Having a financial game plan for your home will give you peace of mind

Creating a financial plan for your home can help you feel more secure in budgeting for the future. A financial plan will spell out how much you need to pay and when, so you know exactly how much money is going toward your home. Without a plan, you could find yourself overwhelmed by unforeseen expenses like emergency repairs that you didn’t budget for, or unable to make updates to your home because of a lack of savings.

Luckily, you can create your own financial planning checklist to get a better look at your expenses and savings in the years ahead.  

Where to start

First, write down recurring expenses like your mortgage payment, taxes, and homeowner’s insurance. Note when each of these payments is due, and how much it is.

• Follow that list up with more occasional expenses like seasonal lawn care and maintenance or replacement dates for major appliances, plumbing fixtures, and the roof. Note that these dates don’t need to be exact, but searching for the average lifespan of a water heater, for example, will help you identify future expenses you’ll need to save for.
• Lastly, write down any voluntary expenses like adding a pool or finishing the basement. By listing the things you want to add to your home and estimating their cost, you’ll be able to see what is financially possible and when. 

Ways to save

With an idea of how much you need to spend in the short and long-term of your home, you’ll be able to turn your attention to places you might save money in order to be prepared for the future.

If you’re planning on staying in your current home forever, pay more than the minimum monthly mortgage payment. Paying more upfront means saving thousands in interest later down the line. Plus, it just feels better to pay down your home sooner.

Another oftentimes overlooked area to save is by checking with your insurance agent to make sure you are covered enough, but not too much. Over-insuring your home means you’re paying more than you need to on a policy that you’ll never see the full benefit from. Likewise, under-insuring your home will leave you paying out-of-pocket should you need to make a claim. Everyone has to pay property taxes.  However, you may be able to reduce your tax burden by getting a reassessment. Do your homework first: Are comparable homes taxed less than yours? If so, you can contact the local assessor, challenge the assessed value of your home and possibly reduce your taxes..

With a little planning, you’ll have peace-of-mind knowing that you’re in good financial shape, and the fear of surprise expenses will be greatly reduced.  If you’re looking for a new home, contact the Three Rivers Association of Realtors at 815-744-4520 to start your search today.

Think about getting a home inspection before putting your home on the market

In a typical real estate transaction, it is the buyer who arranges and pays for the home inspection. However, it can be to a seller’s advantage to pay to have an inspection done prior to placing their home on the market. A pre-listing inspection can provide them with valuable information about the condition of their property and an idea of repairs that they may (or may not) wish to have done. This information can help in negotiating the sales price of the home as well as avoid having these repair issues surface down the road at a less opportune time.  

Is there any difference between a pre-listing inspection and a buyer’s inspection?

The only difference is who (seller or buyer) is having the inspection done and the point in time when the inspection occurs. The scope of the inspection, whether done pre-listing or after the sales price and terms have been agreed upon, will essentially be the same focusing primarily on proper functionality of all major systems and components of the house: heating and cooling, electrical, plumbing, roof and structure, siding, doors, and windows.

Typically, how much does it cost for a pre-listing inspection?

The fee is usually the same as the buyer’s inspection, generally ranging from $350 to $500 for a qualified inspector who carries errors and omissions insurance. The price can vary based on location, square footage, age of the home, and any special conditions.

Why should a seller consider doing pre-listing inspection?

Keep in mind that whether a seller has a pre-listing inspection or not, the buyer may still choose to have their own inspection done. What a pre-listing inspection does is give the seller a chance to resolve any repair issues up front that are likely to surface in the buyer’s inspection or have them accounted for in the asking price. This not only places the seller in a better negotiating position but helps minimize the chance of having to deal with circumstances that may come up in the buyer’s inspection that is done after the sales price and terms have been negotiated.

What should the seller do if a pre-listing inspection uncovers major problems?

Generally, it is better to know about inspection issues early rather than to be blindsided at a later date. Once identified, they can be assessed for proper resolution. A seller shouldn’t automatically assume that everything needs to be fixed prior to placing the home on the market. A REALTOR® can advise them as to which repairs are likely to negatively affect the sale of their home.

If you’re looking for more information about buying or selling your home, Three Rivers Association of REALTORS® can help. Visit our website today to learn more and to find one of our members who can help you!

Study Finds Majority of Today's Home Buyers are Millennials

A report entitled “2017 National Association of REALTORS® Home Buyer and Seller Generational Trends” states that, over the past four years, one consistent finding has been that Millenials/Gen Y-ers or those age 36 and younger make up the largest share of home buyers at 34 percent. Half of them were first time buyers. The report showed that this group has been quite traditional in their buying habits opting for suburban detached single family homes.

The next largest group was Gen Xers or those age 37 to 51 who make up 28 percent of home buyers. They are the most ethnically and racially diverse group as 21 percent identified their race as something other than White/Caucasian. And, because generally they are in their peak earning years, they purchased larger homes in terms of median square footage and number of bedrooms.

Baby Boomers were split into two groups due to differing demographics and buying behaviors. Younger baby boomers identified as those age 52 to 61 make up 16 percent of buyers and older baby boomers age 62 to 70 make up 14 percent. Younger baby boomers are most likely to buy a multi-generation home to take care of aging parents, for cost savings and because children over the age of 18 are moving back. The report also indicates that this group projects that they will remain in their home the longest at 20 years. Buyers 71 to 91, referred to in the report as the Silent Generation, represent the smallest share of home buyers at 8 percent. Nearly one quarter of these buyers purchased senior-related housing.

The study also revealed that 88 percent of all home buyers financed their home purchase… a share that decreases as the age of the buyer increases. Home ownership remains among life’s priorities for most Americans. For all three groups under the age of 61, the main reason given for purchasing was the desire to own a home of their own. The household composition for buyers in all age groups was primarily married couples followed by single females, single males, and unmarried couples.

The report also pointed out that it is a continued trend among all generations of buyers to consult a real estate agent or broker to help them buy or sell their home. Buyers need the help of a real estate professional to help them find the right home, negotiate terms of sale, and help with price negotiations. Sellers, as well, turn to professionals to help market their home to potential buyers, sell within a specific timeframe, and price their home competitively. To learn more, Three Rivers Association of Realtors is here to help. Visit our website or call us at 815-744-4520

Sources:

https://www.nar.realtor/sites/default/files/reports/2017/2017-home-buyer-and-seller-generational-trends-03-07-2017.pdf

REAL ESTATE MARKET SNAPSHOT: Housing Supply Continues to Drop; Prices are on the Rise

According to key indicators in a report provided by Midwest Real Estate Data LLC for Three Rivers Association of REALTORS®, it is predominantly a seller’s market in Will and Grundy Counties. Inventory levels fell 17.9 percent from 2,995 units to 2,459 units or a 3.1 month’s supply. Also on the downward slide is market time which is at 64 days compared to 70 days a year ago. The median sales price is now at $210,000 - up from $200,000 at this time a year ago. Multiple-offer situations over asking price are not uncommon in many communities. The report cites a favorable economy and the low unemployment rate as contributing factors toward these developments. Another reflection of the strong employment growth is the decreasing percentage of homes closed that are either foreclosures or short sales. Through July of this year, 9.5 percent or 87 out of 911 closed home sales fell into one of those categories. In 2016, it was 12.3 percent.

The effect of the shortage of new construction particularly in the median to upper median price range is being felt primarily among first-time buyers as the number of entry-level homes available is at a premium. Normally, new home development provides an important link in the chain that enables many home owners to move on, freeing up the supply of homes at every level. However, despite these circumstances, Three Rivers Association of REALTORS® leadership believes that it is still advantageous for buyers to pursue their dream of home ownership. Association President-elect Ken Pytlewski noted that lenders are also loosening up on mortgage qualification requirements as well as offering new loan Programs, giving buyers the ability to purchase with a minimal down payment.

The City of Joliet is having a Housing Expo on September 9th during which buyers can meet with

lenders and REALTORS® who can assist them in the home buying process. There will also be

information about money that is available to help you with your down payment.

You can get more information about the Expo by calling 815-722-0722, or visit the Three Rivers Association of Realtors website.

Helping Sellers Choose Between Multiple Offers

The housing market is hot and with limited inventory multiple offers is a common occurrence. It's a good problem to have if you're a seller. But how do you choose the best offer?

Start with Price and Terms

The offer with the highest price is going to get your attention, especially if it’s close to or above your asking price.  But, you will want to make sure that the buyer is qualified.  Those offering the most money might be stretching their finances and run into trouble before closing.  Also, asking for a sizeable earnest money deposit can help discern the seriousness of the buyer.  Pay attention to the amount that the buyer is planning as a down payment in the transaction.  A larger down payment means a lower home loan and may ease a closing. Your REALTOR® can help you look at all the details.

Contingencies

When buyers make an offer, they’ll often include a few conditions or contingencies that may allow them to cancel the deal or reduce the price. As a result, sellers may consider taking a lesser offer with fewer strings attached.  With so many issues today surrounding appraisals, waiving the appraisal contingency is a definite plus for sellers.  Normally, the house must appraise at the offer price.  If not, either the buyer would have to make up the difference or the sale price be reduced by the seller to match the appraisal.  When the appraisal contingency is waived, a low appraisal is not a deal breaker.  In any event, Looking for fewer contingencies in an offer may reduce the chances for difficulties toward closing the contract.

Mortgage Pre-Approval

Make sure that the buyer is preapproved for the home loan. An offer from a preapproved buyer usually is stronger than an offer from a buyer who hasn’t made any financing arrangements.

Closing Date 

If you’re reviewing similar offers and want to move soon, a quicker close can be a deciding factor. But if you’re not ready to move, you may be better off with a buyer who’s willing to wait for you to find another home.

Buyer ‘Extras’

Many times a buyer will send a personal letter to tug on your heartstrings and, if this is an emotional sale for you, it may pull your decision one way or another. If you’re considering several offers that have similar price and contingency terms, these kinds of sweeteners can tip the balance.

The Bottom Line

Getting multiple offers when you sell your home seems to be a great situation to be in, but it can be tricky.  Evaluate each offer fairly and consider advice from your REALTOR® to choose the best one. Ready to sell your house? Contact Three Rivers Association of REALTORS® for help finding a REALTOR® that can help meet your needs. 

Three Rivers Association of REALTORS® is a non-profit organization that services more than 1,000 REALTOR® and Affiliate members. Three Rivers Association of REALTORS® is affiliated with the Illinois REALTORS® and the National Association of REALTORS®, and works to provide our members with the tools and information they need to remain successful.  We also strive to keep our membership informed as to the latest developments that affect housing and the real estate industry in general. The Multiple Listing Service, education programs and an extensive political action program are just a few of the services that Three Rivers Association of REALTORS® provides for its members.

4 Reasons you Should Buy Instead of Renting

Purchasing a home has long been seen as the American dream. The pride of ownership and knowing that your dwelling is completely under your control is very appealing. The housing market crash of 2008 has made many renters leery about buying a home, fearing that it will be too expensive and risky. However depending upon where you purchase a home, the amount of your down payment and the interest rate you are able to obtain, purchasing a home might actually be cheaper. Here are four additional reasons you should consider buying instead of renting.

1.     Create your own space – Unlike renting, where you could be charged for every nail hole or floor scuff you leave after vacating the premises (and don’t even consider repainting the walls!) – when you own a home, you are in control of designing your space to suit your tastes. This means you can remodel, repaint, hang pictures, shelves and light fixtures, and you don’t have to worry about anyone saying you can’t.

2.     Fixed monthly payment – While your rent can go up at any time, if you have a fixed rate mortgage, your monthly payments will stay the same for the life of your loan. Additionally, if interest rates go down, you can re-finance your loan for an even lower monthly payment. In comparison, your rent will most likely never be any lower than what you paid your first month.

3.     Tax breaks – Another great benefit of having a mortgage is the fact that you can write your interest payments off on your annual taxes. Additionally, you could also reap tax benefits for having energy efficient products in your home.

4.     Home equity – Unlike rent, your home is constantly building equity as you pay down your mortgage. Every dollar paid towards the loan’s principal is a dollar of equity built in your home. When you reach 20% equity paid, you can borrow against your home for other investments or home improvements. Additionally, that equity will add to the value of your home if you decide to resell.

Are you considering purchasing a home in Joliet or the surrounding communities?  Contact the professionals at Three Rivers Association of Realtors to find a real estate agent to guide you through the home buying process. We are a non-profit organization serving more than 1,000 realtors and affiliate members.

Three Rivers Association of Realtors Can Help!

Located in Joliet, Illinois, Three Rivers Association of Realtors is a non-profit organization that serves more than 950 realtor and affiliate members. Our association represents the realtors in Will and Grundy County and helps resolve a range of industry related disputes.

Working closely with municipal leaders and congress members, it is our mission to help provide a good housing market for the community. Three Rivers helps realtors in the area with a wide, but industry-specific range of services. Our multiple listing service, education programs and extensive political action programs are just a few of the services we provide. Take a look at what our non-profit can offer:

• Speak to and address real estate issues
• Enhance the public image of our members
• Consumer outreach
• Provides opportunity for professional growth and education
• Communicates information to our members to help them succeed in their business activities
• Identifies, anticipates, and addresses economic and marketing trends in the real estate industry
• Works with congress on issues like mortgage interest deduction, flood insurance and all -effect home ownership
• Public relations and government affairs

Three Rivers works with the Illinois Association of Realtors and the National Association of Realtors in an effort to provide members with the tools necessary to remain successful. We aim to enhance the ability and opportunity for realtors to conduct their business successfully, ethically, and to promote the preservation of the right to won, transfer and use real property.

Changes in the real estate industry are ever evolving; let Three Rivers help you navigate your real estate issues and the housing market today! To learn more about Three Rivers Association of Realtors, give us a call at 815-744-4520 or visit www.trarealtors.net.