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Copyright 2017 NATIONAL ASSOCIATION OF REALTORS®
Real Estate mogul, Sean Conlon, host of The Deed: Chicago on CNBC, was recently asked the question, should you buy? Or should you rent a house?
“I am a true believer that you save every penny and you buy your first house… and that is still the fastest path to wealth in this country.”
Conlon went on to suggest that first-time buyers put down 10-20% “if they can make it work,” and to remain in their home at least 4-5 years to see a return on their investment.
Within a few years of working in the real estate industry, Conlon had established himself as one of the leading agents in the United States and has founded 3 billion-dollar brokerages dealing in residential, commercial and investment sales. Since immigrating to America from the United Kingdom in 1990, he believes very strongly in the American Dream and the role that homeownership plays in achieving it. Conlon is quoted on his website as saying:
“I treat people the way I would like to be treated if I went in to buy a house and I work harder than anybody I know. I think if you do that in America, you will always succeed.”
Homeownership is an investment you can leverage against in the future that not only provides shelter and safety but also helps you build your family’s wealth. If you are debating whether or not to purchase a home this year, let’s get together to discuss the opportunities available in today’s market!
Before you get involved in Solar energy – please do your homework. Whether you are the buyer or seller in this transaction, there are important things to consider when it comes to the transfer of ownership of your home.
Do you Lease or Own the panels?
OWNED PANELS: If the panels are owned by the seller, then they should be factored into the price of your home just as any other asset would be. This can usually be accomplished by searching comparable homes with owned solar panels.
A Solar Renewable Energy Credit (SREC): An SREC is created for every megawatt hour (MWh) of electricity produced by a solar generator. SRECs allow a seller with a solar array to use electricity that is produced by the panels and then separately sell the SREC to a utility company. You should factor in an SREC when valuing the asset.
Some solar owners use SREC brokers to handle the sale, so if you are a seller who is part of a ten-year SREC program you may want to consider selling your future credits through such a broker. If a seller does this, they would then value their solar panels based on the energy savings that they provide.
Buyers need to ask sellers if they are part of an SREC program and whether the SRECs will be transferred with the panels. If they are, a buyer would also want to know what the average annual output of the panels has been so that they can properly value them.
Leased Panels: If the panels are leased, it can be a bit more complicated. When a seller has leased solar panels, it is recommend that the seller contact the leasing company right away to let them know that they are planning to sell the home. In fact, some solar companies have set up departments specifically to work on lease transfers.
What’s a UCC-1: The solar company may reference a UCC-1 (Uniform Commercial Code – 1) that has been recorded with the property. A UCC-1 is a legal form that acts as a lien against the solar equipment on the property and is used by the solar companies to protect their interest in the leased panels. These finds should be recorded at your local registry of deeds. It is important to know whether or not a UCC-1 has been recorded with the property, because some lenders may have concerns that the UCC-1 will take priority over the mortgage in the event of a bankruptcy. Some companies will remove the UCC-1 filing and then replace it when the new mortgage is recorded.
Home Buyers: Buyers who are interested in a home with leased solar panels may want to remember to factor the monthly lease cost when determining whether or not you can afford the home. Your lender will most likely consider this when making a determination on your loan. Also, buyers should review your credit scores because the solar leasing companies are going to ensure that the buyer can assume the costs of the lease before they approve a transfer.
LEASED PANELS: A seller client has three options when dealing with leased solar panels:
1. They can buy out the lease;
2. Transfer the lease to the new buyer; or
3. Attempt to transfer the panels to their new home, although this option may only be available in rare occasions.
As you can see Solar panels can at the very least complicate the purchase and sale of a house, and at the most stop the transfer all together if the item is not handled properly from the get-go! Please use caution when buying or selling a house with solar panels.
Got questions? I’ve got answers – please feel free to contact with your house Purchase and Sale concerns!
Tori Denton, PSA, Realtor®
Need more information?
The Attorney General published the following helpful informational sheet on solar panels:
Source: Shining the Light on Solar BY MAR LEGAL STAFF July/August 2016
This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for
negotiation. In reality, this just dramatically lessens the demand for their house (see chart below).
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price, but will instead have multiple buyersfighting with each other over the house.
Realtor.com gives this advice:
“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”
This, too, may seem counterintuitive, as the seller likely believes that he or she will net more money if they don’t have to pay a real estate commission. With that being said, studies have shown that homes typically sell for more money when handled by a real estate professional.
Research posted by the National Association of Realtors revealed that:
“The median selling price for all FSBO homes was $185,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $163,800. However, homes that were sold with the assistance of an agent had a median selling price of $245,000 – nearly $60,000 more for the typical home sale.”
Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.
Contact me today to learn more and get your home SOLD!
Tori Denton, PSA, Realtor®
Talk to someone you can trust!
You might not sell a home every week…. but I kinda do!
413.301.4614 or email@example.com
Having the spare capital to put 20 percent down on a home purchase is great, but it’s certainly not the norm. Still, many people think it is and that belief may be holding some would-be home buyers back, particularly young adults.
Indeed, 39 percent of non-owners say they believe they need more than 20 percent for a down payment on a home purchase. Twenty-six percent believe they need to put down 15 to 20 percent, and 22 percent say they need a down payment of 10 percent to 14 percent to buy, according to the National Association of REALTORS®’ 2017 Aspiring Home Buyers Profile report.
But now for the reality: The average down payment on a purchase mortgage was just 11 percent in 2016. And that’s just the average; often times down payments are much lower. For borrowers under the age of 35, the average down payment was just under 8 percent, according to NAR’s survey.
As such, “aspiring first-time buyers think it takes twice as much to buy a home than it really does,” writes Jonathan Smoke, realtor.com®’s chief economist, in his latest column.
How much a person truly needs for a down payment depends on their situation. Their financial circumstances, home location, and the price of the home are important factors.
But there are many mortgage options that offer the opportunity to make low or even no down payments. For example, the Department of Veterans Affairs and the U.S. Department of Agriculture offer no-money down loans to those who are eligible. In 2016, 16 percent of buyers under the age of 35 put no money down on their home purchase.
Further, the largest share of loans for buyers under age 35 last year were for people putting down less than 5 percent on a home purchase (or about $3,500). The 3 percent down payment programs backed by Fannie Mae and Freddie Mac, and the 3.5 percent FHA mortgage that primarily targets first-time buyers, are both helpful programs to consider. These loan programs don’t require unblemished credit either. The average FICO score was 713, but realtor.com® notes borrowers with a 639 were still getting approved.
As such, Smoke says the millennial dreaming about homeownership needs to get this message: They need a FICO score of at least 639 and enough for a 5 percent down payment (that is, if they don’t qualify for the other programs with lower payment options). In that case, they’ll need to save about $3,500 to buy in the typical American town.
Source: “Attention First-Time Buyers: Here’s the Key Stuff You Don’t Know About Mortgages,” realtor.com® (Feb. 9, 2017)
Is spring closer than we think? Depending on which groundhog you listen to today, you may have less time than you think to get your home on the market before the busy spring season.
Many sellers feel that the spring is the best time to place their homes on the market as buyer demand traditionally increases at that time of year. However, the next six weeks before spring hits also have their own advantages.
Foot traffic refers to the number of people who are out, physically looking at homes right now. The latest foot traffic numbers from the National Association of Realtors (NAR) show that the number of buyers out looking for their dream homes in December reached the highest mark since February 2016.
These buyers are ready, willing and able to buy…and are in the market right now! Take advantage of the strong buyer activity currently in the market.
Housing inventory just dropped to a 3.6-month supply, which is well under the 6-month supply needed for a normal housing market. This means, in many areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices; however, additional inventory is about to come to market.
There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last four years. Many of these homes will be coming to market soon.
Also, new construction of single-family homes is again beginning to increase. A study by Harris Poll revealed that 41% of buyers would prefer to buy a new home, while only 21% prefer an existing home (38% had no preference).
The choices buyers have will increase in the spring. Don’t wait for this other inventory to come to market before you sell.
One of the biggest challenges of the housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. There is less overall business done in the winter. Therefore, the process will be less onerous than it will be in the spring. Getting your house sold and closed before the spring delays begin will lend to a smoother transaction.
If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by 4.7% over the next 12 months according to CoreLogic. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate around 4% right now. Rates are projected to rise by half a percentage point by the end of 2017.
Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.
Got Questions?? I’ve got answers – Let’s talk! 413.301.4614
Tori Denton, PSA, Realtor®
Helping you make the right MOVE – every time!
According to a recent analysis by CoreLogic, Millennial renters (aged 20-34) who have student loan debt also have higher credit scores than those who do not have student loans.
This may come as a surprise, as there is so much talk about student loans burdening Millennials and holding them back from many milestones that previous generations have been able to achieve (i.e. homeownership, investing for retirement).
CoreLogic used the information provided on rental applications and the applicants’ credit history from credit bureaus to determine if there was a correlation between student loan debt and credit scores.
The analysis concluded that:
“Student loan debt did not prevent millennials from access to credit even though it may delay their homebuying decisions.”
In fact, those with a higher amount of debt actually had higher credit scores.
“Renters with student loan debt have higher average credit scores than those without; and those with higher debt amounts have higher average credit scores than those with lower student loan debt amounts.”
Millennials are on pace to become the most educated generation in our nation’s history, with that comes a pretty big bill for education. But there is a light at the end of the tunnel:
“Despite the fact that student loan debt has grown into the nation’s second largest consumer debt, following mortgage, and has created a significant financial burden for millennials, it does not appear to prevent millennials from accessing credit.”
Contact me today to get on the road to home ownership! 413.301.4614 firstname.lastname@example.org