HRI Blog

 

 

May 13, 2020

Should You Sell or Buy a Home in the Middle of the Current Crisis?

Buy or Sell During Crisis

 

The coronavirus pandemic has left the global economy reeling.

 

As anyone with an interest in investment knows, a weak economy and a turbulent property market go hand in hand. If you were considering making a purchase or sale of property in the lead up to the crisis, you may well be rethinking your approach now.

However, depending on your particular situation, the pandemic might actually have certain advantages.

 

Read on as we look at all the factors you should consider when deciding whether to buy or sell property in the current climate.

 

The Situation Before the Virus

 

Even before the onset of this public health problem, our country's property market was in a difficult spot.

 

A chronic shortage of supply had driven prices skyward. Many buyers were unable to find anything suitable within their price range. 

 

This was a trend that had persisted across the United States for a number of years. The recovery from the economic crash of 2008 brought with it a demand for housing that outstripped supply.

 

While this trend had reversed somewhat in Oahu in 2019, prices continued to rise. It was still a difficult time to be a buyer. 

 

As you will see, the coronavirus pandemic has had a dramatic impact on this situation.

 

The Immediate Effects of the Virus on the Property Market

 

The virus has had a number of different effects in terms of the property market, both in Oahu and elsewhere.

 

Firstly, jobs have been lost and wages have been cut. This means that there's less money in our economy to pay high prices for property.

 

Oahu

 

In Oahu, we get a lot of tourism and short-term leasing, especially in the approaching summer months. With the temporary reduction in market traffic here, renting may become more affordable in the short term, especially in tourism hot spots.

 

This may reduce demand for permanent sales in these areas. If you keep an eye out, you could snag a real bargain from someone who's eager to sell.

 

The virus and lockdown will also have a disproportionately large effect on our economy. Because we are so reliant on tourism and the service industry, our recession may be more pronounced than those in other areas.

 

If this isn't something that you're feeling the effects of personally, you will be able to capitalize on the resulting lower prices as a buyer.

 

Should You Buy or Sell?

 

If you've had plans to buy or sell a home for a while, you may be unwilling to give up on the idea now.

 

The good news is that you won't have to. The bad news is that, depending on your circumstances, it may be more difficult.

 

Aside from the economic implications of the virus and lockdown, there are practical, logistical factors to take into account.

 

Social Distancing

 

Ordinarily, people go to view a home before they buy it. They may view several homes, or even dozens, before making their choice.

 

The seller, on the other hand, may have to allow a similar number of viewers before they find a buyer.

 

With the social distancing requirements currently in place, this is now impossible in many cases. The Hawaii government has issued a stay-at-home order, restricting non-essential travel until further notice.

 

If and when the government lifts this order, difficulties will remain. Social distancing will remain a necessity until experts find a vaccine.

 

This is especially true for those working in healthcare, or who have a close relative who is high-risk.

 

Economic Factors

 

As alluded to above, our economy is much weaker as a result of the virus. This will result in lower demand and falling prices.

 

While there are many factors to consider, the upshot of this is that the market is now better for buyers, but worse for sellers.

 

How to Buy a House During the Pandemic

 

If you've been trying to purchase a new home for months without success, this pandemic might be a blessing in disguise for you. Prices are dropping, and supply is likely to increase as cash-strapped investors look to offload their holdings to get some liquidity.

 

Of course, you may have been hit by the economic downturn yourself. If you need to buy a home, but your resources are uncertain, you'll need to make every last cent count.

 

Whatever your situation, the following steps will help you to make the best of it.

 

Look for Bargains

 

The pandemic has left many house sellers with far less confidence in the value of their property. If you find the right house at the right time, you could get it for a steal.

 

Take Advantage of Low-Interest Rates

 

The Fed recently cut interest rates by half a percentage point in an attempt to limit the negative economic fallout from the coronavirus. This is great news for buyers.

 

If you're looking to secure financing for a new property, you want interest rates to be as low as possible. If you combine a low house price with a reduced interest rate on the loan you take out, you could get a deal that would have been unimaginable a year ago.

 

Allow for Extra Room in Your Budget

 

If you're still pressing ahead with your plans to buy, chances are you're in a reasonably secure financial situation. However, during these times, you never know what tomorrow might bring.

 

With this in mind, you should leave room in your budget when you prepare to buy your new house. This will give you room to maneuver if you suffer a job loss or pay cut down the line.

 

How to Sell a House During the Pandemic

 

As we've outlined, the virus has leveled the playing field somewhat in terms of buyers and sellers. While house prices in our area were steadily climbing, creating a favorable situation for sellers, prices are likely to decline steeply in response to current circumstances.

 

This means that buyers have more choice, and are therefore less likely to clamor for your property.

 

However, there are certain measures you can take to try to offload your home a little more quickly.

 

Curb Appeal

 

No matter when you decide to sell your home, curb appeal should be one of your top considerations. In order to sell a property quickly, for a respectable price, you need to make it look attractive to passersby.

 

Curb appeal refers to the attractiveness of your house from the distance of the nearest public sidewalk. It's about garden maintenance and exterior decor.

 

You might wonder why this is so important. After all, it's the inside of your property that the new buyer will be living in, right?

 

Well, yes and no. Because there are fewer buyers around, you'll need to work harder to build demand.

 

If a casual onlooker (who happens to be in the market for a house) is drawn to your property from the outside, they are more likely to want to have a look inside.

 

Online Presence

 

The internet has become increasingly important to the purchase and sale of property over the last number of years. The physical distancing requirements that the virus has imposed have made it even more relevant.

 

Advertise your property on every online platform you can think of. Share your listing on Facebook and Twitter, and ask all of your friends and family to do the same.

 

The wider you cast your net, the better your chances of finding a buyer in good time. 

 

Adaptation to Circumstances

 

Selling has become more difficult because of a shortfall in demand, but also because of practical issues. Fewer people are out physically searching for homes, and in-person viewing has become impossible.

 

To get around this problem, the best thing to do is use technology. Consider hosting virtual tours of your home for those who may be interested in viewing it.

 

Pricing

 

If you take every possible step to sell your house, but you still can't find a buyer, you'll have to reconsider your asking price. While nobody wants to have to take this step, there may not be any other choice.

 

Of course, this depends on your level of urgency in relation to making the sale. If you can afford to wait six months or a year to offload your house, you may well secure more money for it.

 

Getting a Good Deal Despite the Coronavirus

 

The global virus pandemic has made a lot of things more difficult. The purchase and sale of property are no different.

 

However, if you do need to buy or sell a home, you will be able to do so. You may need to take a more considered approach, but you will get there eventually!

 

If you're buying or selling a home and you'd like to learn more about what we can offer you, connect with us today.

 

April 10, 2020

COVID-19: Understanding Mortgage Rates and Opportunities

 

As we battle both a healthcare crisis and an economic crisis due to COVID-19, it can be hard to keep up with topics that might otherwise be important to you like mortgage rates and opportunities in the Oahu housing market.

 

When you do find time to consume the economic news, you might find it hard to digest. You’ll hear jargon like margin calls, short sales and T-notes. What does it mean for your average Oahu homeowner? What does it mean for Oahu home buyers and sellers?

 

Instead of relying on opinions from the talking heads, you can stay better informed by understanding the underlying principles behind housing and mortgages.

 

In this article, we’ll cover the broad strokes of the latest mortgage and housing news. We’ll explain the difference between the Federal funds rate and the 10-year Treasury note, and their effects (or lack thereof) on mortgage rates. And we’ll explore the unique challenges and opportunities presented by COVID-19 to Oahu homeowners and prospective buyers and sellers.

Battle for Wall Street: The Fed vs Coronavirus

The economic impact of COVID-19 has been swift and far-reaching. In just a few weeks between February and March, the stock market lost all its considerable gains from the previous three years. This sharp decline prompted the Federal Reserve to cut rates down to rock bottom (0.00-0.25%) on March 15th. Sounds good for businesses—what about prospective homebuyers?

 

When you hear that “the Fed cut interest rates,” that refers to the Federal Funds Rate. It’s the interest rate that the Federal Reserve charges banks who in turn lend to businesses and individuals. Lowering the Federal Funds Rate gives businesses easier and cheaper access to capital, thereby improving their quarterly outlooks and share values.

 

Since stocks are seen as a relatively short-term investment, other short-term investments tend to follow the same trajectory. In mortgage markets, these include variable-rate loans, such as 3/1 and 5/1 ARMs, as well as home equity lines of credit, or HELOCs.

 

As the Federal Funds Rate rises and falls, so do the rates on these shorter-term real estate loans. Rate cuts by the Fed directly benefit Oahu homeowners with an adjustable-rate mortgage and Oahu homebuyers looking to get one.

 

But adjustable-rate mortgages are nowhere near as popular as longer-term mortgages like the conventional 30-year fixed-rate. How are those affected?

Safe Haven in Long-Term Investments

When investors are spooked by uncertainty in the stock market, they flock to more secure and long-term investments like Treasury notes and mortgage-backed securities. 

 

You’ve probably heard of the “10-year T-note,” at least in passing. It is the most widely tracked government debt instrument and a common benchmark for other economic indicators. Along with other bills, notes and bonds, the US government partially funds itself by issuing 10-year Treasury notes. Investors receive a modest and relatively safe return in the form of interest payments that are exempt from state and local taxation.

 

You probably know about mortgage-backed securities, too—they precipitated the Great Recession. When a lender loans capital to a homebuyer, they don’t necessarily hold onto that investment. Oftentimes, they package the debt and sell it, acting as a middleman between many homebuyers and their ultimate debtholder. If the economy falters, that debtholder is left holding a big bag of bad mortgages. So begins a cascade of financial ruin, which in 2007-2008 we saw firsthand. Fortunately, lending standards are tighter now, and Americans as a whole are less leveraged with debt.

 

Because mortgage debt securities and Treasury notes are both long-term investments, their rates also tend to follow the same trajectory. When wary investors shift from stocks to long-term investments, that increased demand prompts lower interest rates on the long-term investment supply.

 

In short, the falling stock market led indirectly to lower 30-year fixed mortgage rates due to increased demand for long-term investments.

Opportunities for Oahu Homeowners and Homebuyers

On March 5th, the national average rate for a 30-year fixed mortgage hit its all-time low of 3.29%. Homeowners and buyers leapt at the opportunity to take advantage of this historic low, and lenders were soon overwhelmed by an onslaught of refinancing applications. In response, mortgage lenders raised rates back up to 3.65%. Since then, rates have fallen yet again and leveled out at a very attractive 3.33% over the past two weeks.

 

With average 30-year fixed mortgage rates again close to historic lows, now is a great time to refinance your existing mortgage or even buy a home.

 

Keep in mind that refinancing has costs. All told, the fees associated with refinancing—like closing costs, term extensions, and debt consolidation—can total upwards of $5,000. The first step is to make sure the numbers work out in your favor.

 

Conventional wisdom says that you should only refinance if current rates are at least 1 or 2% lower than your existing mortgage. However, real estate analytics firm Black Knight contends that a refinance makes sense for any homeowner with an existing mortgage more than 0.75% (or 75 “basis points”) higher than the going rate.

 

For prospective homebuyers, low rates mean they can afford more home with the same savings and income. Every basis point, up or down, makes a tangible difference in the cost of a mortgage across its lifetime. At 3.33%, today’s near-rock bottom 30-year fixed rates are incredibly appealing for buyers. The question is… during a global pandemic, are they willing to buy?

 

The impact of the novel coronavirus is still evolving throughout local real estate markets and the national economy as a whole. Stay-at-home orders make home tours complicated, if not impossible. If you’re looking to buy a home while rates are low, are you open to making an offer based entirely on a virtual tour, videos, photos, and a look at the exterior? Are you open to leaving your place of residence to tour a property with your partner and a showing agent?

Your Trusted Oahu Real Estate Advisers

At Hawaii Realty International, we are working hard every day to facilitate the needs of our buyer and seller clients with the utmost concern for their health and safety. Some buyers and sellers are motivated by external life events like relocation, divorce, or a birth or death in the family. Some buyers are looking to take advantage of low rates while they last. The good news is that, although business has inarguably slowed, sales are still happening. New listings are coming to market, properties are entering escrow, and deals are being closed.

 

If you are thinking of buying or selling a home, taking advantage of low rates by refinancing, or if you simply have a question about the market, feel free to reach out. We are always here to help, and it’s our honor to be of service. Now more than ever.

 

Stay safe, stay healthy, and stay in touch—figuratively, of course!

Posted in Trends
March 10, 2020

Mortgage Rates Hit All-Time Low

 

Last week, mortgage rates hit an all-time low. Maybe you’ve heard, it’s - big - news. On March 5th, 2020, the national average interest rate for a 30-year fixed mortgage clocked in at 3.29%. That’s the lowest recorded rate in the almost 50 years since Freddie Mac began keeping track in 1971. It's a momentous occasion—historic, even.

 

Before reaching the current low, mortgage rates began to fall during the global economic crisis of 2007-2008. Rates started 2007 well above 6% and averaged about 5% in 2008. By November 2012, they reached the previous historic low of 3.31%. After bumping back up to mid-3 and 4% in subsequent years, rates again began to drop in 2019. In a nutshell, buyers shopping for a mortgage have had it good for quite a while now.

 

Of course, there’s other, bigger news these days. The risk of global pandemic is wreaking economic havoc and pushing rates even lower. It goes without saying that these record-low rates aren’t exactly cause for celebration. Like the rate cuts that followed the Great Recession, today’s boon for borrowers follows another worldwide emergency. The novel coronavirus, or COVID-19, dominates the headlines. It’s impossible to avoid, and for good reason: in times like these, it’s best to stay informed.

 

In that vein, we thought we’d take a look at how the spring real estate market is shaping up. While we can’t predict the future, we are informed by indicators like historically low mortgage rates and the current state of the market.

Record-Low Mortgage Rates

Here’s the good news: When rates are low, both buyers and sellers win. Today’s all-time low average mortgage rates mean buyers can spend more on the principal of their loan instead of the interest. They can be approved for a larger loan, enabling them to buy “more house” with the same savings and income. Additionally, some would-be buyers who couldn't afford to buy an Oahu home may finally get the chance they’ve been waiting for.

 

  • $500,000 loan at 4.29%

    • Total cost of mortgage: $889,712

    • Monthly payments: $2,471

  • $500,000 loan at 3.29%

    • Total cost of mortgage: $787,328

    • Monthly payments: $2,187

 

As you can see, mortgage rates greatly impact both monthly payments and the total cost of a 30-year fixed-rate mortgage.

 

The benefits of today’s all-time low mortgage rates extend to existing homeowners and sellers as well. When more buyers are shopping with more money to spend, listings receive more interest and competition. That means better outcomes for sellers. Existing homeowners can win by refinancing. Analytics firm Black Knight recommends refinancing on any loan that’s at least 0.75% higher than the current average. There are some associated costs, but you’ll save thousands more if you can refinance to a significantly lower rate.

 

In a vacuum, reaching the historical low mortgage rate could be considered great for everyone. It benefits buyers, sellers and existing homeowners. But, unfortunately, there are extenuating circumstances to consider.

Enter Coronavirus: Disease and Unease

Unlike low mortgage rates, the effects of a possible global pandemic on Oahu real estate are a bit harder to guess. What we do know is that COVID-19 is very likely to spread further throughout the country. Fears will heighten, schools may shut. The ultimate toll that the virus might take on our country’s populace is unknown, but it is expected to be significant. The economy will also take a hit, and it already has.

 

Around the world, stock markets are plunging as business has crawled to a halt in some regions and industries. Despite lower rates, buyers whose down payments or reserves are in stock may actually have less buying power. If the virus spreads widely throughout the United States, the Oahu real estate industry may also slow. Open house events at Oahu homes for sale will be less populated during a pandemic. On the other hand, foreign investors are reportedly eyeing US real estate as an even safer investment than before the virus broke out. Call it a silver lining to a particularly grey cloud.

 

We also know that the Oahu real estate market has been largely unaffected so far. Buyers and sellers who are motivated by external circumstance (ie. a new marriage, new baby, new job, death divorce, etc.) are still participating in business as usual. The most affluent sellers or those who are in no real rush may elect to wait. If the disease fades away, things may stay the same. If the situation gets worse, they may change.

 

For now, Oahu real estate is still chugging along. Homeowners, buyers and sellers alike can take advantage of historically low mortgage rates. For those with an externally-motivated reason to buy or sell, that motivation hasn't changed. Those are good things. If you’re interested in buying or selling an Oahu home, or if you need a recommendation for a trusted Oahu lender, let us know. We’re happy to help. Most importantly, follow the CDC’s guidelines for disease prevention, and take good care of yourself.

Posted in Trends
Feb. 7, 2020

Five Oahu Luxury Home Upgrades for 2020

 

Whether you’re looking to buy your dream Oahu luxury home, spruce up your Oahu home for sale, or just browse what’s happening in Oahu luxury real estate, the new year brings some interesting trends in both form and function.

 

Some Oahu luxury homes feature out-of-this-world amenities like a movie theater, full gym and spa, or a vast wine cellar. However, adding a touch of luxury to your home doesn’t necessarily mean multi-million-dollar renovations. By reimagining a room with the latest in fine fixtures and finishes, you can add value and style to your existing residence at a relatively low cost.

 

In this article, we’ll explore some of the latest in luxury home design trends for 2020. Starting with…

Steam Showers

tophomedesign | CC BY-SA 2.0

 

A steam shower is two parts: first, the steam generator which heats water to produce the steam; and second, an enclosed shower stall which traps the steam inside. With the press of a button in your shower stall, the steam generator is activated to quickly heat water to a safe and comfortable temperature. The resulting steam is channeled through your shower system to fill the enclosed stall, resulting in a soothing and luxurious shower experience!

 

Installing a steam shower provides luxurious, high-end features and even health benefits to your Oahu home. Steam can clear stuffy nasal passages, soften your skin before a shave, open your pores, increase circulation and lower blood pressure. With adjustable digital controls for timing, temperature, and even music or scents, the modern steam shower is highly customizable. Additionally, steam showers are quite water-efficient and only use about 2 gallons of water for a 20-minute shower.

Designer Wallpaper

 

Through the years, wallpaper has gotten a bad rap. Now it’s back with a stylish vengeance. Gone are the days of tawdry, stuffy designs once smattered across Grandma’s kitchen walls. There’s a whole new industry of luxurious, fashion-forward wallpaper designs. For relatively little cost, you can redo a room or add a feature wall to spruce up your Oahu real estate.

 

With so many designers out there, who should you choose? If you’re interested in designer wallpaper, take some time to explore all the options. You’ll find hundreds and thousands of designs with a quick Google search, with many options easily available from online retailers like Houzz or big box stores like Home Depot.

Wine Fridges

Bill Wilson | CC BY 2.0

 

Nothing says luxury like a great selection of fine wines. Of course, any growing collection will require storage. Some Oahu luxury homes feature vast wine stockpiles, from spacious cellars of rich mahogany or chic glass displays with LED lighting. But since adding a full new wine cellar to your home is no small task, the next best thing is a dedicated wine fridge! It’s a luxurious solution to keep your cache of spicy reds and oaky whites in top shape.

 

A refrigerated wine cooler is the perfect way to ensure your wines are stored properly. Both built-in and free-standing units are available, ranging from just over $200 to $10,000 and beyond. A wine fridge is convenient, luxurious, and sure to impress your guests. When the time comes to sell your Oahu home, don’t forget to specify whether you will take the unit with you or include it in the sale.

Outdoor Kitchens

 

If you keep an eye on the luxury market, you’ve likely noticed a trend towards “indoor-outdoor” living. Many Oahu luxury homes feature large glass panels and sliding doors which serve to seamlessly blend exterior space with the interior. With more and more value placed on functional exterior space, why not make the ultimate upgrade and create an outdoor kitchen?

 

There are not many ways to better enjoy your backyard than cooking and lounging on a beautiful patio. High-end outdoor kitchens often include full installations of cabinetry, cooktop, grill and wet bar. Even if you’re not looking to drop tens of thousands on exterior improvements, installing a built-in grill with counter space can make a big difference towards entertaining friends and family.

Smart Features

 

Most Oahu homes these days have at least one or two smart devices. Maybe you wake up to Amazon’s Alexa playing your favorite song, or maybe you ask your Google Assistant to hit the lights when you hop into bed. In recent years, the Internet of Things has grown to include so many more appliances, you can now upgrade your home with a full suite of smart devices.

 

The modern smart home allows for easy control of temperature, lighting, security, entertainment, and more. From door locks to wifi to Spotify playlists, much of your daily life can now be smart-equipped for voice control and automation. Not to mention, you can do it all from thousands of miles away (if you so require). We think that luxury means more than extravagant adornments. It means functional ease and convenience. By that definition, outfitting your home with smart-controlled systems is the ultimate in modern luxury living.

Oahu Luxury Real Estate

As your trusted Oahu real estate experts, it’s our goal to provide guidance, insight, and understanding for anything real estate related. Whether you’re looking to buy a Kailua home, sell a Honolulu home, or you’re happy with the home you’re in, we hope these friendly articles offer you some insight into the world of Oahu real estate.

 

For more information about the Oahu real estate services we offer, reach out to start the no-pressure conversation. We are always happy to lend our expertise to explore your options.

Posted in Trends
Jan. 29, 2020

In a Rush? 8 Tips to Sell Your Oahu House Faster

 

To sell your Oahu home fast demands intelligent, informed strategy and precise execution. There are many reasons why an Oahu homeowner may want or need to sell, but unfortunately not all come with the luxury of time. Maybe you are relocating for work. Maybe a death or divorce in the family has forced an abrupt decision. Maybe you need funds for a new home build, or maybe your financial situation has changed and you can no longer afford your current home. In any case, you must make the most of the time you have to make your sale successful.

 

If you’re in less of a rush to sell your Oahu home, don’t click away just yet! Our tips for quickly selling Oahu real estate are still important for you to follow. After all, what seller wouldn’t want to both maximize their sale price and minimize their days on market? While the stakes may be higher if you’re crunched for time, it always pays to do things right. So, whether you have two weeks or two years to sell, read on for our top recommendations for a speedy and lucrative sale.

 

1. Don’t Overprice

We’re not the sorts who beat around the bush, so let’s get the big one out of the way: By far, the most important factor that can determine the speed of your sale is how much you’re willing to take for it. You’ve heard a home’s value is all about “Location, Location, Location!” But when it comes to closing a sale, it’s really “Price, Price, Price!”

 

As we covered in our article on the dangers of overpricing, pricing your home too high can have disastrous effects. An overpriced listing garners less interest from the very buyers who might otherwise make an offer. After languishing on the market, you may elect to make a price reduction; but a home priced right the first time is on stronger grounds to negotiate with buyers later. On the reverse, pricing your new listing at or below market value will lead to more buyer interest, busy showings, better offers, and a faster sale.

 

Some distressed homeowners opt for the extreme. House flippers and “We Buy!” street signs have long lured sellers with the promise of a cash offer and a quick closing. Without the necessary time or support to prep their homes for market, a seller might acquiesce and take the low-hanging fruit. It’s a sad tale, given that there is almost always a better option! Working with an experienced Oahu real estate agent can help you get a better offer, without having to deal with lowballing or scams.

 

So it’s abundantly clear (maybe even painfully obvious) that a lower-priced home sells faster. That’s just how selling things works, right? Then, what are some concrete steps a seller can take to increase both the price and expedience of their sale?

 

2. Look Superb From the Curb

They say not to judge a book by its cover, but that doesn’t hold as true when selling Oahu real estate. The proverbial “cover” of your home is its curb appeal, and it leaves a strong and lasting impression. Make it a good one, and you’ll sell faster and for more money.

 

Boosting your curb appeal has the valuable effect of enticing buyers inside to explore your home. If your exterior looks old and dreary, a fresh coat of paint and revitalized landscaping can make a stark and immediate difference. For a relatively low price compared to large-scale renovations, exterior updates will spark interest in prospective buyers and passers-by. You won’t sell fast if no one wants to come inside to see more! Don’t hamstring your sale from the outset with an unappealing facade.

 

3. Make it Pretty and Presentable

When you’re getting ready to list your home, try to view it through a buyer’s eyes. Is it warm and inviting, or cold and cluttered? Your goal should be to create an attractive space in which buyers can blissfully envision their future selves. We recommend and help our clients to use a professional staging service to get their home in selling shape. If for some reason that doesn’t work for you, though, there are still some things to keep in mind.

 

Before you hit the market, make sure your home is clean, decluttered, and depersonalized. It may be obvious to clean up your trash and dirty dishes, but what about your Tom Brady bobbleheads? Certain items like sports memorabilia, religious decor or political knick knacks should be packed away. Make your home appeal to the broadest possible segment of buyers, not just those who share your tastes and views. That extends to paint colors and other decor, too. Neutral color schemes in a clean and tidy space will make your home more appealing to more buyers.

 

4. Show the World!

You’ve cleaned and painted and prepped. Now it’s time to show it off! As soon as your listing is live, buyers who are looking for a home like yours will be notified through platforms like the MLS and Zillow. Their eyes will be drawn to your photo gallery first, so it’s important to have quality images.

 

Even if you’re something of an aspiring Ansel Adams yourself, it’s still a good idea to use professional photography services to sell your Oahu home. Yes, your smartphone can take some decent photos. No, they’re probably not as good as they could or should be. After pouring your time and effort into prepping your home for sale, why stop there? Hiring an experienced real estate photographer will ensure that your home is shown to the world in its best light (literally and figuratively).

 

5. Show Often and Get Feedback

Now that you’re on the market, it’s important to make your home available for agents and prospective buyers. Showings are easier if you’re not still living in the home, but your situation may not allow for that. Either way, your home should remain in a show-ready state at all times. Keep things tidy and personal items out of view. If you’ve already moved out, then your agent might set up a lockbox system to let agents show the home any time.

 

After a showing, make sure to get feedback from the buyer’s agent. Whether good or bad, it’s incredibly valuable to hear what their clients thought of your listing. Some agents may reach out on their own, but it also never hurts to ask those who do not. Armed with buyer and agent feedback, you can make the right adjustments to make your listing more appealing to the next group of visitors.

 

6. Set an Offer Deadline

If you’re in a rush to sell, then setting a deadline for incoming purchase offers will show buyers that you mean business. Make it clear in your listing that you will only accept offers until a specific date. You don’t need to specify exactly why that date has been set or even that you’re trying to sell quickly. Just set the date and let the offers roll in!

 

7. Get a Bridge Loan

Even if you feel you must sell immediately, there’s a secret weapon that can completely change your timeline: a bridge loan! A bridge loan is a short-term loan that leverages the equity from your current home to provide the funds you need to make an offer on a new one. With a bridge loan, you can move where you want and when you want to, but wait to sell your current home until the time is right.

 

Instead of scrambling to sell on short notice, a bridge loan gives you the breathing room to make well-informed and strategic decisions. Forced to relocate for work during the holidays? A bridge loan means you can wait to sell during the busy spring season when more buyers are browsing the market. Whatever your reasons for selling quickly, a bridge loan can change the whole equation and and alleviate the pressure on your schedule.

 

8. Choose Your Agent Wisely

Selling your Oahu home can seem overwhelming. The good news is that you don’t have to do it alone! By hiring an experienced and trustworthy Oahu real estate agent, you’ll get the guidance and support you need to maximize your sale. At Hawaii Realty International, we have years of experience working in your neighborhood. We know the market, and we are well-regarded by our peers. We leverage our extensive professional network to find you the best deal possible on a timeline that meets your needs.

 

From setting a price to coordinating improvements and staging, we will be your trusted advisor and make sense of the process. If you’re thinking of selling your Oahu home, don’t hesitate to reach out and start the no-pressure conversation. We’ll discuss your options and present a detailed strategy to optimize the sale of your Oahu home.

Posted in Selling a House
Jan. 10, 2020

Are Oahu Realtor Fees Worth It?

Oahu Realtor Fees and Commissions

Are Oahu Realtor fees worth it? Well, it depends on the value and quality of your Oahu Realtor. But as a general rule of thumb in Kailua and Honolulu real estate, like in all things, you tend to get what you pay for.

 

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It’s a new year, and the Oahu real estate market is waking from its seasonal slumber. Dozens of homes are shedding their decorative holiday coats in favor of neutral staging decor. Neighborhoods soon will swell with eager buyers on the hunt for their dream homes. If you’ve been thinking about selling your Oahu home, now is a great time to get down from the fence and find an agent to list it on the market. But which agent should you choose, and how much should you pay them?

 

Across the country, the standard commission rate that a seller pays their listing broker for helping to sell their home tends to hover between 5 and 6%. According to data from the National Association of Realtors®, the average commission in 2019 was roughly 5.7%. Since real estate commissions are not officially regulated, it’s up to the seller and their agent to settle on a fair fee. Therefore, it’s important for sellers to know what they’re getting in return for the agent’s cut. So what does your commission get you?

Doing the Commission Splits

The first thing to understand about commissions when selling your Oahu home is how that money is divvied up. Say you agree to pay your listing agent 6% of the selling price. That 6% does not go straight into your listing agent’s pocket. In fact, he or she will likely only receive a fraction of that amount, maybe around 25 to 40%. That’s because, as the seller, you are actually paying both the listing agent and the buyer’s agent. But wait, there’s more! Let’s explore how a standard real estate commission breaks down.

 

First off, your 6% commission goes to the listing agent’s side. Per your listing agreement, the listing agent denotes what amount of that 6% they will pay to the buyer’s agent for making the deal happen, usually around 2.5 to 3%. Of course, the buyer has their own costs to worry about, from appraisals to inspections to insurance and more. However, they don’t directly pay their agent to help find them a home. Instead, the buyer agent gets about half of that 6% from the listing agent when the transaction is closed.

 

What’s more, agents on both sides of the transaction pay a substantial portion of their earnings to their parent brokerage. From the 3% portions designated for the listing agent and the buyer’s agent, up to half of that may end up going to their brokers. So, instead of 6%, or even 3%, the agents might walk away with 1.5% apiece from the total sale price. While that’s not necessarily a meager sum, as homes routinely sell for hundreds of thousands or millions of dollars, it’s a far cry from the glaring 6% that turns the stomach of many prospective Oahu home sellers.

 

Services Rendered

So your listing agent doesn’t necessarily get a big 6% payday out of your closing price. Even so, if you receive poor, inattentive service from your agent, then any amount will feel like too much. What should your agent do to earn their pay? And what expenses does a listing agent accrue in the process of selling your home? Most marketing practices involved in listing a Kailua or Honolulu home for sale do incur costs out of the listing agent’s pocket.

 

Successfully selling Oahu real estate in this digital age requires a keen eye for web-based marketing. By 2017, up to 95% of buyers were using online search to find a home, and it’s only increasing. That means that professional media including photos, videos, social media and email marketing now play a critical role in improving your home’s visibility to the prospective buyers. Your listing agent should provide marketing multimedia which portrays your home in its best light, and your commission helps to pay for those professional services.

 

Of course, the “new school” of marketing hasn’t replaced the “old school.” Your Oahu real estate agent should include print and mail marketing in their plan. Postcards, flyers and brochures all remain relevant marketing tactics to let the neighborhood know that your home is for sale. And each of those methods costs money for printing, postage, design, and so on.

 

Most of all, your agent’s commission pays for their time and expertise. Hosting open houses, managing marketing campaigns, coordinating vendors like staging and inspections—if done right, each of these aspects of selling a home takes considerable time and effort. A good agent will also spend the time to field your questions, devise a strategy for success, negotiate on your behalf, and ensure that you are comfortable and informed at every step.

 

You Get What You Pay For

As with any profession, there are good and bad apples among Oahu Realtors. Just because John Q. Agent charges 6% doesn’t necessarily mean he’ll do a good job of selling your Oahu home. However, from a purely mathematical perspective, an agent who provides a “discount” service is simply unable to provide the personal care and professional marketing required to make your sale a resounding success.

 

Choosing an agent based on a low fee, or choosing to sell on your own (known as FSBO, or “For Sale By Owner”), is much more likely to backfire than it is to save you any money. In 2017, FSBO sales accounted for 7% of homes sold nationwide. The average FSBO sale price was $200,000, compared to $265,500 for homes listed with an agent. While it’s not a perfect apples-to-apples comparison, the difference of over 32% is still quite jarring.

 

So here’s the big takeaway: when you’re thinking about selling your Oahu home, there’s a number of criteria you should look for. “Lowest commission,” frankly, shouldn’t be that high on your list. You should choose your agent based on their competence and experience. Their honesty and reliability. Their track record. By how well their personality and schedule fit with your own.

 

A great Oahu real estate agent is worth every penny. Lucky for you, we happen to know some of the best. We have dozens of happy client reviews, years of experience in your neighborhood, and a veteran team of dedicated admin and marketing staff. If you’re thinking about selling or buying a home in Oahu, or if you just want to discuss the current Oahu real estate market, get in touch to start a no-pressure conversation. We’re always happy to hear from you.

Posted in Selling a House
Dec. 20, 2019

Hidden Costs of Luxury Real Estate

Oahu Beach - Luxury Real Estate on Oahu

Oahu Luxury Real Estate

Oahu luxury real estate is impressive, extravagant, and, of course, expensive. That should come as no surprise; it’s right there in the name! Luxury is defined as “conducive to sumptuous living, usually a delicacy, elegance, or refinement of living rather than a necessity.” But even if you’ve got the cash to buy a sprawling, lavish estate, there is more than the listing price to keep in mind. In this article, we’ll cover some of the hidden costs of owning a luxury home.

 

While you may have the resources to buy a luxury home in Kailua or Honolulu, it’s important to be aware of externalities. Much like starting a family, it’s only prudent to be prepared before shouldering a new bundle of responsibilities. As your trusted real estate advisors, a crucial part of our job is to ensure that you’re as informed as possible. So let’s explore some examples of the expenses that come with buying a luxury home.

More Than You Can Chew: A Case Study in Luxury Homes

Sixteen years ago, rap artist and former beverage mogul Curtis James Jackson III, aka 50 Cent (Fiddy), purchased a grand Connecticut estate. Nestled 80 miles north of the wealthy town of Greenwich near NYC, the residence at 50 Poplar Hill Drive boasts 52 rooms across 50,000 square feet. Some of the property’s opulent features include a nightclub, two private pools, both indoor and outdoor basketball courts, and a recording studio (naturally). The home is larger than others in the area, which didn’t help when it was later listed for sale.

 

Fiddy bought the estate in 2003 from another famous face, one Mike Tyson of boxing fame. The sale price then was $4.1 million. After a few years of owning the property, Fiddy listed the home for sale at $18.5 in 2007. At such a dramatically increased price, the listing did not sell and was taken off the market. By 2015, Fiddy again listed the home for sale. This time, the price was $4.995 million, but again the home did not garner the asking price. Finally, he sold the property in 2019 for $2.9 million to Florida businessman, Casey Askar. That’s an 84% price drop from his 2007 asking price of $18.5 million.

 

Such a drastic decrease begs the question: Why did Fiddy sell? The answer is in the hidden costs. Reportedly upwards of $70,000 each month, the upkeep and maintenance costs of the lavish estate were simply too much for Fiddy to handle. From the 50,000 sq ft of 52 rooms, to the lawns and the pools, the estate at 50 Poplar Hill Drive required constant effort from groundskeepers and staff. Not to mention utility bills to keep the residence warm throughout the winter, or cool in the summer. In just five years, that monthly cost would add up to the total that Fiddy paid for the original sale, and he could no longer justify the expense.

A Luxury Home Takes a Village

If you’ve watched the popular period drama Downton Abbey, then you are one step ahead of ol’ 50 Cent in knowing that running a palatial estate is a team affair. There’s the estate manager, the household manager, the butler, the chef, the cooks, the gardener, the gameskeeper, the stewardess, the chauffeur, the parlormaid, the chambermaid, housemaid, laundrymaid—the list goes on. But while the costs are steep, they do come with perks: keep your house in order and you may even be graced by a visit from the Queen!

 

In all seriousness, your home need not be a sprawling estate to be considered “luxury.” In the simplest sense, a luxury home is one that is valued well above the average in a given market. In many US cities and metro areas, a price of $1 million is often considered the starting point for luxury homes. In markets like San Francisco and New York, where prices are substantially higher than the national average, luxury is said to start around $4 million.

 

On the bright side, you do get more for the higher price tag. Luxury homes, whether a charming San Francisco Victorian or a giant midwest mansion, tend to come with more square footage and fancier features than the average home. But of course, there’s a hidden cost there, too. For a large luxury property, simple tasks like cleaning your gutters or mowing the lawn become a considerable expense. Want to upgrade to smart devices and appliances? It’ll cost a pretty penny to do so across your whole home. While you may have the money to cover these additional expenses, it's important to be aware of them when planning your home purchase.

Luxury Mortgage and Tax and Insurance, Oh My!

Let’s take a look at another famously fancy luxury home with hidden costs. When Yuri Millner, a Russian-born tech investor, bought his Silicon Valley home in 2011, the sale price of $100 million broke records in California and Santa Clara County. The Bay Area estate sits on 11 acres with structures of roughly 25,000 square feet, and includes a ballroom, a theater, a spa and a gym.

 

Interestingly, the taxable assessed value of the home has marked around $50 million by the Santa Clara County Assessor, just half as much as Milner paid. Yet that still means Yuri is on the hook to pay over $600,000 each year in property taxes. If Yuri has a mortgage, his payments will be whoppers as well. If he financed the home using a standard 30-year fixed conventional loan with 20% down and $80,000,000 in principal, his monthly payments would total nearly $400,000.

 

Of course, a Russian oligarch or any other billionaire likely is not concerned with middling expenses in the mere hundreds of thousands. But the fact remains that, as a home price grows, so too do its associated costs. Getting insurance for a $100 million home is nigh impossible, but insurance on a $5 or 10 million home is just plain expensive. From the tax man to your loan officer, you’ll be paying the pipers by the truckload.

Your Oahu Luxury Experts

Home ownership always comes with additional costs. But despite the increased expenses, buying a luxury property on Oahu can be incredibly rewarding. The stunning views, the lavish spaces, the fixtures and finishes each provide a magnificent setting for your modern, island lifestyle. We love matching our clients with the perfect home to fit their tastes and their budget. If you’re looking to buy or sell a luxury property, get in touch to start the no-pressure conversation and explore your options.

Posted in Buying a home
Dec. 6, 2019

The Dangers of Overpricing Your Oahu Home

Overpricing leaves your listing high and dry.

 

The dangers of overpricing your Oahu home are very clear: It just won’t sell. Simple enough, no? Well, if you’re still curious, then read on to explore the reasons that pricing your home too high for the Oahu market is perhaps the worst thing you can do when trying to sell.

 

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Say you love the old tile smattered over your unique floor plan. You feel the pool you installed for six figures was an excellent investment. Your afternoon naps simply wouldn’t be the same without those blaring trains. You love everything about your home, so it must be worth a little extra, right? Not necessarily.

 

An all-too common mistake by those selling a home in Kailua, Honolulu, and literally everywhere else, is that they overvalue their property. Maybe they want to recoup their investment on costly improvements. Maybe their personal taste doesn’t match with market trends. Maybe they did some misguided research, or maybe they’re just going with their gut. Whatever their reason for an unrealistic sense of their home’s value, they can all be deadly to a listing’s chances.

 

Inevitably, a portion of sellers will heed poor advice from agents who will say anything to sign a listing. Others may scorn the advice of a good agent. But what really happens when a home is overpriced?

More is Less

Ironically, if your listing is overpriced, it’s more likely to sell for less than if you had priced correctly at the outset. Buyers are often reluctant to offer a “lowball” price to an overpriced listing, for fear of wasting their own time or possibly offending the sellers. Sure, some bold buyers might decide (or be convinced by their agent) to bid low, but many more of them won’t even bother.

 

When a listing is priced too high, buyers will move on to spend their time and energy on the reasonably priced listings in the area. They don’t want to waste their effort. That leads to decreased competition for the overpriced listing and, in the end, a lower sales price. Good agents can spot an overpriced listing from a mile away. When they spot one, they will know that their clients needn’t worry about getting stuck in a bidding war. A seller who has overpriced should expect to see lower bids and fewer of them.

Losing Steam

Your first days and weeks on the market are the most crucial. When your listing goes live on the MLS, it triggers a cascade of events meant to help drum up interest in your property. Notifications are sent to buyers and agents through automated MLS alerts and search websites like Zillow, when a home that meets their criteria hits the market. If your listing is overpriced, those alerts won’t get a second look. In fact, if your pricing is way off, those alerts won’t even go to the “right” subset of buyers at all. Either way, you’ve wasted an opportunity.

 

As soon as your listing goes live, open houses and broker tours will populate on search sites, and your agent’s marketing plan should be in full swing. Snail mail, email, social media, agent networkingeverything is full-speed ahead to supercharge your entry into the market. But, if you’ve priced too high, then you’ve stymied that effort from the get-go. Overpricing is an exercise in self-sabotage.

Going Stale

Once the initial marketing period is over, an overpriced listing will continue to linger on the market. And linger. And linger. And linger… you get the point. “Going stale,” in industry lingo, means being confronted with two options. First, you can simply wait. Perhaps you have the time to wait for conditions to improve. You’re not in a rush, and at the very least inflation will catch up to your unrealistic expectations eventually, right? Some sellers choose to pull their home off the market, but many don’t have that kind of time to spare, or they don’t want to live in listing limbo.

 

Your second option is a price drop. Sometimes, a price drop is a perfectly reasonable course of action; if it’s spurred because of a shift in market conditions, then you’re at least somewhat insulated by the fact that everyone else is floating in the same ebbing tide. However, if you must drop your price due to your own initial mistake, then you’ll turn into easy prey. Much like the lion that hunts the sickly gazelle, buyers will identify your listing as fundamentally weak. Offers will come in low, and buyers who see multiple price drops will just wait around for the next one.

Hitting the Sweet Spot

The dangers of overpricing highlight the importance of finding an agent who you trust. You deserve a real and honest discussion. At Hawaii Realty International, we apply our experience in Oahu real estate to fit your needs, and we offer guidance based on the realities of the market—good or bad, up or down. We are your trusted advisor in selling or buying a home on Oahu. If you’re considering making a change, reach out to start the no pressure conversation and we’ll discuss all your options.

 

Posted in Selling a House
Nov. 11, 2019

OK Millennials! The New Generation of Homebuyers

 

As the largest adult population group in the US, millennials wield $1.4 trillion in purchasing power, and more of them are aging and earning their way into the real estate market.

 

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If you explored Twitter recently, you’d get the feeling that inter-generational squabbling has reached new heights. In a flurry of contentious posts, the trending “OK boomer” meme has highlighted the divide between millennials and baby boomers. Even cultural icons like William Shatner have joined the fray.

 

However, despite the often-strained, less-than-cordial relations relations between the two age groups, it is increasingly apparent that both sides agree on at least one thing: Just like their elders, millennials see home ownership as an essential part of the American experience.

Millennials Want to Buy Homes

Like any market, real estate is driven by supply and demand, and demand is strong among millennials. One 2018 study found that a whopping 9 out of 10 millennials are interested in purchasing a home. The same study showed that those millennials intend to act on that interest, albeit with some variance in their expected timelines. 

 

Of millennials who plan to buy a home, just 4% expect to buy in the next year, while a whopping 85% want to buy at some point in the next 2 or more years. If economic conditions allow, we can expect to see many more homeowning millennials in the years to come.

 

The important question is whether millennials will be able to afford to buy the homes they so desperately desire. Despite 2019 seeing slower growth in real estate markets nationwide, making a competitive offer to buy a home is still out of reach for many younger buyers.

Recession: A Coming of Age Story

The Pew Research Center defines millennials as the population born between 1981 and 1996 (ages 23 to 38 in 2019). When the global financial crisis hit in 2007, younger millennials were in middle school, high school and college, and the older half were young professionals just beginning to build their careers. The difficult economic conditions in which millennials came of age have had lasting effects on their long-term earning potential and their overall economic outlook.

 

Millennials had a front row seat to the havoc wreaked by subprime loans, unscrupulous lenders, overextended borrowers and unchecked debt markets. Many parents of millennials struggled financially in the years that followed, and some lost their homes. With firsthand experience of the dangers of debt, it seems that millennials have vowed not to suffer a similar fate.

 

For example, credit card debt among millennials is significantly lower than that of previous generations. Millennials average $3,403 of credit card debt, baby boomers average $5,603, and gen-Xers average $6,752. Millennials also hold less mortgages and car loans. What millennials do have, though, are student loans—and boy do they ever: millennials hold an average of 182% more student debt than their college graduate counterparts in 1995.

 

In short, millennials are cautious. But while they remain wary of overextending themselves, that won’t stop them from buying their slice of the American dream. In fact, millennials already make up the largest proportion of the home-buying market.

 

How I Met Your Realtor®

Spending habits aren’t the only way in which millennials differ from their predecessors. In the same way that dating apps have digitized the world of romance, the internet and real estate apps are poised to revamp the traditional home buying experience.

 

The days of the Yellow Pages and lookie-loo buyers are fading into obscurity, replaced by a savvy and well-researched consumer base. According to the National Association of Realtors®, at least 81% of millennials who already own a home found their property through a mobile app. Millennial buyers tend to know what they want, and that includes fast and attentive service.

 

Millennials also want different types of homes than previous generations. They are trending away from 20th century McMansions, instead preferring smaller, more manageable properties. They are seeking features and amenities that suit their lifestyles, from pet-friendly yards to space for organic gardens. Millennials may prefer cozy locations within walking distance of local shops and nightlife, in lieu of a sprawling estate on the edge of town. From the way that millennials meet their agent, to the way they choose their home, technology and the internet age are pressuring the industry to adapt. 

 

A Guiding Hand

At the end of the day, partnering with a veteran agent for expert guidance and tailored service is still key to buyer success. The home buying and selling process is sure to change further as young blood enters the market and new technologies arise. Those real estate agents who do not provide sufficient value to their clients will fall by the wayside. On the other hand, agents who leverage their market insight, their local connections, and their dedicated role as trusted advisers, will find continued success.

 

Whether you’re a first-time buyer looking to start building equity instead of throwing away rent each month, or if you’re a seasoned homeowner looking to make a move, we have the experience to help you succeed and the track record to back it up.

 

At Hawaii Realty International, we always aim to provide value to our clients buying and selling real estate on Oahu. To get our clients to best terms, the best offers, and the best opportunities. We dedicate our waking hours to help guide you through one of the biggest decisions of your life, because it’s what we love to do. Don’t hesitate to reach out and let us know how we can help!

 

Oct. 31, 2019

Buying Oahu Real Estate: Which Loan is Right for You?

 

Interest rates are low, low, low, and that means it’s a great time to be a home buyer! While median home prices haven’t dropped much nationwide, the costs you save with a low rate over the course of your loan more than make up for any monthly market swings. So, if you’re ready to take the plunge, and if you’ve saved for a down payment (more on that below), it’s time to consider your financing options!

 

These days, the 30-year fixed-rate conventional mortgage remains the predominant form of financing for home purchases around the country. At an average interest rate of just 3.61% in September of this year, standard terms on these loans are currently quite favorable to buyers. However, as consumers grow more sophisticated or seek more help through other alternatives, we are beginning to see a rise in the percentage of purchases financed through non-conventional means.

 

Per the National Association of Home Builders’ analysis of 2018 Census Bureau data, in 2018 nearly 30% of financing secured by home buyers was non-conventional. FHA loans led the pack at 11%, followed by cash purchases at around 10%. While you may or may not have the stack of dough on hand to make an all-cash offer, loans such as an FHA first-time buyer loan may be perfect for you.

 

Let’s take a look at the loan type options, conventional and non-conventional, that you can consider for your Oahu home purchase:

Fixed-Rate Loan:

The big daddy, the standard by which all others are judged. Accounting for over 70% of loans originating in 2018, conventional fixed rate mortgages are far and away the most common form of financing. These loans offer a single interest rate over the course of the loan, from day-one to day-ten thousand, nine hundred and fifty seven (and a half - thanks leap years!). A conventional fixed-rate loan is perfect for buyers who want a predictable payment and who intend to stay in their new home for the long haul. A down payment is required, so be sure to pad your savings account if this loan sounds right for you.

Adjustable-Rate Mortgage (ARM):

As the name implies, adjustable-rate mortgages do not remain constant like a fixed-rate loan. Typically offered at lower starting rates compared to fixed-rate loans, an ARM offers a better deal for a period of time such as five to ten years, and then the rate “adjusts” to the current market. So, if you’re planning to sell the home two or five or even ten years down the line, this financing option may be a great option for you to save money during that period. Considering the incredibly low rates offered these days, it’s unlikely that your ARM rate will remain as low once the initial fixed period runs out, so make sure that the terms of your ARM coincide well with your long-term plans.

FHA Loan:

Backed by the Federal Housing Administration, an FHA loan offers the opportunity for qualifying buyers to pay as little as 3.5% down on their home purchase instead of the typical recommended 20% on a conventional loan. While 20% is not required by all conventional financing, conventional guidelines tend to be more stringent, so FHA loans are a perfect option for prospective buyers with decent credit but lower savings to make a purchase. FHA loans are fixed-rate over 15- or 30-year terms, with a maximum loan amount that varies by state and county. Note that buyers of FHA loans must use the home or investment property purchased as their primary residence, and they are required to pay for mortgage insurance over the course of their loan.

VA Loan:

Veterans who have served for 90 consecutive days during wartime, 180 days during peacetime, or spent six years in the reserves are eligible for a VA loan with no down payment and no mortgage insurance requirements. These loans, backed by the Department of Veterans Affairs, do have some additional requirements, however: The home must serve as the buyer’s primary residence, and the home must fit within certain standards set by the program. That means no fixer-uppers are allowed!

USDA Loan:

If the bustle of city living no longer suits you and you’re looking to start a “Green Acres” life of your own, consider a Rural Development loan from the US Department of Agriculture. These loans are backed 100% by the government, meaning you don’t need to pay a down payment, and the program offers discounted mortgage rates for those looking to lay down roots in a rural area. Guidelines include restrictions on buyers’ debt-to-income ratio (not to exceed 41%), and property purchased must be in an eligible rural area as designated by the USDA. Learn more about the various types of USDA loans.

Bridge Loan:

If you’re looking to buy a new home but your money is tied up in your current home’s equity, then a bridge loan is your answer. Like its namesake, a bridge loan spans the gap between the home you currently own and the home you want to purchase. Lenders will combine your current and your new mortgage payments into one, and when you sell your current home you will use those proceeds to pay back the bridge loan. These loans are great for buyers who currently own a home, have good credit and a low debt-to-income ratio.

Bucking Convention(al Loans)

We hope that this brief overview helps to give you an idea of your options for financing the purchase of your next home. As local real estate experts, we have seen it all, and we know how important it is for you to consider all your options. For a good portion of buyers, a conventional fixed-rate loan makes the most sense. But for many others, these alternatives are worth considering! Let us know if you’re in the market to buy a home, and we’ll be happy to hook you up with a trustworthy lender offering competitive rates. It’s our pleasure to assist in anything real estate related, from the first steps of securing financing to the day you move in and for years to come.

 

Posted in Buying a home