Tag Archive for: Homebuyers

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.

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

There’s more uncertainty in the national real estate market than we’ve seen in some time. We’re two years beyond the onset of COVID and while we’re past many of the main health concerns of the virus, obstacles still remain. Remote work is likely here to stay, thus there are adjustments to housing post pandemic, which continue to unfold and impact the market. Is time running out for sellers to take advantage? Will buyers have a better chance of acquiring real estate being that their purchasing power has somewhat diminished? What’s in store for our market in the Greater Scranton area?

The future of real estate isn’t as dark as some would have you believe. The chance of a housing crash, the likes of 2007-2010, lacks much supporting evidence. In fact, the exact opposite might be true. Many experts are calling for a busy spring market this year and even Zillow projects home appreciation to hover around 9% for 2022. Many of the conditions, which existed prior to the housing bubble, simply aren’t present. When the market began to tank fifteen years ago, there was a surplus in housing inventory, mortgage lending resembled the Wild West and foreclosures occupied their fair share of the market.

Today, the narrative is quite different. There are shortages in markets throughout the country. Here in Northeastern Pennsylvania, our month’s supply of homes continues to unimpress buyers: year-to-date we sit at 1.29.* A magnifying glass would be required if the inventory got any smaller. In the four years, which consisted of the housing bubble, the market was heavily in favor of buyers and saw surpluses of housing between 7.3 and 9.6 month’s supply, according to the National Association of REALTORS®. Furthermore, lending restrictions are much tighter than those that existed fifteen years ago. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act became law with its eye toward consumer protection and a reform of the lending industry, especially riddance of predatory lenders. In general, those who are approved for a mortgage in 2022 are much more qualified than those approved even a dozen years ago. Finally, negative equity in the national housing industry has reached its lowest level over this same period of time. Much fewer homeowners are underwater than were during the housing bubble.

The future of housing post pandemic is not scary. Actually, 2023 will probably resemble 2019 more than it will last year. Inventory will bounce back, but that might take a year or two. The immediate future for sellers does pose a threat to them receiving top dollar for their investment. “There’s a little insanity in our market right now,” maintains Amy L. Kiesinger Bohenek, an Associate Broker with Realty Network Group. “Listing agents are faced with multiple showings and offers, sometimes over asking price. The appraisal process can be cause for a headache from time-to-time too. When a home doesn’t appraise, where does that leave both parties, especially the seller?” Despite this, the window for bidding wars and high price appreciation is closing. Despite climbing mortgage rates, demand for housing remains strong. Price appreciation will continue to trend up, albeit home prices shouldn’t be in the neighborhood of 18%, like much of last year. Sellers in our region should act sooner than later if they want to take advantage of this market they find themselves firmly entrenched.

Buyers must hang in there if they have a desire to pursue real estate anytime soon. The question remains, how can you sit tight when your purchasing power appears to be vanishing? Homebuyers have seen the average thirty-year fixed mortgage rate increase to roughly 5.3%, which is about 2% higher than it was at the beginning of the year. Many first-time buyers are already struggling to get their foot in the door and compete with others, including investors. Higher rates, for those who require a mortgage, generally mean they’ll have less to contribute toward a monthly payment. That’s why it’s important for buyers to have a plan, stick to a budget and know what they can afford.

In addition to the factors listed above, real estate in Northeastern Pennsylvania continues to have affordability as its ally. Year-to-date, the median home sales price is $179,000 (up 7.7% from the previous year).* New listings are down slightly, but inventory is expected to pick up. The groundwork for homes to appreciate at a slightly slower pace with small improvements in inventory is being laid. With an increase in buyer and seller competition that’s sure to come this spring and summer, being too conservative, will surely impact homeowners thinking about selling.

 

* Greater Scranton Board of REALTORS®

What if we told you we were coming up on the sweet spot for buying and selling in real estate? Would you believe us? Real estate has a long tradition of being a seasonal market, especially in Northeastern Pennsylvania where we undergo four seasons. Alright, perhaps we only have three – late summer, long winter and rainy spring! Nevertheless, if and when spring sets in, motivated sellers have their sights set on unloading their home for top dollar. Over the past few years, there’s been a slight shift in the data in how consumers have responded. And of course, COVID-19 has severely affected traditional real estate trends in our Greater Scranton market.

The trends over the past nine months show some of those glaring differences:

Month Sold Listings Year-Over-Year % Active Listings Year-Over-Year %
October 388 68.7 665 -51.5
September 335 46.9 667 -50.8
August 361 36.2 692 -50.9
July 350 29.6 811 -41.5
June 141 -41.2 856 -36.3
May 107 -57.2 888 -30.6
April 156 -23.2 968 -19.0
March 167 -7.2 1046 -8.5
February 156 -1.9 1026 -11.6
January 173 16.1 1079 -8.9

* Greater Scranton Board of REALTORS® statistics

The sold listings from this past May, June, September and October clearly point to disruptions the pandemic has imposed on real estate in Northeastern Pennsylvania all while housing inventory continues to fall. Regardless, if we’re trending back to some sense of normalcy in real estate, Thanksgiving time might be the sweet spot for buying or selling real estate.

If you’re seriously considering purchasing a home, November and December certainly can make their case as to why you should make a move into their corner. Generally, autumn has been an excellent time to buy a property. In fact, according to real estate information company Attom Data Solutions, some of the best days to buy are November 9, December 4, 7, 26 and 29. Boxing Day, December 26, a monster shopping day on the calendar, is actually the single best day to purchase a home!

As we approach the heart of winter, buyers notice some of the lowest prices of the year. In fact, low mortgage rates continue to provide many with the opportunity to purchase, while having more buying power. Though experts believe the rates will stay low for the start of 2021, a change in leadership, bond prices and the state of the economy could certainly change that.

Believe it or not, November and December likewise present a good situation for some who are looking at selling. At the end of the year, buyers typically have less choice and homeowners seeking to sell may take advantage of these circumstances. The fact of the matter is this: There’s generally less competition for sellers, whereas there’s more motivation and perhaps the lure of year-end tax benefits for buyers. If buyers are seriously considering homeownership, this creates ideal conditions for sellers, who are typically competing with lower inventory by year’s end. Today, in the Greater Scranton area, our housing inventory is incredibly low! Furthermore in recent years, more homebuyers are less fixated on “summer buying” as well as school schedules (some don’t even have children) and if they have time constraints, their motivation can play right into the hands of sellers.

“Traditionally November has always been a really terrific month for sales because you’ve got people who have been out there looking saying, look, another year is about to pass. Let’s focus”

Depending on your specific situation right now, this time of the year might be the sweet spot for buyers and sellers alike. Yes, you’ll find highly motivated sellers in the market, but there won’t be a shortage of motivated buyers either. Given the right mix, it might be perfect timing to buy and sell!

 

If you’re a buyer or seller and have more questions, see our (buyer/seller) FAQs or contact us today.

 

Over the years, we’ve been thankful for support from our clients as well as our professionals, who’ve been instrumental and vital to our success. They certainly are motivation through the obstacles brought on from this pandemic. As we can attest, connecting buyers and sellers requires new approaches in order to be successful during this surreal year. So far in 2020, the Greater Scranton market has shifted from being balanced to one now highly in the seller’s favor. The absorption rate (the rate at which homes are selling over a specific period of time) has dropped from 6.44 (last July) to 4.02 (this July), while inventory continues trending downward.* Though housing in Northeastern Pennsylvania is among some of the most affordable in our nation, affordability is dropping in many markets and difficult challenges for both buyers and sellers lie ahead.

Our network of REALTORS® will help you navigate these obstacles and put you on the path toward homeownership or vice versa, if you need to sell.

Please spread the love and vote our firm, Best Real Estate Agency and Best Real Estate Website in this year’s Readers’ Choice Awards. [<– This has since ended, but you can see past winners here.]

We sincerely appreciate your time and support!

* Greater Scranton Board of REALTORS® stats
Readers’ Choice Awards – Times-Tribune

It’s been a trying time for homebuyers and sellers since mid-March. They’ve had to put their plans on hold. Their real estate future has been met with uncertainty, but of course, sadly some have lost their jobs and are either in no position to purchase property or are afraid of losing their home. Thankfully, mortgage loan forbearance has rescued many in this post-COVID-19 society. In fact, loan forbearance won’t negatively affect your credit. (Learn more about it here.) There are others who have surprisingly found themselves in a better position than they did at the start of the year: People have realized how much they dislike their jobs by having time to reflect and/or working from their residences; some are “earning” more on unemployment compensation than they did when they were employed; and some, who have families, are working from home while saving money on daycare costs (though that’s coupled with homeschooling these days).

It is a crazy world we live in right now. It seems as if my third grader had written this tale – a contagious virus attacks our cities, school’s out (as well as our supply of toilet paper) and when we opened our pool in May, it began to snow.

Presently, real estate is opened for business in only twenty-four (yellow) counties in Pennsylvania, but it’s not “business as usual” yet. There are precautions taking place in those counties resuming in-person activities. Over the next few weeks, we could see real estate showings and in-person meetings resume in parts of Northeastern PA. Homebuyers, who are patiently waiting and believe they’ll be in a position to buy in the upcoming weeks, can take steps to be ready for action. We’ve outlined six ways you can find your next home while sheltering in place:

  • Use Google’s Street View option to explore areas of interest. This tool allows you to catch a view of a house or an entire neighborhood without even taking a step outside.
  • Time is a precious commodity. We value it and we know you do too! Therefore, when you discover areas of interest, estimate how long it will take you to commute to and from work.
  • Research area schools and learn how they stack up against other districts in your community. GreatSchools is one place to look, but there are others as well. Gain insight into our area school districts and properties available for sale within those districts.
  • Research local cities to find out all they have to offer. We’ve done a little research for you on some of the popular cities of NEPA, including Archbald, Carbondale, Clarks Summit, Dickson City, Dunmore, Factoryville, Moscow, Old Forge and Scranton.
  • Connecting with locals is a great way to gain insight into a neighborhood. Scour the web for resources from local communities as well as social media groups you can join.
  • Make sure to equip yourself with crime data for neighborhoods where you’re thinking about purchasing a home. This is one way to be informed about how safe or potentially dangerous an area might be.
  • Find a buyer’s agent you can trust, who has experience selling in various market conditions and who’s knowledgeable about the areas you’re interested in.

For more insight, check out 8 Ways To Test-Drive A Neighborhood While Sheltering In Place.

Coronavirus Q&A below. Over the course of the past three weeks, Northeastern Pennsylvania (NEPA) has undergone changes in lifestyle, business and just about everything else you can possibly imagine, including real estate. Governor Tom Wolf’s orders, as they pertain to our industry, remain non-life-sustaining. Yet, in a recent move by the Pennsylvania Association of REALTORS® (PAR), the association entered a brief in support of a lawsuit, which has been filed against Pennsylvania’s governor. The purpose of the suit? To designate real estate as a life-sustaining business.

PAR recognizes the importance of “[minimizing] in-person services wherever possible and [following] appropriate CDC guidelines” to keep the public safe and flatten the spread of COVID-19, but when deemed necessary, the association believes sellers and homebuyers should have the ability to attain shelter – one of life’s three essentials.

Coronavirus Q&A: How to approach selling your home or buying one during the coronavirus pandemic.

Nevertheless, it’s a confusing time for buyers and sellers and you can add real estate professionals to the list also! Some consumers are left wondering if obtaining a roof over their head is even an option right now. The world is changing, which is fairly evident. Real estate and how the industry will operate henceforth will be altered too. We look to keep you informed as this fluid situation constantly changes. In the meantime, we’ve addressed some of the common questions we’ve received from our clients/customers.

Can I sell my home in this current climate?

If you’re thinking about selling your home immediately, understand that the present terrain in real estate has numerous roadblocks, which you’ll encounter in some way, shape or form. Can a home be sold momentarily? Yes, it’s possible, but realize tremendous assistance from the seller would probably be required in conjunction with the agent, while attempting to procure a buyer. This is a discussion you need to have with your REALTOR®.

Are there things I can be doing now to prepare to sell my home?

There are absolutely things which can be done now to prep your home to sell in the months to come. “Clearing out the clutter” should definitely be on the top of your list. Other strategies like painting, reorganizing, attacking problem areas of the home and landscaping should strongly be considered as well. Check out this page on our site, which will give you a few more ideas to consider. As a homeowner, you should contact your REALTOR® to come up with a plan for proceeding, as many sellers find themselves on the sidelines during this outbreak.

Should I look for a home now or wait?

There are multiple phases to the home search process. Prospective buyers typically start their search online months before they even physically enter a home (which is practically impossible since the outbreak of COVID-19). For the consumer who doesn’t have to move – wait. In the state of Pennsylvania, there are no in-person showings until further notice. Only services that a REALTOR® could offer remotely are permitted at this time. Of course, you can look at homes virtually through our extensive online catalog of properties available for sale in NEPA.

As a buyer if I decide to wait, what steps would you suggest I take so that I’m prepared for a time when in-person showings resume?

First and foremost, we would recommend setting up a “virtual” homebuyer consultation. If you have an agent, get in touch with them and discuss your needs. If you don’t have one yet, start your search there. Choosing a real estate professional is more important than one might think. Select the perfect agent for you! Secondly, reach out to mortgage lenders. Have a firm grasp on what you can and can’t afford, find ways to improve your credit score, if necessary, and look at the lending options available to you. Lastly, begin examining the market and what’s available in your price range. Create a list of pros and cons. Having a better understanding of these three dimensions can only propel you toward making better decisions when the time is right.

As homebuyers and sellers, can we engage in executing an agreement of sale during this unprecedented time?

Yes, but there’s so much that goes into making these types of decisions: Can I place an offer on a property I haven’t stepped foot in? Are there certain reasons I might want to press pause for the time being whether I’m buying or selling? We strongly suggest you discuss your concerns with your REALTOR® as well as your real estate attorney.

 

We hope this Coronavirus Q&A was helpful. Should you need further assistance, please reach out to our network of real estate professionals.

To say the Chinese Coronavirus (COVID-19) has affected our nation would be the understatement of the year, a year some wish would be over already. Unless you recently came out of a coma, you know the effects of this pandemic. Lately, Americans have grappled with a loss of certain freedoms caused from a seemingly invisible pathogen. It has impacted the way we work, how we travel (in some cases), how our households function and it certainly has affected our relationships in one way or another.

As a small business real estate firm, who supports the efforts of our clients and our REALTORS®, we understand firsthand how work, travel, household dynamics and relationships have been impacted since COVID-19 was declared a pandemic only ten days ago. Real estate, like so many industries, has been making changes in recent days through a paradigm shift in modes of communication and how they get business done. Since the World Health Organization has declared this disease a pandemic, we’ve taken more precautions, like so many businesses throughout our nation, including Pennsylvania, who have also done the same.

Honestly, real estate appears more trivial since we’ve been asked to hunker down. There are nurses, doctors, emergency personnel, volunteers and scientists, just to name a few on the frontlines. Their health is at risk as well as their loved ones. They certainly didn’t ask for this, but they’re compassion and sacrifice lead the way through this period of uncertainty. Having said that, real estate professionals are an essential link between homebuyers and sellers in their quest for finding a place they’ll call home. At Realty Network Group, connecting buyers and sellers, is our mission in four words. Yet we know through these challenging times, we need to safely operate within the confines of this contagion and administer the highest level of care and service we can reasonably provide to our clients and customers alike.

Guided by the Pennsylvania Association of REALTORS® (PAR), we’re proceeding with caution for the sake of our clients, their families in addition to our agents. For deals already under way, we’re also seeking the advice of counsel – time is of the essence. And that’s why PAR created the COVID-19 Addendum to the Agreement of Sale. Some situations may require a timeout in order to proceed safely through the transaction. This addendum permits these steps to be taken.

Many concerns have risen within our industry in less than two weeks. As of Wednesday (3/25) evening we have more concise guidelines from PAR: REALTORS® should “cease doing [all] in-person business” until Pennsylvania’s governor, Tom Wolf, informs otherwise. We know many sellers are left wondering how they might possibly assist their agents in selling their homes remotely. Prospective homeowners are skeptical about placing their property on the market right now. Buyers are looking at record-low mortgage rates, and depending on their situation, some are realizing there might never be a better time to buy – yes, even in a seller’s market. Though real estate sales have been robust amidst this outbreak, there has been increased caution as to how consumers should be proceeding through these unchartered waters. Our firm hopes to clarify some of these matters over the next few weeks as more information becomes available to us.

Above all, we would like to sincerely wish everyone in our community and in our world good health and safety as we move ahead in these unprecedented times. If you carry one thing with you, let it be hope. Should you need to contact any of our professionals, please do so here. We look forward to addressing more of your concerns as time goes by. Stay healthy!

So you’ve finally convinced yourself now is the time to buy a home. Maybe this is your first rodeo, but perhaps you’ve purchased before. Whether you’re a first-time homebuyer or not, ending up with the property you love for a price you can live with is the goal. Achieving this goal can be grasped through knowledge (it’s power!) and a keen insight into your local market. Focus on your goals and the information at your fingertips, it can save you grief as well as nasty surprises down the road.

When it comes to real estate, very few like surprises. In fact, many don’t even like surprises to begin with (most of my friends despise surprise parties). In order to avoid these unpleasantries, we’ve devised a list of seven ways to make your homebuying experience more enjoyable.

Lenders & Mortgage Brokers

There are so many lending options available to you, but if you’re like a majority of prospective buyers you might settle for one option. This could be a fatal first step, causing you to lose thousands of dollars in the process. Instead, a great approach would be to talk to multiple lenders (at least three) in addition to consulting a mortgage broker. You’ll want to have a solid basis for a comparison. Am I getting a good deal? Is this the lowest possible rate for my present situation (where I find myself in life, credit score, etc.)?

Compare lender fees, customer service, loan terms, rates and response times. The more you shop around, the more you’ll improve your chances of achieving some financial freedom. Certainly tap the bank you do all or most of your business with, but don’t solely rely on them.

Before you begin actively searching for homes in the marketplace, make sure you get pre-approved by a reputable lender. Don’t make the mistake of looking at properties before taking this first step into a much larger world. In competitive niche markets, you could forfeit your chance of landing your choice home if you aren’t pre-approved. This will also prevent you from gushing over a home you simply cannot afford.

Affordability Can Be An Issue Too

Ah yes, you don’t want to bite off more than you can chew either. In many markets throughout the country, the supply is dwindling, but buyers are itching for more affordable homes. It’s in these markets where we discover rising home prices and the challenges that come along with them.

7 Mistakes Homebuyers Must Avoid

If there’s one thing to take away from this article, it’s this: Don’t be swept away by your emotions, don’t let them completely engulf you, making your decisions for you. Rather, create a budget and stick with it. It should contain a list of your monthly expenses: Automobile, student loans, credit cards, groceries, health insurance, child care, investments, etc. Examine your costs and be realistic about what you can actually afford. Be sure to give yourself some wiggle room too.

Remember, by overspending, you could be putting yourself at risk for losing your home in the future should you encounter financial trouble. Overspending can often be tied to emotional needs rather than logical, unhasty decisions. Don’t lust after something that’s outside your price range nor feel the need to borrow the full amount of your pre-approval. Make an offer if you’re serious about buying a home, but do it after much reflection and preparation.

Overpaying For A Home

As stated above, overextending on a home purchase is usually not in a buyer’s best interest. I speak from experience on this. The first home I purchased, I reached to get it and seven years later when I needed to sell it, I found myself in a less than ideal situation. Stay focused on purchasing a home for a good price rather than on what you can spend.

Though there’s no way to absolutely guarantee you’ll make the best choice – markets do change as time goes by – discover the market value of a property before you’re willing to make an offer on such a large investment. Don’t rely on what the rateable or government value of a home would be. These valuations often fail to reflect what the home is actually worth in today’s market. You’ll want to make sure your offer to purchase is based on comparable homes that have already sold in recent months.

REALTORS® & Other Professionals


via GIPHY

Don’t follow the path to home discovery alone! Each homebuyer should have buyer’s representation. This is important in order to protect your own interests or you could find other agents, who are actually working for the seller and not your interests, coaching you. REALTORS® educated buyers about the process. They are the “go to” person before and after a transaction even occurs. They can give you insights into who to consult, the surrounding communities/neighborhoods, if attorney representation is advisable and the like. Find a real estate professional who’s a good match for your personality and your schedule.

An experience REALTOR® can put you at ease. This can’t be overstated. They point many homebuyers in the right direction. They have connections, knowledge and course correction that’s needed in the present landscape. When it’s time to buy a property they link you with the right people as well. Your real estate professional can connect you with reputable inspectors and other service providers who can give you a clearer picture of what you’re facing ahead. What’s the condition of the home? What type of repairs are needed? A thorough inspection will help you avoid a money pit, so don’t neglect to inspect.

Credit Constraints

Before embarking on your quest for a new home, it’s important to give yourself maximum buying power, if time allows. Be patient, pay down some of your debt and save money. Believe it or not, boosting your credit score and/or saving enough for a significant down payment can take months or even years to accomplish. Here are some things to keep in mind prior to getting pre-approved with a bank:

  • Have three to six months of living expenses saved in an emergency fund
  • Don’t drain your savings to put a down payment on a home nor to pay the closing costs associated with settlement
  • Stay level-headed and stick to your budget – meet with a financial planner, if necessary

When the time’s right, get pre-approved and keep the status quo in your finances through settlement. Don’t make your next significant purchase until you’ve closed on your home. Refrain from opening new lines of credit, closing existing accounts or taking on new loans. These would potentially impact your credit score and jeopardize your purchasing power. Furthermore, a buyer’s actions could cause the deal to go south and as a result he/she might be in jeopardy of losing his/her earnest money deposit.

Location, Bones, Location

As you and your agent begin to search for a home that’s perfectly suited to your needs, it’s important to keep an open mind, while not be overly picky with your selections. It may seem like a part-time job, attaining the right fit for you and your family, after all it can be vital to your lifestyle and development. Seek a home you can add value to.

7 Mistakes Homebuyers Must Avoid

When your search is underway, it may be difficult to ignore some of the cosmetic details, but that’s exactly how you may want to approach it to maintain sanity. A homebuyer should grasp the difference between things that can be changed relatively easily (like simple remodeling) versus things which are very expensive or near impossible to correct. Don’t let the physical imperfections turn you off. On the other hand, it’s important to perceive those things like your home’s yard/lot size or location, which cannot be changed. If you fixate on the home over its neighborhood or school district, you could end up loving the home, but hating where you live.

Ground yourself and know your limits. If your funds are tight, you may need to be willing to reside on a busy road, deal with a dated home or put some sweat equity into it. Prospective homebuyers should also do their research. With the aid of your REALTORS®, investigate the crime statistics and school ratings of areas where you’re interest lies. Gauge your commuting time to and from work. Visit the neighborhood where you’re thinking about moving to at different times of the day to understand traffic patterns and its vibe. Don’t look for perfection in a home, it rarely exists. In fact, in doing so, it could lead you to overpay for one along with grossly limiting your search.

Ownership’s Hidden Costs

Before you embark on this exciting adventure toward homeownership, don’t overlook the hidden costs, especially if you’re a first-time homebuyer. Have you considered the other expenses? You may need to pay for property taxes, homeowners insurance, flood insurance, mortgage insurance (PMI), repairs and maintenance costs, utilities, homeowners association dues (HOA), etc.

Set aside 2% to 3% of the home’s value each year to cover costs associated with maintenance and repairs. Don’t underestimate this buffer. In order to maintain your home, you’ll need to have this set aside. For instance, if your home has a market value of $250,000 and wasn’t recently built, then each year you should have $5,000 to $7,500 set aside for upkeep and repairs.

 

I know this information can be a little overwhelming for some thinking about buying a home, but it’s paramount to keep these potential pitfalls in mind. Again, focus on your goals and discuss this further with your real estate professional. How important is it for you to be a homeowner now than continue to rent and be one in the future? This is a question you’ll inevitably need to ask yourself.

We hope you enjoyed this article. For more helpful homebuyer information as well as our FAQs, click here. We always welcome your feedback!

Over a decade ago, the Great Recession was coming to an end. Mortgage lenders were beginning to tighten their requirements as they were sifting through the mess of an influx of foreclosures. Housing prices began to plummet. Millennials, anyone who was then ages 13 to 28, obviously didn’t have much of an impact on the housing market, many will still in school. Over the course of the past decade, home prices as well as the impact this generation has had on housing have steadily increased. The question remains though: What sort of effect have they had?

A recent article from Fortune written by Shawn Tully discusses the challenges millennials have encountered in recent years in a slightly volatile real estate market. Although housing experienced cheaper prices relative to the previous decade, millennials had little impact until two years ago. “[M]illennials had loads of college debt, and many had bad credit,” as the above mentioned cites. Until 2017, this generation became the “lost generation” when it came to home ownership. Last year, they made a big impression accounting for half of new homes sales. Now it appears with under-building in home construction, diminishing home affordability and rising rates on home loans, sales could be shifting back to more affluent buyers (Gen-Xers and baby boomers). We may once again witness a drop in homeownership rates for millennials.

This is concerning for the state of affairs in many markets throughout our nation: multiple locations such as California, Nevada, New York, Florida, just to name a few. The cost of housing has spiked so much in recent years that first-time homebuyers, many of which are millennials, don’t stand a chance. Yet, not all millennials are fighting this battle. In Northeastern Pennsylvania, the “lost generation” continues to be found in the first-time homebuyer market.

The Greater Scranton market presently carries with it an absorption rate of 6.34 year-to-date and 5.82 year-over-year (YOY) for December. Absorption rate is “the rate at which homes are selling in a specific area.” I bring this up, because this market is actually slipping into a seller’s market. Absorption rates between 6-9 (months of inventory) signal a balanced market, whereas rates between 3-6 indicate a normal seller’s market. Millennials are actually the catalyst. They’re buying up homes now.

Millennials, the largest generation in our country, lead the charge to homeownership and improved financial stability in Northeastern PA. As family formation increases in our area this year, we’ll see the effect this “lost generation” has on the growth of our local economy.