Tami Savage, Realtor

Your Key to a New Lifestyle

5(ish) Tips to Make Your Relocation Easier

By Tami Savage

Relocation can be a very stressful and emotional moment in someone's life.

Whether you're relocating for a job or just moving away from family, a little bit of planning can go a long way in avoiding the stress and anxiety related to relocating.

Hi, I'm Tami Savage with eXp Realty.

Moving is hard, there's no doubt about it, you can't find your things, boxes are everywhere and then you add children and/or pets into the mix, and now you're on complete overload.

I get it, I've been there so many times before.

On the other hand, relocating is an adventure, it's a time of excitement, a fresh start, perhaps a new career, new places to explore, new friends to be made, and so much more.

Your first step in moving to a new place is doing your research.

Maybe you already have a home lined up and maybe you don't, either way research is your best ally, before you relocate somewhere new.

Look up things like what kinds of entertainment and leisure activities are there to go do and see.

If you have children, what are your school options?

Some people who relocate, already have a job offer in the new city while some are just looking for a change in lifestyle.

If you're part of that second group, look up jobs and companies online before you move, so you're ready to apply and interview once you get there.

Choosing a neighborhood, is it possible to physically visit the neighborhood before you move in?

If it isn't, Google maps will give you a pretty good idea of what to expect.

If a Google maps street view option is available for the area. Check it out.  It's super cool. 

It's like a virtual walkthrough of a neighborhood.

Now have a look at the houses around the area, where are the closest amenities?

Is it easy to get around by car walking and or transit?

And don't forget to look at the common places like grocery stores, pharmacies, hospitals, doctors, et cetera.

And if you're a coffee drinker, Starbucks, all of these things should be considered when relocating and choosing where you want to live.

If you've got questions or want more information on things to consider when relocating feel free to reach out, I'm always here to help.

I'm Tami Savage with eXp Realty, Your Key to a New Lifestyle.

Thanks so much for watching and make it a great day!

Remote Work Has Changed Our Home Needs. Is It Time for Your Home To Change, Too?

By Tami Savage

Remote Work Has Changed Our Home Needs. Is It Time for Your Home To Change, Too?

Over the past year, many homeowners realized what they need in a home is changing, especially with the rise in remote work. If you’re longing for a dedicated home office or a change in scenery, now may be the time to find the home that addresses your evolving needs.

Working from Home Isn’t a Passing Fad

Before the pandemic, only 21% of individuals worked from home. However, if you’ve recently discovered remote work is your new normal, you’re not alone.

A survey of hiring managers conducted by Statista and Upwork projects 37.5% of U.S. workers will work remotely in some capacity over the next 5 years (see chart below):

Remote Work Over the Next 5 Years. Source: Statista/Upwork

Working from Home Gives You More Flexibility and More Options

If you fall in that category, working from home may provide you with opportunities you didn’t realize you had. The ongoing rise in remote work means a portion of the workforce no longer needs to be tied to a specific area for their job. Instead, it gives those workers more flexibility when it comes to where they can live.

If you’re one of the nearly 23% of workers who will remain 100% remote, you have the option to move to a lower cost-of-living area or to the location of your dreams. If you search for a home in a more affordable area, you’ll be able to get more house for your money, freeing up more options for your dedicated office space and more breathing room. You could also move to an area you’ve always dreamed of vacationing in – somewhere near the beach, the mountains, or simply an area that features better weather and community amenities. Without your job tying you to a specific location, you’re bound to find your ideal spot.

If you’re one of the almost 15% of individuals who will have a partially remote or hybrid schedule, relocating within your local area to a home that’s further away from your office could be a great choice. Since you won’t be going into work every day, a slightly longer commute from a more suburban or rural area could be a worthy trade-off for a home with more features, space, or comforts. After all, if you’ll still be at home part-time, why not find a home that better suits your needs?

According to the latest Top Ten Issues Affecting Real Estate from The Counselors of Real Estate (CRE), many homebuyers are already taking advantage of their newfound flexibility:

“. . . after years of apparent but variant trends towards urbanization, the pandemic universally caused a movement away from urban cores, particularly for those with higher incomes who could afford to move and for lower-income individuals seeking lower costs of living.”

Bottom Line

If you’ve found what you’re looking for in a home has changed due to remote work, it may be time to make a move. Let’s connect today to start prioritizing your home needs.

What You Should Do Before Interest Rates Rise

By Tami Savage

What You Should Do Before Interest Rates Rise

In today’s real estate market, mortgage interest rates are near record lows. If you’ve been in your current home for several years and haven’t refinanced lately, there’s a good chance you have a mortgage with an interest rate higher than today’s average. Here are some options you should consider if you want to take advantage of today’s current low rates before they rise.

Sell and Move Up (or Downsize)

Many of today’s homeowners are rethinking what they need in a home and redefining what their dream home means. For some, continued remote work is bringing about the need for additional space. For others, moving to a lower cost-of-living area or downsizing may be great options. If you’re considering either of these, there may not be a better time to move. Here’s why.

The chart below shows average mortgage rates by decade compared to where they are today:

Mortgage Rates by Decade. Source: Freddie Mac.

Today’s rates are below 3%, but experts forecast rates to rise over the next few years.

If the interest rate on your current mortgage is higher than today’s average, take advantage of this opportunity by making a move and securing a lower rate. Lower rates mean you may be able to get more house for your money and still have a lower monthly mortgage payment than you might expect.

Waiting, however, might mean you miss out on this historic opportunity. Below is a chart showing how your monthly payment will change if you buy a home as mortgage rates increase:

Buyer Purchasing Power Chart
Breaking It All Down:

Using the chart above, let’s look at the breakdown of a $300,000 mortgage:

  • When mortgage rates rise, so does the monthly payment you can secure.
  • Even the smallest increase in rates can make a difference in your monthly mortgage payment.
  • As interest rates rise, you’ll need to look at a lower-priced home to try and keep the same target monthly payment, meaning you may end up with less home for your money.

No matter what, whether you’re looking to make a move up or downsize to a home that better suits your needs, now is the time. Even a small change in interest rates can have a big impact on your purchasing power.

Refinance

If making a move right now still doesn’t feel right for you, consider refinancing. With the current low mortgage rates, refinancing is a great option if you’re looking to lower your monthly payments and stay in your current home.

Bottom Line

Take advantage of today’s low rates before they begin to rise. Whether you’re thinking about moving up, downsizing, or refinancing, let’s connect today to discuss which option is best for you.

Experts Agree: Options Are Improving for Buyers [INFOGRAPHIC]

By Tami Savage

Experts Agree: Options are Improving for Buyers.

Some Highlights

  • Buyers hoping for more homes to choose from may be in luck as housing inventory begins to rise. Many experts agree – new sellers listing their homes is great news for buyers and the overall market.
  • Although the supply increases are modest, more homes means more options for buyers. A rise in inventory may also help slow the price gains we’ve seen recently and could be a sign of good things to come.
  • If you’re searching for a home, rising inventory is welcome news. Let’s connect today to discuss new listings in our area.

Diving Deep into Today’s Biggest Buyer Concerns

By Tami Savage

Diving Deep into Today’s Biggest Buyer Concerns

Last week, Fannie Mae released their Home Purchase Sentiment Index (HPSI). Though the survey showed 77% of respondents believe it’s a “good time to sell,” it also confirms what many are sensing: an increasing number of Americans believe it’s a “bad time to buy” a home. The percentage of those surveyed saying it’s a “bad time to buy” hit 64%, up from 56% last month and 38% last July.

The latest HPSI explains:

“Consumers also continued to cite high home prices as the predominant reason for their ongoing and significant divergence in sentiment toward homebuying and home-selling conditions. While all surveyed segments have expressed greater negativity toward homebuying over the last few months, renters who say they are planning to buy a home in the next few years have demonstrated an even steeper decline in homebuying sentiment than homeowners. It’s likely that affordability concerns are more greatly affecting those who aspire to be first-time homeowners than other consumer segments.”

Let’s look closely at the market conditions that impact home affordability.

A mortgage payment is determined by the price of the home and the mortgage rate on the loan used to purchase it. Lately, monthly mortgage payments have gone up for buyers for two key reasons:

  1. Mortgage rates have increased from 2.65% this past January to 2.9%.
  2. Home prices have increased by 15.4% over the last 12 months.

Based on these rising factors, a home may be less affordable today, but it doesn’t mean it’s not affordable.

Three weeks ago, ATTOM Data released their second-quarter 2021 U.S. Home Affordability Report which explained that the major ownership costs on the typical home as a percent of the average national wage had increased from 22.2% in the second quarter of 2020 to 25.2% in the second quarter of this year. They also went on to explain:

“Still, the latest level is within the 28 percent standard lenders prefer for how much homeowners should spend on mortgage payments, home insurance and property taxes.”

In the same report, Todd Teta, Chief Product Officer with ATTOM, confirms:

“Average workers across the country can still manage the major expenses of owning a home, based on lender standards.”

It’s true that monthly mortgage payments are greater than they were last year (as the ATTOM data shows), but they’re not unaffordable when compared to the last 30 years. While payments have increased dramatically during that several-decade span, if we adjust for inflation, today’s mortgage payments are 10.7% lower than they were in 1990.

What’s that mean for you? While you may not get the homebuying deal someone you know got last year, that doesn’t mean you shouldn’t still buy a home. Here are your alternatives to buying and the trade-offs you’ll have with each.

Alternative 1: I’ll rent instead.

Some may consider renting as the better option. However, the monthly cost of renting a home is skyrocketing. According to the July National Rent Report from Apartment List:

“…So far in 2021, rental prices have grown a staggering 9.2%. To put that in context, in previous years growth from January to June is usually just 2 to 3%. After this month’s spike, rents have been pushed well above our expectations of where they would have been had the pandemic not disrupted the market.”

If you continue to rent, chances are your rent will keep increasing at a fast pace. That means you could end up spending significantly more of your income on your rental as time goes on, which could make it even harder to save for a home.

Alternative 2: I’ll wait it out.

Others may consider waiting for another year and hoping that purchasing a home will be less expensive then. Let’s look at that possibility.

We’ve already established that a monthly mortgage payment is determined by the price of the home and the mortgage rate. A lower monthly payment would require one of those two elements to decrease over the next year. However, experts are forecasting the exact opposite:

  • The Mortgage Bankers Association (MBA) projects mortgage rates will be at 4.2% by the end of next year.
  • The Home Price Expectation Survey (HPES), a survey of over 100 economists, investment strategists, and housing market analysts, calls for home prices to increase by 5.12% in 2022.

Based on these projections, let’s see the possible impact on a monthly mortgage payment:

This chart shows the difference if you purchase today and next year. Expecting the Cost of a home will go up, therefore your down payment will go up, the mortgage amount will be more, and the mortgage rate will be higher. So by purchasing today the estimated savings on payments will be $308 per month.

By waiting until next year, you’d potentially pay more for the home, need a larger down payment, pay a higher mortgage rate, and pay an additional $3,696 each year over the life of the mortgage.

Bottom Line

While you may have missed the absolute best time to buy a home, waiting any longer may not make sense. Mark Fleming, Chief Economist at First American, says it best:

“Affordability is likely to worsen before it improves, so try to buy it now, if you can find it.”

How to Bridge the Appraisal Gap in Today’s Real Estate Market

By Tami Savage

How to Bridge the Appraisal Gap in Today's Real Estate Market

If you’re searching for drama, don’t limit yourself to Netflix. Instead, tune in to the real estate market, where the competition among buyers has never been fiercer. And with homes selling for record highs,1 the appraisal process—historically a standard part of a home purchase—is receiving more attention than ever.

That’s because some sellers are finding out the hard way that a strong offer can fizzle quickly when an appraisal comes in below the contract price. Traditionally, the sale of a home is contingent on a satisfactory valuation. But in a rapidly appreciating market, it can be difficult for appraisals to keep pace with rising prices.

Thus, many sellers in today’s market favor buyers who are willing to guarantee their full offer price—even if the property appraises for less. For the buyer, that could require a financial leap of faith that the home is a solid investment. It also means they may need to come up with additional cash at closing to cover the gap.

Whether you’re a buyer or a seller, it’s never been more important to understand the appraisal process and how it can be impacted by a quickly appreciating and highly competitive housing market. It’s also crucial to work with a skilled real estate agent who can guide you to a successful closing without overpaying (if you’re a buyer) or overcompensating (if you’re a seller). Find out how appraisals work—and in some cases, don’t work—in today’s unique real estate environment.

APPRAISAL REQUIREMENTS

An appraisal is an objective assessment of a property’s market value performed by an independent authorized appraiser. Mortgage lenders require an appraisal to lower their risk of loss in the event a buyer defaults on their loan. It provides assurance that the home’s value meets or exceeds the amount being lent for its purchase.

In most cases, a licensed appraiser will analyze the property’s condition and review the value of comparable properties that have recently sold. Mortgage borrowers are usually expected to pay the cost of an appraisal. These fees are often due upfront and non-refundable.2

Appraisal requirements can vary by lender and loan type, and in today’s market, in-person appraisal waivers have become much more common. Analysis of the property, the local market, and the buyer’s qualifications will determine whether the appraisal will be waived. Not all properties or buyers will qualify, and not all mortgage lenders will utilize this system.3 If you’re applying for a mortgage, be sure to ask your lender about their specific terms.

If you’re a cash buyer, you may choose—but are not obligated—to order an appraisal.

APPRAISALS IN A RAPIDLY SHIFTING MARKET

An appraisal contingency is a standard inclusion in a home purchase offer. It enables the buyer to make the closing of the transaction dependent on a satisfactory appraisal wherein the value of the property is at or near the purchase price. This helps to reassure the buyer (and their lender) that they are paying fair market value for the home and allows them to cancel the contract if the appraisal is lower than expected.

Low appraisals are not common, but they are more likely to happen in a rapidly appreciating market, like the one we’re experiencing now.4 That’s because appraisers must use comparable sales (commonly referred to as comps) to determine a property’s value. These could include homes that went under contract weeks or even months ago. With home prices rising so quickly,5 today’s comps may be lagging behind the market’s current reality. Thus, the appraiser could be basing their assessment on stale data, resulting in a low valuation.

HOW ARE BUYERS AND SELLERS IMPACTED BY A LOW APPRAISAL?

When a property appraises for less than the contract price, you end up with an appraisal gap. In a more balanced market, that could be cause for a renegotiation. In today’s market, however, sellers often hold the upper hand.

That’s why some buyers are using the potential for an appraisal gap as a way to strengthen their bids. They’re proposing to take on some or all of the risk of a low appraisal by adding gap coverage or a contingency waiver to their offer.

Appraisal Gap Coverage

Buyers with some extra cash on hand may opt to add an appraisal gap coverage clause to their offer. It provides an added level of reassurance to the sellers that, in the event of a low appraisal, the buyer is willing and able to cover the gap up to a certain amount.6

For example, let’s say a home is listed for $200,000 and the buyers offer $220,000 with $10,000 in appraisal gap coverage. Now, let’s say the property appraises for $205,000. The new purchase price would be $215,000. The buyers would be responsible for paying $10,000 of that in cash directly to the seller because, in most cases, mortgage companies won’t include appraisal gap coverage in a home loan.6

Waiving The Appraisal Contingency

Some buyers with a higher risk tolerance—and the financial means—may be willing to waive the appraisal contingency altogether. However, this strategy isn’t for everyone and must be considered on a case-by-case basis.

It’s important to remember that waiving an appraisal contingency can leave a buyer vulnerable if the appraisal comes back much lower than the contract price. Without an appraisal contingency, a buyer will be obligated to cover the difference or be forced to walk away from the transaction and relinquish their earnest money deposit to the sellers.7

It’s vital that both buyers and sellers understand the benefits and risks involved with these and other competitive tactics that are becoming more commonplace in today’s market. We can help you chart the best course of action given your individual circumstances.

DON’T WAIVE YOUR RIGHT TO THE BEST REPRESENTATION

There’s never been a market quite like this one before. That’s why you need a master negotiator on your side who has the skills, instincts, and experience to get the deal done…no matter what surprises may pop up along the way. If you’re a buyer, we can help you compete in this unprecedented market—without getting steamrolled. And if you’re a seller, we know how to get top dollar for your home while minimizing hassle and stress. Contact us today to schedule a complimentary consultation.

Sources:

  1. Wall Street Journal –
    https://www.wsj.com/articles/u-s-home-prices-push-to-record-high-slowing-pace-of-purchases-11621605953
  2. US News & World Report – https://realestate.usnews.com/real-estate/articles/what-is-a-home-appraisal-and-who-pays-for-it
  3. Rocket Mortgage –
    https://www.rocketmortgage.com/learn/appraisal-waiver
  4. Money –
    https://money.com/coronavirus-low-home-appraisal/
  5. S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index – https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-20-city-composite-home-price-nsa-index/#overview
  6. Bigger Pockets –
    https://www.biggerpockets.com/blog/appraisal-gap-coverage
  7. Washington Post –
    https://www.washingtonpost.com/realestate/competitive-buyers-waive-contingencies-to-score-homes-in-tight-market/2021/06/02/d335b050-af2c-11eb-b476-c3b287e52a01_story.html

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