Garrett Knox from Knox Mortgage

Exploring Real Estate and Mortgage Insights with Garrett Knox on the Saint Louis Property Management Podcast

In this episode of the Saint Louis Property Management Podcast, Greg Abel sits down with Garrett Knox from Knox Mortgage to dive deep into the world of mortgages, real estate investing, and the ever-changing market dynamics in the Saint Louis area. Whether you're a seasoned real estate investor or a first-time home buyer, this conversation is packed with valuable insights about navigating the complexities of real estate financing and investment.

Mortgage Beginnings: From Direct Sales to a Thriving Mortgage Business

Garrett’s journey into the mortgage industry started over 23 years ago in a surprising way. Initially in the direct sales business, Garrett made a major shift when a friend approached him for office space. That simple conversation sparked the idea of launching a mortgage company, which led to the formation of Mid America Mortgage Consultants. What began as a small operation in Valley Park, Missouri, soon evolved into a full-time career.

Garrett’s ability to adapt and grow within the industry is one of the key takeaways from the podcast. He highlights how important it is to remain flexible and ready to pivot when opportunities arise—a lesson many real estate professionals can appreciate.

Navigating the Mortgage Landscape: Mortgage Brokers, Bankers, and Beyond

One of the main topics in the conversation is the distinction between different roles in the mortgage industry: mortgage brokers, mortgage lenders, and mortgage bankers. Garrett explains how the 2008 financial crisis changed the perception of mortgage brokers, and for a time, the term "broker" carried negative connotations. However, today, Garrett has returned to the mortgage broker model, which he believes is advantageous for both him and his clients.

By being a broker, Garrett can offer competitive rates from various lenders. This flexibility allows him to work with a wider range of clients, particularly those looking for the best mortgage deals. For investors and home buyers alike, this means better pricing and a more tailored approach.

"The benefit of being a broker is you have access to multiple lenders, and owning the company allows me to control my pricing and offer better rates than big companies."

The Importance of Understanding How Rates Work

A common challenge home buyers and investors face is understanding how mortgage rates work. Garrett demystifies the rate-setting process, explaining how different lenders may mark up their rates by varying percentages. As a broker, Garrett can offer more favorable rates by keeping his margins thin, ensuring his clients get better deals than they might from large, corporate lenders.

This section of the podcast provides a behind-the-scenes look at the inner workings of mortgage rate setting, offering a transparent view of how brokers like Garrett can help clients navigate the often-confusing world of home loans.

Real Estate Investing: Flips, Rentals, and Long-Term Strategy

Garrett’s experience isn’t limited to mortgage lending—he’s also an avid real estate investor. He shares the story of his first real estate flip, which turned out to be a "home run" that hooked him on property investment. Since then, Garrett has completed over 80 property flips, as well as rentals, giving him a unique perspective on the local real estate market.

The conversation turns to how the current market conditions—particularly high interest rates—are affecting real estate investors. Garrett explains that, while it’s more difficult to cash flow properties in today’s market, there are still opportunities for long-term investors who are willing to wait. He mentions his strategy of refinancing properties over time to improve cash flow and highlights the importance of taking advantage of appreciation and tax benefits through strategies like cost segregation studies.

"Right now, you’re not going to cash flow at all, but you’ll get the appreciation and tax write-offs. The long-term play is refinancing when rates drop, which is when you’ll start to see better cash flow."

Holding vs. Flipping: A Changing Investment Strategy

Over the years, Garrett’s approach to real estate investing has evolved. While he once focused heavily on flipping properties, he’s now shifting toward holding rentals for long-term gains. His goal is to acquire 20 rental properties in West County, targeting ranch homes in good school districts.

This shift reflects a growing trend among real estate investors who are opting to hold onto properties for appreciation rather than quick profits from flipping. As Garrett notes, the long-term value of owning a rental property often outweighs the short-term gains of flipping, especially in today’s market where interest rates and carrying costs make quick flips more challenging.

Advice for New Investors: Overcoming the Cash Flow Hurdle

One of the most valuable parts of the podcast is Garrett’s advice for new investors looking to break into the market. He explains that many first-time investors are intimidated by the initial cash requirements, such as the typical 20-25% down payment needed for investment properties. However, Garrett’s ability to offer competitive rates and lower fees helps ease this burden for his clients.

He also touches on the importance of qualifying for investment property loans and the role rental income plays in the approval process. For example, lenders often use 75% of the rental income from a property to help offset the mortgage payment, making it easier for investors to qualify for financing.

"Once it’s on your tax return for a year, or if you have a signed lease, we can count 75% of the lease income to help offset the mortgage."

Understanding Debt Service Coverage Ratio (DSR) Loans

Garrett introduces the concept of Debt Service Coverage Ratio (DSR) loans, which are growing in popularity among real estate investors. These loans are based on the rental income a property can generate rather than the borrower’s personal finances. Garrett explains how DSR loans are ideal for investors looking to qualify based on the property’s cash flow potential.

"If the rental income is 1.25 times the mortgage payment, you can qualify for a DSR loan. This type of loan is a great tool for investors, and it’s growing in popularity."

Market Reflections: The Challenges of Today’s Real Estate Environment

The podcast closes with a reflection on the broader real estate market, particularly the challenges of financing properties in today’s high-rate environment. Garrett emphasizes the need for patience and long-term thinking, as many investors are now facing higher rates that eat into cash flow. However, with proper planning and refinancing opportunities on the horizon, there are still ways to make smart real estate investments.

"Right now, rates are in the high sevens to mid-eights, but refinancing down the line could improve cash flow."

Final Thoughts: A Wealth of Knowledge for Real Estate Enthusiasts

This episode of the Saint Louis Property Management Podcast provides a wealth of knowledge for anyone interested in real estate, from seasoned investors to first-time home buyers. Garrett Knox’s expertise in both mortgages and property investing offers listeners practical tips and a deeper understanding of the local market dynamics in Saint Louis.

Whether you're looking to secure your next mortgage, make your first investment, or grow your portfolio, this podcast is a must-listen. With Garrett’s insider insights and Greg’s experienced hosting, you’ll come away with actionable information and a better grasp of what it takes to succeed in real estate.

00:00:01 – 00:00:20:
Introduction to the Saint Louis Property Management Podcast hosted by Greg Abel. Today’s guest is Garrett Knox from Knox Mortgage. The conversation will focus on real estate, mortgages, and investing, keeping the discussion local to the St. Louis area.

00:00:21 – 00:02:30:
Garrett shares how he transitioned into the mortgage business 23 years ago. He started a mortgage company after his previous business wasn’t fulfilling, and opened his first office in Valley Park, Missouri.

00:02:31 – 00:04:00:
Discussion about Garrett’s first mortgage company, Mid America Mortgage Consultants, and how business names evolve over time. Garrett shares his background, growing up in St. Louis, moving to California, and eventually returning to Missouri for family.

00:04:01 – 00:06:10:
Greg and Garrett discuss the St. Louis real estate market, including why people move back to the area, often due to family or work. They touch on the extremes of the St. Louis weather and how some clients only stay temporarily.

00:06:11 – 00:08:45:
Conversation shifts to understanding mortgages—terms like "mortgage banker," "mortgage broker," and the impact of the 2008 mortgage meltdown. Garrett explains how becoming a broker allowed him to offer more competitive rates and control his pricing.

00:08:46 – 00:12:30:
Greg asks about how mortgage rates work for clients. Garrett explains the rate calculation process and how different lenders mark up rates. As a broker, Garrett can offer lower rates, which benefits clients looking for better deals.

00:12:31 – 00:15:30:
Garrett shares how he became interested in real estate investing and did his first flip back in 2005 after reading various real estate books. His first successful investment fueled his passion for property flips and investments.

00:15:31 – 00:18:15:
The conversation addresses the current real estate market and how interest rates are affecting cash flow for investors. Garrett explains how he continues to invest in rentals, despite knowing he won’t cash flow immediately but expects long-term appreciation.

00:18:16 – 00:21:45:
They discuss strategies such as cost segregation studies to accelerate depreciation, which can benefit property owners. Many investors are now holding onto properties for appreciation rather than immediate cash flow.

00:21:46 – 00:25:10:
Garrett shares his investment goals, including aiming to acquire 20 rental properties in the West County area. His focus is on ranch-style homes in good school districts.

00:25:11 – 00:28:00:
For new investors, Garrett explains the process of getting financing for an investment property. He outlines the typical down payment (20-25%) and how he offers competitive rates. Garrett also discusses the importance of qualifying based on rental income and how it can offset mortgage payments.

00:28:01 – 00:31:30:
Greg and Garrett discuss the challenges for young investors trying to break into the market, particularly due to cash requirements. They compare the long-term benefits of real estate investment to other financial markets, emphasizing the value of leveraging real estate appreciation.

00:31:31 – 00:34:30:
Garrett introduces the DSR (Debt Service Coverage Ratio) loan, a growing tool among investors. This loan allows qualification based on rental income rather than personal income. The conversation touches on loan specifics, such as minimum down payments and interest rates.

00:34:31 – 00:37:00:
They talk about how hard it is to secure mortgages for low-value properties, given the points and fees that make smaller loans difficult. Garrett explains that properties under $80,000 are less common in the current market due to rising home prices.

00:37:01 – 00:39:00:
The podcast wraps up with Greg and Garrett agreeing to check in weekly for market updates, humorously suggesting they rename the podcast "Two Old Guys on Social Media." Garrett shares how personal branding with his name, Knox Mortgage, has helped him grow his business.

The Impact of Interest Rates on the St. Louis Housing Market

The Impact of Interest Rates on the St. Louis Housing Market

As we look ahead to 2025, the dynamics of the housing market are set to be significantly influenced by interest rates. Redfin economists predict that as mortgage rates decrease, more homeowners will list their properties for sale, particularly move-up buyers looking to take advantage of these lower rates. However, this influx in listings is expected to be met with even higher demand, causing homes to sell more quickly and often above their listed prices.

How Lower Interest Rates Influence the Market

Lower mortgage rates have a profound effect on the housing market:

1. Increased Affordability: As interest rates drop, monthly mortgage payments become more affordable, allowing buyers to consider higher-priced homes. This increased buying power can lead to more competitive bidding and higher overall home prices.

2. More Listings: Homeowners who were previously hesitant to sell may be more inclined to list their homes, knowing that lower rates could make it easier to afford a new, more expensive property.

3. Demand Exceeding Supply: Despite the expected increase in listings, the demand for homes is likely to outpace supply. This imbalance can result in homes selling faster and for prices above their initial listing.

Visualizing the Impact

The chart below illustrates how varying mortgage rates affect the maximum home price buyers can afford based on different monthly payments:

For example, at a 3% mortgage rate, a $3,000 monthly payment supports a home price of around $600,000. However, at a 6% rate, the same payment only supports a home price of about $450,000. This demonstrates how crucial it is for buyers to secure the lowest possible rates to maximize their purchasing power.

Current Market Conditions

Even though mortgage rates have decreased from their recent peaks, they remain significantly higher than the lows experienced during the pandemic. The current economic volatility suggests that rates might experience temporary increases. U.S. Treasury yields, which are an indicator of where mortgage rates are headed, recently showed fluctuations, underscoring the importance for buyers to act quickly.

Recommendations for Buyers

Given the current market conditions, here are some strategies for prospective homebuyers:

• Act Quickly: With the likelihood of demand outstripping supply, buyers should move fast to take advantage of improving affordability and existing inventory.

• Shop Around: Ensure you’re getting the best mortgage rate by comparing offers from different lenders.

• Stay Informed: Keep in touch with your lender to secure the best available rate as market conditions change.

Conclusion

Lower interest rates significantly enhance home affordability, driving demand and influencing the overall housing market. As we approach 2025, understanding and leveraging these dynamics can help buyers navigate the market more effectively. Locking in lower rates now could provide substantial financial benefits and increase your buying power.

Stay proactive and informed to make the most of the current and future housing market opportunities.

Source: https://www.redfin.com/news/home-affordability-improves-mortgage-rates-drop

ST. LOUIS MONTHLY HOUSING REPORT - ARRIL 2023

US existing-home sales declined 2.4% month-over-month as of the last measure, according to the National Association of REALTORS® (NAR), reversing February’s sales gain of 14.5%. Fluctuations in mortgage interest rates have caused buyers to pull back, with pending sales dropping 5.2% month-over-month. Meanwhile, the median existing-home sales price declined for the second month in a row, falling 0.9% nationally from the same time last year, the largest year-over-year decline since January 2012, according to NAR.

New listings decreased by 21.1% for residential homes and 33.2% for townhouse/condo homes. Pending sales decreased by 18% for residential homes and 22% for townhouse/condo homes. Inventory decreased by 1.7% for residential homes and 10.8% for townhouse/condo homes.

Median sales price increased 5.3% to $276,000 for residential homes and 3.3% to $219,000 for townhouse/condo homes. Days on market increased 12% for residential homes and 48% for townhouse/condo homes. Months supply of inventory increased by 27.3% for residential homes and 9.1% for townhouse/condo homes.

https://www.stlrealtors.com/pages/housingreport/

St. Louis Property Management

St. Louis is a bustling city with a rich history and a diverse economy. If you're a property owner in St. Louis, you know that managing your properties can be a challenge, whether you're dealing with tenant issues or maintenance problems. That's where St. Louis property management comes in.

What is St. Louis Property Management? St. Louis property management is a service that helps property owners manage their rental properties. It includes a wide range of services, such as tenant screening, rent collection, property maintenance, and legal compliance. Property management companies in St. Louis specialize in managing single-family homes, multi-family properties, apartments, and commercial buildings.

Why Choose a St. Louis Property Management Company? There are many benefits to choosing a St. Louis property management company to manage your properties. Here are a few reasons why:

1. Save Time and Energy: Property management can be time-consuming and stressful, especially if you have multiple properties. A property management company can handle all of the day-to-day tasks, so you don't have to.

2. Tenant Screening: Finding reliable tenants is key to running a successful rental property. A property management company can handle tenant screening, including credit checks, background checks, and reference checks, to help ensure that you find the right tenants for your properties.

3. Rent Collection: Collecting rent can be a hassle, especially if you have tenants who are late on payments. A property management company can handle rent collection for you, and can even evict non-paying tenants if necessary.

4. Maintenance and Repairs: Property maintenance can be costly and time-consuming. A property management company can handle maintenance and repairs for you, which can save you money and reduce your stress levels.

5. Legal Compliance: Property management companies are well-versed in local, state, and federal laws and regulations. They can ensure that you're in compliance with all relevant laws, which can help protect you from legal issues.

Choosing the Right St. Louis Property Management Company If you're considering hiring a St. Louis property management company, it's important to choose the right one. Here are a few things to look for:

1. Experience: Look for a property management company with experience managing properties similar to yours.

2. Reputation: Check online reviews and talk to other property owners to gauge a company's reputation.

3. Services and Guarantees: Make sure the property management company offers the services and Guarantees you need.

4. Fees: Understand the fees associated with property management, and make sure they fit your budget.

In conclusion, if you're a property owner in St. Louis, a property management company can help make your life easier. By handling everything from tenant screening to maintenance and repairs, property management companies can save you time, money, and stress. Just be sure to choose the right St. Louis property management company for your needs.

For more information on property management by Avenue please visit LeasingSTL.com

Why Today’s Housing Market Isn’t Headed for a Crash

Why Today’s Housing Market Isn’t Headed for a Crash

67% of Americans say a housing market crash is imminent in the next three years. With all the talk in the media lately about shifts in the housing market, it makes sense why so many people feel this way. But there’s good news. Current data shows today’s market is nothing like it was before the housing crash in 2008.

Back Then, Mortgage Standards Were Less Strict

During the lead-up to the housing crisis, it was much easier to get a home loan than it is today. Banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance an existing one.

As a result, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices. Today, things are different, and purchasers face much higher standards from mortgage companies.

The graph below uses data from the Mortgage Bankers Association (MBA) to help tell this story. In this index, the higher the number, the easier it is to get a mortgage. The lower the number, the harder it is.

This graph also shows just how different things are today compared to the spike in credit availability leading up to the crash. Tighter lending standards have helped prevent a situation that could lead to a wave of foreclosures like the last time.

Foreclosure Volume Has Declined a Lot Since the Crash

Another difference is the number of homeowners that were facing foreclosure when the housing bubble burst. Foreclosure activity has been lower since the crash, largely because buyers today are more qualified and less likely to default on their loans. The graph below uses data from ATTOM to show the difference between last time and now:

So even as foreclosures tick up, the total number is still very low. And on top of that, most experts don’t expect foreclosures to go up drastically like they did following the crash in 2008. Bill McBride, Founder of Calculated Risk, explains the impact a large increase in foreclosures had on home prices back then – and how that’s unlikely this time.

“The bottom line is there will be an increase in foreclosures over the next year (from record level lows), but there will not be a huge wave of distressed sales as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.”

The Supply of Homes for Sale Today Is More Limited

For historical context, there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), and that caused prices to fall dramatically. Supply has increased since the start of this year, but there’s still a shortage of inventory available overall, primarily due to years of underbuilding homes.

The graph below uses data from the National Association of Realtors (NAR) to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just 2.7-months’ supply at the current sales pace, which is significantly lower than the last time. There just isn’t enough inventory on the market for home prices to come crashing down like they did last time, even though some overheated markets may experience slight declines.

Bottom Line

If recent headlines have you worried we’re headed for another housing crash, the data above should help ease those fears. Expert insights and the most current data clearly show that today’s market is nothing like it was last time.

2022 Housing Market Forecast [INFOGRAPHIC]

Some Highlights

• What does the rest of the year hold for the housing market? Here’s what experts have to say about what lies ahead.

• Home prices are projected to rise and so are mortgage rates. Experts are also forecasting another strong year for home sales as people move to meet their changing needs.

• Let’s connect so you can make your best move this year.

Things That Could Help You Win a Bidding War on a Home

With a limited number of homes for sale today and so many buyers looking to make a purchase before mortgage rates rise further, bidding wars are common. According to the latest report from the National Association of Realtors (NAR), nationwide, homes are getting an average of 4.8 offers per sale. Here’s a look at how that breaks down state-by-state (see map below):

The same report from NAR shows the average buyer made two offers before getting their third offer accepted. In this type of competitive housing market, it’s important to know what levers you can pull to help you beat the competition. While a real estate professional is your ultimate guide to presenting a strong offer, here are a few things you could consider.

Offering over Asking Price

When you think of sweetening the deal for sellers, the first thought you likely have is around the price of the home. In today’s housing market, it’s true more homes are selling for over asking price because there are more buyers than there are homes for sale. You just want to make sure your offer is still within your budget and realistic for the market value in your area – that’s where a local real estate professional can help you through the process. Bankrate says:

“Simply put, being willing to pay more money than other buyers is one of the best ways to get your offer accepted. You may not have to increase it by a lot — it’ll depend on the area and other factors — so look to your real estate agent for guidance.”

Putting Down a Bigger Earnest Money Deposit

You could also consider putting down a larger deposit up front. An earnest money deposit is a check you write to go along with your offer. If your offer is accepted, this deposit is credited toward your home purchase. NerdWallet explains how it works:

“A typical earnest money deposit is 1% to 2% of the home’s purchase price, but the amount varies by location. A higher earnest money deposit may catch a seller’s attention in a hot housing market.”

That’s because it shows the seller you’re seriously interested in their house and have already set aside money that you’re ready to put toward the purchase. Talk to a professional to see if this is something you can do in your area. 

Making a Higher Down Payment 

Another option is increasing how much of a down payment you’re going to make. The benefit of a higher down payment is you won’t have to finance as much. This helps the seller feel like there’s less risk of the deal or the financing falling through. And if other buyers put less down, it could be what helps your offer stand out from the crowd.

Non-Financial Options To Make a Strong Offer

Realtor.com points out that while increasing these financial portions of the deal can help, they’re not your only options:

“. . . Price is not the only factor sellers weigh when they look at offers. The buyer’s terms and contingencies are also taken into account, as well as pre-approval letters, appraisal requirements, and the closing time the buyer is asking for.”

When it’s time to make an offer, partner with a trusted professional. They have insight into what sellers are looking for in your local market and can give you expert advice on what levers you may or may not want to pull when it’s time to write an offer.

From a non-financial perspective, this can include things like flexible move-in dates or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). For example, you could make an offer that’s not contingent on the sale of your current home. Just remember, there are certain contingencies you don’t want to forego, like your home inspection. Ultimately, the options you have can vary state-to-state, so it’s best to lean on an expert real estate professional for guidance.

Bottom Line

In today’s hot housing market, you need a partner who can serve as your guide, especially when it comes to making a strong offer. Let’s connect so you have a trusted resource and coach on how to make the strongest offer possible for your specific situation.

How To Approach Rising Mortgage Rates as a Buyer

In the last few weeks, the average 30-year fixed mortgage rate from Freddie Mac inched up to 5%. While that news may have you questioning the timing of your home search, the truth is, timing has never been more important. Even though you may be tempted to put your plans on hold in hopes that rates will fall, waiting will only cost you more. Mortgage rates are forecast to continue rising in the year ahead.

If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise.

How Rising Mortgage Rates Impact You

Mortgage rates play a significant role in your home search. As rates go up, they impact how much you’ll pay in your monthly mortgage payment, which directly affects how much you can comfortably afford. Here’s an example of how even a quarter-point increase can have a big impact on your monthly payment (see chart below):

With mortgage rates on the rise, you’ve likely seen your purchasing power impacted already. Instead of delaying your plans, today’s rates should motivate you to purchase now before rates increase more. Use that motivation to energize your search and plan your next steps accordingly.

The best way to prepare is to work with a trusted real estate advisor now. An agent can connect you with a trusted lender, help you adjust your search based on your budget, and make sure you’re ready to act quickly when it’s time to make an offer.

Bottom Line

Serious buyers should approach rising rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.

Why a Real Estate Professional Is Key When Selling Your House

With today’s real estate market moving as fast as it is, working with a real estate professional is more essential than ever. They have the skills, experience, and expertise it takes to navigate the highly detailed and involved process of selling a home. That may be why the percentage of people who list their houses on their own, known as a FSBO or For Sale By Owner, has reached its lowest point since 1985 (see graph below):

Here are five reasons why selling with a real estate professional makes more sense, even in today’s hot market:

1. They Know What Buyers Want To See

Before you decide which projects and repairs to take on, connect with a real estate professional. They have first-hand experience with today’s buyers, what they expect, and what you need to do to make sure your house shows well.

If you don’t lean on their expertise, you may spend your time and money on something that isn’t essential. That’s because, in today’s low-inventory market, buyers are willing to take on more of the renovation work themselves. A survey from Freddie Mac finds that:

“. . . nearly two-in-five potential homebuyers would consider purchasing a home requiring renovations.” 

A professional can help you decide what you need to tackle. It’s not canned advice you could find online – it’s recommendations specific to your house and your area.

2. They Help Maximize Your Buyer Pool

Today, the average home is getting 4.8 offers per sale according to recent data from the National Association of Realtors (NAR), and that competition is pushing prices up. While that’s promising for you as a seller, it’s important to understand your agent’s role in bringing buyers in.

Real estate professionals have an assortment of tools at their disposal, such as social media followers, agency resources, and the MLS to ensure your house is viewed by the most buyers. According to realtor.com:

“Only licensed real estate agents can list homes on the MLS, which is a one-stop online shop of sorts for getting a house seen by thousands of agents and home buyers. . . . This is certainly one of many good reasons why the majority of home sellers decide to employ the services of a listing agent rather than going it alone.”

Without access to these tools, your buyer pool is limited. And you want more buyers to view your house since buyer competition can drive your final sales price higher.

3. They Understand the Fine Print

Today, more disclosures and regulations are mandatory when selling a house. That means the number of legal documents you’ll need to juggle is growing. That’s why Investopedia says:

“One of the biggest risks of FSBO is not having the experience or expertise to navigate all of the legal and regulatory requirements that come with selling a home.”

A real estate professional knows exactly what needs to happen, what all the paperwork means, and how to work through it efficiently. They’ll help you review the documents and avoid any costly missteps that could occur if you try to handle them on your own.

4. They’re Trained Negotiators

If you sell without a professional, you’ll also be solely responsible for all the negotiations. That means you’ll have to coordinate with:

• The buyer, who wants the best deal possible

• The buyer’s agent, who will use their expertise to advocate for the buyer

• The inspection company, which works for the buyer and will almost always find concerns with the house

• The appraiser, who assesses the property’s value to protect the lender

Instead of going toe-to-toe with all these parties alone, lean on an expert. They’ll know what levers to pull, how to address everyone’s concerns, and when you may want to get a second opinion.

5. They Know How To Set the Right Price for Your House

If you sell your house on your own, you may over or undershoot your asking price. That could mean you’ll leave money on the table because you priced it too low or your house will sit on the market because you priced it too high. Pricing a house requires expertise. Investopedia explains it like this:

“. . . There is no easy or universal way to determine market value for real estate.”

Real estate professionals know the ins and outs of how to price your house accurately and competitively. To do so, they compare your house to recently sold homes in your area and factor in the current condition of your house. These factors are key to making sure it’s priced to move quickly while still getting you the highest possible final sale price.

Bottom Line

There’s a lot that goes into selling your house. Instead of tackling it alone, let’s connect so you have an expert on your side throughout the entire process.

What You Need To Budget for When Buying a Home

When it comes to buying a home, it can feel a bit intimidating to know how much you need to save and where to find that information. But you should know, you’re not expected to have all the answers yourself. There are many trusted professionals who can help you understand your finances and what you’ll need to budget for throughout the process.

To get you started, here are a few things experts say you should plan for along the way.

1. Down Payment

As you set your savings goal for your purchase, your down payment is likely already top of mind. And, like many other people, you may believe you need to set aside 20% of the home’s purchase price for that down payment – but that’s not always the case. The National Association of Realtors (NAR) says:

“One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership. Having this knowledge is critical to know what to save . . .”

The good news is, you may be able to put as little as 3.5% (or even 0%) down in some situations. To understand your options, partner with a trusted professional who can go over the various loan types, down payment assistance programs, and what each one requires.

2. Earnest Money Deposit

Another item you may want to plan for is an earnest money deposit. While it isn’t required, it’s common in today’s highly competitive market because it can help your offer stand out in a bidding war.

So, what is it? It’s money you pay as a show of good faith when you make an offer on a house. This deposit works like a credit. You’re using some of the money you already saved for your purchase to show the seller you’re committed and serious about their house. It’s not an added expense, it’s just paying some of that up front. First American explains what it is and how it works:

“The deposit made from the buyer to the seller when submitting an offer. This deposit is typically held in trust by a third party and is intended to show the seller you are serious about purchasing their home. Upon closing the money will generally be applied to your down payment or closing costs.”

In other words, an earnest money deposit could be the very first check you’ll write toward your purchase. The amount varies by state and situation. Realtor.com elaborates:

“The amount you’ll deposit as earnest money will depend on factors such as policies and limitations in your state, the current market, what your real estate agent recommends, and what the seller requires. On average, however, you can expect to hand over 1% to 2% of the total home purchase price.”

Work with a real estate advisor to understand any requirements in your local area and what they’ve recommended for other buyers in your market. They’ll help you determine if it’s something that could be a useful option for you.

3. Closing Costs

The next thing to plan for is your closing costs. The Federal Trade Commission (FTC) defines closing costs as:

“The upfront fees charged in connection with a mortgage loan transaction. …generally including, but not limited to a loan origination fee, title examination and insurance, survey, attorney’s fee, and prepaid items, such as escrow deposits for taxes and insurance.”

Basically, your closing costs cover the fees for various people and services involved in your transaction. NAR has this to say about how much to budget for:

“A home costs more than just the sale price. For example, closing costs—which make up about 2% to 5% of the home’s purchase price—are a major added expense…Lenders provide a Closing Disclosure at least three business days prior to closing on a mortgage. But buyers will need to budget for these added costs ahead of time to avoid sticker shock days before closing.”

The key takeaway is savvy buyers plan ahead for these expenses so they can come into the process prepared. Freddie Mac sums it up like this:

“If you’re in the market to buy a home, your down payment is probably top of mind. And rightly so – it’s likely the biggest cost of homebuying. However, it is not the only cost and it’s critical you understand all your expenses before diving in. The more prepared you are for your down payment, closing and other costs, the smoother your homebuying journey will be.”

Bottom Line

Knowing what to budget for in the homebuying process is essential. To make sure you understand these and any other expenses that may come up, let’s connect so you have reliable expertise on what to expect when you buy a home.

The Best Week To List Your House Is Just Around the Corner

Are you thinking about selling your house? If so, you may want to make it a priority to start the process soon. According to realtor.com, the sweet spot for sellers is just around the corner. In a recent study, experts analyzed housing market trends by looking at data from the past several years (excluding 2020, since it was an atypical year). When applied to the current market, experts determined the ideal week to list a house this year. The research says:

“Home sellers on the fence waiting for that perfect moment to sell should start preparations, because the best time to list a home in 2022 is approaching quickly. The week of April 10-16 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year.”

If you’ve been putting your move on the back burner waiting for the ideal time to sell, you should know your golden window of opportunity is coming up. If you’re able to get your house ready quickly, here’s what you can expect from that week.

You Should See More Buyer Activity

The article expects higher buyer demand based on what’s happened in previous years. This could result in increased competition among buyers and ultimately a bidding war over your house. And since mortgage rates recently ticked up over 4%, chances are good that analysis is right. When rates rise, experts say buyers often hurry to make their purchase before rates climb higher. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

“. . . Buyers are rushing to lock in lower rates as the outlook is for even higher mortgage rates in the following months.”

Your House Is Expected To Sell Quickly

Additionally, the realtor.com analysis shows houses sell even faster during this week of the year, likely due to the heightened buyer demand. If you work with a trusted real estate professional to price your house right, it should sell quickly. And when homes are already selling in just 18 days according to NAR, that could set you up for a big win.

Your House Will Be in the Spotlight

Since the beginning of the year, the number of homes available for sale has been at or near record lows. According to the realtor.com study, the typical trend for this week of the year is that there will be even fewer sellers on the market. If you list when inventory is low, your house will be the center of attention for eager buyers craving options.

If you’re ready to move fast, you may want to shoot for April 10th-16th as your target goal. Just remember, even if you’re not ready to list within the next couple of weeks, rest assured this is still a hot sellers’ market. If you list later in April, you’ll still be in the driver’s seat.

Bottom Line

Ready to get the ball rolling? Let’s connect and schedule a time to go over your next steps. In the meantime, make a checklist of things you need to tackle to get your house ready. When we talk, we can prioritize your to-do list and get you on the road to selling your house.

The Average Homeowner Gained More Than $55K in Equity over the Past Year

If you’re a current homeowner, you should know your net worth just got a big boost. It comes in the form of rising home equity. Equity is the current value of your home minus what you owe on the loan. Today, you’re building that equity far faster than you may expect – and this gain is great news for you.

Here’s how it happened. Home values are on the rise thanks to low housing supply and high buyer demand. Basically, there aren’t enough homes available to meet this high buyer interest,  so bidding wars are driving home prices up. When you own a home, the rising prices mean your home is worth more in today’s market. And as home values climb, your equity does too. As Dr. Frank Nothaft, Chief Economist at CoreLogic, explains:

“Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth.”

The latest Homeowner Equity Insights from CoreLogic shed light on just how much rising home values have boosted homeowner equity. According to that report, the average homeowner’s equity has grown by $55,300 over the last 12 months.

Want to know what’s happening in your area? Here’s a breakdown of the average year-over-year equity growth for each state based on that data.

How Rising Equity Impacts You

In addition to building your overall net worth, equity can also help you achieve other goals like buying your next home. It works like this: when you sell your house, the equity you built up comes back to you in the sale.

In a market where you’re gaining so much equity, it may be just what you need to cover a large portion – if not all – of the down payment on your next home. So, if you’ve been holding off on selling and worried about being priced out of your next home because of today’s home price appreciation, rest assured your equity can help fuel your move.

Bottom Line

Equity can be a real game-changer if you’re planning to make a move. To find out just how much equity you have in your home and how you can use it to fuel your next purchase, let’s connect so you can get a professional equity assessment report on your house.

Why It’s Critical To Price Your House Right

When you make a move, you want to sell your house for the highest price possible. That might be why many homeowners are eager to list in today’s sellers’ market. After all, with record-low inventory and high buyer demand, many homes are selling for more than asking price. Data from the National Association of Realtors (NAR) shows 46% of homes are selling above list price today.

But even in a market like we have now, working with an agent to set the right asking price is critical, as pricing it too high or too low could have a negative impact on your final sale. Here’s why.

Pricing Your House Right Is Crucial Even in a Sellers’ Market

The price you set for your house sends a message to potential buyers. Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with the property. Not to mention, you could leave money on the table, which decreases your future buying power if you undervalue your house.

On the other hand, price it too high and you run the risk of deterring buyers. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.

In other words, think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value. Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see a bidding war, too. And when a bidding war happens, you’ll likely get an even higher final sale price. Plus, when homes are priced right, they tend to sell quickly.

To get a look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below:

Lean on a Professional’s Expertise To Price Your House Right

There are several factors that go into pricing your house and balancing them is the key. That’s why it’s important to lean on an expert real estate advisor when you’re ready to move. A local real estate advisor is knowledgeable about:

• The value of homes in your neighborhood

• The current demand for houses in today’s market

• The condition of your house and how it affects the value

A real estate professional will balance these factors to make sure the price of your house makes the best first impression and gives you the greatest return on your investment in the end.

Bottom Line

Even in a sellers’ market, pricing your house right is critical. Don’t rely on guesswork. Let’s connect to make sure your house is perfectly priced.

An Expert Advisor Will Give You the Best Advice in Today’s Market

Having an experienced guide coaching you through the process of buying or selling a home is important in a normal market – but today’s market is far from normal. As a result, an expert real estate advisor isn’t just good to have by your side, they’re essential.

Today’s housing market is full of extremes. Experts project mortgage rates will continue to rise this year, and that’s driving significant demand for homes as buyers want to make their purchases before rates climb even higher. At the same time, an absence of sellers is leading to record-low housing inventory. This imbalance in supply and demand is creating bidding wars and driving home price appreciation as well as considerable gains in home equity.

These market conditions can feel overwhelming, but you don’t have to go at it alone. Having a trusted expert to coach you through the process of buying or selling a home gives you clarity and confidence through each step.

Here are just a few of the ways a real estate expert is invaluable:

Contracts – Agents help with the disclosures and contracts necessary in today’s heavily regulated environment.

Experience – In an unprecedented market, experience is crucial. Real estate professionals know the entire sales process, including how it’s changed over the past two years.

Negotiations – Your real estate advisor acts as a buffer in negotiations with all parties throughout the entire transaction and advocates for your best interests.

Education – Knowledge is power in today’s market, and your advisor will simply and effectively explain market conditions and translate what they mean for you.

Pricing – Finally, a real estate professional understands today’s real estate values when setting the price of your home or helping you make an offer to purchase one.

A real estate agent is a crucial guide through this unprecedented market, but not all agents are created equal. A true expert can carefully walk you through the whole real estate process, look out for your unique needs, and advise you on the best ways to achieve success. Finding an expert real estate advisor – not just any agent – should be your top priority when you’re ready to buy or sell a home.

What’s the key to choosing the right expert?

It starts with trust. You’ll want to know you can trust the advice they’re giving you, so you need to make sure you’re connected with a true professional. No one can provide perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in today’s unique market. But a true professional can give you the best possible advice based on the information and situation at hand. They’ll help you make the necessary adjustments along the way, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions. That’s exactly what you want and deserve.

Bottom Line

It’s critical to have an expert on your side who’s well versed in navigating today’s rapidly changing market. If you’re planning to buy or sell a home this year, let’s connect so you have a real estate professional on your side to give you the best advice and guide you along the way.