Date Archives: May 2022

The past several years has seen one of the hottest housing markets in recent memory. Sellers are enjoying high prices while buyers face bidding wars for limited stock. These market conditions have resulted in buyers employing several creative tactics to give them the edge in a competitive market. Many homeowners are skipping the building inspection as one tactic to make their offer stand out.

While this tactic can help a buyer stand out and be the determining factor in closing a deal, it is not without serious risk.

A standard home building inspection can increase your confidence about a home before closing a deal. Having a professional home inspection can work as a negotiating tool if issues are found during the process. It also gives a buyer cause to walk away from a deal.

Why Buyers Are Waiving A Building Inspection

With just 1.04 million homes for sale by the end of 2020, home inventory supplies in the U.S. were at the lowest level since the National Association of Realtors began collecting data in 1982.

In this climate, with multiple buyers competing, the pressure to make an offer that stands out is intense. The National Association of Home Builders Trends Report found that in the 4th quarter of 2020, buyers' most common reason for not purchasing a home was being outbid.

In a hot market, it's not unsurprising that desperate buyers are amenable to waving the building inspection. For the seller, this makes an offer look more appealing. This can often be the deciding factor that can close a deal. However, most professionals suggest that waiving the inspection is a bad idea.

When Skipping the Inspection Can Make Sense

There are few benefits to skipping an inspection, but there are scenarios where it can make sense and be beneficial.

• If the real estate is new construction and includes a builder warranty, it might make sense to skip the building inspection.
• If a buyer has been renting and living in the home for some time, chances are, they are familiar with the house and are aware of any problems.
• Finally, an experienced flipper or real estate investor might feel comfortable skipping a building inspection because they plan extensive renovations.

Besides these specific scenarios, there are a few advantages to skipping the inspection process. Waiving the building inspection means less hassle for the seller and can result in increased interest in an offer; however, buyers are putting themselves at significant risk by skipping this step.

Why Skipping the Building Inspection is a Bad Idea

The building inspection is intended to provide the buyer with accurate information on a building's current condition and alert a buyer to significant problems in the home. This information is crucial for both buyers and sellers.

A thorough home inspection will examine the following:

• Foundation
• Basement, attic, crawlspace
• Property drainage
• Exterior materials
• Interior ceilings, walls and floors, windows, and doors
• The electrical, plumbing, and HVAC systems
• Furnace and hot water heater
• Attached structures like the porch, garage, etc.

Problems in any of these areas could result in costly repairs. Armed with this information, a buyer can negotiate with the seller to make certain repairs or may choose to offer a lower price or walk away from a deal to avoid costly projects.

Alternatives For Crafting A Strong Offer Without Skipping the Inspection

Buying a home is probably the most significant investment you will make in your lifetime. The building inspection process is the best way to know what you are getting yourself into. After the close, it becomes your problem. A missed problem can potentially cost you thousands of dollars in repairs.

Waiving the inspection is one way to get your offer considered. These are a few other tactics you can take to make your offer more appealing to the seller.

Have your finances in order – Get a preapproval letter from a lender. A mortgage preapproval in hand shows a seller you are serious and have the financing to close the deal.

Ask for an "informational inspection" rather than a contingency. This language lets the seller know that you will be getting the home inspected. Still, it is for informational purposes only, so the seller will not be responsible for any issues you uncover.

Make a larger down payment – More cash upfront is another way to show a seller you are serious. A larger down payment puts more money in the seller's pocket right away and signals that your financing is solid, and the deal will close.

Include an Escalation Clause – Sellers like this because it eliminates back-and-forth negotiations between buyers. For example, an escalation clause will automatically bid $1000 over any offer up to $250,000 on a property listed at $200,000.

With a careful offer in a hot market, you still might not close the deal. But remember, a home is a significant investment, and going in without a building inspection can lead to serious financial ramifications down the road.

Northern New England is charming in every season! But, there's something special about summers out on the lakes, enjoying the sea breeze and summertime activities.

Our real estate agents will be creating their own delightful summer memories with activities at these amazing locations around Northern New England. Which ones will be on your list?

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The effects of the COVID-19 pandemic were felt worldwide in many significant ways. COVID-19 became a humanitarian challenge that continues to have lasting effects on how we live, work, and play.

From how we shop, learn, and communicate, to where we live, the pandemic touched every area of our lives and forced us to adjust to a new reality. In the first days of the pandemic, the economic uncertainty, health concerns, and stay-at-home orders, many metropolitan areas experienced a noticeable drop in home sales. As the pandemic took hold in April and May of 2020, nationwide home sales dropped to their lowest levels since the housing and financial crisis in 2008.

Driven by the pandemic, the real estate market shifted dramatically. Low inventory, the ability to work from anywhere, low-interest rates, and the many government stimulus measures flooded the market with liquidity. With low supply and lots of cash in the system, prices exploded in many markets.

The Summer of 2020: Demand Recovers, Supply Remains Low

By the summer of 2020, after the initial shock of the lockdowns, potential buyers started to increase their housing search and purchase activity by the end of May. By summer, sales began to approach pre-pandemic levels. Pending sales in U.S. metro areas were down more than 30% in April were up almost 30% over 2019 sales by August, aided by the increase in online and socially distant viewings.

While sales recovered relatively quickly, the way homes were shown and the demand for various types of space had changed.

Early Effects: Shifting Priorities

Physical distancing directly changed the way people were inhabiting and interacting with physical space, in addition, the effects of the pandemic had made the demand for many types of properties like retail and office space go down, perhaps for the first time in modern memory.

The abrupt economic recession, economic uncertainty, and steep job losses changed the market. Even today, as we begin to emerge from two years of pandemic disruptions to the economy, there is much discussion about how the pandemic has reshaped the nature of work and home.

Workers who remain able to work from home are placing less value on a shorter commute and have or are moving farther away from the office. Families are looking for amenities, like swimming pools and swing sets, instead of community amenities like parks or stadiums. This shift places a higher value on a property's specific characteristics and less on its location. The landscape is still adjusting to the new Covid reality, and it is not yet clear if these types of shifts will be permanent or will return to pre-pandemic norms.

One thing is certain, the COVID-19 pandemic has shifted how home buyers and sellers approach the process.

Technology and The New COVID Reality

One significant change that will most likely remain is how buyers and sellers negotiate the real estate process. The lockdowns, distancing, and subsequent government mandates severely impacted traditional techniques like physical walkthroughs of properties and open houses, as-well-as in-person closings, and other legal transactions related to a sale.

Pandemic-related disruptions and the need for social distancing have accelerated the trend toward digital technologies in the home buying process. From house hunting, VR walkthroughs, and video presentations, to applying and securing a mortgage, notarizing documents, and signing final closing papers, the virtual home buying and selling experience is becoming more common. The virtual trend is especially prevalent among millennials who are increasingly buying homes sight unseen.

As a result of the pandemic and its effects, industry experts agree that new socially distanced tools and methods to facilitate sales may be here to stay, including:

• Virtual walkthroughs/tours
• High-quality photography
• 3D mapping
• Drone Surveys
• Video conference and calls - for showing properties as well as more mundane aspects of the deal)
• No-Touch, curbside closings – for example with DocuSign
• Online and drive by appraisals
• Remote online notarization
• Smart contracts/contract sharing platforms like DocuWalk

Some of these new methods may be temporary, but the truth is, the process for selling homes will likely never be the same in the new post-COVID reality.

"All the technologies that we have built for virtualizing a home and virtualizing the closing process will just keep growing in importance in a post COVID reality." - Ken Kelman, CEO, Redfin

The trends like listings stuffed with high-quality photography, virtual showings, curbside, and no-touch closings, and buying homes without stepping foot on the property are going to be here for the long term.

A recent survey conducted by realtor.com found that 59% of millennials said that COVID has changed the way they are approaching their home buying search. The survey found that:

• 37% are spending more time researching online
• 35% are spending more time looking at listing photos
• 32% are spending more time watching listing videos
• 31% are being selective about the homes they choose to tour
• 27% are doing drive byes to check out the neighborhood

As buyers and sellers become more comfortable with virtual tools and the new post-COVID reality of the home shopping experience, many of the new methodologies may be here to stay. Or will at least be used in conjunction with in-person transactions as we slowly return to a new post-pandemic normal.

Covered bridges represent a living history of life in New England, with ingenious, long-lasting designs that are as beautiful as they are functional. New Hampshire is home to dozens of covered bridges spanning local waterways, and our real estate agents have the history behind some of the state's most storied covered bridges.

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For many of us, homeownership is a source of pride. Your home is also the most significant investment you will make in your lifetime. Homeownership also offers some pretty impressive financial benefits. With every mortgage payment you make, you're building equity and creating wealth for yourself. Equity is the primary advantage ownership offers over renting. A mortgage benefits you while paying rent benefits your landlord.

As a first-time buyer, your priority is to buy a property with a mortgage that fits your budget. For many homeowners, creating an at-home side hustle or using your home to generate some additional income can help you pay your mortgage or other costs like your real estate taxes, homeowners insurance, or even to pay for upgrades or renovations to your home.

If you're a new homeowner or just someone who would like to create a little revenue from your property, your house can generate the additional income you need to take that dream vacation or pay for your new kitchen!

In this post, we're going to look at several income-generating opportunities to help you decide which might be right for you!

Seven Income Opportunities for Residential Homeowners Today!

With a little creativity, your home can contribute to your income and be a place to live. Before you make any decision check your local building code for any restrictions your city or town may have for residential homeowners. Also, if you live in a condo, coop, or have a homeowner's association, they may have their own rules on short-term rentals.

Here are seven potential ways to make money with your home.

1. Rent Your Home Out When You're Away

Whether you live alone, travel for extended periods, or take a family vacation, you can earn some extra income as a residential homeowner. Renting your home through sites like Airbnb.com or HomeAway.com is a relatively simple and reliable way to make some income on the side. You'll need to register to create a free listing where you can set the rental amount, dates of availability, and a refund policy, should a reservation be canceled. You'll pay a 3 to 5% service fee for confirmed rentals based on the rental amount.

2. Rent Out Your Driveway!

Don't want to rent out your home? If you live in a city with a lack of parking, consider renting your driveway! Tourists, renters who don't have a designated space, or commuters tired of battling for a metered spot are all your potential customers. Check out JustPark.com or CurbFlip.com to learn more. Like Airbnb, these sites charge a fee for short and long-term bookings.

3. Turn Your House into a Film Set

Ever wonder how those great homes from your favorite TV show or movie made it onto the screen? You know the ones we're talking about that Hollywood rambler that was home to the Brady Bunch or the red brick McMansion that Home Alone made famous.

If you think that your home has the right stuff, you might be able to cash in by connecting with location scouts for TV and film productions. How do you get started? Have professional pictures taken of your home and send them along with your contact information to local film commissions, location scouts, and film commissions in your area.

4. Add a Rental Space

There is an affordable housing crunch in various markets throughout the country. Some municipalities have changed zoning laws to allow residential homeowners to create and rent alternative dwelling units. If you live in an area where it's legal, you can add a rental suite to your property. If you don't have the space inside, consider converting the garage, or if you have the space, building rate free-standing structure. Make sure to check with your local building department before you renovate or build.

5. Seasonal Rentals

If you live in an area like the beach or a ski resort area, residential homeowners can often earn significant rental income in a single season. If you can move out for the season or are planning on taking an extended vacation, you can make a year's worth of mortgage payments in a season. If you don't live in a resort area, being close to a college, hospital, big employer, or an area with a tight rental market can make your property desirable.

6 Open a B&B

Maybe your kids have grown up and moved out, and you have several rooms available. Why not maximize your income by turning your home into a Bed and Breakfast! Being able to rent our several rooms in your house nightly or weekly can be a lucrative option. Make sure you research what it takes to start and operate a B&B before you open!

7. Start a Home-Based Business

Your home might be the perfect place to start a small business. After all, Silicon Valley is full of stories about computer companies like HP getting their start in the garage! Running a business from home can be convenient and offer the added bonus of home office tax deductions. Some home businesses require certifications, licensing, or permits to operate. Check with your local government.

Some Final Thoughts On Residential Homeowners Generating Income

There are two critical points to consider for residential homeowners before opening your home (or driveway) to renters. The first is insurance. You may void your policy in the event of a fire, flood, or other catastrophes if you're using your home in ways not outlined in your homeowner's insurance. If you choose to use your property to generate income, acquire the proper insurance.

Another consideration is to make sure you can handle it. Renovations can be expensive, and not everyone is cut out to host a Bed and Breakfast. However, if you've done your research and carefully thought out your decision, you can start using your home to generate extra income today!

If you're in the process of listing your home for sale, you've almost certainly begun staging the indoors to attract potential buyers. Have you done the same for the outdoors? 

Outdoor spaces are just as important to many buyers as the home itself. For some, they're the most important feature of any property. Staging your outdoor spaces properly can massively enhance your home's appeal and potentially raise its total value. Our real estate agents have decades of combined experience with the art of staging, including in outdoor contexts. Here are eight suggestions from them to help you make your yard and gardens look their best. 

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Buying a home is an exciting adventure! According to NerdWallet's 2020 Home Buyer Report, about 99.3 million Americans plan to purchase a home in the next few years. Today, as we begin to return to normal, the Federal Reserve is signaling that interest rates are on the way up.

If you're one of the 99.3 million, or if you already have a home with a variable rate loan, you need to take steps today to secure the best mortgage rate possible. Here are some steps to take to help you prepare to apply for a mortgage.

Preparation is the Key

Taking simple steps before applying for financing can help you get the best mortgage interest rate. It can save you real money over the long term. Here are some tips that can help whether you're buying a home or refinancing a variable-rate mortgage.

• Check Your Credit Scores and Reports

Any effort to secure the best interest rate possible begins with your credit. Start by checking your scores and reports with Experian, Equifax, and TransUnion. Check for any inaccuracies in your credit report that may be dragging down your score.

• Work on Your Score

If your credit score is below 760, it's worth taking the time to improve your score. Take steps to pay down balances and clean up any inaccuracies on your credit report. Having excellent credit will make you eligible for the lowest mortgage rate.

• Save For a Bigger Down Payment

Lenders look favorably on buyers who put down a larger down payment. With a lower down payment, your lender may require private mortgage insurance. Typically, this is the case if you put down less than 20%. However, a larger down payment can help you to avoid PMI costs. Plus, a larger down payment can also get you a lower interest rate.

• Consider a Shorter Loan Term

The interest rate on a 15-year loan is lower than a 30-year loan. A shorter-term loan can save you tens of thousands of dollars in interest payments over the curse of the loan.

• Decrease Debt

Decreasing your debt can improve your debt-to-income ratio. Banks measure this important ratio when issuing a mortgage. Combining paying down debt with increasing income can significantly affect your credit score.

• Apply with at Least Three Lenders

There are literally thousands of mortgage lenders competing for your business. Another way to assure the lowest rate is to apply with at least three lenders and see which offers you the lowest rate.

Five Questions To Consider Before You Choose A Lender

The first step is to figure out what you can afford. Then you need to begin the search for a lender offering a great rate.

Understanding what you can afford when buying a home is a critical first step.

Answering the following questions can help you to define your needs.

• Fixed or Adjustable-Rate Mortgage?

Mortgages either have a fixed interest rate or an adjustable rate.

A fixed-rate loan locks you into a consistent interest rate for the entire term of the loan. The portion of your payment that goes toward principal plus interest remains constant. However, insurance, property taxes, and other costs can vary.

The interest on an adjustable-rate loan can change over time. Most ARMs begin with an introductory period of 10, 7, 5, or 3 years, during which your rate remains stable. After that, your rate may change periodically.

• Should You Pay Points?

Discount points are fees borrowers pay to reduce the interest rate on their mortgage. One point is equal to 1% of the loan. Each point reduces the mortgage rate by .25%. However, the rate can vary. When you pay points, you are paying thousands of dollars upfront to save a few dollars each month. It takes several years for the monthly saving to add up to where they exceed the initial amount paid upfront.

• What are Closing Costs

Closing costs are charged by the lender and other parties. They do not affect the mortgage rate (unless you're paying points). But they do impact your expenses. Closing costs are typically around 3% of the purchase price of your home and are paid at the time you close.

• What About First-Time Home Buyer Programs?

Before choosing a mortgage, find out if any special programs can make homebuying less costly. Each state offers its own mix of programs, for example, first-time buyer programs or professionals like teachers, first responders, or veterans.

• How Much Will You Put Down?

Some groups like Veterans may qualify for 100% financing. Other mortgages only require a down payment as low as 3% or 3.5%.

VA Loans – If you or a spouse are active military or a veteran you may qualify for a no down payment VA loan.

USDA Loans – If you live in a rural area, the Department of Agriculture might guarantee a low or no-down-payment loan, and even help cover closing costs.

FHA Loans – Mortgages insured by the FHA allow down payments as low as 3.5% and are more forgiving of low credit scores, but you will pay more in insurance over the life of the loan.

Comparing Loan Offers

Applying with multiple lenders means you'll need to compare loan offers. Here are a few tips for comparing offers.

• Lenders offer Different Mortgage Rates

by applying with multiple lenders, you'll receive different rates. The more you shop, the more you might be able to save. Apply with different types of lenders, such as a bank, a credit union, and an online lender so you can compare offers.

• Shop for Loans Within a Set Time Frame

The big three credit bureaus encourage you to shop for the best rate. You typically have 14 to 45 days, depending on the scoring model, to apply for as many mortgages as you want with the same effect on your score as applying for a single loan.

• Compare Closing Costs

Each lender is required to provide a loan estimate form that details the terms and fees of the loan. The loan estimate is designed to simplify comparing mortgages.

Taking the time to prepare and get your financial information in order by paying down debt, checking your credit scores and reports with the big three, and saving a bigger down payment can help you to get the best possible mortgage rate. Speak with your accountant and your realtor to learn about all of your options.

Getting a lower mortgage rate can save you thousands of dollars throughout your loan term. It's worth taking the time and effort to educate yourself and get your financial house in order before you begin applying for a loan.

If you have a friend or family member who has recently bought a home, giving them a gift is a lovely tradition that helps them celebrate their new residence. 

Our real estate agents suggest choosing from the following housewarming gift ideas that are sure to please new homeowners:

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