Get Ready to Buy This Spring

Once you decide that this Spring you want to buy a new home — or your first house — the question is, “Where do we start?”

The answer lies in two sets of decisions:

#1. Start With Success: Begin by deciding what success means to you. Clarify what you really want and why, not just what’s “in” right now. Explore this practical side before viewing properties. What matters is not the number of homes you see, but zeroing in on genuine good matches. For instance, a couple who wanted to add a mortgage-paying basement suite to their next home, decided to search for houses with an existing basement bathroom since this would be the most expensive part of creating a rental unit.

#2. Who’s “We”?: The other essential to a good start is to decide who “we” is going to be:

  • Will friends or family come along to share their construction or real estate ownership expertise?
  • Will you have a contractor on-call to provide renovation-cost estimates to back up your offer price?
  • Who will you select as your local real estate professional to be sure you see all the best matches without being dragged through definite “nos.” For instance, a condominium specialist may not be the best match if you are intent on a detached house with rental suite potential. How much do you need to learn about real estate before you will be comfortable when it’s time to sign on the dotted line? If you have a steep learning curve, you’ll benefit from a real estate profession who is well equipped to inform as well as provide access to the best-fit real estate. Then there’s the professional negotiation skills you’ll want to tap into.

If you want to buy this Spring, when should you start?: How quickly you can find a home to buy and move into it depends on many factors:

  • The transition from searching for an ideal property to moving in can be condensed into a few weeks. This is often the pace for corporate relocation. Frenzied decision-making may not generate the best long-term results unless you are ultra-prepared and an experienced real estate buyer.
  • At the other extreme, stretching the search for that “perfect forever home” over many seasons or even years may work for those who want a specific location or type of property and are not displeased enough with their current home to accelerate the process.

Somewhere in between those extremes lies your ideal time line:

  • Buying within a market cycle, enables your real estate professional to identify specific properties that present the best return in that buyers’, sellers’, or flat market.
  • If you have a busy work and personal life, carving out time to consider listings, view properties, explore neighborhoods, investigate financing, and deal with all related details can be a stressful juggling act. Your priorities coupled with how quickly new listings sell will determine how you prioritize your home search. Consider how well you make major decisions when under stress.
  • When the goal is to enroll children at the start of school year or to arrive at a new job on time, back calculating with your real estate professional will reveal when the search should begin. When in doubt, start sooner, so you don’t end up faced with time-pressured decisions.
  • Hot real estate markets are the hardest to plan timing in. You may be eager to purchase, but lose out on property after property in multiple offers. Decide what your worst-case scenario would be and act accordingly.
  • Waiting for your local real estate market to change gears so prices drop is risky. Timing the real estate market is no easier than timing the stock market. The best advantage in any market lies in selecting ighly-knowledgeable, experienced professionals fully committed to working with your best interests as their top priority.
  • You may not be 100% certain this is the Spring for you to plunge into the market, but if you’re more sure than not sure, invest time finding the right professionals. If the timing is not right for you, that will become evident and you’ll discover what your options are and why.

Real estate professionals, committed to understanding market pace in areas they work, can help you manage timing. One thing they may suggest, is not to wait for the Spring Market, but to get ahead of the mass of spring buyers and jump into real estate now. For instance, sellers who are listed now are serious about selling and, depending how long their property has been on the market, they may be more receptive to negotiation.

Whether you decide to wait until Spring or jump in now, here are Five Savvy Buying Tips that ensure you’ll get the best property for your needs, at the best price, with the minimum amount of hassle and disappointment:

#1. Apply Smart Buying Rules: If you consider yourself a smart buyer when purchasing a car, a phone, or travel, apply that savvy to buying real estate. Understand what you need and why. Set a realistic budget. Learn how things work. With all these issues, the right professional should save you time, stress, and money.

#2. Ensure Location Overrules Features & Decor: Real estate is an immoveable object. That reality dictates that where you buy is the prime value concern. Smart buyers look for the least property in the best area, so their real estate improvements result in increased market value. Values within a neighborhood or community are not uniform. There are specific streets, even ends of streets, that represent the highest local value just as boundary streets and other locations may represent lower prices. Particularly in urban areas, proximity to the most highly-regarded schools, popular shopping areas, and sought-after local features like parks dictates price, as your real estate professional will explain.

#3. Maximize Move-In Timing: The more flexible your move-in date, the more room to negotiate with sellers. Agree to their ideal move date and that may generate concessions in price or inclusions. When you have a fixed move-in date, you may find yourself paying more to buy what you want, when you want it. Timing is a significant consideration when deciding whether to buy your next home before you have sold your current property, that is, taking the risk of paying on two mortgages at once. Since the market where you are selling may be different from that where you want to buy, timing decisions should involve the experience of a real estate professional or two.

#4. Own The Money Factor: Affordability encompasses costs ranging from purchase price (including legal fees and other costs), mortgage financing, and the cost of customizing the living space to including ongoing expenses like heating, cooling, commuting, and anything else that matters. With mortgage rates on the rise, reducing consumer (car) loans and credit card debt may open up borrowing room.Mortgage professionals can help you shop a wider range of lenders. These money experts can also explain why there is so much more to consider than just interest rate.

#5. Face Reality Head On: Compromises to your “must have” list can maximize value and returns.

  • You may want four bedrooms, but if two younger children share a large room until the eldest child goes to college, maybe that 3-bedroom with significantly-better location and greater appreciation potential will really work for your family.
  • If cosmetic or minor renovations don’t daunt you, this could also provide a location advantage and may even mean a larger home is affordable.
  • Compromising on location can also mean more living space, just be sure that commuting costs, including needing an extra car and possible lower appreciation rates, don’t swallow up that saving.
  • Your buying perspective is also an important consideration. Do you expect to stay until a second child appears or until all the kids finish school or are you in for the long haul? Shopping for a “forever home” is a popular approach. Just take care that projections are fact based and not fantasy that leaves you buying more home than you can comfortably afford in a rising interest-rate world.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

10 Hot Trends For Your Home In 2018

10 Hot Trends For Your Home In 2018

Starting to think about making changes to your home? The new year is, not surprisingly, a popular time to try on new trends or make overdue updates. Before you hit the paint store or buy those new kitchen cabinets, take a look at what industry experts are predicting will be some of the hottest home trends for 2018.

Brass

Brass has been showing up in kitchens, baths, and lighting for a few years, but homeowners who were hesitant to take the leap can feel more confident next year. Brass accents are expected to be huge for 2018.

 

The end of the all-white kitchen?

It’s been the dominant interior trend for several years now, with white cabinets, white subway tile, and white quartz or marble countertops dominating kitchen design. But, next year, don’t be afraid to add a little color. Everyone will be doing it.

“Houzz says white will always be a classic color for kitchen design, but homeowners are expected to throw in bits of color, especially other neutrals like gray and blue,” said inman. “In order to add a little warmth to such a cool palette, designers are ditching painted cabinets for warm wood tones, such as mahogany.”

Mindfulness

Last year, hygge made a splash, bringing “the Danish concept of finding contentment in cosiness” to the home,” said The Independent. While we’re not quite ready to get rid of this homey trend, a new one is burgeoning: Ikigai. Will this lifestyle concept from Japan “help us live our best lives?”

The central principle of Ikigai is about finding purpose in life, and covers everything from a mindfulness surrounding daily tasks and goals to social connections to what we buy—and keep—in our home.

Wabi-Sabi

Of course, don’t fear that following Ikigai means you have to be perfect. If you also follow the principle of wabi-sabi, “the Japanese art of finding beauty in imperfection,” said Country Living, you can relax your mind and enjoy your surroundings without needing everything to look just so. “In home design, this translates to handmade or hand-painted items including rough linens and pottery. The result? A deeply personal, organic aesthetic.”

Into the purple

Ultra Violet, a rich, dark purple, is Pantone’s new 2018 color of the year, so if you’re a fan, you’ll have lots of options for incorporating it into your home in 2018.

Lavender

If Ultra Violet is too dramatic for you, there are other options within the purple family that designers say will be hot for 2018. “Millennial pink is still around and I still love it, but it’s morphing into lavender and lilac,” Nancy Fire, creative director of HGTV HOME, Design Works International and Studio NYC Design told House Beautiful. “People were sarcastic about millennial pink at the beginning, but it’s being used to bring out beautiful, soft tones with accents that are deeper.”

The end of gray?  In other very important color news: “Beige and brown are back,” said Gates Interior Design. “If you never got around to embracing the grey trend, well guess what? You’re back in!”

A sink to remember

Popularized in large part by HGTV’s Chip and Joanna Gaines, the farmhouse sink has earned superstar status in the kitchen. But, they have mostly been stainless steel. Not so in 2018. Houzz predicts “warmer hues and grittier textures,” with “concrete, stone, copper and granite composite sinks in darker hues of gray, bronze or black.”

Circles

Geometric shapes aren’t going anywhere, but we may be seeing more than linear shapes next year. “Hard geometrics are going to be huge, and I think circles are the new triangle,” interior designer Genevieve Gorder told House Beautiful. “You can start small with accent pillows or dive in with graphic wallpaper.

Non-linear shapes are also showing up in other areas, like these curvy couches.

Standout lampshades Make a little, no-commitment update by addressing your lampshades. “White drum lampshades, begone,” said My Domaine. Anna Brockway, co-founder of Chairish, told them, “We’re seeing strong interest in pleated, patterned, and even wicker lampshades. This is a great way to get a sophisticated, decorated look and bring freshness to existing lighting pieces.”

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

Slaying That Credit Score – New Tips For A New Year

Getting ready to buy a house or just thinking about it?

Where to buy, what to buy, and how you’ll afford it are probably top of mind. But if you’re not also concentrating on your credit score – and by concentrating on, we mean actively trying to raise your scores as much as possible – you’re not looking at the whole homebuying picture.

Not only can does your credit score factor greatly into what you’ll pay for your house, it can keep you from being able to buy one, period. Your credit history determines what loans you will qualify for and the interest rate you will pay. A credit score provides an easy way for lenders to numerically judge your credit at a point in time. It gauges how likely you are to repay your loan in a timely manner. The better your history appears, the more attractive you become as a loan customer.

Thankfully, your credit score is not static; it can (and does) change all the time, and there are all kinds of ways to improve it, some better than others. I’m running down the smartest options to boost your score in the new year.

Shoot for perfection

850 is the best score you can possibly get, and, while it may seem completely out of reach, there are people who actually crest that credit mountain and reach the top. It’s the Holy Grail of all credit scores: 850. On the widely used FICO credit score scale, approximately one in every 200 people achieves perfection, at least as of a 2015 estimate by the Fair Isaac Corporation. Careful budgeting and detailed attention to every aspect of their financial picture are the umbrella tactics they use to get and maintain that score – and they’re ones you should be using, too.

Or, shoot for 750

If 850 is out of reach within a reasonable timeframe (reasonable being the maximum amount of time you want to wait before buying a home), try for 750. This is the magic number for many lenders and creditors. It puts the ball completely in the corner of the consumer rather than the lender. You’ll often have lenders fighting for your business, and in nearly all instances, you’ll be offered the best interest rate by lenders, meaning you’ll have the lowest possible long-term mortgage and loan costs of any consumer.

Talking to your lender about the items on your credit report that have the best chance of raising your score is key. You may think that paying off that old unpaid account from six years ago is an easy way to get a score bump, but is it about to fall off of your report on its own?

Set up automatic payments

According to CreditCards.com, a good 35 percent of your credit score is taken from your payment history. You may have missed payments in the past that you need to deal with now, but you certainly don’t want to make another mistake while you’re trying to get homebuyer-ready. Almost every creditor, from your utilities to your car payment to any outstanding student loans you may have, offers the option of automatic payments. This is the easiest way to ensure you never miss a payment because you got busy or spaced on the due date.

But, just remember to make sure there is enough cash in your account to cover the payments on the day the money will be coming out. If you have been busy moving funds into savings for your down payment, you’ll want to set a reminder to put money back into whatever account your auto payments are attached to.

Ask before you shut down credit cards

The amount of credit you have is a factor in qualifying – or not – for a mortgage. Too much debt is a bad thing. But, long-term credit use that has been managed properly can be helpful to your score. If your lender does recommend getting rid of some of your available credit, it likely won’t be older cards. Length of credit history is considered when determining your score – so the longer you’ve had a credit card, the better.

Also beware that closing any card triggers a change in your “utilization,” and that might not be a positive. Be sure to consult with your lender first.

Watch your credit limits

Banks don’t look kindly on those who have used all of their available credit because it gives the appearance that you’re not living within your means. The amount of available credit you use is the second most important factor in your score. Experts recommend you keep your balance on each card below 30% of your limit — if your limit is $5,000, your balance should be under $1,500.

Of course, even lower is better. Get to 20% or even 10%, and you’ll be in great shape. But don’t go below that. While it may seem like a zero balance would indicate that you are financially savvy, banks like to see responsible credit management. That means using your cards and paying down the balance to a reasonable level every month.

Pay down your debt…but check with your lender first

If you’re trying to weigh the best tactics for improving your credit and you don’t have the funds to take care of every outstanding wrinkle on your credit report and pay down your existing debt at the same time, you definitely want to check with your lender before you make any move. Every dollar is important, and while NerdWallet notes that your credit score will “soar” as you “pay off your debt as aggressively as possible without acquiring more”, it could be that your lender has a strategy that places more importance on other credit issues in your report, or has structured your credit repair according to a different timeline.

This underscores the importance of working with a lender who is skilled and experienced in credit repair. Using the tools, allows you to qualify for the home you wanted and get a great interest rate.

Don’t be afraid to refinance

You may end up buying a home before you get your credit score exactly where you want it to be. If you’re in an appreciating market, which much of the country is, and your score continues to rise after you close escrow, you might be in a position to refinance sooner than you think. Especially if you buy your home with an FHA loan, their streamline refinance program can potentially lower your rate without an appraisal, a credit check, or job/income verification.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

Biggest mistake homebuyers make in trying to get a good deal

The process of buying a house requires an investment of time as well as money. So, if you want to get a good deal, doing your homework is crucial.
The fallacy is that ‘getting a good deal’ is all locked in at the initial transaction, on the purchase price or the initial loan.
In reality, that assumption is not always true. When you become a homeowner, the money you had been putting toward rent not only goes toward a mortgage, but to insurance, repairs, maintenance and upgrades.
You have to think of homeownership not just as a one-time event, but as a process over the life of you owning this asset that you’ll be able to manage it wisely and make smart choices with it.
Say you negotiate the purchase price down 5 percent from what the seller is asking and are able to get the loan you want at a quarter point below market rate. Sounds like a great deal, right? Well, not so much if the reason the seller is willing to decrease the price is because the home needs repairs or renovations.
If you’re saving $10,000 on the purchase price but you have to spend $30,000 gutting the kitchen, the home might not be much of a deal.
Don’t be fooled by the sticker price. It’s only the beginning.
For buyers who have saved up and worked toward buying a home for years, it can be overwhelming to think about all the abstract costs associated with homeownership. Think of it like buying a car: You might be able to afford a $300 a month payment on its own, but how much does it cost once you add the price of gas, insurance, oil changes and other maintenance?
It’s a misconception as a car owner to think that it’s the down payment on the car and the monthly cost, and that’s it. Ditto for homeowners. You should not think, ‘Oh I got an interest rate of 3 percent, I got a good deal!’ or ‘The home is being offered for $950,000 and I got it for $930,000. I got a great deal!’
In the context of owning your home, if you plan to live there for the next seven to 10 years — or for the rest of your life — knowing whether or not you got a good deal depends on how well you managed the overall homeownership process.
Homeowners can expect to pay around 3 percent of the of the closing price per year on hidden costs, such as repairs and utilities, although your expenses will vary depending on your location and the size and quality of your home.
I also recommend researching home warranties, which can provide another layer of financial protection.
If you’re trying to get the best possible deal on a home, you need to think long-term. In addition to the initial price of each home, consider the investments you’d need to make years down the line. Being aware of the big picture now could help you save big now — as well as later.

 

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

5 Surprising Benefits Of Buying Or Selling Your Home In The Fall

Seeing fewer for-sale signs now that summer is over? That can be great news for buyers who are looking to score a new home and buyers who want to get rid of their place and buy a new one. If you think you missed the boat on making your move this year, we’re here to tell you why buying and selling in the fall can work for you.

Less competition

Yes, there may be fewer homes on the market, but there are also fewer buyers out there competing for the same home you want. That gives buyers an important edge. Families on a mission to move into a new home before school starts are out of the picture. Competition for houses drops off in the fall, a time many people consider to be off-season in real estate. But there are still homes for sale – and in some cases, there’s just as much inventory as there was during the spring and summer.

The benefit to sellers is that those buyers who are out there tend to be more serious, which means your REALTOR® can key in on the real buyers without having to sift through the riffraff.

Tax breaks

If you’re a buyer who closes escrow before December 31, and you may get a nice write off on your taxes. Property tax and mortgage interest are both deductions you can take for your whole year’s worth of income, even if you closed on your home in December. Any payments that are made prior to the closing of the loan are tax-deductible. This can make a serious difference in the amount you owe the government at the end of the year.

There are also potential tax breaks for home sellers. You can include all sorts of selling expenses in the cost basis of your house. Increasing your adjusted cost basis decreases your capital gain because this is what’s subtracted from the sales price to determine how much of a gain – or loss in some cases – you’ve realized. If you have less of a gain, you’re more likely to fall within the exclusion limit, and if you’re gain isn’t excluded, you’ll pay taxes on less. And that’s just the beginning. Closing costs and home improvements may also be write offs for sellers.

Home for the holidays

Buy or sell early in the fall and you could be nicely situated in your new home in time for the holidays. Moving during a calmer time of year also means you may have better access to movers and other necessary resources than during the busier spring and summer seasons.

The right price

Did you list in the spring or summer with an exorbitant number that you thought you’d have no trouble getting because it was a hot market? That’s pretty common these days. Whether you’ve had a revelation about the price you should be asking or have made updates to your home to justify a higher price, you’re probably in better shape to get your (realistic) asking price in the fall. If you’re a seller and you establish a smart pricing strategy, you could find your home standing out in the crowd and selling while others sit on the market under a blanket of snow.

Buyers also may have a better time getting a home that’s within their budget because when there is less competition for homes, there is less chance of bidding wars and over-asking-price sales.

 

Great deals on stuff to fix up your home

Coordinate the timing right, and those items you need to fix up your home for sale in the fall or update and upgrade after a purchase might be priced to your advantage. Check Consumer Reports for a full list of the best times of year to buy everything, and keep in mind holiday and Black Friday sales. You could score some great deals at this time of year.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

7 first-time homebuyer mistakes to avoid

It’s tough being a first-time buyer in today’s housing market.

Home prices are hitting record highs in many parts of the country, often selling for more than the asking price.

Don’t make it even harder (or more expensive) for yourself by making these common mistakes:

1. Assuming you won’t get approved for a mortgage

Ideally, you’d like to have as little debt as possible, an impeccable credit score, and a 20% down payment before borrowing money for a home. However, even borrowers with less can get loans in today’s market, thanks to options like Federal Housing Authority loans, which are meant to help first-time buyers.

2. Interviewing only one lender

The fees and rates offered by lenders may vary substantially, and they all offer different service levels and different loan products. Be sure to at least chat with a big bank, a regional bank or credit union, and an online lender.

3. Not getting pre-approved early on

Getting pre-approved for a mortgage serves two important purposes: First, it gives you a realistic understanding of how much you can spend on the house. Second, it shows sellers that you’re serious and gives you slightly more standing if you’re competing for homes with all-cash buyers.

Make it less stressful by gathering up relevant financial documents like bank statements, tax returns, and pay stubs, and by checking your credit report for errors in advance. Given the competitive interest rate environment and the competitive housing market, it’s a good idea to be prepared and organized before you start the process.

4. Maxing out your mortgage limit

Just because a lender says that you can borrow a certain amount, doesn’t mean you should borrow that much. Staying below that limit will give you more financial flexibility to cover the added expenses that come with purchasing a home, as well as long-term changes to your income.

Create a budget that includes how much money you can spend on housing costs each month, and then use those numbers to figure out what your “real” limit should be.

5. Letting your emotions control your decisions

Buying a home can be a long and frustrating process. These days, starter homes go quickly, and it’s common for first-time buyers to experience rejection on the first offers they make. In that kind of environment, it’s easy to fall in love with a house that’s out of your budget, or get caught up in the heat of a bidding war and end up paying more than you expected.

It’s OK to get excited when you think you’ve found your house, but you don’t want to put yourself in a bad spot.

6. Waiving contingencies without understanding the risks

In highly competitive markets, it’s becoming increasingly common for buyers to make offers that aren’t contingent on financing or inspection. While waiving contingencies can make your bid more desirable to a seller, it can make the transaction much more risky for you. Have a conversation with your realtor and a lawyer before opting out of contingencies in your contract. In a worst-case scenario, you may end up losing your deposit.

7. Allowing your credit score to change before the close

A pre-approval letter is not a guarantee of funding, and if your credit score or income levels change drastically between the pre-approval and the closing of the loan, lenders may change their terms or rescind the offer entirely. While you’re home shopping, be sure to pay all your bills on time and steer clear of new credit accounts, even if that means you have to wait to pick out your furniture. If possible, try not to switch jobs until after you close, particularly if you’re moving into a new industry.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

3 Questions to Ask If You Want to Buy Your Dream Home

If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Ask yourself the following 3 questions to help determine if now is a good time for you to buy in today’s market.

1. Why am I buying a home in the first place? 

This is truly the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

For example, a survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”

This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. They are:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in December (the latest data available) was $232,200, up 4.0% from last year. This increase also marks the 58th consecutive month with year-over-year gains.

If we look at the numbers year over year, CoreLogic forecasted a rise by 4.7% from December 2016 to December 2017.

What does that mean to you?

Simply put, with prices increasing each month, it might cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.

The Mortgage Bankers Association (MBA), the National Association of Realtors, and Fannie Mae have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:

Bottom Line

Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

Open Floor Plan Still Popular

Open floor plans continue to reign. Eighty-four percent of builders say that in the typical single-family home they build, the kitchen and family room arrangement is at least partially open. Fifty-four percent say it’s completely open, according to responses from a September 2016 National Association of Home Builders/Wells Fargo Housing Market Index.

“Completely open” essentially means the two areas are combined into the same room. Partially open signifies areas separated by a partial wall, arch, counter, or something less than a full wall.

Seventy percent of recent and prospective home buyers say they prefer a home with either a completely or partially open kitchen-family room arrangement; 32 percent say they prefer the arrangement completely open, according to an NAHB survey.

Only 16 percent of buyers say they want the kitchen and family rooms in separate areas of the house.

As demand continues to increase for open floor plans, homeowners of existing-homes are also looking to open up their kitchen and family room areas. Professional remodelers report that 40 percent of their projects involved making the floor plan more open by removing interior walls, pillars, arches, etc., according to first quarter of 2016 data in the Remodeling Market Index.

Source: “Builders Satisfy Demand for Open Floor Plans,” National Association of Home Builders’ Eye on Housing blog (Jan. 11, 2017)

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

How to Avoid House-Hunting Drama

Horror stories often abound when house hunting enters the conversation. Whatever you’ve heard, it’s natural to feel a little apprehensive when making what could be one of the biggest purchases in your life.

Moving is one of the most stressful situations that a person can go through. It’s one of the most rewarding, but also one of the most stressful. So if you’re in the market for a house, follow these tips to drop the drama at the door during your search for a home.

Know What You Want

The first step to avoid house hunting drama is to really sit back and think about what is most important to you. What are your non-negotiables? Location? Educational opportunities? Price? Daily commute? Once you have determined what is important to you and your family, then begin your home search.

Stick to Criteria

Be sure to check that the communities in which you are conducting your search include homes that align with your values. This will narrow down your scope so you are not looking at hundreds of homes, just the ones that fit in your criteria. If you do your research ahead of time, you can be more confident that what you want is available in the area that you want. Looking in an area that’s not going to provide the home type that you want is going to cause frustration.

Get Preapproved

The search for the right home can take long enough, let alone with extra interruptions. Avoid paperwork hiccups by submitting all of the necessary documents to make sure your loan is completely preapproved. So if there is any issue, it is identified early on in the process and not the moment that you’re trying to submit a contract on the property.

Remember that you don’t make your monthly payment to the price of the home. Price is relative to the mortgage you are able to obtain. So be sure to get your numbers locked down so you know what price range you are most comfortable with.

Choose the Right Person

When choosing a real estate agent, do your research. Meet with them to make sure you are a fit. Give them your expectations and make sure they have the ability to get the job done.

Hiring the right home inspector could also ensure a smoother home buying process.

It’s all in the reports that they provide. The ideal reports by inspectors include detailed explanations as well as photographs. Unfortunately, some reports consist of a two- to three-page checklist. This can create frustration on the buyers and the sellers part because you don’t have clear enough documentation on what the problem is.

Communication is Key

Communication is the antidote for any drama disease. The more open the client is with the agent, the less drama is going to present itself in the transaction. You have to trust your agent and relate to them as a confidant, as an ally.

Be open about your biggest stressors and fears in the home buying process with your real estate agent. If you are prone to anxiety and stress, don’t be embarrassed by that, but bring that to your agent.

Know Your Personality

Let’s face it. Most of us have at least one drama queen in our lives. And some of us might just be one. Be true to yourself. If you know that you’re a drama-filled person, then embrace that. A good real estate agent will have experience in working with all different kinds of people and family dynamics. If that’s your personality type, make your agent aware.

Don’t Wait

Procrastination causes drama. If you have a deadline, many real estate professionals recommend beginning four to six months ahead of time to start educating yourself on the process. Do some research on your local housing market. For example, find out the average amount that is negotiated in your community. Have the right expectations, or else you’re setting yourself up for frustration. A little preparation will go a long way in helping your assumptions stay reasonably accurate.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

The Fed Raised Rates: What Does that Mean for Housing?

You may have heard that the Federal Reserve raised rates last week… But what does that mean if you are looking to buy a home in the near future?

Many in the housing industry have predicted that the Federal Open Market Committee (FOMC), the policy-making arm of the Federal Reserve, would vote to raise the federal fund’s target rate at their December meeting. For only the second time in a decade, this is exactly what happened.

There were many factors that contributed to the 0.25 point increase (from 0.50 to 0.75), but many are pointing to the latest jobs report and low unemployment rate (4.6%) as the main reason.

Homebuyers shouldn’t be particularly concerned with last week’s Fed move. Even with rates hovering over 4 percent, they’re still historically low. Most market observers are expecting a gradual rise in home loan rates in the near term, anticipating mortgage rates to stay under 5 percent through 2017.

Bottom Line

Only time will tell what the long-term impact of the rate hike will be, but in the short term, there should be no reason for alarm.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com