Confidence Is the Key to Success for Young Homebuyers

Confidence Is the Key to Success for Young Homebuyers

Presented as a public service by Joe Peters of Coldwell Banker

First-time buyers need an experienced agent to help them navigate them through the maze of items required in order to find and purchase their first home.  That is where I come in.  Having done this hundreds of times I the past, I can put my experience to work for you in order to make this a smooth and enjoyable experience.

 

Buying your first home can seem overwhelming. Thankfully, there’s a lot of great information out there to help you feel more confident as you learn about the process. For those in younger generations who aspire to buy, here are three things to consider sooner rather than later in your journey:

1. Understand What it Takes to Purchase a Home

Overall, Millennials make up the largest group of homebuyers in today’s real estate market, and Gen Z is not too far behind. A recent study shared by Freddie Mac shows, however, that Generation Z isn’t as confident in the home buying process as Millennials. The best thing potential young buyers can do is understand what it takes to buy a home. Learn as much as you can about the mortgage processdown payment options, and the overall steps to take along the way. 

2. Realize Your Opportunity to Build Wealth 

Homeownership allows you the chance to put a small portion of the home’s value down when you buy, and then watch your appreciation grow on the full value of the home – not just on the down payment. It’s one of the best investments you can make, and a form of forced savings working in your favor over time. The added bonus? You get to live there, too.

3. Find Someone You Trust to Help You Through the Process 

Having someone you trust to guide you through this process is invaluable. Finding a local real estate expert to help you navigate through the transaction and feel more confident as you make important decisions could be the best choice you make.

For Millennials and Gen Z’ers thinking about buying, today’s historically low interest rates combined with the outlook for future home appreciation is a big win. This means whatever you buy today, you’ll be bragging about 10 years from now. You can feel confident about that!

Bottom Line

If you’re ready, buying your first home sooner rather than later is one of the best decisions you can make. But there are many things to consider before taking that step, so let’s work together to help you confidently navigate the full journey.


Presented as a public service by:

 



 

 


Is This the Future of Rent-To-Buy?

Real Estate Forecast

Is This the Future of Rent-To-Buy?

Presented as a public service by Joe Peters of Coldwell Banker

In theory, the idea behind a rent-to-buy arrangement is a good one for those who want to purchase a home but aren’t quite ready yet. More than anything, it gives buyers hope, and often a solution to their credit woes, while locking in a home that will, presumably, belong to them one day.

“One of the main reasons why rent-to-own agreements are attractive to renters is because they can engage to a contract even though they have a bad credit status,” said Passive Real Estate Investing. “He or she can improve their credit rating by renting the property and later on, they may be able to get a loan to purchase the property.”

Another benefit of renting to own is that it “allows buyers to lock in a purchase price, which can be especially beneficial in a time when home prices are on the rise,” said Quicken Loans. “If the option money or a percentage of the rent is applied to the home’s purchase price, you can also begin to build equity in the home before you even purchase it.”

Prospective buyers also get a test run of sorts to figure out if it’s the right house and the right area, or if they need to start their search over. “If that’s the case, they can walk away,” said Passive Real Estate Investing. “Of course, they lose whatever premium they’ve been paying above and beyond what the regular rent one of been.”

That premium is perhaps the biggest negative of entering into a rent-to-own arrangement. First, there’s the upfront money. “In a rent-to-own agreement, you (as the buyer) pay the seller a one-time, usually nonrefundable, upfront fee called the option fee, option money, or option consideration,” said Investopedia. “This fee is what gives you the option to buy the house by some date in the future. The option fee is often negotiable, as there’s no standard rate. Still, the fee typically ranges between 2.5% and 7% of the purchase price.”

You can expect to pay more per month, too. “Typically, the rent is slightly higher than the going rate for the area to make up for the rent credit you receive,” said Quicken Loans. “But be sure you know what you’re getting for paying that premium.”

And that’s not the only downside. “In the end, when you decide not to buy the property, you will lose all the money you paid including the initial premium payment,” said Passive Real Estate Investing. “Also, in cases of missed or late payments, you may lose the option to buy the property.”

You’ll also want to make sure you read the contract carefully so you know the terms. “Some landlords include a lease-purchase in their rent-to-own agreement, which legally obligates the renter to purchase the home at the end of the lease,” said Quicken Loans.

A new way to rent-to-own

Divvy Homes is a new player on the rent-to-own scene that may be the answer for buyers looking to get into a home while mitigating some of the potential drawbacks to a more typical arrangement. Divvy works with buyers to figure out the budget that is comfortable for them and requires just 2% down while covering “all fees, closing costs, taxes and insurance.”

“You pick the house you want to buy—not just any house,” said Marketplace. “Around 20 percent of your monthly rent goes toward what Divvy calls ‘equity credits.’ “After three years, renters own 10 percent, typically enough to qualify for a mortgage and buy Divvy out.”

Divvy also refunds some of the money for those who opt not to purchase the home. “If they leave or default before three years, they’ll get back half of the equity they’ve built.”

 

Note:  While Rent to Own has always been around, this approach seems to give more structure to the process.  Give me a call if you would like to discuss your options.  Joe Peters (908) 238-0118


Presented as a public service by:

 

 

You Don’t Need 20% Down and Seven Other Myths That Are Getting in the Way of Homeownership

You Don’t Need 20% Down and Seven Other Myths That Are Getting in the Way of Homeownership

Presented as a public service by Joe Peters of Coldwell Banker

Think you need to come up with 20% for a down payment in order to buy a house? It might surprise you to know that the median down payment for first-time buyers last year was just 7%, per the National Association of Realtors®. And there are plenty of loan programs out there that require far less. The 20% myth is just one of the things that’s keeping homeownership out of reach. We’re digging in to seven others.

You need to be well-established in your forever career

There has been a lot of discussion about how millennials are waiting longer and longer to purchase homes. “As a result of their consequent struggle to save, millennials are delaying major life milestones like getting married and buying a home,” said Business Insider.

Nonetheless, there are still millennials jumping into the market because, even know their name isn’t yet on the door, they’re excited to have a home in their name. Having a stable job, a comfortable salary, and the desire to own a home may just be enough.

Sure, you might not be ready to buy the house of your dreams or move to the neighborhood where you can imagine raising kids and, someday, retiring, but that doesn’t mean you’re completely out of the game. A smaller place closer to work or an attached property can, quite literally, get your foot in the homeownership door and allow you to start earning equity.

You have to be completely out of debt

Recent data shows that nearly half of all undergraduates are delaying homeownership because of student loans. “According to a recent Federal Reserve study, a $1,000 increase in student loan debt lowers the homeownership rate by about 1.5%, equivalent to an average delay of about 2.5 months in attaining homeownership,” said Clever Real Estate. “For the average college debt holder with $37,000 in debt, that ends up being about a 7.7-year delay in their path homeownership.”

Regardless of your debt, whether it’s from student loans or credit cards, it may still be possible to qualify for a mortgage and afford the payments, especially because rents are often comparable to mortgage payments. Mortgage underwriters don’t expect homebuyers to be debt-free; In fact, having no debt might actually work against you. They like to see responsible credit use and management.

You need to have a family

Yes, many would-be homebuyers hold off until parenthood is looming, because they’re not ready to move to the suburbs, get married, and have kids. But, a third of today’s new homeowners are unmarried, according to CITYLAB. “The shift is detailed in a new working paper from Harvard University’s Joint Center for Housing Studies, in which researchers crunched demographic data from HUD and from American Housing Surveys taken every other year between 1997 and 2017. Perhaps the most notable departure from 20 years ago is the marital status of new homeowners. According to the paper, the share of married buyers declined from 61 percent in 1997 to just over half by 2017. Meanwhile, 35 percent of first-time homebuyers in 2017 had never been married.”

You need to be a man

There was a time when single women wouldn’t even have considered buying a home on their own. That time has clearly passed. According to the National Association of Realtors® 2018 profile of home buyers and sellers, single women homebuyers outnumbered single male homebuyers by 2 to 1!

You need a 30-year conventional loan

There are tons of different loans that can help you purchase your first home, make payments more affordable and/or give you the flexibility you need to make homebuying affordable. FHA loans are among the most well-known and most popular loans for first-time buyers because they require just 3.5% down and have low credit score requirements. Other loans worth looking into depending on your circumstances include: government VA loans for veterans; USDA loans for properties in rural areas; and loans like Fannie Mae’s HomeStyle Renovation loan, which gives buyers bundled funds to purchase and make improvements to their home.

You need to have great credit

If your score isn’t in the 800s, or even the 700s, it doesn’t mean you’re going to be living that apartment life forever. You might be surprised to see the credit score minimums for some loans. “While there is no official minimum credit score for a home loan approval, the minimum FICO credit score for conventional loan approval tends to be around 620,” said Credit.com.

It has to be your primary home

“Some rich urban millennials are choosing to rent in the city and buy a vacation home instead of a primary residence,” said Business Insider. Meanwhile, some other savvy investors are continuing to rent and plunking down money to purchase homes in tourist-friendly locations so they can take advantage of the AirBNB craze. “According to Priceonomics, hosts on Airbnb are earning more than anyone else in the gig economy and are raking in an average of $924 a month,” said Travel & Leisure. “Airbnb hosts make nearly three times as much as other workers…with some hosts making more than $10,000 per month.”


Presented as a public service by:

 

 

What Do Younger Renters Want in a Multifamily Community? Convenience Amenities and Hospitality-Like Service

What Do Younger Renters Want in a Multifamily Community? Convenience Amenities and Hospitality-Like Service

Presented as a public service by Joe Peters of Coldwell Banker

Reposted form nreionline.com

Millennial and Gen Z renters put an emphasis on convenience, technology and prompt service.

The multifamily market has certainly evolved over the last several years. From the types of amenities renters demand, to an influx of new development, to rising competition, all these factors have an impact on property owners and the bottom-line profitability of a community.

This is why today, more than ever before, it is extremely important for property managers to ensure their properties are catering to the latest demands of millennial renters, one of the largest rental cohorts in the United States.

The multifamily market has certainly evolved over the last several years. From the types of amenities renters demand, to an influx of new development, to rising competition, all these factors have an impact on property owners and the bottom-line profitability of a community.

This is why today, more than ever before, it is extremely important for property managers to ensure their properties are catering to the latest demands of millennial renters, one of the largest rental cohorts in the United States.

The influx of multifamily development in many markets across the nation has also increased competition for renters. It’s pertinent for property managers to truly understand the needs and wants of this demographic in order to drive leasing activity.

So, what are millennial renters looking for in their apartment communities and how can property managers ensure their properties standout amongst the competition?

Convenient service-based amenities

Millennials grew up in the digital age where access to whatever they needed could be found

with a click of their fingertips whether on a computer, cell phone or now an app. This instant access has continued to evolve with ride sharing apps like Uber and food delivery apps like DoorDash, both of which make life more convenient for users.

Today’s renters are demanding the same in their apartment communities, especially the millennial and Gen Z demographics.

This includes everything from automated storage areas or lockers for packages, trash valet services, community dog parks and dog walking services, nest thermostats, and smart fitness equipment, among others. Renters continue to require amenities that bring ease to their lives, saving them time and money.

For example, renters today do not simply want an on-site gym facility. They are demanding a fitness and wellness center equipped with access to on-site yoga, zumba and other fitness classes or access to on-site personal trainers, or smart fitness equipment. This provides a convenience to residents that allows them to access services for which they would traditionally have to go off-site.

Along with fitness features, we’ve seen a rising demand for ride-sharing drop-off and pick-up zones. This amenity is well-received by millennial residents who rely on this form of transportation on the weekends, and some even daily, for their commute. This is a standout feature for prospective renters and plays a role in attracting and retaining residents.

Providing amenities that simplify the lives of residents can leave a lasting impact, giving property managers an increased retention rate, which is vital when competing with new developments.

Hospitality-like service

Millennial renters are also demanding many amenities that are typically found in luxury hotels, such as dry cleaning drop-off and pick-up, concierge services for residents such as valet services, spa services, and grooming services for pets, among many others.

This type of hospitality-like service goes beyond the concierge services in themselves and into the superior customer service offered. Community managers and every employee at a community today needs to be thoroughly trained in providing superior hospitality-like customer service to residents at all times.

This includes fast response times, addressing and resolving needs quickly, being available and easily accessible for questions or concerns, etc.

With an influx of multifamily communities, property managers need to ensure their team is equipped with the skills to address resident requests and feedback with the same level of service these individuals would receive when staying at a luxury hotel. This aids in leaving a lasting impression for residents and makes the community standout amongst the competition.

For example, if an individual stays at a Marriott Hotel, whether it’s a higher-end Marriott or a Courtyard Marriott, they will receive the same level of service at every level. Today, the same applies to multifamily communities. Whether it’s a luxury apartment community or a more affordable community, the level of service is expected to be the same and residents are actively demanding this.

Overall, with increased demand for convenience amenities and concierge services, there comes an increased demand for superior customer service. Today’s renters want to be catered to and know that in their apartment community they will get amenities that make their lives easier and service that makes them stay.


Presented as a public service by: