Why is it Important to Know Your Home's Value
In a 2020 twist, our local Bismarck-Mandan real estate is on fire. Not literally, but if you know anyone trying to buy a home - especially first time home buyers - they are having to work hard. With COVID's effects dropping interest rates to all time lows, the affordability of homes has skyrocketed. This has created upward pressure on housing prices because more people can afford to buy a home than normal. That demand has literally cut our inventory in half. Now with more people trying to buy and less inventory that means most affordable homes end up receiving multiple offers. May the highest bidder win scenarios.
Top 3 Reasons to Know Your Home's Value
A home owner can refinance their home loan to improve the interest rate, pull out cash, or change the length of the loan. Typically a refinance is used to lower a payment or to cut the length of the loan. Cashing out equity - the difference between the value and what you owe - can be used for debt consolidation or purchasing another home.
Most people fall under the first option where they are saving money in monthly payment or interest paid. If you purchased your home with interest rates over 3% - you could be saving money with a refinance.
CAUTION - if you are multiple years into a refinance, lowering the interest rate/refinancing may cost you more! Check with your lender to see if it's worthwhile as a refinance restarts your amortization.
2. Upgrade or Downsize
If you are planning to make a change like stepping up to a larger home or getting out of town, you will need to know what your current home is worth. Unlike a refinance where you buy your house from yourself, there are different fees involved.
Knowing your value PLUS the fees involved in the sale and purchase of your home will set you up for success. That way you don't overshoot your target or give up something you could have had.
3. Estate Planning
If/when you have to help plan for your home or your parent's home, knowing that value is very important. It allows the retiree to plan on what will be affordable for their final move. An added bonus is if the home needs updating or work, you can find out its current value verse its future value if repaired.
This information will help you know how much you will have left over from the sale of the home or to help fund the new place. Also, if it is quicker to sell the home versus repair the home.
When you need to get the market value of your home, you have a few options.
DO NOT USE ZESTIMATES!
Now that we have that covered, a Realtor will be your best bet. A full time agent who is actually buying and selling homes will have the best market knowledge.
As an agent, we can access the data on the MLS to find the most accurate and recent data. Even with that data, a walkthrough or property inspection is a must. We can't see the finishes, the wear and tear, the settling issues and more that may affect the value of the house. If you want the most accurate information, be prepared to let your agent through.
If you are ready for a free home analysis, click HERE. We can pull up your home report or do a customized CMA for you. That way you can plan and prepare for your next steps!
Who Could Have Guessed COVID Would Make Homes Sell?
For the strangest year in our life, it is hard to believe that homes are in high demand! In February and March it looked like it was gunna be a slow year. Fast forward a global pandemic and home sales have jumped 10% across the country. Here in Bismarck and Mandan, we've swallowed our inventory and cut down absorption rate (how long it would take to sell all the homes listed) by 45%. If you are looking to buy a home or upgrade, this is for you.
Your Hot Market Strategy
If you have a home to sell - you are in luck! I've witnessed homes that I sold just last year around $200,000 appraise for $220,000 just a year later. That's some real money to use for the next home.
If you are looking to buy with nothing to sell, then you are the most sought after buyer. You don't have to wait on an appraisal, inspection, or other slow moving parts of the hot market.
So what does this process look like and how long does it all take?
- Get Approved - YOU HAVE TO DO THIS FIRST BECAUSE MULTIPLE PEOPLE WILL OFFER WITH YOU
- Find a Great Agent - One who can show you properties ASAP since there will be multiple people looking
- Be Ready to Make an Offer - If the home is decent and priced right, it will sell in a day!
- Give Yourself Time for Inspections - Many inspectors who make sure you're happy with the home can be booked 2-3 weeks out, so give yourself time to fit into their schedule
- Get Ready to...Wait - Appraisals are taking 6-10 weeks (even longer out of town) so that means it will be at least TWO MONTHS before you are moving if you are using a loan
- 2 Weeks to Close - transfer utilities for closing date, cable, internet, insurance, etc
- Final Walkthrough - last chance to make sure all cleaning, repairs, etc are done
- Close! - Sign 32-68 times and you get a new set of keys!
At the beginning of 2020, you could buy a house in 30 days and turn in your rental notice. Now, you find a house, get it under contract, THEN notify your landlord you will be moving. I recommend you get through the inspection phase first just to be sure.
Be Ready to Move Fast then Wait
That's really it. If you are using a loan to buy a home, it takes 2 months to purchase a home in our area now. If you go rural, 3 months. If you have something to sell under $400,000 you will love how fast decently priced homes go under contract. Just be ready to compete to find your next home.
Inventory is dwindling, financing is amazing, appraisals are slow so be ready to sprint, jog, and walk through the finish line with todays market.
3 Minute Guide for Your Success
Buying your first home is super exciting and also very scary. As an investor, property manager, and Realtor, even I get nervous when I purchase something new. That's why I wanted you to have this quick FAQ so you know the process - straight and to the point.
Step 1: Talk to Your Lender
Many first time home buyers start at the bank that has their checking/savings account. This is a great place to start since you already have a relationship there. Many banks now have online applications so you don't even have to mask up and go visit them in person. The other portion of first time home buyers check out online brokerages because they have attractive terms or other options. Here's what you need to know:
Make your banks compete with each other, it will save you $1000's!
All you need is a pre-approval letter so you and your agent know what price range you can look at and how much a month that payment will be. After that, you can switch lenders or whatever you need to get the best price, term, closing costs, etc. Even though it's your personal house, its business to them. FIGHT FOR YOUR BEST DEAL.
Step 2: Find an Great Agent
As an agent who didn't like Realtors to begin with, I've had to change my attitude. For those who have the time to learn everything there is to know about a house to make their own decisions - yeah, fine. Skip the agent. For the other 95% of people who need and agent or should have an agent, you need a great one.
How can you tell if they're good or not? *That article will come later* More people go with the first agent they talk with than shop around. To keep it simple, your gut will tell you after meeting them. Another great way is to check out their online reviews. Otherwise ask your friends, family, and other trusted people who they used.
You want to work with someone who cares more about you than their paycheck.
When an agent is $$ focused, we call them 'transactional'. When they actually care about you, we call them 'friends'. This is your largest purchase, its best to work with someone you feel comfortable calling with all your questions.
Step 3: Search, Sort, and Filter
You agent will hook you up with a direct feed to your local MLS service. Otherwise Realtor.com is the next best resource because they actually purchase their data from the local Realtor Boards. Zillow.com just rips the information off which is why they have so many inaccuracies. #ZestimatesFail
Find the area, size, amenities, bedrooms, yard, garage and kitchen size of your dream. Make sure it fits the budget and makes sense. Most times you'll make your list before you agent even gets to sit down. Its fine! You're excited and it really helps us narrow down the search.
Pick your top 3-5 houses, do walkthroughs, and see which one feels like home. If you're analytical, see which one makes the most sense and checks off the majority of your boxes. The home might have repairs or paint thant needs updating, but that can all be worked out.
Step 4: Your Agent Will Take Care Of
Yup, that's right. You hire an agent instead of doing it all yourself and you don't need to know much more. Just know this:
The seller has offered to pay your agent if they bring a buyer.
What's that mean? You don't pay an agent to work with them, the seller has offered to do it. If you team up with a good agent who cares about you, they will handle writing offers, picking prices, negotiating, finding inspectors, contractors, handle title documents and closing documents and get your home sale finished! BOOM - DONE.
What to Do Next?
If you're reading this and would like to know more, feel free to give me a ring, send a message, text, or email. The truth is many people start with an agent or a house, then figure out the financing. It doesn't matter the order so much but it saves time and heartache if you know what you can afford up front.
Buying your first home is a very exciting time and there is too much information out there. Get approved, get an agent who cares about you, and the rest will be taken care of.
Why a VA Loan is the BEST Loan for You
This may not come as a surprise but I think if you can qualify for a VA loan - you should use it over most any other loan. Why is that? Multiple reasons:
- It is the CHEAPEST loan on the market with less than 20% down
- There is No Private Mortgage Insurance (PMI) that can add over $240 to your monthly payment
- You can purchase a home up to $510,400 with ZERO $$ down
- There is a VA funding fee that the seller or lender pay (you absolutely cannot pay it)
- Another qualified Veteran or Active Duty member can take over the loan when you sell
- With the lowest interest rates of all time, your low rate will ADD VALUE to your home
So How do I Qualify?
To use your VA benefits, you must have a Certificate of Eligibility (COE). Your VA lending specialists can pull that up for you HERE. To qualify for a COE you need the following:
- Served at least 90 days of active duty during wartime
-Have 6 years of service in the National Guard or Reserves
-Served at least 181 days during peacetime
-Are a spouse of a service member who has died either in the line of duty or as a result of a service-related disability
Once you have your COE it's time to get you pre-approved with a lender. Almost all lenders can offer VA loans but NOT ALL LENDERS ARE QUALIFIED TO DO VA LOANS. Seriously, I've watched home sales and purchases blow up because a lender didn't know how to properly use income, disability, housing allowance and other property qualifications and the Vet almost lost their new home. Thankfully, we moved them to a QUALIFIED VA Lender who knew how to manage VA loans properly and saved their home purchase.
Who Should I Use for a Realtor?
Search for Military Relocation Professionals in the market you wish to live. If they truly are living up to the MRP title, they will already have local lenders who can quickly and properly approve you. They know how to handle you and your family to get you into the right home in the right amount of time.
Because I have a soft spot for our active duty service men and women and veterans, I flew down to Arizona to earn my MRP designation so I could help my friends, family and other veterans buy and sell homes. I learned how to get you qualified, pick the right homes, understand the different scenarios (PCS and all), and how to get you set up for success.
MRP Realtors are spread across the country so we can connect you with a local agent almost anywhere in the country. If you have questions, CALL ME. I am here to help you succeed in getting your VA benefit and will set you up with a MRP in your area.
Why Should I Use a Local Lender?
You probably already see USAA, Veterans United, and more every time you log on to Facebook or go online. They are great at insurance but should be avoided for purchasing your home. Team up with your MRP Realtor and their local VA lender so you have ONE point of contact with ONE phone number and ONE email so you know WHO to call with questions.
If you are looking for a DIRECT VA LENDER who can get you lower fees and a lower interest rate, click here.
I work with a variety of lenders to help my clients but the ones who specialize in VA loans prevent false sales, broken dreams, and unwanted heartache. They pull your COE, they get you approved, and they get you into your new home! Want to check out a VA specific page? Click HERE.
Work with a VA Loan PRO. Just because a Realtor or lender has "worked" with VA loans and veterans doesn't mean they KNOW how to do them well.
Call me, email or message me HERE if you have any questions. If you want your COE or to get qualified, click HERE. *I am not paid by these lenders nor receive any form of compensation from them, they just take care of my vets the BEST
Rent to Own in Bismarck & Mandan
Believe it or not, it is still possible to rent-to-own a home in the Bismarck and Mandan market. What is rent to own? Rent to own is an option where individuals are allowed to move into the property they wish to purchase and pay monthly until they are "approved" to purchase the home through a bank. In many cases individuals who this strategy works out really well for are NEW BUSINESS OWNERS and individuals and couples REPAIRING CREDIT.
Rent to own has two basic components:
1. Down Payment: Because the seller is taking some risk that you may not buy the property, they need a down payment. This is typically 5% or $5000 depending on purchase price. This way they know you are serious and won't back out.
2. Pre-Pre Approval: As most rent-to-own scenarios can't qualify for normal financing for 12-60 months, they can and should be working with a lender to get them ready for a loan. This may mean setting goals to improve credit, start credit, pay down debts, or have past issues removed from their credit. While working with these lenders, you can get a conditional approval meaning that once your credit is repaired or started, they would approve you.
With your down payment and a solid plan to get you qualified for a loan, you are ready to hook up with a rent-to-own specialist in your area. If you are looking for one in Bismarck, Mandan, Minot or Fargo (and pretty much anywhere in between) check out https://setyourrent.com/ . These guys specialize in getting you set up for success and into your next home before you can get the loan.
Once you are approved with the Set Your Rent guys, you call me for Bismarck, Mandan and surrounding communities. Together, we know your purchase price and can start finding you your dream house. If you're not from this area, do not fret! There are plenty of other agents and investors who can help you around the country.
So how does it all finish?
Once we have found you a home, the Set Your Rent team will purchase the home and hold your lease until you are able to buy the home outright. At that point you buy it from them. The best part is you know the terms ahead of time! You know what your rent will be and what the purchase price will be. No surprises, no gimmicks. After you purchase the home, it is 100% yours.
Rent to own strategies are not for everyone but if you want your own home to live in and enjoy, this can allow you to get into your dream home 1-5 years earlier than if you waited.
If you have questions, please message me or call. This strategy does require money down and a stable income, but it can truly help you get into a home a heck of a lot sooner!
I look forward to helping you!
P.S. If you know you have good income and will want to get qualified right away, click HERE!
Contact Me Today
Let's find you the right home at the right price.