The Belt Team sells lots of homes to first-time homebuyers and invariably when we meet for the first time, there are lots of misconceptions about what it takes to buy a home. How much money you need for a down payment is almost always one of them.
Here’s an article from Keeping Current Matters about some of the mythunderstandings:
According to a recent survey conducted by Genworth Financial Inc. at the Annual Mortgage Bankers’ Association Secondary Market Conference, mortgage professionals say that first-time buyers still believe a 20% down payment is necessary to buy in today’s market.
Nearly 40% of mortgage industry professionals surveyed believe that a lack of knowledge about the home-buying process is keeping potential buyers on the sidelines. Saving for a down payment is often cited as a huge barrier for first-time homebuyers to make the leap into homeownership.
If homeowners believe that they need a 20% down payment to enter the market, they also believe that they will have to wait years (in some markets) to come up with the necessary funds to buy their dream homes.
The greatest source of confusion cited in the survey results centered around down payments. The results are broken down in the chart below:
Rohit Gupta, CEO of Genworth Mortgage Insurance had this to say,
“While first-time homebuyers continue to drive the purchase market, we believe many are staying on the sidelines due to the misconception that a 20 percent down payment is required to secure a mortgage.
There are various low down payment options available today that allow prospective homebuyers to reach their dreams of homeownership sooner. It is crucial that, as an industry, we proactively educate eligible borrowers about solutions that will enable them to buy a home when they’re ready.”
Don’t let a lack of understanding of the home-buying process keep you and your family out of the housing market. Let’s get together to discuss your options! Call The Belt Team at (703) 242-3975.
If you are considering moving up to your dream home, it may be better to do it earlier in the year than later. The two components of your monthly mortgage payment (home prices and interest rates) are both projected to increase as the year moves forward, and interest rates may increase rather dramatically. Here are some predictions on where rates will be by the end of the year:
“While full employment and rising inflation are signs of a strong economy, they also have the potential to push mortgage rates and house prices up. The higher rates and higher prices create significant affordability concerns, which may continue to characterize the housing market for the rest of 2017.”
“By the time we get to the fourth quarter of this year, we will still be under 5 percent – we are thinking 4.7 percent…Something north of 5 percent by the time we get to 2018, and by the time we get to 2019, we show fourth-quarter rates hitting 5.5 percent.”
“Despite some regional disparities, title agents and real estate professionals do not expect increasing mortgage rates to have a significant impact on the housing market this spring. Continued good economic news, increasing Millennial demand and confidence that buyers will remain in the market even if rates exceed 5 percent bode well for 2017 real estate.”
We get questions from first-time homebuyers like this all the time:
Do I have to have a perfect credit score?
Do I need 20% cash for my down payment?
Aren’t interest rates really high?
Can I really afford to buy?
Check out what Keeping Current Matters has to say about the myths related to buying a home:
Interest rates are still below historic numbers.
88% of property managers raised their rent in the last 12 months!
The credit score requirements for mortgage approval continue to fall.
The Belt Team has a Buyer Specialist whose expertise is First-Time Homebuyers. If you’re looking for someone to walk you through each step of the process, call Beth Dadisman at (703) 577-1144. Or click here to schedule a FREE consultation.
Here’s how you might feel after you buy your first place! We helped these first time homebuyers find their dream home and go to settlement just last week! The Belt Team is ranked in the Top 20 Real Estate Agents in the State of VA (out of 30,000 agents). Don’t you deserve the BEST?!
Wondering how the real estate market is faring? Take a look at this snapshot from Keeping Current Matters:
What’s most important in the infographic is the quote from Lawrence Yun. You see, sales in November 2015 were down from sales in November 2014. In our opinion, the real reason for this is TRID.
TRID (Truth-In-Lending RESPA Integrated Documentation – or as some Realtors call it, “The Reason I Drink”) is a new government regulation that affects people who are buying and selling homes. We won’t go into all the details (and there are a LOT of them), but the bottom line is that TRID is causing increased costs and delays in settlement. We expect that when numbers come out for December, that many of the expected November closings will show up.
That said – TRID is just another reason why it’s SO important for consumers to be represented by Realtors who do this every day and can help their clients navigate what often feel like shark infested waters. Part of what we do is manage all the details of the buying & selling process. We make sure deadlines are met, you are protected, and that you get where you want to go when you want to be there.
We have heard all kinds of horror stories about delayed closings – Buyers with their household belongings on trucks for days, staying in a hotel because their settlement was pushed back due to a TRID delay. Others where their mortgage loan lock-in expired, only to have to pay hundred or thousands of dollars to extend the rate. Sellers who pack up and move out – but can’t get their money when they need it because the Buyer was held up by TRID.
Terry Belt, CEO of The Belt Team says, “You don’t need to know all the ins & outs of TRID, but your Realtor does. Our advice to you – whether buying or selling a home – is to make sure to work with a seasoned real estate team – the best you can find. It’s in your best interests to use their years of experience and their immense resources to your advantage. When problems arise, and with new regulations like TRID it’s not unusual – you need someone with creativity & pull on YOUR side. The more homes a Realtor sells, the more likely they are to be a great problem solver. So ask for details when you’re interviewing your Realtor. (We even have a list of questions you should ask your Realtor!)”
Schedule an appointment with The Belt Team by calling (703) 242-3975.
The Belt Team is one of the Top 20 Best Real Estate Agents in the State of Virginia (as named by Real Trends) and one of Washingtonian Magazines Best Realtors in 2015. Our mission statement is “Changing Lives For The Better”. If it’s time to change YOURS, call us at (703) 242-3975 TODAY. It’s our pleasure to help you make the RIGHT move.
The Belt Team had a very successful first-time homebuyer seminar recently. And what we have found over time is that there are a lot of “mythunderstandings” out there about what it takes to buy a home – whether it’s your first home or your fourth. Here’s a great article from Keeping Current Matters that “slays” those myths!
Interest Rates are still below historic numbers.
88% of property managers raised their rent in the last 12 months!
Credit score requirements to be approved for a mortgage continue to fall. The 723 average score is the lowest since Ellie Mae began reporting on scores in August 2011.
The average first-time home buyer down payment was 6% in 2015 according to NAR.
Northern Virginia housing prices may be rising, but appraised values often lag.
Whether you’re selling a home or buying a home, this can be a problem. It’s not uncommon for a home to sell quickly, sell with multiple competing offers and net a sales price ABOVE list price – only for things to come to a halt because the appraisal comes in low.
One strategy that’s used to battle a low appraisal is to find additional comps the appraiser can use. Oftentimes – that means finding homes that may be under contract, but not yet settled. These homes are likely to have higher sales prices than comps that closed months ago – especially as we head into the hot spring market.
In the past, Realtors were reluctant to release information to appraisers about sales prices until the home had actually settled. But new language in the Northern VA sales contract means this process may become much more common. January 1 changes added a new paragraph called “Disclosure of Sales Price to Appraiser”. The contract now gives authority to brokers to release the sales price of the contract to any appraiser who contacts them to obtain the information.
Although the contract has changed, changes in actual practice often happen slowly because many Realtors are part-time and/or sell very few homes. This means they are not always intimately familiar with the contract and the form changes that happen every six months. This is just another example of why it’s SO important for buyers and sellers to choose Realtors from among the top 10%. The more homes they sell, the better they are at protecting you and avoiding/solving problems such as low appraisals.
If you’re trying to buy a home in Northern Virginia, you’re well aware that inventory in many areas is just about as low as we’ve ever seen. And it’s been that way all year.
Some buyers & agents are walking around wringing their hands about how their buyers just can’t compete. Or how they lost out on that perfect home because it sold before they even knew it was on the market.
Instead, we like to think outside the box (just look at our car!) And so this year, we searched high & low for what we call our secret weapon – and we implemented the Showing Partner Model.
The concept is based on a study that was discussed at length in the book “Outliers” by Malcolm Gladwell. Basically, the idea is that mastery of a skill to the point of greatness (whether that’s art, athletics, public speaking, music or negotiation) comes with 10,000 hours spent practicing & developing the skill. We decided to apply that study to our business (because our buyers & sellers deserve GREAT, not just good.)
Here’s how the Showing Partner Model works.
Our Lead Buyer Specialist (Tom Reilly) and our Showing Partner (Beth Dadisman) work in tandem. Instead of the traditional model where one agent does everything (or two agents work together to “cover” for one another), our buyers have two agents each working at their specialty – and both working directly with the buyer. That way – each one is twice as good at their particular area of expertise because they hone that skill twice as often. (We do the same thing for our Sellers – with a Listing Specialist and Client Care Manager.)
STEP 1: CONSULTATION
Buyers meet with both Tom & Beth for an initial consultation (no cost, no obligation). You discuss:
What you are looking for IN DETAIL
Why you are moving
General market overview
Market analysis of your target area
STEP 2: LOOK AT HOMES
Beth specializes in knowing the market, showing houses and identifying exactly the right home for our buyers. Because that’s all she does (she does not write contracts, negotiate, etc) – she is SO much more knowledgeable than the average agent. She’s like a hawk stalking the market, swooping in for the kill. (That sounds a bit harsh and she’s really a sweet person, but she looks out for her buyers big time!) And she saves them tons of time because she doesn’t show properties that are not a good fit for the criteria they have identified. (We also have a state-of-the-art home search website that our buyers use. It’s faster and more up-to-date than others, so they see new listings first & don’t miss out!)
STEP 3: NEGOTIATION OF CONTRACT
Tom, who not only is a top-notch, experienced Realtor, also has a legal and technology background. His role is Master Negotiator. When you find that “perfect” home, he moves fast & furious to get the wheels turning. Tom also provides a second set of eyes and an objective perspective on the property you have identified – making sure you are aware of such things as potential resale challenges – so that you are well informed when making an offer.
With inventory so low, the Showing Partner Model is a HUGE advantage. Some buyers have to wait around until their agent has time to show them homes (we had one client whose previous Realtor would only show homes after 6PM!). But between Tom & Beth (and the rest of our team) – our buyers get almost 24/7 coverage. The same thing happens when it’s time to write a contract. Some buyers finish looking at the house and then have to wait for their agent to drive back to their office, draw up the contract and send them the paperwork. In our case, Beth is so skilled at knowing the market and knowing her buyers, that she often has already told Tom which home she thinks the buyers will love. And Tom has already talked to the listing agent and gotten the paperwork rolling.
Here’s how recent buyer Mike Taphorn described it: “Beth from the Belt Team helped us find the home that we were looking for. We were indecisive about whether to stay in Fairfax County or move to Prince William County, and Beth patiently showed us homes in both Gainesville and Clifton/Centreville areas until we found the home we were looking for. And Beth was the one who found, and helped us jump on this listing before it drew too much competition. Beth’s partner Tom also played a key role in negotiating the sales contract and contingencies until we reached settlement.”
One of our favorite buyer success stories from the Showing Partner Model came earlier this year when we identified what we thought would be a dream home for our buyers the Pogors. We showed the property & the buyers fell in love. But it was Friday and an open house was scheduled for Sunday. Tom not only got the contract executed & presented so well & so fast, but also convinced the Seller to respond and ratify the contract and cancel the open house (which was a HUGE relief to our buyers since it likely would have resulted in competing contracts and a higher sales price IF they even got the home.)