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Mortgage rates are trending up ahead of the Federal Reserve’s meeting next week, with the FOMC expected to increase the federal funds rate.

Freddie Mac’s Primary Mortgage Market Survey shows the 30-year fixed mortgage rate increased to 6.43% as of April 27, up four basis points from last week and 133 basis points from this time last year, when rates averaged 5.10%. The PMMS focuses on conventional, conforming loans for borrowers who put 20% down and have excellent credit.  

“The 30-year fixed-rate mortgage increased modestly for the second straight week, but with the rate of inflation decelerating, rates should gently decline over the course of 2023,” Sam Khater, Freddie Mac’s chief economist, said in a statement. 

Khater added: “Incoming data suggest the housing market has stabilized from a sales and house price perspective. The prospect of lower mortgage rates for the remainder of the year should be welcome news to borrowers who are looking to purchase a home.”

For now, according to the Mortgage Bankers Association (MBA) president and CEO Bob Broeksmit, “rates are trending up because financial markets are anticipating that the Fed will raise short-term rates” at its next meeting on May 2-3. 

Per the Commerce Department‘s data, the U.S. economy grew at a 1.1% rate in the first quarter. It’s the weakest pace in three quarters but still represents growth. 

“Continuing growth in the economy, coupled with a strong job market and inflation that is still too high – the first quarter PCE index showed 4% growth, double the Fed’s target – will likely lead the Fed to raise the Fed funds rate one more time at its next meeting, even as credit conditions tighten due to challenges and uncertainty in the banking sector,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. 

Kan added: “They are expected to then hold the funds rate at this higher level at least through the end of 2023.” 

LLPA changes 

Mortgage rates are increasing as the Federal Housing Finance Agency (FHFA)’s loan-level price adjustments (LLPAs) go into effect on May 1. (Because of the length of the process from origination to delivery to Fannie Mae and Freddie Mac, lenders have baked in LLPA changes into conventional loans for more than a month.)

On social media platforms, misstatements circulated that the change will make mortgage fees cheaper for low-credit scores borrowers than for good-credit scores borrowers, among other claims. 

These fees are based on factors such as borrowers’ credit scores and the size of their down payment. They are charged by the government-sponsored enterprises Fannie Mae and Freddie Mac as an upfront fee, but most lenders convert it into an interest rate so borrowers can pay it over time. 

FHFA Director Sandra Thompson said in a statement that changes will “bolster safety and soundness, better ensure the Enterprises fulfill their statutory missions, and more accurately align pricing with the expected financial performance and risks of the underlying loans.”

Thompson added: “Higher-credit-score borrowers are not being charged more so that lower-credit-score borrowers can pay less. The updated fees, as was true of the prior fees, generally increase as credit scores decrease for any given level of down payment.”

Thompson said that some updated fees are higher and some are lower, in differing amounts. “They do not represent pure decreases for high-risk borrowers or pure increases for low-risk borrowers. Many borrowers with high credit scores or large down payments will see their fees decrease or remain flat.”

According to Jiayi Xu, Realtor.com’s economist, while having a lower credit score still costs more, the effective penalty for scores under 680 is now smaller than it was. 

Xu gave the following example: if a first-time home buyer has a credit score of 659 and a down payment of 20%, then the buyer will pay a fee equal to 2.25% of the loan balance under the new structure instead of the 3.0% under the previous policy. On a hypothetical $400,000 loan, the borrowers would save $3,000 in closing costs.

Meanwhile, borrowers with scores ranging from 680 to above 780 will likely have to pay slightly more than they did under the previous system. Xu said it raises concerns about the impact on middle-class homebuyers. 

According to Xu, a homebuyer with a 739 credit score and a down payment of 20% will face a surcharge of 1.25%, compared to 0.75% previously. This equates to an additional $2,000 in closing expenses for a $400,000 loan. 

“As we enter the typically busy spring season, affordability remains the primary concern in the housing market,” Xu says.

Source: housingwire.com

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Editor’s Note: Freddie Mac, which has tracked weekly average mortgage rates since 1971 and has periodically made changes to its Primary Mortgage Market Survey, changed the source of its data as of November 17, 2022. Instead of surveying lenders, the weekly results will be based on applications received by lenders that are submitted to Freddie Mac. Find more about Freddie Mac’s change here.

Mortgage rates dropped sharply last week following a series of economic reports that indicated inflation may finally be easing.

The 30-year fixed-rate mortgage averaged 6.61% in the week ending November 17, down from 7.08% the week before, according to Freddie Mac, the largest weekly drop since 1981. A year ago, the 30-year fixed rate stood at 3.10%.

Mortgage rates have risen throughout most of 2022, spurred by the Federal Reserve’s unprecedented campaign of hiking interest rates in order to tame soaring inflation.

In the last week, two key inflation reports – the Consumer Price Index and Producer Price Index – showed that prices rose at a slower pace than expected in October, suggesting inflation is inching in the right direction, and has perhaps even peaked.

“While the decline in mortgage rates is welcome news, there is still a long road ahead for the housing market,” said Sam Khater, Freddie Mac’s chief economist. “Inflation remains elevated, the Federal Reserve is likely to keep interest rates high and consumers will continue to feel the impact.”

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey only includes borrowers who put 20% down and have excellent credit. But many buyers who put down less money upfront or have less than perfect credit will pay more than the average rate.

Inflation appears to be easing

Investors saw last week’s lower-than-expected CPI data as an indication that the Federal Reserve may make smaller interest rate hikes in the months ahead, said George Ratiu, Realtor.com’s manager of economic research.

While the Fed does not set the interest rates borrowers pay on mortgages directly, its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasury bonds. As investors see or anticipate rate hikes, they make moves which send yields higher and mortgage rates rise.

“The 10-year Treasury dropped from 4.15% last Wednesday to 3.68%, as capital markets seemed to cheer the slowdown in inflation as a sign that the Federal Reserve’s monetary tightening is having its intended effect,” Ratiu said.

Even though inflation data is moving in the right direction, the Fed has said it does not expect to back off of raising rates until inflation gets closer to the desired target of 2%.

Still, the downshift in mortgage rates over the past week has brought a sliver of relief to buyers, said Ratiu.

A buyer purchasing the median-priced home with a 20% down payment at last week’s average rate of 7.08%, was facing a monthly payment of about $2,280, according to Realtor.com. At a rate of 6.61%, the same buyer would see their payment fall to $2,174. While the $100 in savings a month may not seem like much, over the course of a 30-year loan, the buyer would save close to $48,000 in interest.

Those savings spurred some home buyers to sweep in and lock in a lower mortgage rate.

Mortgage applications increased for the first time in seven weeks, according to the Mortgage Bankers Association, with both purchase and refinance applications up.

“Signs of slowing inflation pushed mortgage rates below 7% for the first time since mid-October, but with rates still relatively high and affordability correspondingly reduced, the average loan amount is now at its lowest level in nearly two years,” said Bob Broeksmit, president and CEO of the MBA.

Affordability challenges persist

Affording a home remains a challenge for many home buyers. Mortgage rates are expected to remain volatile for the rest of the year. And prices remain elevated in many areas, especially where there is a very limited inventory of available homes for sale.

Meanwhile, inflation and rising interest rates mean many would-be buyers are also facing tightened budgets.

“For consumers, quickly rising prices have added significant financial pressures, especially as inflation erodes any wage gains,” said Ratiu. “The Fed’s rate hikes are directly tied to higher interest rates for credit cards and car loans, which along with higher mortgage debt, adds additional burdens to household finances.”

More than 20% of listings have seen price cuts, as sellers adjust their strategy to meet buyers in a changing financial landscape, according to Realtor.com.

“On one hand, sellers have been coming to terms with the fact that homes priced for the housing market we experienced when rates were at 3% leave very few buyers able to manage the mortgage payments with today’s rates,” said Ratiu. “On the other hand, buyers may hesitate to move forward with transactions if they find the erratic nature of current mortgage rates disconcerting.”

The volatility in mortgage rates is not expected to let up in the near future, causing uncertainty for both buyers and sellers.

“With inflation still north of 7% and the Fed committed to keep increasing the funds rate over the next few months, the mortgage market is not out of the woods,” said Ratiu. “We may still see rates rebound back above 7% before the end of the year.”

Source: cnn.com

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If you’re looking for a wide selection of home loan options, you may want to check out “Homeside Financial.”

The Columbia, Maryland-based mortgage lender offers a ton of different options for home buyers and existing homeowners looking to tap equity or snag a lower rate.

Aside from their goal of providing the highest level of customer satisfaction, they also strive to be #1 in employee satisfaction.

Hopefully that translates to a pleasant experience for all involved. Let’s learn more.

Homeside Financial Fast Facts

  • Retail direct-to-consumer mortgage lender
  • Offers home purchase financing, construction/renovation loans, and refinances
  • Founded in 2013, headquartered in Columbia, Maryland
  • Licensed to do business in 42 states and the District of Columbia
  • Has 500+ employees and 40+ branch locations nationwide
  • Goal is to become a top-20 home purchase lender
  • Sister company of Lower.com

Homeside Financial is a retail, direct-to-consumer mortgage lender, meaning you can work remotely online or visit a local branch.

They offer a very large variety of mortgage options, from home purchase loans to construction loans to refinances and HELOCs.

Their goal is to be a top-20 home purchase lender nationally, so they could be an especially good choice for home buyers.

But they are also big on mortgage refinances, with such loans accounting for two-thirds of their 2020 volume.

Last year, the company funded a healthy $5.1 billion, putting them close to the top-100 lenders nationally.

While they’re licensed in 42 states and D.C., they’re most active in Illinois, Maryland, North Carolina, Ohio, and Virginia.

They don’t appear to lend in Maine, Nevada, New Hampshire, New York, Rhode Island, South Dakota, Vermont, or Wyoming.

How to Apply with Homeside Financial

  • Call them up, visit a branch, or browse their online loan officer directory
  • Connect with a loan officer to discuss loan pricing and eligibility
  • Then you can apply online via their digital mortgage application powered by ICE
  • You’re able to manage your loan 24/7 via the online borrower portal

To begin, simply navigate to their website, visit a local branch office, or call them up on the phone.

You’ll need to get acquainted with a human being (loan officer) before you can proceed to the digital loan application.

This is generally a good first step to discuss loan pricing and eligibility to ensure you don’t waste your time or theirs.

Once you determine your path, you’ll be able to apply online via their digital app powered by ICE Mortgage Technology.

Simply select your loan officer from the “Find a Loan Officer” tab on their website and you’ll be able to search for that individual by name or location. Then you can get started.

The application allows you to link financial accounts, scan/upload docs, eSign disclosures, and start and stop from any device as you see fit.

After your loan is approved (hopefully!), you’ll be able to manage it via the online borrower portal.

Easily check loan progress, get status updates, and connect with your lending team at any time along the way.

Loan Programs Offered by Homeside Financial

  • Home purchase loans
  • Refinance loans
  • Home renovation loans
  • Construction-to-perm loans
  • Conforming loans backed by Fannie/Freddie
  • Jumbo loans
  • FHA/VA/USDA loans
  • Manufactured home loans
  • Fixed-rate mortgages and ARMs

One of Homeside Financial’s major strengths is its vast product menu. They offer pretty much everything under the sun.

If you’re a prospective home buyer, they’ve got home purchase loans, renovation loans, and one-time close construction loans.

Existing homeowners can take advantage of a mortgage refinance or even tap their equity via a HELOC.

They offer all major loan types from conforming loans backed by Fannie Mae and Freddie Mac to jumbo loans and government options including FHA, VA, and USDA.

It’s also possible to get a manufactured home loan, a student loan cash out refinance, and much more.

Both fixed-rate and adjustable-rate options are available, including 5/1, 7/1, and 10/ ARMs.

The Homeside HELOC

Homeside Financial is also one of the new nonbank lenders out there to offer a home equity line of credit (HELOC) product.

They refer to it as “The Homeside HELOC,” which is a line of credit that lets you borrow up to 95% of your property value. That’s very high by industry standards.

There is no prepayment penalty or annual fee, and you can borrow up to $350,000, with a minimum loan amount of $15,000.

A 1% loan origination fee is charged, so you’ll only want to draw what you need to avoid being hit with excessive costs.

For example, if you draw $25,000, you’ll be assessed a $250 fee, along with whatever interest is charged.

Homeside Financial Mortgage Rates

Like many other lenders, Homeside Financial doesn’t post mortgage rates on their website.

As I always say, this doesn’t mean they’re good, bad, or otherwise. It’s simply an unknown.

You’ll need to speak with a licensed loan officer to get pricing. However, a decent number of their Zillow reviews indicate lower-than-expected interest rates.

And while they have a page dedicated to lender fees on their website, they don’t list dollar amounts. They just explain what certain fees are. It’s more of a glossary than a pricing guide.

As such, it’s unclear if they charge an application fee, a loan origination fee, and so on. Be sure to inquire about those all when you obtain your rate quote.

Homeside Financial Reviews

On Zillow, the company has an excellent 4.89-star rating out of 5 from over 2,000 customer reviews.

That’s where the bulk of their reviews exist online. Take the time to filter by loan officer to find someone really fantastic to work with.

They’ve also got a 3.3-star rating on Google, though it’s only based on tiny sample size of 12 reviews.

Homeside Financial is not an accredited company with the Better Business Bureau (BBB), but does hold an ‘A+’ rating based on customer complaints.

To sum things up, Homeside Financial excels when it comes to loan choice. They have basically everything you can think of and more.

They also have brick-and-mortar branches if that’s your thing, but still offer the latest technology as well.

The possible downsides might be pricing and fees, though we’re in the dark when it comes to that.

Ultimately, you should take the time to shop around regardless, or check out their sister company Lower, which may offer even cheaper mortgage rates.

Homeside Financial Pros and Cons

The Pros

  • Offer a digital mortgage application
  • Can apply apply in a matter of minutes
  • Most loan tasks can be completed electronically from any device
  • Also have physical branch locations in several states
  • Excellent reviews from past customers
  • Tons of loan programs including renovation/construction loans and HELOCs
  • Free mortgage calculator and how-to guides on their website

The Cons

  • Mortgage rates and lender fees aren’t listed online
  • Need to speak with someone before you apply
  • Not licensed in all states

(photo: Indrid Cold)

Source: thetruthaboutmortgage.com

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A paradoxical picture is emerging as the spring market is underway. On the one hand, elevated mortgage rates continue to erode buyers’ purchasing power, and in some markets, home prices are falling. On the other hand, inventory is still low, and homes are still selling fast, often with multiple offers.

All major housing market metrics point to a restrained housing market. The number of new listings coming on the market this spring is lower than it has been in more than a decade. Sales and new pending contracts are below pre-pandemic levels. Buyer interest has increased over the past few months, but showing activity is still much lower than it would be in a typical spring market.

But if you are a prospective buyer, macro housing metrics probably do not reflect your experience. On a transactional level, many buyers are experiencing a housing market that feels very competitive and they are having a hard time reconciling the news about the housing market with their experience trying to buy a home. 

What can we expect in 2023?

It is always difficult to talk about the “national housing market” but this year, in particular, there will be wide variation in housing market conditions across the country. At the same time, there are some key trends I think will characterize the housing market in 2023.

1. Buyer disappointment. Home shoppers who are waiting to score a deal are going to be disappointed in 2023. Inventory has increased from a year ago but in most markets, it is still well below pre-pandemic levels. Home prices have come down in some places, but the price correction is relatively modest and prices are still typically 20% or 30% higher than they were three years ago. 

Even though the pool of buyers is smaller than it was a year ago, there is still a lot of competition over relatively few homes. Bright MLS’ recent survey showed that sellers in the Mid-Atlantic received an average of 3.4 offers on homes sold in March and more than a third of homes sold for above asking price.

This article is part of our ongoing 2023 Housing Market Forecast series. After this series wraps, join us on May 30 for the next Housing Market Update Event. Bringing together some of the top economists and researchers in housing, the event will provide an in-depth look at the top predictions for this year, along with a roundtable discussion on how these insights apply to your business.  To register, go here.

First-time buyers are having the hardest time, competing with higher-income buyers who are offering all-cash or who are able to roll equity for a home sale into a new home purchase. Unfortunately, 2023 is not going to bring much relief to those looking to become a homeowner for the first time.

2. Mortgage rate fatigue. To a certain extent, the presumption that the housing market will live or die with rates is misplaced. The Bright MLS survey found in its recent survey that 7 out of 10 recent homebuyers indicated that rates were not a factor in the decision to buy. Fifty percent of buyers said they were going to buy regardless of rates and about one in five bought with cash. Only 4% of buyers said they were buying now because they believed rates were going to go higher.

Homebuyers, particularly repeat and all-cash buyers, seem to have accepted current mortgage rates as the “new normal.” If mortgage rates rise to 8, 9, 10% or higher, the calculus for these buyers will change. But with rates in the 6 to 7% range this year, mortgage rates might not be as important as conventional wisdom suggests. 

3. Selective sellers. New listings activity will continue to be very low throughout much of 2023. However, there are some categories of sellers that could have an impact in their local market.

Who is selling right now? Some people who bought homes in far-flung locations during the pandemic are selling as employers are calling people back into the office. Others who purchased second homes or investment properties during the last few years are looking to cash out amidst projections of a weaker housing market. 

Data from Bright MLS’s survey indicated that more than a quarter of homes sold recently in the Mid-Atlantic were rental properties, vacation or second homes, or investment properties. Look for this segment to drive inventory growth in some markets.

4. Atypical seasonality. Home sales will rise throughout the spring and into the early summer, but 2023 will not have typical well-defined seasonal patterns. Economic uncertainty and constrained inventory will keep overall transactions below 2019 levels, and we will also have longer run-ups and wind-downs to the usually busy spring and fall housing markets. 

The housing market remains in a period of transition, though sellers still have the advantage. The market will be more balanced in the second half of 2023, but look for a lot of variation across local areas.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author responsible for this story:
Dr. Lisa Sturtevant at [email protected]

To contact the editor responsible for this story:
Brena Nath at [email protected]

Source: housingwire.com

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Like many Aurorans, Nancy Martinez is a product of more than one culture.

And that’s exactly what she has incorporated into her new store in dowtown Aurora, Nide Jardin, 140 S. River St., a home decor and plant boutique that features local vendors from the area where she grew up, and the bright, vibrant colors of the Mexican home of her parents and grandparents.

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“I want a place for the community to feel they have an oasis, especially in the winter – not just in the summer,” she said. “Younger people can see someone who looks like them open a business.”

Martinez was born and raised in Aurora’s Pigeon Hill neighborhood on the East Side, and calls herself an East Aurora High School Tomcat through and through.

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By the same token, she has taken trips back to Mexico where her parents came from, and her grandmother still lives. It was at her grandmother’s house that she saw the bright colors that she has put into Nide Jardin.

Nide Jardin, in downtown Aurora, features bright colors, plants and home decor items. (Steve Lord / The Beacon-News)

“I tried to incorporate both cultures,” she said.

The name Nide Jardin hails in part from an old saying in Spanish, “Ni De Aqui, Ni De Alla.” It translates as, “Neither From Here, Nor There.”

Martinez said the saying relates to people in Aurora asking where she’s from, and she answers, Aurora.

“Then they say, ‘but where are you really from?’” she said. “I say, Aurora. When I’m in Mexico, they just look at me as an American. I’m neither from here, nor there, but I’m from everywhere!”

Like many during the pandemic, Martinez was in seclusion and feeling sad. She began to make plans for a business that would include the plants she loves.

“I kind of started thinking, if I feel this much joy, why not others?” she said.

Still, she admitted, she was unsure about opening a store.

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“I never would have imagined I would open my own business, downtown, in my own hometown,” she said.

Her husband, Hector Martinez, owner of Martinez Built, spent months remodeling the suite in the River Street Plaza, and Nide Jardin was born. Martinez opened the business quietly this week, and plans a bigger grand opening sometime in May, around Mothers Day.

The front of the store features plants and home decor items, and in the back part of the suite is an open space Martinez plans to eventually use for workshops and other events. She’s open to ideas for programs for both young people and adults.

“We have a large Latino community,” she said. “This could be a space for other small businesses to come in.”

The store is another in the burgeoning South River Street area in downtown Aurora, across the street from the Aurora Public Library. The area is seeing more boutique-type stores, coffee houses, brew pubs and restaurants, in a mix of historic and new buildings.

People can see more about the store at NideJardin.com

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[email protected]

Source: chicagotribune.com

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Last Updated on February 25, 2022 by Mark Ferguson

I love real estate; becoming a real estate agent was one of the best decisions I ever made. However, when you become a real estate agent, you give up a steady paycheck and it takes a while to start making money. Unless you can start out as an assistant making an hourly wage, you are going to have to save money before you become a real estate agent. It could be a month, three months, or six months before you sell a house and earn a commission check. It is very important that new agents plan for the time they will not be making money or it can make it very tough to succeed in this business.

How much money can agents make?

It is risky becoming a real estate agent because you do not have a steady income in most situations and it can take months before you make a sale. It can also take years before you become an established agent earning a steady income. Many people ask themselves why anyone would want to become a real estate agent under these circumstances.

The biggest reason people want to become real estate agents is that they can make a lot of money. In this article, I talk about exactly how much money you can make as a real estate agent. The average income for a full-time real estate agent is $54,000, but many agents make much more. You also are able to run your own business, create your own schedule, and invest in real estate more easily as an agent.

Why does it take so long to start making money?

One reason it takes so long to make money as a real estate agent is that it takes a long time to close on a house. Once a house goes under contract, it usually takes 30 to 40 days for that house to close. If real estate agents are able to get a deal right after they get their license, they will not be paid until the house closes at least a month later.

It can also take a real estate agent months or longer to get their license. I talk about how hard it is for an agent to get their license here. If potential agents quit their jobs before they get their licenses, there will be a couple of months without any money while they are getting their license.

It takes time to build up business as a real estate agent. When starting out, an agent’s circle of influence is the best opportunity to make sales. Friends and family are the easiest targets to make sales, but they may not be in the market to buy or sell right away. Finding buyers or sellers can take months for a new agent, and then you have to wait for properties to close.

If you are interested in taking online classes, I took my real estate classes and I take all of my continuing education through VanEd.com. My assistant got his license through Real Estate Express.

How long does it take to make consistent money?

The key to being a successful real estate agent is getting leads. The more leads you get, the more people become your clients, and the more sales you will have. I have seen new agents go into real estate with everything they have. Those agents have closed one or two deals a month in their second or third month in the business. After six months, they really start to take off and have consistent sales and income every month.

I have seen other agents get stuck educating themselves and preparing to be an agent for months without going after business. It takes them a year or longer to start making consistent money and some give up before they make it. It is hard to say it will take three months or six months before a new agent will make enough money to support themselves because everyone is different. I would plan on it taking at least six months.

Remember, there is no better way to learn the business than to start working with clients right away. The more people you talk to about being a real estate agent, the better chance you have of making sales.

How much money do you need to become a real estate agent?

Not only do you have to worry about working for months as a real estate agent before you start making money, but you also have to spend money to make money as an agent. What an agent has to pay for will depend on the agreement the agent has with their broker. Some brokers will help an agent with costs like MLS dues, board dues, and advertising. Other brokers will not pay for anything, but they offer a larger commission split to the agent.

A real estate agent will most likely have to pay for E and O insurance, MLS fees, advertising, marketing materials, business cards, mailings, office fees, and the cost of getting a license. This assumes that an agent has the basic materials needed such as a smartphone, laptop, desk, chairs, and other basic supplies most agents need.

Minimum startup costs for real estate agents

  • Obtain license              $1,000
  • Initial marketing           $500
  • Insurance                         $200
  • MLS and board dues     $200

Total: $1,900

Minimum monthly costs for real estate agents

  • Marketing                      $250
  • Insurance                        $40
  • MLS and board dues    $50
  • Office fees                      $200

Total: $540

These are the minimum costs needed to get started, and these costs vary from state to state and market to market. I would always check the costs before you make the decision to become an agent. Talk to other agents and brokers in your market to see what their costs are. Some other costs to consider are that you will be driving much more and you will have higher fuel costs. You may have to take clients out to lunch or dinner. You may have to buy for sale signs or name riders.

How much should you save?

I would calculate all your costs based on a realistic plan of becoming an agent. That plan should include when you will start making money and how much money you will spend on marketing and expenses. If you want a basic idea of how much you should save, I would save six months of living expenses plus $700 per month for expenses once you become an agent. That does not include the initial start-up costs of becoming a real estate agent such as getting your license. The cost of being a real estate agent is why many people start as part-time agents, but I explain here why it is very hard to make it as a part-time real estate agent.

What are some ways to get started without saving?

Many people simply cannot save enough money to start a real estate career. Some may get lucky and sell houses right away but others will have to give up because they were not prepared for the long wait for a paycheck. There are some ways to get started as an agent without a huge savings.

Join a team

When you join a team you may be able to get hourly work on top of the real estate sales commissions. This can be a huge boost to keeping you in the business even if the hourly pay is not significant. Teams can also help pay some of the expenses.

Get a part-time job

I do not recommend real estate agents working part-time. However, they may be able to get a part-time job that can supplement their income. We had an agent on our team that drove for Uber. It was the perfect part-time job for an agent because they could work whenever they wanted and stop working whenever they needed to. You also get to drive around and explore neighborhoods.

Become an assistant

This may seem similar to joining a team, but it is different. When you join a team your primary goal is to become an agent. When you become an assistant to an agent your primary goal is to make money as an assistant. In the process of working as an assistant, you may be able to get your real estate license and you will also learn a ton about the business.

Conclusion

Starting in the real estate business can be very tough because it takes time to sell houses and it takes money. One of the biggest reasons many people fail at the business is because they are not prepared and they run out of money. You have to plan as much as possible for the time it takes to gain traction as an agent and the costs.

Build a Rental Property Empire

Categories Real Estate Agent

Source: investfourmore.com

Apache is functioning normally

Last Updated on March 29, 2023 by Mark Ferguson

When buying a house, buyers are given a certain amount of time to complete a home inspection. Most people complete some type of inspection when purchasing a home, but is a home inspection always necessary? I have been a Realtor since 2001 and I am also a real estate investor. In my opinion, 95 percent of house buyers should always get a home inspection. There are a few cases when a home inspection is not needed and some cases when not getting a home inspection will actually give you a better chance at getting a great deal on a house. I have not asked for a home inspection for over a year on my own investments.

How does a home inspection work when buying a house?

When buying a home, most buyers are given a chance to get an inspection done on the house before they buy the home. In most states, it is typical for the inspection to occur right after the home goes under contract. Buyers are given a specific amount of time to either inspect the house themselves, have a friend inspect it, a contractor or a professional home inspector check out the home.

Buyers should be allowed to check out everything in a home including the major systems, utilities, and minor cosmetic issues. In some cases like with HUD homes or some REO sellers, the utilities cannot all be turned on. If the pipes on a HUD home do not hold pressure when HUD inspects a house, the buyer will not be allowed to turn on the water for inspections or appraisals (will discuss HUD rules later in the article). In some cases, houses that are in really bad shape may not have the electric or gas turned on if it is not safe to do so. The buyers are usually responsible for ordering and paying for the home inspection and it gives them a chance to ensure the house is in satisfactory condition before they buy the home.

I also made a video on this subject below:

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How much does a home inspection cost?

The cost of a home inspection can vary greatly. Smaller houses are cheaper to inspect and larger houses are more expensive. Costs vary depending on the region of the country you are in and living costs. Different inspectors have different rates as well.

For a rental property, I would buy that is about 2,000 square feet total I can get an inspection done for about $300. On my personal house which is close to 6,000 square feet, the inspection was $600 and the inspector did not even get a chance to look at everything in the home (after 5 hours). I am able to get slightly lower rates because I am a Realtor and there is a chance I might send business to inspectors. As a regular buyer expect to pay a little more than I do.

Besides using an inspector you can also use a contractor to look at home for you. I would be cautious when using contractors because they might tend to underestimate the seriousness of some repairs. If they convince you not to buy a home and they know you will use them to fix it up, they just cost themselves a job. I had a local roofing contractor look at a flip for me last year where there were major structural problems in the roof. He said it looked like an easy fix and not to worry about it. After he got started on the job, the easy fix turned into almost a complete rebuild of the roof!

What happens to the earnest money if a contract is canceled due to a home inspection?

When you write a contract to buy a home or your real estate agent writes a contract for you, you usually include earnest money. A typical amount for earnest money is one percent of the purchase price, but it can vary depending on your location and the seller. The earnest money is a good faith deposit showing the buyer is serious about buying the home. However, that does not mean the earnest money is nonrefundable if the buyer backs out.

Most contracts are written so that the buyer can cancel the contract and get their earnest money back if certain things happen. If a buyer has an inspection contingency written into the contract, they have a certain amount of time to complete an inspection. If the buyers cancel their contract because of the inspection and they notify the seller before their inspection contingency expires, they will receive their earnest money back most of the time (HUD is an exception I will go into more detail later).

If a buyer is not able to get a loan, there is a title problem or another contingency allows the buyers to cancel (title, appraisal, survey, etc.), they can cancel the contract and get their earnest money back as well. You just have to make sure the seller is notified before the dates on the contract expire for those contingencies. It is actually pretty rare that a buyer will lose their earnest money unless their agent misses a date or the buyers decide to cancel the contract very late in the process after their contingencies have passed.

Does a contract automatically get canceled after a failed home inspection?

If you find major problems after a home inspection you do not automatically lose the house. There are many options for the seller and buyer to save the deal. The outcome will depend on how serious the problems are with the house and how motivated the sellers and buyers are. The buyer can ask the seller to renegotiate the contract terms or to cancel the contract. Here are a few ways home inspection issues can be resolved.

  • Buyer agrees to purchase the home as-is. In some case,s the buyer will decide to proceed with the purchase of a home, even if there are major problems. In some case,s the buyer will have no choice because the seller will not make repairs or change the contract (HUD).
  • Seller agrees to make repairs to a home. Many times a seller will agree to make repairs to a house after an inspection is done. The seller may agree to make all the repairs the buyer asks for or negotiate to make some of the repairs.
  • Seller agrees to lower the price or renegotiate other terms. The buyer may ask the seller to lower the price, or the seller may offer to lower the price after the buyer requests repairs to be made. The seller can also agree to lower the price and make some repairs.

The buyers can ask the seller to repair whatever they want or lower the price to whatever they want, but the seller does not have to agree to anything. If the seller and buyer cannot come to an agreement on what to fix or how much to renegotiate, then the contract will fail.

Why would a buyer not want a home inspection?

In most circumstances, it makes sense to get an inspection done. Most homebuyers do not have the expertise to know what problems they may encounter when buying a house. A professional contractor or inspector can discover what problems a house has and how serious they are. A home inspection also gives a buyer the chance to ask for repairs or renegotiate the contract. I recommend almost all buyers get a home inspection done.

Having said that, I have not gotten an inspection or asked for an inspection contingency in a contract on the last ten houses I have bought. When you waive your inspection contingency it makes your offer much more attractive to the seller and gives you a better chance to get your offer accepted. This is a great tactic to use in a very competitive market when there are few deals to be had. It is also a great tactic to use in a multiple offer situation.

Do not waive a home inspection if you are not very experienced in buying homes, knowing what repairs are possible to come up and how much they will cost!

Why do I feel comfortable buying houses without an inspection?

I have been a Realtor since 2001, I have more than 20 rental properties and have flipped over 180 houses. I have a lot of experience with repairs on properties and what to look for. I have repaired an entire flip myself back a few years ago, which did not go as planned, but sure taught me a lot! There are many things that can cause a lot of problems on houses and you have to know what to look out for.

  • Foundations
  • Roofs
  • Plumbing
  • Electrical
  • HVAC (heating and cooling)
  • Mold
  • asbestos
  • Siding
  • Wood rot

These are just some of the things you must be aware of and know what to look for if there is a serious problem. These issues do not include cosmetic items or things you can see are wrong like:

  • Kitchens
  • Baths
  • Fixtures
  • Paint
  • Carpet
  • Doors
  • Windows

Not only do you have to be able to see when there is a problem, but you also have to know how much it will cost to repair these items if there is a problem. When I buy flips or rental properties I am buying them at a huge discount. When I make my cost estimates for repairs on a home, I always budget in extra money for things I may miss or discover during the rehab. I never assume a house only needs the work I can see, which is another reason I feel comfortable buying houses without an inspection.

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Why are HUD inspections different from traditional sale inspections?

HUD homes and some REO sales have many different guidelines than traditional sales. HUD homes are government-owned foreclosures and you can find much more information on them here. For owner-occupants, HUD allows the buyer a 15 day inspection period. The buyer must pay for the utilities to be turned on for the inspection and in some cases, HUD will not allow the water to be turned on. HUD has all of their homes pre-inspected and they do a pressure test on the plumbing system. If the plumbing system does not hold water, HUD will not allow the water to be turned on for the inspection or appraisal.

The inspection HUD does before they list a home provides some information to a buyer, but many times the utilities are not on when that inspection is done. I would never rely on the HUD inspection only; I would get my own inspection on HUD homes as well (if I were a normal buyer). HUD publishes the findings of that inspection (it is called the PCR) on hudhomestore.com under addendums. This is important to know because if HUD lists something that needs to be repaired on the PCR the buyer cannot use that as a reason to get their earnest money back. If the buyer of a HUD home finds an inspection problem and they want to cancel it has to be a new problem that HUD did not find.

HUD will also not make any repairs or lower the price based on the inspection and investors are treated differently than owner-occupants. An investor will not get their earnest money back due to inspection problems period on a HUD home.

Is it safe to waive an inspection if a home is pre-inspected?

HUD homes have an inspection done before they are listed. I have already talked about why you should not trust a HUD inspection and you should have your own done. Some traditional listings will advertise they are pre-inspected. I think it is a good sign that a home is pre-inspected, but again it is best to get your own inspection done. Inspections are relatively cheap compared to the cost of the problems they might find. Even if a house is pre-inspected I would have your own inspection done to confirm nothing was missed.

Is it wise to use an inspection contingency as a negotiating tool?

If you find major problems with a house that you did not know about, it makes sense to ask for repairs to be done or the price to be reduced. Some buyers will make an offer with the intention of asking for a price reduction from the inspection results, no matter how the inspection turns out. I never do this and I find it to be dishonest and unethical. For investors who buy many houses, it can also hurt your chances to get a great deal.

I have seen a few deals fall apart because buyers tried to use this tactic and it made the sellers and real estate agents very unhappy. When investors buy a lot of homes they will make offers to the same agents over and over again. I am a HUD and REO listing broker and list many houses. If I see a buyer who always asks for ridiculous inspections items or price reductions I will let my seller know before they accept their offer. If a buyer or real estate agent gets a reputation for renegotiating every offer on inspections, it will make it harder for them to get offers accepted.

One reason I am able to get so many deals from the MLS, is other agents know I do not play games, I do not renegotiate and if I say I will close, I will close.

How to find a great home inspector

When you use a real estate agent they should have suggestions for inspectors in your area. There are also inspectors you can find online, but I would use the recommendation of a professional in the business. There are many home inspectors and in some states, they need no training or licenses to be a home inspector.

I would interview any inspector before you use them and make sure you are comfortable with their knowledge and services. Some inspectors will nitpick a house over minor issues and some inspectors will not be very thorough and could miss major issues.

I would interview any inspector before you use them, and make sure you are comfortable with their knowledge and services. Some inspectors will nitpick a house over minor issues and some inspectors will not be very thorough and could miss major issues. A good real estate agent can help you choose the right inspector, as well as help you go over the report.

Conclusion

Home inspections are very important for most buyers who are not buying a lot of houses. Even if you buy a lot of homes, you have to be very comfortable judging repair costs and what will need to be repaired if you are thinking of waiving your inspection. If you do waive your inspection, you can get out of a contract but may lose your earnest money in the process. My advice to most is to always get an inspection done.

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Categories Real Estate

Source: investfourmore.com

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How much?

This one’s the biggest factor in most home buyer’s cases, which is why it is number one on our list of questions. To avoid shopping out of your price range, get pre-qualified first. Pre-qualification can help you narrow what your budget can actually support. Once you have a price range, the pool of houses that you can consider will grow smaller. Certain locations and types of builds will be crossed off the list, so you can get a little pickier with what is available.

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Where?

As the old saying goes, “location, location, location”. How far are you willing to drive to get to work, daycare, or your favorite hangout spot? Narrow your search down to a few cities that you’re willing to live in and that have homes in your budget.

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What?

What are you looking for exactly? Think of a few things that your dream home ABSOLUTELY has. Basically, these traits are what you’d be looking for in the perfect home Tinder profile. Is it a rambler or multi-story? Does it have a large backyard? How many bedrooms and bathrooms do you need?

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Go forth and hunt houses!

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**Subject to terms and conditions outlined in the Buyer Broker Agreement.

Source: homie.com