Millennials Archives | Page 3 of 13 | Blessings Realty | Colorado Springs and Monument Realtor

Don’t Get Caught Off Guard by Closing Costs

March 18, 2022 By Claire Garlick Leave a Comment

As a homebuyer, it’s important to plan and budget for the expenses you’ll encounter when you purchase a home. While most people understand the need to save for a down payment, a recent survey found 41% of homebuyers were surprised by their closing costs. Here’s some information to help you get started so you’re not caught off guard when it’s time to close on your home.

What Are Closing Costs?

One possible reason some people are surprised by closing costs may be because they don’t know what they are or what they cover. According to U.S. News and World Report:

Closing costs encompass a variety of expenses above your property’s purchase price. They include things like lender fees, title insurance, government processing fees, upfront tax payments and homeowners insurance.

In other words, your closing costs are a collection of fees and payments made to a variety of individuals and organizations who are involved with your transaction. According to Freddie Mac, while they can vary by location and situation, closing costs typically include:

Government recording costs
Appraisal fees
Credit report fees
Lender origination fees
Title services
Tax service fees
Survey fees
Attorney fees
Underwriting Fees

How Much Will You Need To Budget for Closing Costs?

Understanding what closing costs include is important, but knowing what you’ll need to budget to cover them is critical to achieving your homebuying goals. According to the Freddie Mac article mentioned above,the costs to close are typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to cover your closing costs.

Let’s say you find a home you want to purchase for the median price of $350,300. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,000 and $17,500.

Keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.

What’s the Best Way To Make Sure You’re Prepared at Closing Time?

Freddie Mac provides great advice for homebuyers, saying:

As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.

The best way to understand what you’ll need at the closing table is to work with a team of trusted real estate professionals. An agent can help connect you with a lender, and together we can provide you with answers to the questions you might have.

Bottom Line

In today’s real estate market, it’s more important than ever to make sure your budget includes any fees and payments due at closing. Work with us to be sure you have the knowledge you need to be confident going into the homebuying process.

Article source: https://www.keepingcurrentmatters.com/2022/03/15/dont-get-caught-off-guard-by-closing-costs/.

Alternatives to Buyer Love Letters

March 11, 2022 By Claire Garlick Leave a Comment

Ah the love letter… in today’s raging hot market, with extremely low inventory and bidding wars becoming the new normal, it’s become almost a necessity for prospective buyers to include a love letter in their offer package to sellers. These love letters are written to essentially attract the sellers’ attention and explain the many reasons why they should pick you as the buyer.

However, as love letters become more popular there are also more warning signs being thrown up. The National Association of REALTORS® warns that sending love letters could open real estate professionals and their clients up to fair housing violations. In fact, last year, Oregon was the first state to ban buyer love letters.

There are, however, alternatives you can consider in order to get a leg up on the competition:

Money

Adding things to a love letter like photos of you and/or your pets is a novel approach, but that’ll likely have a negligible effect on the seller. At the end of the day, money talks. The best alternative to a love letter is cash. Be sure to always make the highest offer that you are personally comfortable with, not the number that you think will be highest.

An alternative to this is the all-cash offer. Of course, making an all-cash offer is not possible for most buyers, and if another buyer can offer all cash, then they’ll likely be the buyers who end up purchasing that particular property. However, there are other avenues that you can take, including companies like Ribbon, Knock and FlyHomes that can lend you money to make an all–cash offer.

Waive Contingencies

In the current competitive market that’s already full of contingencies, a great alternative to sending a love letter to the sellers is to waive one or two of these contingencies and reduce the burden on them.

Removing the financing contingency and/or the appraisal contingency can do a lot more to make your offer more attractive compared to sending a love letter. During the height of the pandemic, many buyers even waived inspection contingencies, although this is never recommended and should only be considered by experienced homeowners.

Tighten the Terms

Another excellent way for you to increase your chances of winning an offer is to tighten your terms. If it’s possible to reduce the timeline from when we submit the offer package to closing, your offer will be much more enticing to sellers. Some tactics for doing this is to shorten the length of the escrow period, as well as getting the loan pre-underwritten so that you can remove the financing contingency completely.

Use an Escalation Clause

Seller’s agents are usually tight-lipped when it comes to the exact number of offers and the highest offer their clients have received. An underused tactic that we can use to make your offer package more enticing to sellers is an escalation clause. This clause states the offer, but adds that you will beat any higher offers that are presented by the amount you specify.

This clause is incredibly useful because it gives you the opportunity to present the highest offer. However, you should cap your escalation clause at the highest sum you are willing and able to pay.

Build Rapport

Lastly, this step falls on us as the real estate professionals. Building rapport with the seller’s agent is critical when it comes to increasing your chances of nailing that offer. Naturally, the longer agents are in the industry, the more connections and relationships they make with other agents. But there are new agents entering the industry every day and we need to be able to build rapport with other professionals in a short period of time. This is a vital skill for any agent.

Although love letters are endearing and can have a very real impact on a seller’s decision when choosing an offer, the suggestions listed above are more actionable steps that we can take to ease the stressful home-buying process. Let us know if this information has been helpful, as well as if you have any questions on the best way to go about submitting an offer on the home you hope to purchase! We would love to help you!

Article source: http://blog.rismedia.com/2022/alternatives-love-letters/.

More Buyers Are Specifically Looking for New Construction

May 21, 2021 By Claire Garlick Leave a Comment

A recent post revealed that 16% of adults are planning a home purchase in the next 12 months. Among that group of prospective buyers, 42% are looking to buy a newly-built home and 30% an existing home. A year earlier, in the first quarter of 2020, only 24% of buyers reported a preference for new homes, while 40% were looking for an existing home. These changes provide evidence that a growing number of buyers are looking specifically at new home construction from the onset of their home search.

When broken down by generation, a majority of Millennial buyers (56%) would prefer a new home, the most of any generation. In contrast, 44% of Boomers and 41% of Gen Z buyers are looking for an existing home. Regionally, in the Northeast and West, a majority of buyers would prefer a new home. In the Midwest, on the other hand, 41% are looking for an existing home.

If you are one of the 42% of buyers planning to buy new construction this year, plan to be patient. Homebuilders are so busy that they can’t keep up with the demand. Buyers can expect to wait a minimum of 10 months to a year. They have waiting lists for future phases. Get in touch with us to chat about new home options in your area, any time!

* The Housing Trends Report is a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are not seasonally adjusted due to the short-time horizon of the series, and therefore only year-over-year comparisons are statistically valid. A description of the poll’s methodology and sample characteristics can be found here. This is the second in a series of six posts highlighting results for the first quarter of 2021. See previous post on plans to buy.

Article source: https://www.residentialrealtytoday.com/?open-article-id=16011409&article-title=more-buyers-are-specifically-looking-for-new-construction&blog-domain=eyeonhousing.org&blog-title=eye-on-housing.