3 Reasons Why the Fed Raising Interest Rates Is Good for Home Buyers

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If you’re either in the process of buying a house, or thinking of jumping into the market, you’re probably well aware that rates have jumped significantly in recent weeks. And that likely doesn’t feel or sound like anything good to you. 

But what you might not be well aware of is that, according to Chair of the Federal Reserve, Jerome Powell, raising interest rates is actually being done (at least in part) for the good of home buyers. 

With rates nearly double what they were not too long ago, you may be wondering where on earth the silver lining is. This Fortune article keys in on three things Powell is hoping the Fed’s actions will do for real estate buyers. Here’s a quick summary and how it can help you in your home search:

  • They hope it gives you a “bit of a reset” – In short, there hasn’t been enough listings, and there are too many active buyers for the amount of available inventory. Ultimately, that is what led to bidding wars and prices continuing to rise. They’re hoping that by raising the rates, it will help raise inventory levels and price some buyers out of the market, giving buyers who continue with their search for a home more time and options to choose from.
  • Potentially lower prices – Powell didn’t come right out and say that he hoped prices would fall, or that they definitely would. In fact, he basically said he’s not sure if it’ll affect them at all, but that they’re keeping an eye on how it affects prices. The issue is still that there are not enough houses for sale. In order for prices to come down, there needs to be an uptick in inventory. If you read between the lines, it sounds more like they’re hoping that “overvalued” markets will correct, but other areas will plateau or only see mild increases for some time, as opposed to the steep increases in value we’ve been seeing. So, this isn’t a promise, and it will likely depend a lot on your local market conditions. Keep in mind that they’ll also be sensitive to protecting the values and equity of homeowners to avoid causing homeowners financial issues or the inability to maintain or sell their house. It’s a balancing act, which is likely why he sounds a bit vague and says they’ll be watching it carefully.
  • They want mortgage rates to fall – Powell just wants to get inflation under control, and calm down the real estate market so that prices don’t get too out of whack with incomes. Once that’s done, he wants to see rates drop again. Now that won’t be in the next few weeks or months. In fact, it could take a couple of years before you see that happen.

The Takeaway:

While this certainly isn’t great news for every buyer in the market, it can be for you. The rate hikes will edge some buyers out of the market, but those who are qualified and in a position to buy at the higher rates will ideally benefit from lower competition and more homes to choose from at a less frenzied pace. 

Prices may not take a steep dive, which some buyers may be hoping for, but that can be a good thing if you already own a home anyway, and want to use the equity you’ve gained by using it to buy a bigger home, or downsize and pocket some of your gains. 

On the other hand, if you are hoping for prices to fall, they will at least likely stop rising so much and so fast, and may even take a dip if your market is overvalued. So there is hope for that. Just be ready and in a position to pounce if they do, because inventory is still low, and competition is always fierce for well-priced houses, regardless of what rates are doing.

And lastly, even if you buy at a higher mortgage rate right now, know that the Fed wants to lower rates in the near future, so you can always refinance when they do.

So, even though it may not seem like the Fed raising rates is a good thing for you, it can be if you understand what they’re trying to do and are in a position to take advantage of the lower competition and increased inventory they’re hoping to create by doing so. Let’s discuss your next step – Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside HanleyHomeTeam.com 904-515-2479

These DIY Home Improvements Can Make a Negative Impression on Potential Buyers

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Many homeowners enjoy changing, updating, and renovating their homes—and many enjoy tackling those changes, updates, and renovations themselves.

But if you’re planning on selling in the future, it’s important to recognize that potential buyers might not be as impressed with your DIY handiwork as you are.

So, what are some of the DIY home improvements that might make a negative impression on buyers, and potentially make it harder to sell your home?

recent article from realtor.com outlined some of the DIY projects that can come back to haunt you if and when you decide to sell, including:

  • Converting your garage into additional living space. While it might make sense for you and your family to convert your garage into additional living space (like a home office or game room), a lot of buyers have “garage” on the top of their non-negotiable list—so think twice before you transform your garage space into anything other than a garage.
  • Painting your walls… Painting your walls is one of the fastest, easiest, and most affordable DIY home projects. And, if you do it right, there shouldn’t be any problem when it comes time to sell. But if you don’t know what you’re doing (and the paint job looks sloppy, uneven, or unprofessional), it could make a negative impression on potential buyers.
  • …or your kitchen cabinets. Instead of buying brand new cabinets, many homeowners choose to add a coat of fresh paint to older cabinets to breathe new life into their kitchen. And while that’s a fine decision if you’re planning on staying in the home, if you’re planning to sell, it’s important to recognize that a fresh coat of paint won’t fool buyers into thinking the cabinets are newer or more modern than they actually are.

The Takeaway:

So, what does this mean for you? There’s nothing wrong with taking a DIY approach to home renovation projects. But before you do, it’s important to make sure you know what you’re doing—and to consider what kind of impression those DIY projects are going to have on potential buyers if and when you’re ready to sell. Want to know more projects that don’t always work well – give us a call! Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty HanleyHomeTeam.com 904-515-2479

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Homeowners Gain an Average of $64K in Equity From Q1 2021 to Q1 2022

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When you buy a home, you want to gain equity in that home over time.

So, when it comes to equity, how did homeowners fare over the past year? According to the most recent Home Equity Insights Report from CoreLogic, homeowners did very well.

According to the report, homeowners gained, on average, approximately $64,000 in equity between Q1 2021 and Q2 2022—although many states saw much larger average equity gains for homeowners, including California ($141,000), Hawaii ($139,000), and Washington ($119,000). Overall, U.S. homeowners with mortgages (which makes up 62 percent of all properties) saw their equity increase by a whopping $3.8 trillion between Q1 2021 and Q2 2022—a year-over-year change of 32.2 percent.

The Takeaway:

If you’re a homeowner, chances are, you’ve gained some equity in your home over the past year—and if you’re planning to sell and/or buy a new home, understanding those equity gains is a must. Give us a call and let’s discuss! Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty HanleyHomeTeam.com 904-515-2479

Have a Bankruptcy on Your Record? Here’s What to Know About Buying a Home

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There’s no denying that bankruptcy is a serious financial challenge. But filing for bankruptcy doesn’t have to keep you from successfully applying for a mortgage; you just need to know how to navigate the process.

So how, exactly, do you do that?

recent article from realtor.com outlined tips for people who are looking to buy a home following a bankruptcy, including:

  • Understand you may need to wait. Most people will have to wait a certain stretch of time after filing for bankruptcy to apply for a mortgage—which can range from one year (for FHA loans) to two to four years (for traditional lenders). If you’ve recently filed for bankruptcy, do your research to see how long your lender will want you to wait before they’ll consider your loan application.
  • Take the time to build back up your credit. Filing for bankruptcy negatively impacts your credit score—so you’ll want to do everything you can to build it back up before applying for a mortgage. Apply for a few revolving lines of credit, pay your bills on time every month, and keep your balances low to help boost your score.
  • The more documentation you can provide, the better. If you filed bankruptcy due to an unforeseen, negative, or extenuating circumstance that kept you from being able to pay your bills—such as a serious illness or the death of a spouse—lenders may be more willing to work with you. Before you apply for your home loan, write a detailed letter explaining the circumstances behind your bankruptcy, and then submit that letter with documentation supporting your claims (like a note from your doctor or a death certificate).

Need more tips? Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty HanleyHomeTeam.com 904-515-2479

Homeowners Should Have Some “Fear of Missing Out” on This Market

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If you’ve been thinking about selling and hesitating or simply waiting, you may want to start thinking about how you’ll feel if you miss out on the best time to sell your house in a long time. You never know when (or if) conditions will be like this in the real estate market again.

It’s been a sellers’ market for quite some time now, and with rates going up significantly and home prices still historically high, there’s a lot of chatter about whether or not there’s a real estate “bubble” that’s about to pop. In particular, The Federal Reserve Bank of Dallas recently warned about the potential of a housing bubble and how buyers’ “fear of missing out” (FOMO) is making it worse.

On the other hand, a recent survey revealed that home buyers are still hopeful and feel that it will still be a good time to buy a home in the next three months. 

That’s despite the fact that even though there have been signs and reports about the market slowing, according to this Realtor Magazine article, as of March sellers have still been:

  • Receiving an average of 5 offers on their home
  • Selling for above list price over 57% of the time
  • And 87% of listing sold in less than a month

Much of that may very well be fueled by buyers’ FOMO, but it can’t and won’t last forever. That’s how the real estate market works—it goes up, then it goes down, and then back up again in cycles. So even if you “miss out” on this moment in history, there will certainly be a time when home values are this high, or even higher. 

But will there be such a combination of high values, low inventory, historically low rates, andhigh demand? And when will it happen? How will you feel if you “miss out” now? 

Those are questions you need to ask yourself if you’ve been toying with the idea of selling your house. 

The Takeaway:

Don’t be fueled by fear of missing out, but definitely think about how it would affect you if you did, because the market’s still in your favor…for now at least. If you’re going to sell in the next few years, now is as good a time as any to take advantage of the fact that buyers are still hopeful, offers are plentiful and over asking price, and homes are selling quickly.

GITT (get in touch today!) Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 HanleyHomeTeam.com

Hate Your Neighbor? New Survey Shows You’re Not Alone

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Do you have a neighbor that annoys you? The chances are, you do! According to this REALTOR Magazine article, a recent survey done by Lending Tree revealed that 75% of Americans don’t like their neighbor.

What bugs people about their neighbors the most? Take your pick:

  • They give off a “weird vibe” (28%)
  • They’re too loud (27%)
  • They’re rude (27%)
  • Disruptive pets (17%)
  • They’re nosy (16%)
  • They don’t maintain their home (16%)
  • Unruly kids (13%)
  • Guests park in front of their home or in their spot (13%)
  • They’re smokers and the smell is bothersome (11%)
  • Disagree with political views (4%)
  • They rent their house out short-term (3%)

So if you have a neighbor that annoys you for any of those reasons, just know that you’re not alone. But simply knowing that doesn’t make it any better, so here are a few tips on how to avoid or deal with neighbors you don’t get along with.

  1. Try before you buyBefore you buy or rent a place, take a walk around the neighborhood during the time people will likely be outside. Get a feel for how they greet you…or don’t greet you. Chat with the neighbors you’ll potentially live directly next to if possible, and see what they’re like. Walk around and just watch and listen to what goes on in the area. If possible, do this on different days and times to get a more thorough feel.
  2. Be pleasant and friendly Most people aren’t going to intentionally annoy someone who’s pleasant and friendly with them. Whether you like them or not, just being nice can go a long way in getting them to treat you nicely. And if they do something that bothers you, it’ll be easier to have a conversation and resolve the issue.
  3. Avoid themPeople complain about how everybody is so busy nowadays, and even when they’re home, they spend all their time inside. So, you can probably live on the same street or in the same neighborhood as someone and not interact all that much. So if you don’t see eye to eye with someone, just do your best to avoid having to even lay eyes on them as much as possible. 
  4. Have a chatIf you have a problem with a neighbor and can’t avoid them or the issue, don’t come at them aggressively. Bring up what bothers you in a diplomatic way. See how they react before you presume they’ll be defensive or argumentative. They may have no clue that they do something that bugs you, and they might be willing to do whatever it takes to keep the peace. 
  5. Put it in writingIf you have a chat and it doesn’t go over well, or the problem persists, see if what they’re doing violates any local laws or ordinances. If it does, let them know that you’d prefer to avoid reporting the behavior to authorities, but will if it continues. Putting it in writing puts them on notice that you’re serious. But, it is a serious step, so only do this if it’s intolerable, because it’ll be hard to be on friendly terms at all afterwards. The best outcome you can hope for going this route is that they cease the behavior, but you still won’t be on good terms. 
  6. Call the authoritiesIf it persists or escalates, you may just have to call the police or local authorities to step in.
  7. Maybe moveThe last resort is to just move. If you don’t feel safe or comfortable, definitely consider moving. But if it’s just not ideal, and you wish you had better neighbors, think twice about moving. As you can see by the results of the survey, the chances are, even if you move somewhere else there’s a good chance you’ll have a neighbor you won’t like.

The Takeaway:

As statistics show, there’s a good chance you won’t like a neighbor wherever you move, which also means there’s a good chance one of your neighbors won’t like you. Even if you live on a one-way street, being a good neighbor is a two-way street. As much as a neighbor might annoy you, you could be doing something to annoy them. So think about how you’d want to be treated if that were the case, and treat your neighbors similarly. Try to handle your grievances with diplomacy, respect, and understanding.

Get in touch and let’s find you a GREAT neighbor! Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 HanleyHomeTeam.com

Just Sold Your Home? Make Sure to Do These Things

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You just sold your house. Congratulations! But while you’ve knocked the biggest task off of your moving to-do list, there are still things you’ll need to take care of as you transition out of your current home and into a new living situation.

So what, exactly, are those things?

recent article from realtor.com outlined key things sellers will definitely want to consider doing following the sale of their home, including:

  • Organize and file all of your paperwork. After you sell your home, you may be tempted to toss your paperwork into a drawer and forget about it—but when tax day rolls around, you’ll need copies of any paperwork associated with the closing and settlement. Make sure to organize and file all of your paperwork in a safe place; that way, when April 15 hits, you’ll have everything you need for your taxes ready to go.
  • Send change-of-address notices. Once you sell your home and move out, you want to make sure your mail follows you to your new address—so make sure to fill out your change of address form ASAP. (In fact, the US Postal Service recommends completing your change of address request 30 days before you move out.)
  • Think about what you need from a buying agent. Sometimes, the agent that helped you sell your house is the perfect person to help you find a new home—but not always. Before you commit, think about what you need from a buyer’s agent—and whether your selling agent fits that criteria. (For example, if you’re moving to a new city, you’ll probably want to work with an agent that’s familiar with the area.) If you do opt for an agent other than the one who helped you sell your home, ask him or her for a referral to an agent they trust to help you with your purchase.

Want more tips? Get in touch! Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 HanleyHomeTeam.com

Selling a Home in Today’s Market? Don’t Believe Everything You Hear

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People say a lot of things about selling a home in today’s market. But unfortunately, some of it isn’t true—and buying into those myths can have a negative impact on your home sale.

So what, exactly, are people saying about selling your home in today’s market that just don’t align with the facts?

recent article from realtor.com outlined common myths about selling a home in today’s market that simply aren’t true, including:

  • “Buyers will take anything—so there’s no need to renovate or repair.” Many sellers think that low inventory means that buyers will be willing to pay top dollar for any property. But the truth is, many buyers are put off by homes that appear like they need a lot of work. So while there’s no need to completely renovate your home prior to listing, making small, cosmetic repairs (like tidying up the landscaping or repainting the walls) can make a huge difference in how attractive your home is to buyers—and ultimately, how quickly (and profitably!) your home sells.
  • “There’s no need to invest in marketing my home; in this market, homes sell themselves.” It may be a seller’s market—but that doesn’t mean, as a seller, you don’t have to put in any effort to sell your property. Buyers spend a lot of time scouting homes online—so if you want your home to sell, you’ll want to invest time and resources into making your listing as attractive as possible (for example, getting professional photos of your property).
  • “In a bidding war, choosing the highest offer is always the right move.” Bidding wars are a common occurrence in today’s market—and many sellers believe that, if their home inspires a bidding war, they should accept the highest offer. But that’s not always true. There’s a lot more to an offer than just the purchase price—and going with a slightly lower offer with better terms (for example, more flexible closing terms or an all-cash offer) is often a better option than just choosing whichever offer has the highest dollar amount.

The Takeaway:

So what does this mean for you? If you’re thinking about selling your home, it’s important to arm yourself with the right information about how to navigate the current market—and to avoid buying into myths that could potentially derail your sale.

7 Ways for Homebuyers to Deal With Rising Interest Rates

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If you’ve been considering buying a house — or if you’re actually in the process — you’ve probably heard two things quite a bit lately:

  1. Interest rates are on the rise.
  2. They’re still historically low.

Yes, they are still historically low, but that doesn’t change the fact that they’re higher than if you’d just bought a house a little while ago. Kind of painful to hear, huh? 

What you’d probably rather hear is that rates and house prices will come down in the near future, so just hold on a little while and waiting will have paid off. Unfortunately, it’s looking like rates could go up even more in the near future, and house prices aren’t looking like they’ll definitely take a dramatic tumble. 

So let’s look at some ways you can deal with rising interest rates to make your payments as manageable as possible, and maybe even save some money.

  • Clean up your credit. The better your credit is, the better your rate will be. Take a look at your credit report and see if there’s anything glaringly wrong that you can have corrected. If it all looks foreign to you, ask your mortgage rep or a credit repair specialist to take a look and give you advice on anything they see that you could get corrected, pay off, or pay down in order to raise your credit score.
  • Shop around. Check with several lenders and see who offers you the best rate. Or go through a mortgage broker who has access to many lenders and can do the shopping for you. Be careful if one sounds way too good to be true; they could be quoting you a much better rate, but beware of the fees. If you have access to a credit union or a smaller local bank that knows you, make sure to check with them—they often have better rates because they lend their own money and / or have a closer relationship with their customers.
  • Buy discount points. Consider buying down your mortgage rate by paying “discount points.” These are fees you pay up front in order to get a lower mortgage rate. Buying a point will cost you 1% of your home loan and will generally buy your rate down by a quarter percent, although that can vary from lender to lender. Most will have a cap on how many points you can buy, and they also may offer you the option of buying lower increments than a full point. This is a good option if you plan on staying in the house for some time. Make sure to weigh how much it’ll cost you, and how long it’ll take to break even and then reap the benefits in terms of savings. 
  • Lock in your rate. Even though rates have already been on the rise, there’s a good chance they’ll go up even more. Rate locks are typically only offered for up to 60 days, so if you’re serious about buying soon, consider locking in at the current rate. Make sure to ask your lender how much a rate lock will cost you, if anything. Also find out if they offer a “float down” option, which will allow you to get a lower rate than you locked in at, if the rates do happen to come down before you close on your house.
  • Get an adjustable rate mortgage. Rates have been so low for so long that there wasn’t much demand for adjustable rate mortgages, since the 30-year fixed-rate mortgage was so affordable. But now that people are trying to save money however they can on their rate, adjustable rate loans are making a comeback. These typically afford you a better interest rate at a fixed rate, but only for a certain number of years before they adjust (as the name suggests). They could adjust up or down, depending upon what rates are when the time comes. To be safe, plan on the worst-case scenario of the rate being higher when that day comes. The length of time you have before the rate adjusts is often 5, 7, 10, or 15 years. These are perfect if you’re not even thinking about staying in the house for a full 30 years. So, consider how long you plan on staying in your house, and opt for one that won’t adjust before you move so you won’t be affected by a rate adjustment at all. For instance, if you’re pretty sure you’ll move in the next decade, a 10-year ARM might be the way to go.
  • Pay biweekly. By paying half of your monthly mortgage payment once every two weeks, you end up making an extra payment per year. Doing this cuts years and lots of interest off of your loan. 
  • Refinance when rates go down. Keep an eye on mortgage rates. When they come down a good amount, refinance your mortgage at a lower rate.

So, even if rates aren’t as low as they were in the recent past, you still have some options and control over how much interest you have to pay. Use one, or a mix of the strategies above, and you’re bound to save money! Let’s strategize together…Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 HanleyHomeTeam.com