Homebuilder Headaches

The National Association of Home Builders recently surveyed their members to ask them about the challenges they currently face and the challenges they expect to face.

 

Far and away, the biggest headache for homebuilders right now is the rising cost of building materials.

 

96% of the survey respondents cited this as a significant problem they faced in 2020 and 89% believe it will be a significant problem this year.

 

It turns out that builders are not only concerned about building material costs, but also the availability of those materials.

 

78% said availability was a significant problem last year and 80% said that it will be a significant problem in 2021.

 

Due to increasing materials costs, we notice builders locally having to raise their base prices significantly in order to keep up with rising costs.

 

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The Importance of Pre-Approval

To set yourself up for a smooth and successful home purchase, getting pre-approved is perhaps the most productive first step you can take. It strengthens your buying credibility, informs your home search, and speeds up the closing process.

The Pre-Approval Process 

There is an important distinction to made between two important steps of your mortgage application process: pre-qualification and pre-approval. They are similar in that they both help to inform your financial standing, but there are key differences between the two.

Pre-qualification

Pre-qualification is the first step in your mortgage application process. It will help you to understand the approximate loan amount you can expect to qualify for. You’ll begin by sharing your financial information—debt, income, assets, etc.—with you bank or lender. After reviewing the information, the bank or lender will give a loan estimate. The process is relatively simple, only taking a few business days to process.

Pre-approval

The pre-approval process is more involved than pre-qualification. After submitting a mortgage application, your lender will require all the necessary info to conduct a thorough credit history check and review of your financial health. Getting pre-approved will give you a better idea of how much you can borrow, estimated monthly costs, and what interest rates you can expect on your loans. Mortgage pre-approvals are typically valid for 60 to 90 days.

 

Benefits of Pre-Approval

Credibility

The truth is, each home on the market can only go to one buyer. To maximize the chance that your offer is accepted, sellers need to know that your offer is serious. Getting pre-approved shows that you are financially prepared and, in the event that your offer is accepted, there will be no hold ups in obtaining your mortgage. This assurance is what sellers want to know about their potential buyers, especially in a seller’s market.

Home search

Not only does pre-approval help to bolster your case as a buyer, but it also Indicates your affordable price range. By knowing your budget, you will be able to hone your home search and start preparing offers, eliminating any potential wasted time looking at houses you can’t afford.

Closing process

Once your offer is accepted, you’ll be counting down the days to move-in. Unfortunately, the closing process can often drag on, leaving buyers feeling like they’re in post-purchase limbo. Pre-approval will speed up the closing process, since the mortgage approvals have already been taken care of, allowing you to focus on next steps like appraisals and inspections.

 

When to Get Pre-Approved

Being financially prepared for a home purchase is a solid indicator that you’re ready to go about getting pre-approved, but what does that look like? Buying a house means taking on serious debt, so it’s important to either have your remaining debt paid off or have a clear path to becoming debt-free before getting pre-approved. Having adequate savings for a down payment is a sign that you’re ready to make your offer. For any questions about the pre-approval process and to get connected to a mortgage professional, contact your Windermere agent.

Writing

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Double Lumber

The price of lumber has doubled in three months.

 

Lumber is just one of several examples of skyrocketing materials costs which are impacting both home builders and home buyers.

 

The cost of lumber is now at a record-level $1000 per 1000 board feet.

 

These rising costs not only add to the sales price of a home but also add to the inventory shortage issue.  Some large, publicly-traded home building companies are slowing production in hopes of building costs dropping over the next few months.

 

Many people expected lumber prices to drop, or at least level off, when the tariff on Canadian lumber changed in December.

 

However, because demand has been so high from both building and remodeling, lumber costs continue to climb.

Construction

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Yes is the Answer

It turns out that ‘yes’ is the answer to the most common questions we hear right now about the market…

Do you think more properties will come on the market this Spring?  Yes, the normal pattern in our market is for new listings to be 40% to 70% higher in April versus January.  The peak month for new listings is typically June.

Do you think buyer demand will grow even more as time goes on?  Yes, for two main reasons.  Buyer activity, just like listing activity, increases significantly in the Spring and Summer.  Plus, we expect the economy to open up even more as the COVID vaccine gets rolled out over the course of the year.

Do you think interest rates will go up?  Yes, all of the trusted forecasters and economists expect rates to be slightly higher by the end of the year.  Our own Chief Economist sees rates at 3.07% by year-end.

Do you think prices will keep rising?  Yes, because of the simple economic forces of supply and demand.  Supply is at historic lows.  The number of properties for sale today is roughly 80% below the average.  Demand is being fueled not only by the low-interest rates, but also a rebounding local job market that is poised to rebound even more.  Plus, the new work-from-home dynamic positions the Front Range as a sought after place to live.

The post Yes is the Answer appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Yes is the Answer

It turns out that ‘yes’ is the answer to the most common questions we hear right now about the market…

Do you think more properties will come on the market this Spring?  Yes, the normal pattern in our market is for new listings to be 40% to 70% higher in April versus January.  The peak month for new listings is typically June.

Do you think buyer demand will grow even more as time goes on?  Yes, for two main reasons.  Buyer activity, just like listing activity, increases significantly in the Spring and Summer.  Plus, we expect the economy to open up even more as the COVID vaccine gets rolled out over the course of the year.

Do you think interest rates will go up?  Yes, all of the trusted forecasters and economists expect rates to be slightly higher by the end of the year.  Our own Chief Economist sees rates at 3.07% by year-end.

Do you think prices will keep rising?  Yes, because of the simple economic forces of supply and demand.  Supply is at historic lows.  The number of properties for sale today is roughly 80% below the average.  Demand is being fueled not only by the low-interest rates, but also a rebounding local job market that is poised to rebound even more.  Plus, the new work-from-home dynamic positions the Front Range as a sought after place to live.

The post Yes is the Answer appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

A Guide to VA Loans

Military

Image source: Shutterstock

VA loans provide a path toward homeownership for active service and veteran personnel and their families. The following serves as a guide to understanding what they are, who they are available to, and what types of loans are available to them.

VA loans can be confusing, so talk with your Windermere agent as you prepare to discuss your options with your lender. “Even people in the military have misconceptions about (VA loans),” said Windermere agent and Veteran Gervon Simon in a recent episode of our “Ask An Agent” series.

 

What are VA Loans?

The VA loan program was established by the United States Department of Veterans Affairs (VA) to help active service members, veterans, and surviving spouses become homeowners. VA loans are backed by the federal government yet provided by private lenders such as banks and mortgage companies. VA loans can be used to buy, build, or improve a home, or to refinance a current home loan.

 

How do VA Loans work?

VA loans have appealing characteristics for homeowners including lower-than-average mortgage rates, zero down payment on the purchase price, no-prepayment penalties, limited closing costs, and no Private Mortgage Insurance (PMI). They are typically easier to qualify for than standard home loans. With VA-backed loans, they guarantee a portion of the loan from a private lender. This means less risk for the lender, often resulting in more favorable terms for the homeowner. You do not have to be a first-time homebuyer to receive a VA loan. VA loan limits vary by county, so be sure to work with your Windermere agent to determine the limit in your area.

 

Which loans are available?

 

Purchase Loan

  • VA-backed purchase loans may be used to buy a single-family home, condo, manufactured home, or land. They also may be used to make energy-efficient changes to your home. Additionally, you can use a purchase loan to build a new home.
  • They offer no down payment, as long as the home’s sales price does not exceed its appraised value.
  • There is no need for PMI or mortgage insurance premiums (MIP).

 

Native American Direct Loan (NADL)

  • For Veterans who are either Native American or have a Native American spouse, the NADL can help to buy, build, or improve a home on federal trust land.
  • Beyond basic requirements of eligibility and credit standards, to be considered for the loan your tribal government must have an agreement—or Memorandum of Understanding (MOU)—with the VA. For more information on MOUs, visit this page: MOU Info

 

Interest Rate Reduction Refinance Loan (IRRRL)

  • The IRRRL is a refinancing tool for those with VA-backed home loans that are looking to reduce their monthly mortgage payments.
  • The IRRRL replaces a current loan, giving homeowners the ability to stabilize their repayment plans.
  • A VA funding fee may be required. Loan interest and closing fees will be charged by your lender but including these costs in your IRRRL will help you avoid paying the costs upfront.

 

Cash-out refinance loan:

  • The cash-out refinance loan allows homeowners to take cash out of their home equity or refinance a non-VA loan into a VA-backed loan.
  • In addition to your Certificate of Eligibility (COE), you’ll need to provide additional federal income tax information to your lender.
  • A home appraisal will be ordered by your lender. Similar to an IRRRL, a VA funding fee may be charged at closing. Follow their closing process and pay all closing costs.

 

For more information on the different types of VA Loans, eligibility, and more, visit the Veterans Affairs website here: VA Loans

The post A Guide to VA Loans appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

A Guide to VA Loans

Military

Image source: Shutterstock

VA loans provide a path toward homeownership for active service and veteran personnel and their families. The following serves as a guide to understanding what they are, who they are available to, and what types of loans are available to them.

VA loans can be confusing, so talk with your Windermere agent as you prepare to discuss your options with your lender. “Even people in the military have misconceptions about (VA loans),” said Windermere agent and Veteran Gervon Simon in a recent episode of our “Ask An Agent” series.

 

What are VA Loans?

The VA loan program was established by the United States Department of Veterans Affairs (VA) to help active service members, veterans, and surviving spouses become homeowners. VA loans are backed by the federal government yet provided by private lenders such as banks and mortgage companies. VA loans can be used to buy, build, or improve a home, or to refinance a current home loan.

 

How do VA Loans work?

VA loans have appealing characteristics for homeowners including lower-than-average mortgage rates, zero down payment on the purchase price, no-prepayment penalties, limited closing costs, and no Private Mortgage Insurance (PMI). They are typically easier to qualify for than standard home loans. With VA-backed loans, they guarantee a portion of the loan from a private lender. This means less risk for the lender, often resulting in more favorable terms for the homeowner. You do not have to be a first-time homebuyer to receive a VA loan. VA loan limits vary by county, so be sure to work with your Windermere agent to determine the limit in your area.

 

Which loans are available?

 

Purchase Loan

  • VA-backed purchase loans may be used to buy a single-family home, condo, manufactured home, or land. They also may be used to make energy-efficient changes to your home. Additionally, you can use a purchase loan to build a new home.
  • They offer no down payment, as long as the home’s sales price does not exceed its appraised value.
  • There is no need for PMI or mortgage insurance premiums (MIP).

 

Native American Direct Loan (NADL)

  • For Veterans who are either Native American or have a Native American spouse, the NADL can help to buy, build, or improve a home on federal trust land.
  • Beyond basic requirements of eligibility and credit standards, to be considered for the loan your tribal government must have an agreement—or Memorandum of Understanding (MOU)—with the VA. For more information on MOUs, visit this page: MOU Info

 

Interest Rate Reduction Refinance Loan (IRRRL)

  • The IRRRL is a refinancing tool for those with VA-backed home loans that are looking to reduce their monthly mortgage payments.
  • The IRRRL replaces a current loan, giving homeowners the ability to stabilize their repayment plans.
  • A VA funding fee may be required. Loan interest and closing fees will be charged by your lender but including these costs in your IRRRL will help you avoid paying the costs upfront.

 

Cash-out refinance loan:

  • The cash-out refinance loan allows homeowners to take cash out of their home equity or refinance a non-VA loan into a VA-backed loan.
  • In addition to your Certificate of Eligibility (COE), you’ll need to provide additional federal income tax information to your lender.
  • A home appraisal will be ordered by your lender. Similar to an IRRRL, a VA funding fee may be charged at closing. Follow their closing process and pay all closing costs.

 

For more information on the different types of VA Loans, eligibility, and more, visit the Veterans Affairs website here: VA Loans

The post A Guide to VA Loans appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Buyer Beware: Is That House For Sale Haunted?

Haunted House

Image Source: Canva

A trope as old as horror movies: a family moves into a beautiful house that they bought for well under market value. They’ve put all their savings into the move, and they’re looking for a fresh start. When they meet the neighbors and other townsfolk, they quickly learn that there’s a history to the home that they weren’t aware of.

When they start to experience the abnormal, it’s easy to brush off as new home jitters. The children who hear noises in the closet, and a husband who starts sleepwalking, are chalked up to stress and anxiety from the move. It’s only when the experiences escalate beyond control that the family finally realizes the extent of the haunting.

While sharing a home with the supernatural can be a selling point for some buyers, it’s quite the opposite for others. In fact, a 2017 survey by Realtor.com found that 33% of people were open to living in a haunted house, 25% would consider it, but 42% said it was a deal-breaker. So how do you make sure you’re fully informed about a home’s history? Knowing the right questions to ask is the first step:

 

Ask to see the seller disclosure form

In the famous 1991 case Stambovsky v. Ackley, the new homeowner, Jeffrey Stambovsky, won a lawsuit against the previous owner for not disclosing the history of hauntings.

In this case, the previous owner had published stories about the family’s experiences in Reader’s Digest and their local newspaper. In her writings, she explained several interactions with ghostly beings in the home, including finding that her children had been given rings, which would later disappear, bed shaking, and conversations with the floating specters.

The court took this evidence and ruled the “defendant is estopped to deny [the ghost’s] existence and, as a matter of law, the house is haunted.” Setting a new standard, this case created a basis for future seller disclosers. In this instance, they found that the history of the home, and the seller’s experiences in the home, would have influenced the marketability, and therefore, omitting these facts was unfair to the buyer.

Fast forward to 2019, there is not a specific section on seller disclosure forms for hauntings or ghostly sightings, but thanks to Stambovsky v. Ackley, sellers in many states are obligated by law to disclose things that affect a house’s marketability.

 

Ask Google about the history of the home

In 1991 when Mr. Stambovsky bought his haunted house, search engines didn’t exist. Today, we’re lucky enough to have things like Google which would have found the previous home owner’s stories in mere seconds. Search keywords like the address or town name, and words like “haunted” or “ghosts”, as well as “murder” or “news report” should help you start your dive into the history of the home.

 

Ask the neighbors and your agent  

This is where nosey neighbors come in handy. When you find a place you’re serious about, contact the neighbors to see what they know about the home’s history. The same goes for your real estate agent; he or she can reach out to the listing agent to see if there is anything haunting you should know about prior to buying. While many states don’t require sellers to disclose paranormal activity or deaths in the home, if asked, all real estate agents must, by law, answer truthfully.

The post Buyer Beware: Is That House For Sale Haunted? appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Buyer Beware: Is That House For Sale Haunted?

Haunted House

Image Source: Canva

A trope as old as horror movies: a family moves into a beautiful house that they bought for well under market value. They’ve put all their savings into the move, and they’re looking for a fresh start. When they meet the neighbors and other townsfolk, they quickly learn that there’s a history to the home that they weren’t aware of.

When they start to experience the abnormal, it’s easy to brush off as new home jitters. The children who hear noises in the closet, and a husband who starts sleepwalking, are chalked up to stress and anxiety from the move. It’s only when the experiences escalate beyond control that the family finally realizes the extent of the haunting.

While sharing a home with the supernatural can be a selling point for some buyers, it’s quite the opposite for others. In fact, a 2017 survey by Realtor.com found that 33% of people were open to living in a haunted house, 25% would consider it, but 42% said it was a deal-breaker. So how do you make sure you’re fully informed about a home’s history? Knowing the right questions to ask is the first step:

 

Ask to see the seller disclosure form

In the famous 1991 case Stambovsky v. Ackley, the new homeowner, Jeffrey Stambovsky, won a lawsuit against the previous owner for not disclosing the history of hauntings.

In this case, the previous owner had published stories about the family’s experiences in Reader’s Digest and their local newspaper. In her writings, she explained several interactions with ghostly beings in the home, including finding that her children had been given rings, which would later disappear, bed shaking, and conversations with the floating specters.

The court took this evidence and ruled the “defendant is estopped to deny [the ghost’s] existence and, as a matter of law, the house is haunted.” Setting a new standard, this case created a basis for future seller disclosers. In this instance, they found that the history of the home, and the seller’s experiences in the home, would have influenced the marketability, and therefore, omitting these facts was unfair to the buyer.

Fast forward to 2019, there is not a specific section on seller disclosure forms for hauntings or ghostly sightings, but thanks to Stambovsky v. Ackley, sellers in many states are obligated by law to disclose things that affect a house’s marketability.

 

Ask Google about the history of the home

In 1991 when Mr. Stambovsky bought his haunted house, search engines didn’t exist. Today, we’re lucky enough to have things like Google which would have found the previous home owner’s stories in mere seconds. Search keywords like the address or town name, and words like “haunted” or “ghosts”, as well as “murder” or “news report” should help you start your dive into the history of the home.

 

Ask the neighbors and your agent  

This is where nosey neighbors come in handy. When you find a place you’re serious about, contact the neighbors to see what they know about the home’s history. The same goes for your real estate agent; he or she can reach out to the listing agent to see if there is anything haunting you should know about prior to buying. While many states don’t require sellers to disclose paranormal activity or deaths in the home, if asked, all real estate agents must, by law, answer truthfully.

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The Remote Worker’s Home Buying Process

Home Office

Image Source: Getty Images

The pandemic’s influences on home life are far-ranging, prompting buyers to look at homeownership through a new lens. Remote work has created a paradigm shift in the wants and needs of homebuyers. Here’s what the remote worker should keep in mind when looking to buy.

Location

The location, location, location cliché has taken on new meaning for homebuyers who work from home. Because remote work gives us the opportunity to work from anywhere, home searches are expanding. Work commute times typically play a significant role in the home buying process; however, many buyers now have the option to view homes further away from their places of work.

Those who previously dreamed of the quiet life, but didn’t want the commute that came with it, are now able to make a move toward a more suburban environment. If you prefer to be away from the hustle and bustle of a downtown area but don’t want to feel isolated, search for properties in the suburbs with active town centers.

The proper space

When COVID-19 began sending workers home in the early months of 2020, homeowners worldwide discovered their varied level of preparedness for remote work. Some had spacious home offices and were able to make the transition easily. Others had to create makeshift workspaces out of living rooms or bedrooms. What we have learned is that a dedicated workspace is paramount to productive remote work, its importance emphasized by the unknown timeline of a return to working in-person in many parts of the country.

Before you buy: 
  • When searching for homes, understand that a home office situated in an open floor plan is more prone to distraction.
  • Look for features such as an additional bedroom, finished basement, or bonus room that offer ample space to create your remote work environment.
  • Having a designated space you can associate solely with work will not only drive your focus but helps to balance your home and work life. It allows you to wrap up the workday, leave your home office, and easily transition back into the goings-on of your household.
After you buy: 
  • Light it up: You’ll want plenty of light in your home office to stay fresh throughout the workweek. If you are next to a window, let in as much natural light as possible. Add in desk and floor lamps to brighten your space.
  • Work comfortably: While working at home, it’s easy to sit in one place for hours on end. Shop for comfortable desk chairs that provide proper lumbar support. Explore alternatives to desk chairs like yoga balls and standing desks.
  • Personalize: Adding personal touches will help to make your home office feel comfortable. Inspirational quotes, your favorite artwork, and pictures of loved ones are all types of décor that will keep you inspired in your remote work.

For all these considerations and more, talk with your Windermere agent about how your remote work is shifting where you’re looking for a home and what you’re looking for when it’s time to move there.

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