple of years, you will have to bring money to closing.

2. Buying the Dream house…too soon! We all have our dream house and there is nothing wrong with having it…if you can afford it. For first time homebuyers, do not expect to get your ultimate dream house with your first home. Most people work up to the dream house and start with one that meets their needs initially, then as they earn a greater income, look to move into the dream house. Many people who buy the dream house too soon end up in foreclosure or bankruptcy. If this happens, it will take you longer to get back to that dream house than it would have had you purchased a modest home first and worked towards the dream.

3. Overlook the Inspection report! Overlooking the inspection report is fraught with disaster. Granted an inspection report will not find everything, but it should find the majority of the issues with the house and can give you insight to potential issues. For example, an inspector in North Carolina will only do a visual inspection of the roof. The inspectors cannot be certain of issues with the roof from this visual inspection from the yard, but it can point to potential issues which should be followed up by a roofer to make sure you are not going to have to replace the roof within a few months in the house. As I inform my buyer clients, we should focus on repairs for the major items first and foremost, then look to having the minor stuff repaired by the sellers. This will save you both time and money in the future. At some point, everything deteriorates, but knowing about the issues earlier can help you prepare and save money to do these repairs.

4. Community Schools! This can work both way. Buyers can fall for a house because of the school district or they can fall in love with a house only to learn the local school is not very good. With both extremes, reason is required to make the best decision. To me, the school is not as big of a factor since all schools have good and bad students. The primary factor in whether your child will succeed in school is parental involvement. However, safe schools trumps this theory so you want to make sure the schools for your home is a relatively safe school. When I first moved to South Carolina, I attended a school that had multiple fights every day at lunch period. This was not a safe school. So, my parents pulled me out of that school and sent me to a closer school that was much more safer. I still struggled that year in school, but that was due to other influences, not the safety of the environment.

5. Commute to work! Again, this works both ways…just like the schools. You shouldn’t let your love for the house influence the commute to work. In the beginning, it is easy to say that the commute would not be an issue, but after a few months of the long commute, you will start to hate it. With my first home in South Carolina, I had a forty minute commute to work and it became a bare very quickly. Of course in my situation, I lived closer to my work when I purchased the home, but a transfer placed me in another county. This extended commute led me to make a change in employers to lessen my commute dramatically…that plus the career opportunities.

6. Environmental issues! Falling in love with a house can impact your ability to fully consider the environmental issues for that new house. If the house backs up to a busy road with non-stop traffic, it will influence how much enjoyment you get from the outdoor living space. For some, they can easily ignore the street, but others will hate it to the point that they will spend less time in this space. No matter what the environmental issues are, be prepared and be sure you can live with it. No home is perfect and no location is perfect so every home will have some environmental concerns, it’s just a matter if you can live with it or not. Some other environmental concerns may be AirTraffic patterns, noise from athletic parks, traffic, odor from a manufacturing plant, just to name a few. Do your due diligence and don’t let the love for the house adversely impact your buying decision.

7. Community By-laws! This is one of the most overlooked areas that tends to impact the enjoyment of your new home. Most of the newer homes have a Home Owner’s Association with rules and regulations. Where the rules can be changed by the Board of Directors and is harder to anticipate future rules, the by-laws are more difficult to change and typically requires a vote of the homeowners to make a modification. You should review these rules to ensure you can put the addition you want or the fence you want. If the HOA has a rule against fences, you will not be able to put up that fence. Typically the Board of Director’s has a reason for the rules, but that doesn’t mean they will not rule against you and your enjoyment of the home. Know the rules when you purchase and be prepared.

As I mentioned, these are just some of the pitfalls of falling in love with a house. As a buyer’s agent, I expect you to fall in love with a house, but you still need to use reason and common sense when deciding on the appropriate home to purchase. Despite perception, there is typically more than one house that will pull your emotions ‘heart strings’ and if not, wait until you find the house that does. Not every purchase is emotion driven, but many are, especially for the first time homebuyers.

Remember, emotions fade over time, but reason does not. You may ‘feel’ this is the only house that will make you happy, but if you purchase without considering these pitfalls, that emotion may quickly turn to hatred of that house. You don’t want to hate your house like I did my first house.

 

 

 

High foreclosure offer better opportunities for 1st time home buyers!!!

High foreclosure offer better opportunities for 1st time home buyers!!!

News Intern-Triangle Business Journa

Home foreclosures across the nation have hit a new low since the housing bubble burst in 2006. But in Raleigh, foreclosure filings have rocketed 133 percent higher than the same time last year, according toRealtyTrac data.

RealtyTrac’s Midyear 2014 U.S. Foreclosure Market Report shows a total of 613,874 U.S. properties with foreclosure filings in the first two quarters of 2014, a 23 percent decrease from the first half of 2013. Even in North Carolina, foreclosures are down from last year.

Raleigh’s market is not yet out of the woods.

Read: Durham housing foreclosure activity plummets, Raleigh-Cary wobbling

There are currently 950 properties in Raleigh that are in some stage of foreclosure (default, auction or bank owned), and in June, the number of properties that received a foreclosure filing in Raleigh was 133 percent higher than the same time in 2013. On the other hand, U.S. property foreclosure filings were down 16 percent from a year ago.

Despite North Carolina’s overall positive performance, scheduled foreclosure auctions increased 15 percent since 2013, one of 17 states where this occurred.

 

A great video I wanted to share concerning the sacrifices our Founding Father’s experienced for the act of signing the Declaration of Independence. Please remember their sacrifices this 4th of July!

Can you find the 'perfect' home? Does it exist? What would the 'perfect' home cost?

Can you find the ‘perfect’ home? Does it exist? What would the ‘perfect’ home cost?

This is a question I have heard many times from first time homebuyers and the answer varies, depending on the individual. What are your needs and wants in your first home? How much can you afford to pay for your next home? What are your priorities for your first home? Based upon your answers to these and other questions will greatly determine what you can get for your money.

When it comes to a needs and wants assessment, it is important to understand exactly what is a ‘need’ and what is a ‘want’. Having a 3 bedrooms because you have a son and a daughter is more of a ‘need’…requiring a 4th bedroom for guest is more of a ‘want’. To really understand the difference between the two, you have to completely access your personal situation. I have this discussion with my wife all the time when she says she ‘needs’ a certain blouse to go with a pair of pants. Is that really a ‘need’ or a ‘want’? If you boil it down to its essence, you need clothing, you want to be color coordinated.

Others have described the perfect home! For most people, the perfect home does not exist…and I dare say it doesn’t exist for anyone, no matter your financial position. Unless you have an unlimited budget and time, it is nearly impossible to find a ‘perfect’ home to purchase. To be honest, the only way to get the ‘perfect’ home is to build it yourself and even then, it may not be the ‘perfect’ lot or location that you desire.

Even if you found the perfect lot in the area you want to be and built the ‘perfect’ house, life situations change. It is the beauty and curse of life, but nothing will ever stay the same in any person’s situation. What may be ‘perfect’ today may not be a good fit five years from now. Are you going to go through the same process to have the ‘perfect’ house every five to seven years?

For instance, I have a beautiful home…the nicest home I have ever owned. But, it is not the ‘perfect’ home. I love the community and the neighbors and it is convenient to everything I could ever want. However, there are things about this home I wished it had such as a basement, a library and a grand master bedroom suite. Does this make me not like the home? No. Does this make me unhappy living here? No. It checks off the ‘needs’ we had for a 3 bedroom townhouse with great closets (at least for the wife) in a great part of North Raleigh. I have my two-car garage, a loft for my home office, a room for my wine cellar and a place for my built-in bar. The last three items I had to add myself as they were not present when we purchased the house.

It was a house that became a home as we have developed some great memories here.

So, what can you get for your money? It depends, but there will never be a home that will have all of your needs and wants…it simply doesn’t exist. With the market as strong as it is, your options may be limited depending on the location you choose, but it doesn’t mean you cannot find a house that will become a home for you and your family.

A house is a dwelling…a home is where you create your life!

 

As I sit her to write this entry, I wanted to consider adding the greatest Memorial Day Speech I could find. After looking at several to include those delivered by presidents and literary geniuses such as Oliver Wendell Holmes, I cannot help but come back to a relatively unknown soldier who spoke from experience and the heart.

U.S. Marine Nick Popaditch saw action in the Middle East…he saw his brethren in arms fall…he heard the final words of a soldier who would never return. When I think of the greatest speeches, nothing takes the place of a veteran. This speech from Nick may not be the greatest Memorial Day speech ever, but it is one of my favorites. A moving tribute…not to an individual…but to a nation.

Semper Fi’!!!