Mortgage News • August 19, 2024

How Mortgage Rate Changes Impact Your Homebuying Power

by Steve Vavrek

If you’re thinking about buying or selling a home, you’ve probably got mortgage rates on your mind. That’s because you’ve likely heard that mortgage rates impact how much you can afford in your monthly mortgage payment, and you want to factor that into your planning. Here’s what you need to know.

What’s Happening with Mortgage Rates?

Mortgage rates have been trending down recently. While that’s good news for your homebuying plans, it’s important to know that rates can be unpredictable because they’re affected by many factors.

Things like the economy, job market, inflation, and decisions made by the Federal Reserve all play a part. So, even as rates go down, they can still bounce around a bit based on new economic data. As Odeta Kushi, Deputy Chief Economist at First American, says:

“The ongoing deceleration in inflation, coupled with the Federal Reserve’s recent indication of potential rate cuts [in 2024], suggests an environment supportive of modest declines in mortgage rates. Barring any unforeseen circumstances and resurgence in inflation, lower mortgage rates could be on the horizon, but the journey towards them might be slow and bumpy.”

How Do These Changes Affect You?

When mortgage rates change, it affects how much you pay each month for your home loan. Even a small rate change can make a big difference to your monthly bill.

Take a look at the chart below to see how different mortgage rates impact your house payment each month for various loan amounts. Imagine you can afford a monthly payment of $2,600 for your home loan. The green part in the chart shows payments in that range or lower based on varying mortgage rates (see chart below):

Understanding how mortgage rates impact your payment helps you make better decisions.

How Can You Keep Track of the Latest on Rates?

Real estate agents have the expertise to help you understand what’s happening and what it means for you. They can provide tools and visuals, like the chart above, to show how rate changes impact your buying power.

You don’t need to be a mortgage expert; you just need professionals by your side. People who can help you make sense of the market and guide you through your homebuying or selling journey.

Bottom Line

If you have questions about the housing market, reach out to me. I can help you understand what’s going on and how to navigate it.

Why Use a Realtor? • August 16, 2024

Some reasons why working with a realtor is often a better choice

by Steve Vavrek

Selling your property on your own, often referred to as “For Sale By Owner” (FSBO), might seem like a way to save money on realtor commissions, but it comes with significant challenges. Here are some reasons why working with a BHGRE realtor is often a better choice than selling your property yourself:

1. Expert Pricing Strategy

Accurate Valuation: BHGRE Realtors have access to comprehensive market data and tools to accurately price your home. Overpricing can result in your home sitting on the market too long, while underpricing could mean leaving money on the table.
Market Insight: BHGRE Realtors understand local market trends and can set a competitive price that attracts buyers quickly.

2. Marketing Power

Wider Exposure: BHGRE Realtors have access to the Multiple Listing Service (MLS), which ensures your property is visible to a large pool of potential buyers and other real estate agents.
Professional Marketing: We use professional photography, virtual tours, staging, and marketing strategies to present your home in the best light, attracting more serious buyers.

3. Negotiation Skills

Professional Negotiators: BHGRE Realtors are trained to negotiate and can often secure a higher sale price for your property. They handle offers, counteroffers, and contingencies with the expertise to protect your interests.
Objective Mediation: We provide an objective perspective during negotiations, helping you avoid emotional decisions that could affect the sale.

4. Time and Convenience

Managing the Process: Selling a home requires coordinating showings, open houses, inspections, and appraisals. Realtors handle these tasks, saving you time and effort.
Qualifying Buyers: BHGRE Realtors pre-screen potential buyers to ensure they are serious and financially capable, reducing the chances of a deal falling through.

5. Handling Paperwork

Complex Documentation: Real estate transactions involve extensive paperwork, including contracts, disclosures, and legal documents. BHGRE Realtors ensure that all paperwork is completed accurately and on time, reducing the risk of errors that could delay or derail the sale.
Legal Compliance: We are knowledgeable about all of the new real estate laws and regulations, ensuring your transaction complies with all local, state, and federal requirements.

6. Avoiding Pitfalls

Experience with Challenges: BHGRE Realtors have experience dealing with common issues that arise during the sale process, such as home inspections, appraisals, and buyer financing problems. They can quickly address these issues to keep the sale on track.
Less Risk: Without a BHGRE realtor, you might miss critical steps or overlook important details that could lead to legal or financial problems later on.

7. Maximizing Profit

Higher Sale Price: Studies show that homes sold by realtors often achieve higher sale prices than those sold by owners. The additional exposure, professional marketing, and negotiation skills can result in a better overall outcome, even after accounting for the realtor’s commission.
Avoiding Hidden Costs: DIY sellers may not realize the costs involved in marketing, staging, legal fees, and other expenses that a realtor would typically handle or advise on.

8. Emotional Detachment

Objective Advice: Selling your home can be emotional, especially if you’ve lived there for a long time. A BHGRE realtor provides an objective perspective, helping you make decisions based on market data rather than emotions.
Buffer Between Parties: BHGRE Realtors act as a buffer between you and the buyer, which can help in maintaining a professional and smooth transaction.

9. Peace of Mind

Professional Guidance: Knowing that an expert is managing the sale reduces stress and ensures that you’re not missing any crucial steps in the process.
Trust and Security: BHGRE Realtors provide a layer of security, ensuring that potential buyers are serious and that your interests are protected throughout the transaction.

In summary, while selling your property yourself might seem appealing to save on commissions, the expertise, resources, and services provided by me as a BHGRE realtor can often lead to a quicker sale at a higher price, with less stress and fewer risks involved.

Credit Score Help • August 15, 2024

What Credit Score Do You Really Need To Buy a House?

by Steve Vavrek

When you’re thinking about buying a home, your credit score is one of the biggest pieces of the puzzle. Think of it like your financial report card that lenders look at when trying to figure out if you qualify, and which home loan will work best for you. As the Mortgage Report says:

“Good credit scores communicate to lenders that you have a track record for properly managing your debts. For this reason, the higher your score, the better your chances of qualifying for a mortgage.”

The trouble is most buyers overestimate the minimum credit score they need to buy a home. According to a report from Fannie Mae, only 32% of consumers have a good idea of what lenders require. That means nearly 2 out of every 3 people don’t.

So, here’s a general ballpark to give you a rough idea. Experian says:

“The minimum credit score needed to buy a house can range from 500 to 700, but will ultimately depend on the type of mortgage loan you’re applying for and your lender. Most lenders require a minimum credit score of 620 to buy a house with a conventional mortgage.”

Basically, it varies. So, even if your credit isn’t perfect, there are still options out there. FICO explains:

“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single “cutoff score” used by all lenders, and there are many additional factors that lenders may use . . .”

And if your credit score needs a little TLC, don’t worry—Experian says there are some easy steps you can take to give it a boost, including:

1. Pay Your Bills on Time

Lenders want to see that you can reliably pay your bills on time. This includes everything from credit cards to utilities and cell phone bills. Consistent, on-time payments show you’re a responsible borrower.

2. Pay Off Outstanding Debt

Paying down what you owe can help lower your overall debt and make you less of a risk to lenders. Plus, it improves your credit utilization ratio (how much credit you’re using compared to your total limit). A lower ratio means you’re more reliable to lenders.

3. Don’t Apply for Too Much Credit

While it might be tempting to open more credit cards to build your score, it’s best to hold off. Too many new credit applications can lead to hard inquiries on your report, which can temporarily lower your score.

Bottom Line

Your credit score is crucial when buying a home. Even if your score isn’t perfect, there are still pathways to homeownership. Let’s connect if you want to go over your options with an expert.

Use a Realtor • August 5, 2024

What Every Homeowner Should Know About Their Equity

by Steve Vavrek

Curious about selling your home? Understanding how much equity you have is the first step to unlocking what you can afford when you move. And since home prices rose so much over the past few years, most people have much more equity than they may realize.

Here’s a deeper look at what you need to know if you’re ready to cash in on your investment and put your equity toward your next home.

Home Equity: What Is It and How Much Do You Have?

Home equity is the difference between how much your house is worth and how much you still owe on your mortgage. For example, if your house is worth $400,000 and you only owe $200,000 on your mortgage, your equity would be $200,000.

Recent data from the Census and ATTOM shows Americans have significant equity right now. In fact, more than two out of three homeowners have either completely paid off their mortgages (shown in green in the chart) or have at least 50% equity in their homes (shown in blue in the chart):

Today, more homeowners are getting a larger return on their homeownership investments when they sell. And if you have that much equity, it can be a powerful force to fuel your next move.

What You Should Do Next

If you’re thinking about selling your house, it’s important to know how much equity you have, as well as what that means for your home sale and your potential earnings. The best way to get a clear picture is to work with your agent, while also talking to a tax professional or financial advisor. A team of experts can help you understand your specific situation and guide you forward.

Bottom Line

Home prices have gone up, which means your equity probably has too. Connect with me so you can find out how much equity you have in your home and move forward confidently when you sell.

If Selling - Tips • July 29, 2024

Boost your home’s value without undergoing a major renovation

by Steve Vavrek

Here are several effective ways to boost your home’s value without undergoing a major renovation:

1. Enhance Curb Appeal

Landscaping: Trim bushes, plant flowers, and maintain the lawn.
Paint the Front Door: A fresh coat of paint in a welcoming color can make a big difference.
Outdoor Lighting: Install or update lighting fixtures to highlight pathways and architectural features.

2. Upgrade the Kitchen

Cabinet Hardware: Replace old knobs and handles with modern ones.
Faucet: Install a stylish, new faucet.
Lighting: Update or add lighting, such as under-cabinet lights or a new pendant light over the island.

3. Bathroom Improvements

Fixtures: Replace faucets, showerheads, and towel racks.
Caulking: Re-caulk the bathtub and sink areas.
Mirrors and Lighting: Install a new mirror and modern lighting fixtures.

4. Interior Paint

Neutral Colors: Fresh paint in neutral tones can make rooms look larger and more inviting.

5. Flooring

Deep Clean Carpets: Professionally clean carpets to make them look new.
Hardwood Maintenance: Refinish hardwood floors or use area rugs to hide worn spots.

6. Energy Efficiency

Insulation: Add insulation to attics or crawl spaces.
Smart Thermostat: Install a smart thermostat to attract tech-savvy buyers.
Weatherstripping: Apply weatherstripping to doors and windows to improve energy efficiency.

7. Lighting

LED Bulbs: Replace old bulbs with energy-efficient LED lights.
Dimmer Switches: Install dimmer switches to control lighting levels.

8. Declutter and Depersonalize

Storage Solutions: Add shelves or storage units to keep spaces tidy.
Remove Personal Items: Make it easier for potential buyers to envision themselves in the space.

9. Modernize Fixtures

Switch Plates and Outlets: Replace old switch plates and outlets with modern ones.
Ceiling Fans: Update ceiling fans to more modern designs.

10. Deep Cleaning

Professional Cleaning: Hire a professional service to clean carpets, windows, and every nook and cranny.

11. Staging

Furniture Arrangement: Rearrange furniture to highlight the best features of each room.
Decor: Use simple, modern decor to appeal to a wide range of tastes.

These improvements can make your home more attractive to buyers and can often be done at a fraction of the cost and time of a full renovation.

Uncategorized • July 22, 2024

Are you ready to Buy a Home?

by Steve Vavrek

Finding and purchasing a home is a detailed process that demands time and dedication. I am
passionate about my work because it leads to the ultimate reward – handing you the keys to your dream
home. I am happy to talk through the several types of buyer representation I offer so we can find the one that
works best for you. [only use if exclusive buyer agency is authorized in your market] Exclusive Buyer
Representation is my preferred method of representing you. With an exclusive commitment, I can
dedicate substantial time and energy to helping you find and purchase a home. You become my highest
priority. But understand that I am willing to be retained to represent you on a nonexclusive basis. Either
way you retain me we do need to discuss how I will be paid for my services.

First, the brokerage itself and I personally are paid on a commission basis. That means that I only get paid if I
help you find a home you want to purchase, and the purchase happens. Unless and until that happens, no
payment is due. Even though I may not be paid, I will do a substantial amount of work trying to make your
home buying process a success. That starts with looking at properties to find one that is right for you. As
your agent, I will search listings and preview homes on my own to make sure I help you find that home.
Beyond that I will explain the home buying process, help you develop your goals, set expectations,
arrange a pre-approval with a lender, negotiate the purchase price, coordinate inspections, help
coordinate title insurance and other closing services, and manage a myriad of other details needed to
close the home efficiently and seamlessly.

Second, there are several ways in which I can be paid for my services. These include: a) the seller of the
property you are interested in has offered to pay a commission to the buyer’s broker; b) the seller has
not offered to pay a commission to the buyer’s broker, but we include that requirement as part of the offer you
make on the property; or c) the seller will not agree to pay a buyer’s broker commission, in which case you
would be responsible for paying me. Please note that my payment amount is not set by law and is
fully negotiable. The payment terms are in the buyer representation agreement that you would sign when I am
retained.

As your broker, we can help you to make informed and educated decisions. For example, we will prepare a
comparative market analysis to help you assess the market value of any particular property in which you are
interested. That market analysis will also help us negotiate the purchase price and terms most favorable
to you. As your broker we can recommend other professionals you may need for the home purchase
such as home inspectors, lenders, attorneys, insurance providers, movers, painters, and other local
support. Having a dedicated professional to advocate for you throughout the homebuying process is
a very worthwhile investment for you as you make one of the biggest purchases in life.

© 2024 Better Homes and Gardens Real Estate LLC. All rights reserved. Better Homes and Gardens®, BHGRE® and the Better Homes and Gardens Real Estate Logo are registered service marks owned by
Meredith Operations Corporation and licensed to Better Homes and Gardens Real Estate LLC. Better Homes and Gardens Real Estate LLC fully supports the principles of the Fair Housing Act and the Equal
Opportunity Act. Each franchise is independently owned and operated.

Uncategorized • July 22, 2024

WHY OFFERS OF COMPENSATION FOR BUYERS AGENTS ARE GOOD FOR SELLERS

by Steve Vavrek

Whether to offer compensation to a buyer’s broker, and the amount of compensation you may decide to offer, is purely your
choice. You are not required by law to offer such compensation, and all compensation is fully negotiable. However, so that you
can make an informed decision, and to help you understand why we recommend that you make such an offer, we wanted to
share why we believe there are significant benefits to doing so.

Stated simply, the most significant benefit of offering compensation to a buyer’s broker is to help make your property attractive
to the widest possible pool of potential buyers. We believe there likely will be a reduced number of potential buyers who are
interested in looking at a property that does not offer buyer agent compensation for several reasons.

First, some buyers may not have the cash to pay their own real estate agent out of pocket. Often buyers need their cash for the
down payment and other expenses. Generally, buyers cannot finance a brokerage commission through a mortgage. So, buyers
without the necessary cash will not have the option of borrowing the money to pay for their own agent. Those buyers may be
unwilling to consider your property if it’s important for them to have an agent representing them.

Second, in our experience, the seller benefits from the buyer having an agent because the sales and closing process goes
much better. Without an agent representing the buyer, the buyer may not be able to navigate the complexities of making an
offer, negotiating the sales price and other terms, understanding how to address issues that may arise in a home inspection,
obtaining financing, paying real estate transfer taxes (in those states where it is split between seller and buyer), and so on. As a
result, the closing process can take longer, and other complications can arise that are less likely to occur if the buyer is
represented by a professional real estate agent. Delays in the process can cost you in several ways– greater carrying costs,
disruption of the process if you need the closing funds for a new home you are purchasing, or delays or losses incurred if a
home needs to be relisted.

My recommendation is that it is a smart financial decision to make your property attractive to the largest number of potential
buyers possible. Experience has shown that this is a good way to create demand, and potentially competitive bidding for your
home– with the goal of generating the highest demand, fastest sale, and potentially the best price for your home.

WILL OFFERING COMPENSATION TO BUYERS AGENTS MAKE MY HOME MORE ATTRACTIVE TO BUYERS?
We think so. Buyers often have significant costs they must pay during the home buying process, such as homeowner’s
insurance, pro-rated property taxes, movers, contractors, down payment, costs charged by lenders and title companies, home
inspection and appraisal costs, and attorney’s fees. Your home will be competing against some (likely many) homes that will
pay the buyer broker’s compensation, which could make those houses more attractive to a buyer because it will mean less
money out-of-pocket for the buyer at closing. Consider how much longer it might take to find a qualified buyer or how much
less you might get in the sale of your home if buyers found it less attractive.

BUYERS AGENTS OFFER A MORE PROFESSIONAL TRANSACTION EXPERIENCE FOR ALL
Another significant benefit of offering compensation to the buyer’s agent is that it generally increases the chances that the
buyer is represented by a licensed professional who will manage their side of the transaction. Explaining the home buying
process, setting expectations, arranging a pre-approval with a lender, showing homes, negotiating on the purchase,
coordinating inspections, helping to coordinate title insurance, and closing services, and managing the myriad of details needed
to close a home efficiently and seamlessly. An unrepresented buyer may not be able to work through these issues.
So, you get a signed purchase agreement…great. Then something happens that the buyer is not prepared to deal with. The
sale either falls through or takes much longer to close. Our goal is to make sure that your transaction goes from contract to
close and manage the process throughout. A buyer’s agent also facilitates completion of the transaction because they are there
to advise the buyer how to work through these issues.

Uncategorized • June 28, 2024

Top Tips for a Smooth and Stress-Free Home Sale

by Steve Vavrek

Selling a home is considered more stressful than planning a wedding.

Yes, you read that right! According to a recent study by Opendoor, selling a home is 35% more stressful than planning to exchange vows. And for many homeowners aged 55 and over, selling a home is often intertwined with major life transitions, adding another layer of emotional complexity.

This statistic might surprise some, but it highlights the significant emotional and logistical hurdles involved in selling a property. Whether you’re downsizing, relocating, or simply embarking on a new chapter, understanding the potential stressors and planning effectively can make a world of difference.

Why is Selling a Home So Stressful?

Among 55+ Americans, selling a home (65%) ties with starting a new job (65%) as the most stressful life events. These events are considered more stressful than buying a home (62%) and planning a wedding (48%).

Women in this age group find home real estate transactions significantly more stressful than men, with 72% of women citing selling a home as the most stressful event compared to 57% of men.

Here are just a few of the reasons selling a home can be overwhelming:

Emotional Attachment

Homes are more than just structures; they hold memories and sentimental value. Of those surveyed, 66% feel attached to their homes, and 56% have lived in their homes for 15 years or more. This makes leaving a home a bittersweet mix of emotions, making the selling process emotionally taxing.

Uncertainty and Financial Pressure

Selling a home involves many uncertainties, such as finding a buyer, negotiating prices, and dealing with market fluctuations. The financial stakes are high, and the pressure to get the best deal can add to the stress.

Coordination of Logistics

From staging and showing the home to handling paperwork and moving logistics, the process requires meticulous planning and coordination. This can be overwhelming, especially for those who are also juggling other life responsibilities.

Tips for Managing Home Selling Stress

Understand Your Selling Options

Knowing your options and planning ahead can significantly reduce the stress of selling a home. Partnering with a real estate professional allows them to handle marketing, negotiations, and paperwork.

Another option is iBuyers, which is when companies buy homes directly. These often offer a fast and convenient sale, though offers are typically lower than a traditional sale. Selling yourself (FSBO) requires a significant effort in marketing, negotiations, and legal aspects. This can save on agent commissions, but typically results in a lower sale price.

Set Realistic Expectations

Understanding the current market conditions and setting realistic expectations can prevent disappointments. Today’s market is not like the one in 2021-2022! If working with a professional, discuss your goals with your real estate agent and be prepared to make changes based on what’s happening locally.

Simplify the Process

Consider decluttering and staging your home early in the process. A well-presented home can attract buyers more quickly, reducing the time your home is on the market. Additionally, having all necessary documents organized and ready can expedite the closing process.

Final Thoughts

Selling a home is undoubtedly an emotional experience. However, understanding the factors that contribute to this stress and implementing strategies to manage it makes the process more manageable. By planning ahead and setting realistic expectations you can navigate the home selling journey with greater ease and confidence.

Call or Email me 203-917-0833 stevevavrek.bhgrecre@gmail.com and I would be happy to listen to your real estate needs.

Uncategorized • June 28, 2024

The Difference Between an Inspection and an Appraisal

by Steve Vavrek

When you decide to buy your first home, you may come across a number of terms and conditions you’re not familiar with. While you may have a general idea of what an inspection is, maybe you’re not sure why you need one or how it’s different from an appraisal. To keep it simple, here’s an explainer of each one and what they mean for you as a homebuyer.

Home Inspection

Once you’re under contract on a home you’d like to buy, getting an inspection is a key part of the process. An inspection gives you a clear idea of the safety and overall condition of the home – which is important for such a big transaction. As a recent Realtor.com article explains:

“A home inspection is something that protects your financial interest in what will likely be the largest purchase you make in your life—one in which you need as much information as possible.”

If anything is questionable in the inspection process – like the age of the roof, the state of the HVAC system, or just about anything else – you have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. And don’t worry – you don’t have to go through that process alone. Your real estate agent will be your advocate and negotiate with the seller for you.

Home Appraisal

While the inspection tells you about the current state of the house, an appraisal gives you its value. Bankrate explains:

“When buying or selling a home, an appraisal verifies that the sale price of the home is in line with fair market value. This ensures the homebuyer doesn’t pay more than the home is worth, and the mortgage lender doesn’t lend more than it is worth.”

Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal protects you from overpaying and the bank from lending you more than the home is worth.

And if there’s ever any confusion or discrepancy between the appraisal and the agreed-upon price in your contract, I will always help you navigate any additional negotiations to try to close the gap.

Bottom Line

The inspection and the appraisal are different but equally important steps when buying a home – and you don’t need to manage them by yourself. Connect me today so you have expert guidance from start to finish.

Uncategorized • May 30, 2024

The Biggest Mistakes Buyers Are Making Today

by Steve Vavrek

Buyers face challenges in any market – and today’s is no different. With higher mortgage rates and rising prices, plus the limited supply of homes for sale, there’s a lot to consider.

But, there’s one way to avoid getting tripped up – and that’s leaning on a real estate agent for the best possible advice. An expert’s insights will help you avoid some of the most common mistakes homebuyers are making right now.

Putting Off Pre-approval

As part of the homebuying process, a lender will look at your finances to figure out what they’re willing to loan you for your mortgage. This gives you a good idea of what you can borrow so you can really wrap your head around the financial side of things before you start looking at homes. While house hunting can be a lot more fun than talking about finances, you don’t want to do this out of order. Make sure you get your pre-approval first.

As CNET explains:

“If you wait to get preapproved until the last minute, you might be scrambling to contact a lender and miss the opportunity to put a bid on a home.”

Holding Out for Perfection

While you may have a long list of must-haves and nice-to-haves, you need to be realistic about your home search. Even though your ideal state is you find a home that checks every box, you may need to be willing to compromise – especially since inventory is still low. Plus, a home that has everything you want may be too pricey. As Investopedia puts it:

“When you expect to find the perfect home, you could prolong the homebuying process by holding out for something better. Or you could end up paying more for a home just because it meets all your needs.”

Instead, look for something that has most of your must-haves and good bones where you can add anything else you may need down the line.

Buying More House Than You Can Afford

With today’s mortgage rates and home prices, there’s no arguing it’s expensive to buy a home. And while it may be tempting to stretch your finances a bit further than you’re comfortable with to make sure you get the house, you want to avoid overextending your budget. Make sure you talk to me about how changing mortgage rates impact your monthly payment. Bankrate offers this advice:

“Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan doesn’t mean you can comfortably handle the monthly payments that come with it along with your other financial obligations. Every borrower’s case is different, so factor in your whole financial profile when determining how much house you can afford.”

Not Working with your Local Real Estate Agent

This last one may be the most important of all. Buying a home is a process that involves a lot of steps, paperwork, negotiation, and more. Rather than take all of this on yourself, it’s a good idea to have a pro working with you. I can help reduce your stress and help the process go smoothly.

As CNET explains:

“Attempting to buy a home without a real estate agent makes the process more arduous than it needs to be. I will give you professional legal guidance, market expertise and support, which will save you time, money and stress. They can also increase your chances of finding the right home so you don’t have to spend hours scouring the internet for listings.”

Bottom Line

Mistakes can cost you time, frustration, and money. If you want to buy a home in today’s market, connect with me so you have a pro on your side who can help you avoid these missteps.