Finding A Home Before It Hits The Market

Surviving a seller’s market the likes of the past few years can be exhausting, especially for buyers. Many realize this isn’t the market for them. When most of the COVID restrictions to purchasing a home in Pennsylvania were lifted in June of 2020, homebuyers raced into bidding wars and other highly contested situations. The climate wasn’t on their side and some could argue it was a little caustic for those who needed to move due to career or lifestyle changes. Whatever the case, potential buyers are beginning to see some relief in terms of a smaller pool of competition searching for their dream home.

Nonetheless, a buyer’s market can only be seen in the distance and many would-be buyers remain secluded behind their firewall and smart devices, browsing homes from a greater orbit than most sellers or REALTORS® might care to admit. What opportunities wait in the wings? Is there a path to homeownership for those who are looking to buy, but have been disenchanted by the market over the last few years? Here are three main courses of action buyers should undertake now to stay ahead of the game. In the words of Din Djarin, “This is the way.”

Lock Down An Agent

The absolute best way to spot which homes are entering the market before they go live is to seek the services of a competent real estate professional. But not just any agent will do. We would suggest finding one who is experienced, successful, reputable, hard-working and well-connected. Isn’t this too much to ask? Not necessarily. In fact, even though this certainly narrows the field quite a bit, an agent with a few of these qualities will likely possess them all.

It greatly benefits you to work with a REALTOR® who has a large network already in place, one that’s been working for them. In markets, such as the Greater Scranton area, where housing supply is exceedingly low, real estate professionals are constantly in touch with one another. Get inside intel by utilizing their strengths to your advantage. Yes, you might be the “metaphorical bait” cast out to entice would-be sellers, but it could pay off. By asking your agent what other reputable agents in their business have been sharing, you could get the inside track to finding a home before others even know about it. Your agent may also have presented their services to other homeowners who were thinking about selling. They might know of homes, which are set to debut on the market in the immediate future. Your agent might also be seeing “coming soon” listings from other agents in their MLS.*

Hello Neighbor

While we’re not advocating for anyone to go on private property nor play the creeper in their search for the perfect home, there are some things you can do to increase your chances of buying in this market (or any market, for that matter). First, search out neighborhoods that are desirable, whose location fits the profile you’ve created. Next, walk the streets and find properties that grab your attention. Maybe there are for sale by owner (FSBO) listings or homes that are on the verge of foreclosure that interest you. Of course, your REALTOR® will assist you throughout this whole process, connecting with owners of FSBOs or those trying to avoid the bank from ceasing their property. They’ll see if the owner would have any interest in selling their property to you, a serious buyer. Often, FSBOs have little luck selling on their own, and thus are likely very interested in selling to an agent who has an interested party.

Homeowners’ associations (HOAs) can be another channel for prospective buyers as well. Have your agent reach out to the association to see if there have been rumors of residents who are about to move/sell. That internal chatter might be just what you need to locate your next house. Some of these HOAs regularly have community (digit) bulletin boards, which seek to share information with other members of their association.

Another great strategy to employ is direct mailings (letters of interest or postcards). While snail mail isn’t as effective for real estate agents to deploy, mass mailings straight from buyers could open some doors. This tactic will allow you to avoid the open market. It shows select homeowners that you’re very interested and would strongly consider buying their home at the right price. If you’re willing to put the extra time and money into your home search, this approach can be a game-changer. 

Don’t Be Shy

While it is important to routinely stay in touch with your REALTOR® and have them do a bulk of the heavy-lifting, don’t fear getting your hands dirty too! Those looking to buy, need to get out there and leave no stone unturned. They need to network, establish connections (prior to their search is ideal) and get the word out that they are serious about purchasing a home. Share this desire with everyone you meet, but especially family, friends, co-workers in addition to your sphere on social media. There might be opportunities on Facebook to join neighborhood or community groups (though some are private) and identify what you’ve been seeking all along. Social clubs, open houses, country clubs, professional and charity organizations can all be great avenues for gaining worthwhile information in your home search.

If you’re looking to gain the upperhand over other aspiring buyers, keep your ears attune to life events such as the birth of a baby, weddings, divorces, obituaries, just to name a few. These occasions are legitimate leads for those looking to buy.

 

Finding a home that’s “off market,” either presently not listed on the MLS (i.e. a pocket listing) or not for sale in the first place, can be challenging for most, but it can and has been done. Stay focused and stay up to speed with the inventory in a particular locality. Of course, lean on your agent at all times and good things will develop as time begins to take root in this grand adventure you find yourself in.

For more insight prior to purchasing a home, make sure to read this.

* According to local MLS requirements, unless a listing is filed at the Greater Scranton Board of REALTORS® office (GSBR) and a seller(s) has explicitly requested in writing that their property not be displayed on the Internet, the listing information must be disseminated by the MLS. Furthermore, any member of the National Association of REALTORS®, and likewise the GSBR, must adhere to the clear cooperation policy, which states that “within one business day of marketing a property to the public [i.e. a “coming soon” listing displayed on social media], the listing Broker must submit the listing to the MLS for cooperation with other MLS participants.”

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When Buyers Get More Realistic

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Homebuyers, 2023 may be your year! There’s no guarantee next year will welcome a buyer’s market, but recent indicators are trending in that direction. Though properties are still moving for sellers in our market, they need to be priced right and there must be an element of enticement for prospective buyers, such as its location or curb appeal. Buyers can start getting down to business. They can deal with the market at their own pace and with very little pressure.

Some never caved to outside influences, especially those who could be patient and didn’t need to purchase a home. The winds in our market are shifting. Yes, inventory is bleak, scarcer than it was only three years ago. In July of 2019, 1,387 active listings sat on the market, this past July only a fraction of that – 553 listings – down 60%. And even less today with 532 residential listings currently active.* Many professionals in the industry thought the housing supply would recover by now, but that remains to be seen. Furthermore, the national supply is up year-over-year, over a 30% increase, the largest jump since 2017.

So where is this shift occurring? First, buyers are beginning to see the housing shortage disappear (at least on a large scale). Secondly, there’s a seasonal shift to buying and selling, this is traditional and it’s obvious, it’s “back to school” and it’s the onset of the autumn season, but it’s also temporal. Next, the pool of buyers has dwindled in recent months, placing more tension back upon the sellers. Buyers have faced climbing interest rates since the beginning of the year when they hovered near 3%. Though recent weeks have seen decreases to the mortgage rates, they currently sit around 5.5-5.6%. Buyer as well as sellers have been affected by these increases. Finally, buyers are regaining the upper hand over sellers. Now, they’re looking back to contingencies and leaning on them when signing sales agreements. When competition was fierce between buyers for over two years, this rarely happened.

“It’s certainly a breath of fresh air,” explains Ann E. Cappellini, Associate Broker for Realty Network Group. “There’s a stronger sense of hope for those looking to buy a home, though obstacles still remain.” Buyers can get more realistic nowadays. As long as they have the means financially, the way is less burdensome. With less resistance, homebuyers can use contingencies, such as home inspections to weigh their options, if and when sizable issues present themselves.

When the financial risks of an escrow deposit arise, it’s in the buyer’s best interests they utilize inspections, mortgage and/or appraisal contingencies. According to Redfin, escrow is a legal arrangement where typically a third party will temporarily hold the buyer’s deposit (often used as a down payment or toward their closing costs) until the deal is consummated. In Pennsylvania, the listing Brokerage will generally hold the earnest money deposit (not a neutral third party), though this isn’t always the case. “Escrow matters in Pennsylvania, like many other states, are held in strict compliance with the Real Estate Licensing & Registration Act (RELRA) and the state’s agreement of sale, which has been formulated by the Pennsylvania Association of REALTORS® (PAR),” emphasizes Cappellini. “During the homebuying escrow period of a sale, though the deposit might be held in the listing agency’s escrow account, the money may not be commingled with other funds and furthermore not released to either party, if the Broker is in receipt of a verifiable written notice that there’s a dispute over those funds and it’s subject to mediation or litigation.” Escrow is a serious matter in real estate, especially in our state, and as such, RELRA and PAR specifically outline how earnest money is to be handled from the beginning to the end of all transactions.

Yes, contingencies can kill a transaction and they certainly impact a deal, but they’re in place to protect buyers. These protections are good for both parties, even though it doesn’t always appear so for sellers. Perhaps a deal goes south due to one of the clauses employed by the buyer. It doesn’t go as expected and the buyer is able to receive their deposit monies back. On the flip side, if it’s understood that all the contingencies are met and the buyer walks away or defaults on the deal, the seller might be entitled to the deposit and can also sue for specific performance. Whether you’re a buyer or seller, make sure to discuss with your REALTOR® how contingencies in a real estate transaction can impact you. You’ll be glad you did!

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How To Buy & Manage Your First Investment Property

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It’s exciting when you decide that it’s the right time to grab your first investment property. However, if you’re new to these kinds of purchases, it’s also intimidating. Fortunately, as our experts understand, you can handle everything properly if you know how to approach it.

Finding the Right Investment Property

The Market

Calling the housing market hot can feel like an understatement. The median sale price for residential properties in the US was just over $408,000 at the end of 2021 and home prices across the country year-over-year (YOY) still exceed 20%, according to CoreLogic. In the Greater Scranton market, median home sale prices have been trending up at a YOY rate of 13.8%, more than the increase from a year prior (July 2020 to July 2021).*

By and large, prices have trended upward for the past few years and it isn’t uncommon for buyers to spend over list price, with some going for many thousands above list.

However, the price can vary throughout a particular area. Overall, each neighborhood can come with its own vibe and price point. As a result, where you buy matters, both from a cost and desirability standpoint.

When searching for investment properties, be sure to partner with one of our real estate professionals. They can help navigate the particulars of purchasing a home in Northeastern Pennsylvania. 

Features of Desirable Properties

When looking for investment properties, you need features that appeal to renters. For example, ValuePenguin notes that 53% of consumers want a home office over an extra bedroom. In some areas, open floor plans may typically be preferred. For downtown properties, a parking space might be a necessity, too.

Since traffic can be challenging, finding a location near convenient roadways or close to critical amenities like stores or medical centers (or even pizza!) is also essential. That way, renters won’t have to go far to get what they need.

If you’re looking at family-sized residential investment properties, then choosing one with exceptional school ratings is a smart move. That’ll make the home more attractive to parents, increasing its potential value.

The same goes for homes with large yards. Whether it’s parents or renters with dogs, having outdoor space may be high on the list. If the yard isn’t in great shape, making some outdoor improvements may be all it takes to elevate its curb appeal.

For instance, you could connect with local contractors to install a new fence, if it’s allowed by your homeowners association and/or the local municipality. Ensure they’re licensed, insured and check for underground utility lines. Next, read reviews online. Then, reach out to discuss your needs and get a quote. While the average price can vary (and it usually does in this market with distribution and supply issues that contractors typically encounter), the size, materials and location play a role, so get several estimates in advance to ensure you’re in the ballpark.

Managing the Investment Property, Beginning with Forming an LLC

Before getting into the investment property business, make sure you’ve set up a limited liability company to operate under. This will help protect you from personal liability, as well as confer tax benefits to you. You can accomplish this relatively simply by using a formation service. Once you find the right property, then you’ll need to determine how to manage it. Usually, you have two choices.

First, you can operate as the landlord, and as such, you’re responsible for all activities relating to the lease property. Along with advertising the property, you’ll screen tenants, collect rent, handle maintenance calls and more. In some cases, that also means enforcing the lease – a task that often lacks enjoyment and may not always go as planned – and handling evictions, if needed. It’s a full-plate for sure, but it’ll allow you to keep all of the profits too.

Second, you can hire a property manager. By using this approach, you’ll end up with less profit in exchange for support handling the property. The property manager will handle practically most everything, including screening tenants, accepting payments, tackling repair requests and the like. They’re also an ally for lease enforcement, ensuring you don’t have to address violations directly unless an eviction becomes necessary.

Which option is best depends on how hands-on you’d like to be along the way. While you’re always involved, a property manager reduces your burden in exchange for a fee, giving you access to support and expertise. However, if you’re confident in your capabilities, that may be unnecessary, as many investors manage their own properties.

* statistics from the Greater Scranton Board of REALTORS® (July 2020-July 2020)

 

[This content is compliments of Fix It Dads.]

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What’s A Real Estate Broker? And What Do I Do When I Find One?

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The search for a home begins online. It has for some time. In fact, consumers are surveying the terrain and pouncing on anything that hits the market like a school of piranha, unsure of when their next opportunity to eat will surface. You can’t blame homebuyers either. Today, the ones that remain, still looking to purchase, have repeatedly struck out in their attempts for homeownership. Now, feeling the pressures of inflation, higher mortgage rates and rising home prices, they’re looking to get in before the door closes on their “must-haves” and what they can afford.

The winds of a housing shortage have shifted, new listings with a slowdown in purchases have given way to more selection – finally some welcomed news for prospective shoppers. Yet the search becomes very real for them as they exit the digital environment, previewing actual houses, and doing so in a more urgent manner than buyers did only three years ago. Buyers should rely on the services of a real estate professional whenever possible, because representation is critical for protecting the interest of buyer-clients, especially in this market. And you probably have questions.

What type of real estate professionals exist today and what do they look like? There are four main distinctions homebuyers should be aware of, and they are: real estate agents, REALTORS®, REALTORS® with an ABR® designation and Brokers.

  • Real estate agents – Independent contractors who are connecting buyers and sellers and are licensed to help others rent, buy or sell real estate. Licensure requirements vary from state to state. These professionals should not be confused with REALTORS®, but regularly are.
  • REALTORS® – Licensed real estate agents who are also members of the National Association of REALTORS® (NAR) and must likewise adhere to this organization’s code of ethics. These professionals can include real estate appraisers, salespeople, Brokers and more.
  • REALTORS® with ABR® designation – Members of NAR who have a particular skill set and frequently work with homebuyers in their day-to-day business. These professionals are usually more in accord with the trends affecting buyers and are equipped with knowledge to help their buyer-clients succeed.
  • Brokers – Licensed professionals who further their education, and if they so desire, can open their own real estate firm, hiring independently contracted agents to work under them. They perform many of the same tasks as the agents they hire, but there’s a distinction between the two.

A handful of real estate agents become Brokers after a period of time in the business. Often those pursuing licensure as a Broker are ready to dedicate more study to this field. They’ve firmly planted themselves within the real estate turf surrounding them. Having said that, real estate agents who aren’t Brokers can and are certainly encouraged to dedicate more time and study to the business as well.

What is it like to be a Broker? “The dynamics of real estate have changed significantly over the past five years, but the standards of practice remain the same,” emphasizes Dianne Montana, Principal Broker for Realty Network Group. “I enjoy working with a talented group of professionals, helping them thrive, ultimately paving the way for our clients to buy and sell successfully.” Being a Broker allows for additional independence (more than solely being an independent contractor), but with that comes greater responsibility. Brokers are responsible for supervising the agents in their Brokerage and ensuring the office/company is in compliance with national and state real estate laws and regulations. Real estate Brokers face their fair share of liability as well, and as such, it’s important for Brokers to possess an advanced skill set in order to be both distinguished and ethical.

As a homebuyer, which of these four types should you seek when actively looking to acquire property? There’s no clear cut choice, but a REALTOR® is definitely a great starting point. Those specializing in servicing buyers generally provide the best opportunity. Furthermore, a REALTOR® with an ABR® designation could be a perfect match, especially for first-time homebuyers. Can you go wrong with a Broker? Usually not, but it’s imperative that those pursuing real estate do their due diligence in finding a professional they can work well with, one who actively listens and has a tract record for success.

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NEPA’s Most Walkable Communities

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Summer is the best time of the year to explore Northeastern Pennsylvania (NEPA)! Alright, I lied, my favorite time of the year in our region is early autumn with cider donut runs, changing foliage and high school football back on the menu, but summer is easy on the eyes too. There’s plenty to see and do in the Greater Scranton area and we hope you can set aside some time to get busy and explore.

NEPA has diverse environments with everything from hiking trails to city streets and commercial businesses in the downtown areas of Scranton, Wilkes-Barre, Dickson City, to name a few. You can explore much of this region from our “search by city” page.

Over the past two years, homebuyers have looked at their purchase slightly differently. Now, some buyers desire spaces where they can work-from-home. They want living spaces without open floor plans to allow for remote work in addition to having areas for their children to complete their homework and other ways to escape. Are open floor plans going out of style? Maybe, but the pandemic brought us here and we’ve taken notice of this trend in recent months. A modification in purchasing habits certainly happens from time-to-time. That’s why there are trends in the first place, but this one came on rapidly. Solitude in the home is welcomed and some buyers need walls for crying out loud. But if you can’t break from an open-concept home, perhaps living in a walkable community will help ground you and alleviate some of that stress.

In Northeastern Pennsylvania, walkable communities are slightly harder to discover, because after all, we have many rural areas. On the other hand, you can get just about everywhere in Scranton. While various parts of the city are certainly walkable and unique to the area (Green Ridge, North Scranton or the Hill Section immediately come to mind), car traffic has its day too. Is Scranton walkable? Yes, but it didn’t make our list. 

The tiny town of Jessup is nestled between Mount Cobb and the Lower Valley (Blakely) with a good mix of dwellings. There’s a rich heritage here, especially from those of Italian-American descent. The town is laid out well with the Casey Highway (Route 6) cutting through/above town, yet not obtrusive in any way. Jessup has a few parks for its residents to frequent, including Jessup Memorial Field Park & Kids Korner and Eales Preserve (a nature conservancy). Another bonus for inhabitants is the ease of access to the Lackawanna River Heritage Trail, in the north section of town. Shops and restaurants are within walking distance and most sit on Church Street or Hill Street. One drawback is walking access to grocery stores. For instance, the nearest one is approximately 1 to 2.5 miles depending on where you live. While some errands require car use in Jessup, the town does feature tourists at various times of the year and has access to public transit. Is Jessup walkable? Yes, but it didn’t make our list either.

Nonetheless, here are NEPA’s four most walkable communities:

Pittston

Location – Northeast of Wilkes-Barre, southwest of Scranton, in Luzerne County
Access – Route 11 and within close proximity to Interstate 81 and the northeast extension of the Pennsylvania Turnpike
Walk Score – 76 
Highlights – Campbell’s Ledge is close to Pittston and for those who love to walk/bike, hop on the Lackawanna River Heritage Trail
Parks – Riverfront Park, Sullivan Park, Jefferson Park, James Clark Park, Albert West Park
Amenities – Restaurants and shops fill in Main Street as well as across the bridge in West Pittston (on/off Route 11)

Dunmore

Location – Neighboring Scranton on its east side
Access – Ranks very high with the ability to connect to Interstates 81, 84, 380/80 and the Casey Highway, all directly from town
Walk Score – 74
Highlights – Walking and biking around town is relatively easy with the wonderful sights of the Dunmore Cemetery and Marywood University. Scranton is relatively close too.
Parks – McHale Park (Dunmore Community Center), Sherwood Park, Saint Anthony’s Memorial Park
Amenities – Restaurants and shops along South Blakely and East Drinker Streets

Tunkhannock

Location – Northwest of Scranton in Wyoming County
Access – Route 6 and Route 29
Walk Score – 61
Highlights – Some of the cutest shops you’ll find outside of Clarks Summit and Honesdale, businesses are coming back into town and if you visit, you’ll see why
Parks – Riverside Park, McCord Park, Lazybrook Park
Amenities – Wonderful access to stores, restaurants and more on Tioga Street or Bridge Street; the Bypass has also helped keep much of the business/commuter traffic away from town

Old Forge

Location – Southwest of Scranton
Access – Quick ability to connect to the northeast extension of the Pennsylvania Turnpike, Interstate 81 and Route 11
Walk Score – 59
Highlights – Pizza is a favorite here, but you probably already knew that
Parks – There are nearby parks, which are worth the trip, but other than softball and little league fields, there are no parks in this borough
Amenities – Superb access to restaurants, stores along Main and Oak Streets, grocery stores would need to be accessed by car

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When The Home You Want Fails To Appraise

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As a homebuyer, the landscape can be downright intimidating these days. Yes, multiple offer situations exist now, but this is changing and by July they might all but cease. First-time buyers can especially have concerns in this market, which is still a seller’s market, even though the pendulum is shifting. Why the concern? Well, interest rates have climbed and aren’t going down anytime soon. Furthermore, there’s still competition from other buyers who are eager to purchase, have been looking for a while and haven’t been priced-out of the market yet. There are many forces to consider when given the opportunity to buy real estate. Buyers in our region (Northeastern Pennsylvania) are paying about $300 more per month for a home via lender financing than they would have only six months ago for the same house. This is because rates have crept up about 2.5% points since January.

Lately, the Pennsylvania Association of REALTORS® (PAR) made some clarifications to one of their standard forms, the Appraisal Contingency Addendum (ACA), in an effort to clear up a little of the confusion surrounding buyer and seller rights and obligations surrounding the purchase of a property, specifically if a home fails to appraise. These changes will take effect on July 1, 2022. There’s been a misunderstanding in recent years about what the appraisal contingency means exactly for both parties and why the buyer doesn’t have the right to terminate an agreement of sale, if the appraisal contingency falls away, but that’s another conversation altogether.

As we mentioned above, there are still homes selling for over list price and there will be pockets of this type of activity I’m sure during the next few weeks. The concern for many potential buyers today is where does it put me if the appraised value of the home I’m looking to purchase comes in lower than the actual purchase price? This is a legitimate consideration. Thankfully, in Pennsylvania, the purchaser, through guidance from their REALTOR®, can rely on what’s called the “minimum appraised value” to protect them in the transaction. This would be the lowest value an appraiser could produce that would require the buyer to continue with the purchase. The ACA is there to accompany the sales contract and help these parties make every effort to continue forward in good faith toward settlement.

Of course, it doesn’t always work out for one or both parties, but protections like the appraisal contingency can help buyers sleep at night. “Homes failing to appraise happens more than you might think, even now,” asserts Maria Muchal Berta, Associate Broker for Realty Network Group and Owner/Certified Residential Appraiser of Chiave Appraisal Group. “It really depends if the buyer has the money to close the gap between the purchase price and its appraised value. How badly do they want the home? In some cases where the appraised value falls short of the purchase price, where there’s a will, there’s a way.”

Angelo Ambrosecchia, Loan Officer for Guild Mortgage breaks down many of the intricacies involved in the following scenarios where homebuyers are seeking to secure funding for a home purchase.

“Prior to us getting involved, many transactions are negotiated that up to a certain price point, the buyer will pay the difference out of pocket, if a home appraises low. For example, someone is buying a home for $290K. If it appraises for $280K, they agree to pay the difference out of pocket, again, up to a certain amount. With inventory levels so low, we’re seeing this more as buyers don’t want to lose out on a home, if they can avoid doing so. In this example, if they were putting 5% down and getting a conventional loan, they would now be putting 5% of $280K down, and on top of that, paying $10K to make up the difference for the low appraisal, in addition to closing costs.”

“If the borrower has enough money down and they’re agreeable, we can adjust the loan-to-value to keep their out of pocket money the same. Here’s what I mean by that. We have someone buying a home for $290K and putting 20% down. This would make the loan amount $232K and down payment $58K. Let’s assume the home appraises for $280K and they want to keep their total out of pocket money the same, but agree to pay a total of $290K. We can lower the down payment from $58K to $48K and they can use that $10K to make up the difference. This keeps their total out of pocket funds overall, the same. In this case, they would now be putting $48K down on $280K and the loan-to-value would go from 80% to 82.9%. This would add a small PMI payment, but help the borrower accomplish their overall goal when it comes to total money, out of pocket.”

“As lenders, we can only lend up to the lesser of the appraised value or the purchase price. Always the lesser of the two.”

“If this isn’t agreed upon upfront, we first go to each REALTOR® and ask for any additional comparable properties the appraiser may have missed. At the permission of the buyer, we’ll have the buyer’s agent review the appraisal with them to see if any material items were missed. Is the bedroom count correct? Bathroom count? Square footage? Etc.”

“If no mistakes were made and the value isn’t able to be met, the REALTORS® involved would need to see if any re-negotiation can take place. If all parties can work it out or compromise on it, we move forward. If not, unfortunately, it may be a dead deal.”

There’s no “one-size-fits-all” solution for when the home in a real estate transaction fails to appraise, but we’ve attempted to give structure to variables that might come into play. We hope homebuyers have gained some valuable insight and can proceed with more confidence toward settlement.

 

For a related topic, see Why would I need an appraiser?

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Top 3 Reasons To Purchase A Home

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The later part of this year might bring about some stabilization in the way of a more balanced market, but don’t expect one favoring buyers anytime soon. As inventory shortages continue, and they will, prospective homebuyers are attempting to determine if they should stay in the game. Others have doubts and aren’t sure if they should join the quest for homeownership either.

The anticipation of homeownership can be intoxicating for some. Recent months have been a prime example of this in our region of Northeastern Pennsylvania. With homes sold on par with the previous year (843 versus 853, respectively)*, and inventory struggling to see the light of day (1.29 month’s supply),* there’s an element of hysteria to real estate transactions these days. Certainly the pandemic was a catalyst for the surge in activity, but make no mistake about it, our housing supply had already been depleted prior to 2020.

Before we reveal why now is a good time to buy, there are a couple reasons we caution some to re-evaluate their situation before purchasing a home. These reasons include those facing upheaval in their lives, those who must remain nomadic for the sake of their job as well as anyone who struggles to cover their monthly expenses. If your life is a little frantic today and you’re going through transitions, purchasing a home might not be the best course of action. If you’ve undergone more change than you care to admit, renting may provide you more freedom and less stress. It’s also favorable for those who need to move promptly due to work. Homeownership can only create headaches for these successful itinerant types, who could potentially sit on the sidelines waiting longer than expected for their home to sell. Finally, owning a home comes with maintenance, presumably a mortgage, taxes, insurance and occasionally other fees/costs. If you presently grapple with covering your expenses and debt, purchasing a home isn’t a path you should pursue until your situation changes for the better.

Obviously, renting in particular situations just makes sense! Doesn’t a seller’s market, the likes of 2022, qualify as one of those instances? Not necessarily. In fact, since the “lockdown dam” ruptured in June of 2020, rents have been rising too.

Yes, glaring issues in our economy such as inflation, the increasing costs for food/gas, among others, create barriers to buying (we can’t minimize them), but opportunities exist for those looking to enter the market, especially for the first time. They remain even in the midst of a supply shortage.

Homebuyers, now is the perfect time to pursue homeownership, especially if you don’t need to sell and your rental rates are continuing to climb. Purchasing property is advantageous, and in the majority of cases, will be the smarter play over leasing. Here are the top three reasons why purchasing a home (or likewise, continuing to own one) now makes sense.

Stability

Because the landscape for buying and selling is more volatile recently, having a meticulous plan of approach is essential. Before you commit to taking on a mortgage, understand your finances and prepare them appropriately. The first step toward investing in your future in real estate is stability. If you’re grounded in your finances, with trace amounts of bad debt in your name, and you have the ability to afford a home at a particular price point in addition to the closing costs that are associated with it, you’re in a good position to invest. If you have a nest egg or emergency fund, you’re in a superb position. Of course, having excellent credit gives you a competitive advantage and firmer stability still.

You’ve Been Squandering Your Extra Money

If you’re looking for safer places to store your loot, you should strongly consider building equity by purchasing a home. Homeownership forces you to produce equity. On the other hand, renting makes it easier to spend your extra cash rather than invest it. The money you’re putting into a home will come back to you as your property appreciates over time. In 2021, we witnessed homes appreciate by roughly 19% and they should sustain 5-10% through year’s end. Housing appreciation in the Greater Scranton area registers 13.1%, year-over-year for the April.* According to the latest numbers from CoreLogic from March, homes have appreciated by 20.9%, year-over-year. It’s a great time to make an investment in a home!

Feel At Home

As a result of owning property, you can create something that’s truly yours. Would you like to renovate? You can. [Make sure to check with your local municipality/borough first.] Want a bigger say in lifestyle decisions? Make them for yourself and your family. Need increased privacy? You’re in the driver’s seat. You can make additions to your property to make it more secure. You can erect shrubs and fences. Alter the landscaping or design of your residence, because you can – you’re captain of this ship. Don’t worry about the logistics! Homeownership means less restrictions and limitations and more freedom.

Why not own a place you can call home, when it’s all said and done? As a prospective homebuyer, especially a first-time one, you have the ability to invest in your family and create a foundation to build on, for their stability too. What’s more, homeownership statistically creates a better environment for children. There are many intangibles produced when a child has a safe and affordable place to live. Furthermore, homeownership drives your local economy and has the potential to enhance your community. For every two home sales, one job is generated, increasing economic mobility. 

If you’re looking for housing, don’t give up hope. Our region might be slightly oversaturated with buyers, but that continues to improve. What we can expect six months from now is anyone’s guess, but we’re approaching a more balanced market in the months ahead. At the moment, it’s a great time to buy, and if you’re in the position to do so, will you take the steps necessary to join those who find homeownership very rewarding?

* statistics from the Greater Scranton Board of REALTORS®

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3 Things to Know Before You Buy Your First House

So you’re ready to buy your very first house! While becoming a homeowner is an exciting journey, there’s much to consider and prepare before you actually buy a house. Your life plans, career, finances and preferences in a home will all be factors that affect the kind of house you can buy as well as where you’ll want to live. To help you navigate all these factors, read on to learn about the three most crucial considerations when buying your first home.

Money Matters

Buying a house is no small endeavor, especially when it comes to money. You’ll want to start saving up as early as possible so that you can afford a down payment. However, after that, chances are you’ll need to get a mortgage to pay for this house over time. A common plan of payment is a 30-year fixed mortgage, which holds fixed principal and interest rates, meaning you’ll pay the same amount over the life of the loan (30 years). This is one method of paying off a mortgage, so do your research and discover what works best for you. There are other mortgage options available too such as FHA, VA, among others.

Additionally, you will want to take a close look at your finances, specifically credit and debt, as these factor into your mortgage eligibility and interest rates. When making moves to purchase a house, you’ll want to ensure that you’ve paid down as much debt as possible and that your credit score is the highest it can be. Avoid other large purchases and refrain from switching jobs during the home buying process as well.

Your Future is a Long-Term Game

Your future plans should be taken into account before you buy a house, as you’ll likely live in this house until your mortgage is paid off. Will you need to pay off any past loans, like car payments or student loans? If so, you may want to research or consult a financial planner on how to juggle paying for multiple long-term payments.

Do you want children in the future? Do you think you’ll help pay for your children’s college education? Although that may be years into the future, it’s crucial to consider everything you might possibly be paying for. Many financial aspects like paying off a mortgage or college tuition are a long-term game, so starting a college fund when you decide to have children is a great way to prepare financially for the future. It can be taxing to pay for several significant costs like college tuition and mortgage payments at the same time, as well as any other loans.

Needs Come Before Wants

Next, you’ll want to consider what you need and what you want in a house. Perhaps you need at least three bedrooms or even more if you plan on starting a family. You may need an open concept floor plan with ample room for seating, for example, if you like hosting. If you have a dog or plan on getting one, a backyard is a great asset to have. If you are self-employed, a house with enough room for a home office is necessary, so read our tips on launching a home-based business while moving to a new home.

You will also want to think about where you’ll want to reside. Depending on the state or city, houses will vary in cost. If you want a house in a large city, it’s going to cost more than a house in a very rural area. Explore and research the cost of living in different areas and what will work best for you. Remember the difference between needs and wants, as your very first house might not have everything you dreamt of. Luckily, you can always renovate or add on to your home in the future to make it your perfect home. Maybe flex space is an option for you?

 

Purchasing your first house is quite an accomplishment, but a lot of preparation and financial planning needs to be done beforehand. By considering these three factors, you set yourself up for a smooth homebuying process.

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Why Would I Need A Real Estate Appraiser?

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As a homeowner, why would I need the services of a real estate appraiser? And is one needed if I already have a business relationship with a REALTOR®? These are great questions, but before we dive in and answer them, let’s establish what we mean when we say “appraisal.”

For our purposes here, we’re not concerned with commercial real estate appraisals. These are a whole different animal and are sought after less than residential ones in our region. By appraisals, we’re referring to an accurate estimate of a home’s current/fair market value (emphasis added). We’ll break down the difference between this and how we understand a comparable market analysis, but it’s safe to say appraisals hold much more weight. Furthermore, an appraisal, which is required by a homebuyer’s lender, for instance, is completed by a licensed appraiser and not solely a real estate agent.

While some homeowners, who are looking to sell their home, might request from a REALTOR® what’s called a comparable market analysis (CMA), it’s critical to recognize the distinction between it and an appraisal. While agents might use methods of comparison similar to appraisers, they aren’t licensed appraisers with no motivation for the sale of the property. Generally speaking, CMAs are for agent purposes (listing a home for sale, data to support a buyer’s offer) and appraisals are for lending purposes. Read more about their differences here.

Regardless of the business relationship you have with a real estate professional, unless he/she has a license to appraise property in that state, his/her assessment on what a property is worth won’t hold water with the mortgage lender actually making the investment on the home on your behalf (whether you’re the homeowner or mortgagor). Not all appraisals involve banks though. “There are many reasons someone would hire an appraiser,” exclaims Maria Muchal Berta, Owner/Certified Real Estate Appraiser for Chiave Appraisal Group and Associate Broker with Realty Network Group. “One reason is if a buyer is using cash to purchase a property, meaning there are no banks involved in the transaction. It gives the buyer a piece of mind knowing they’re not overpaying for a property. Other common reasons for hiring an appraiser include divorces, settling estates, refinancing, applying for home equity loans, appealing tax assessments or they’re just curious about their home’s worth.”

We hope this elucidates why someone might need the services of a real estate appraiser. It’s a complicated market out there! Make sure you have the right people and tools at your fingertips. If you need further clarification regarding homebuying, look into this resource.

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New Home, New Career: How To Launch A Home-Based Business While You’re Moving

Becoming an entrepreneur is an exciting time, but it does require a lot of work. And if you find that you need to move at the same time to have a bigger workspace to suit your needs, it can be doubly challenging. It’s not an easy feat to start a home-based business while moving at the same time, but you can do it!

Here are eight tips on how you can accomplish both:

  • Make sure you select the right location. Make a list of everything you need close by for your personal life and then also for your business. That might be proximity to your shipping partners, an airport if you need to travel frequently, your suppliers or whatever else that might be. We have success with our clients who are relocating. We can help you find the perfect place!
  • Hire a professional moving company. Yes, you can do it all yourself and it will be cheaper, but it’ll take a lot of time and effort, which would be better spent on establishing your new business.
  • Plan ahead so that you don’t have too much workload when moving into your new place. The last thing you want is more stress piled onto everything else, so keep the days surrounding your move free of calls and deadlines as much as you can.
  • Get your business registered at your new home-office address. An LLC might be a good option for you, but make sure you check the filing requirements by state, as these can vary. This will allow you to work on your new venture without having to worry about any legal implications. You’ll also need the proper registration to claim tax deductions for expenses related to starting your business.
  • Sign up for continuing education. It’s easy to get bogged down in the day-to-day details of running your business. But if you keep investing in building your skills, it will help you make better business decisions and ensure long-term success. There are plenty of online degrees available in business or accounting that you can fit around your work schedule. 
  • Invest in state-of-the-art technology. Your old laptop might have been good enough for downloading music and email, but when you start a business, having the right tools will be a productivity game-changer. Invest in phones, screens, tablets, computers and any other technology you might need – keep it up-to-date.
  • Design a business plan to map out your long-term vision. By putting all of your ideas down on paper and going through the assumptions that back up all of your financials, you can troubleshoot potential problems before they arise. A business plan is also crucial if you need to go to investors or request a bank loan.
  • Stay on top of your accounting. Many entrepreneurs end up with stacks of crumpled invoices in a drawer and find themselves overwhelmed when tax season comes around. There are plenty of easy-to-use software options available today to set you off on the right foot from day one and make sure you don’t fall behind.

We hope that this post has provided you with some insights and tips on starting a small business from home while moving. You’re now ready to join the millions of entrepreneurs, who decided to pursue their dreams as well. Good luck with your new endeavours!

 

[This content is compliments of TidyHome. Image for this post – Unsplash]

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