In a word, No.

You should not wait to buy or sell your home until after the election. It’s understandable that people fear change. When they’re afraid they make emotional decisions rather than rational ones. People “wait and see” for the results of an election because they worry about how the president might impact the U.S. economy and housing market. During election time, the current economy and current president’s policies are what is relevant. Who gets elected can impact the future of the economy and housing market however, as long as there isn’t a wild policy, most buyers shopping median value homes will fare well.

We have to remember that the election is on a nation-wide, macroeconomic scale. Whereas, housing markets are localized. Sure there are national trends, however housing markets are subject to microeconomic shifts and they are dependent on supply and demand.

One thing on a macroeconomic scale that has impacted the real estate market has been Covid-19. However, since cases have declined and restrictions have been lifted, there have been improvements in the U.S. economy and an overall surge in the real estate market. People are back to work and feel more secure about their finances and the economy. We see this especially now in Florida as we are in phase three of reopening.

Other reasons to buy or sell now are that mortgage rates are at historic lows, home values are up, the number of homes sold has increased and current inventory is down. This is an advantage for sellers because they can get top dollar for their home and sell quickly. When others might be waiting on covid-19 or the election, buyers can be smart shoppers and purchase their dream home before prices continue to go up. Buyers can also take advantage of tax breaks for investing in real estate or buying a home before the end of the year.

Brevard County Housing Statistics August 2020 (source: Space Coast Association of Realtors)

Single Family Homes                                  

943 Homes Sold                                                                                     

+5.1% Year-Over-Year                                  

$268,500 Median Sales Price                         

+14.7% Year-Over-Year                                

1.8 Months of Inventory                                       

-35.7% Year-Over-Year                                

 Condos and Townhomes

 270 Homes Sold   

+2.7% Year-Over-Year 

$222,750 Median Sales Price

+20.4% Year-Over-Year

  2.7 Months of Inventory   

 -22.9% Year-Over-Year

Regardless of the season we’re in, here are the main questions buyers need to ask themselves to determine if they’re ready to buy a home:

·         Do I have a job?

·         Do I have a down payment?

·         Do I have a credit score of at least 580?

·         Can I afford the mortgage payment and keep my debt to income ratio less than 36 percent?

If you’d like more information on buying or selling your home or what we see happening in your current or target neighborhood give us a call at 321-610-3622.

Have you been renting as a way to save money? It may be time to make a move. Rent has been steadily increasing in recent years and in many cases it’s less affordable than owning a home.

Many people continue to rent because they think it is more affordable. However, rents have increased across the country while the average mortgage payment has actually dropped.

The typical mortgage payment (based on the U.S. median home sale price that incorporates both principal and interest) has decreased four percent since 2005, while the monthly cost to rent a single-family home has increased by 36 percent (according to a report from CoreLogic).

Whether you buy or rent, the key is to always try and keep your housing costs below 30 percent of your monthly income. In other words, live within your means.

The 30 percent rule — that a household should spend no more than 30 percent of its income on housing costs — has long been accepted in academic circles and is often included in blogs and websites on family budgeting. The 30 percent rule traces back to The Brooke Amendment passed in 1969 as a response to rent increases and complaints about services in public housing, capped public housing rent at 25 percent of a resident’s income and in 1981 was changed to 30 percent.

The Department of Housing and Urban Development defines cost-burdened families as those “who pay more than 30 percent of their income for housing” and “may have difficulty affording necessities such as food, clothing, transportation, and medical care.” Severe rent burden is defined as paying more than 50 percent of one’s income on rent. Examples of housing costs can include mortgage, property taxes, utility bills and other expenses associated with housing. Cost-burdened households feel a significant financial strain as a result of their housing costs.

Renters are more cost-burdened than homeowners. 47 percent of renters spend more than 30 percent of their income on housing according to Harvard University Joint Center for Housing Study 2019. A report from CoreLogic found similar results, with 46 percent spending more than 30 percent of their total income on rent compared to just 27 percent of homeowners.

Renting? You are less likely to be cost-burdened as a homeowner than a renter which is good news if you’re a renter who has been thinking about buying a home. You may be able to pay less per month and own a home rather than rent and pay someone else’s mortgage.

Are you cost-burdened and own your home? Contact us today to look for a home with a more manageable monthly payment.

What is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). This governmental agency was formed in 1934 after the banking crisis that happened during the Great Depression. Many homes were foreclosed and there was a drastic decrease in home ownership.

The FHA is part of the Department of Housing and Urban Development (HUD) and was established in response to the housing market in the 1930s. The FHA continues to strive to improve housing standards and conditions, stabilize the housing market, promote home ownership, and provide home financing through the insurance of mortgage loans.

FHA loans or FHA mortgages are issued by approved lenders. The government doesn’t loan money, but it does insure these loans which means it will reimburse the lender for any loans on which the borrower defaults. FHA loans are less risky for lenders who underwrite, approve and fund FHA loans because they are insured by the FHA. Lenders in turn offer better terms and lower interest rates than conventional loans.

FHA loan lending limits in Florida vary based on a variety of housing types and the cost of local housing. Here in Brevard County, the lending limits for 2019 are as follows:

An FHA loan is one of the most popular among first-time home buyers because of the low down payment and less strict credit score requirement. FHA loans are one of easiest types of mortgage loans to qualify for because borrowers can qualify with credit scores as low as 500. Home buyers can purchase a home for as little as 3.5 percent down with a credit score of 580 or higher. If a borrower has a credit score between 500 and 579 they may still qualify for an FHA loan, however they are required to put 10 percent down. It’s important to remember that the lower the credit score, the higher the interest rate will be.

Credit score and down payment are not the only requirements to obtain an FHA loan. Check out a list of FHA loan requirements below:

FHA Loan Requirements

·         Valid Social Security Number.

·         Steady employment history or worked for the same employer for the past 2 years.

·         Loan must be for a primary residence. Buyer must live in it the majority of the year.

·         Property must be appraised from an FHA-approved appraiser.

·         The property must meet certain minimum standards at appraisal. If the home doesn’t meet these standards the seller must complete the required repairs. If the seller won’t do the repairs, the buyer is required to pay for the repairs at closing to be held in escrow until the repairs are completed.

·         Borrowers’ front-end ratio needs to be less than 31 percent of their gross income, however sometimes lenders can justify up to 40 percent if they believe the mortgage presents acceptable risk. Front-end ratio is mortgage payment plus HOA fees, property taxes, mortgage insurance and homeowners insurance.

·         The back-end ratio typically needs to be less than 43 percent of the borrowers’ gross income. Sometimes you can get approved up to 50 percent. Back-end ratio is the mortgage plus all your monthly debt such as student loans, car payment, and credit card payments.

·         Borrowers must be two years out of bankruptcy and have re-established good credit.

·         Borrowers must be three years out of foreclosure and have re-established good credit.

·         Borrowers must have a minimum credit score of 500-579 for a minimum down payment of 10 percent.

·         Borrowers must have a minimum credit score of 580 with a minimum down payment of 3.5 percent and maximum financing.

·         Mortgage insurance is required for FHA loans.

What mortgage insurance is required for FHA loans?

 Regardless of your credit score, FHA loans require two types of mortgage insurance. One is paid upfront and the other is a monthly fee.

Upfront mortgage insurance premium is a one-time upfront monthly premium of 1.75 percent. This sum can be paid at closing as part of the settlement charges or can be rolled into the mortgage payment.  

Annual mortgage insurance premium (charged monthly) is a percentage of the loan amount (usually between .45 and .85 percent) and calculated from the loan-to-value (LTV) ratio, the loan size and length of the loan. Borrowers will have to pay mortgage insurance for the entire length of the loan if they put less than 10 percent down (their LTV is greater than 90 percent at the time the loan was originated). If they put 10 percent or more down (the LTV is less than 90 percent) the borrower will pay mortgage insurance for 11 years.

Many people refinance their FHA loan into a conventional mortgage once they have enough equity in their home in order to remove the cost of mortgage insurance sooner.

Are FHA loans only for first-time home buyers?

FHA loans are a popular and affordable option among first-time home buyers due to their low down payment requirements, flexible credit underwriting methods, and competitive interest rates. However, the FHA is not only limited to first-time home buyers. FHA loans can be used by all home buyers who qualify to purchase or refinance their home.

What are the benefits of FHA loans?

·         Low down payment. FHA loans require as little as 3.5 percent down payment for maximum financing.

·         Easier to qualify. Since the FHA insures the mortgage, lenders are more likely to give loans to borrowers with less than perfect credit. Borrowers with credit scores as low as 580 can qualify for 3.5 percent down payment. Credit scores of 500-579 may qualify for 10 percent down payment. If you have undergone a bankruptcy or foreclosure you still may be able to qualify for an FHA loan. You just need to be two years post-bankruptcy or three years post-foreclosure and re-established credit. 

·         Down payment assistance or gift. The down payment does not have to come from your own pocket, which can greatly reduce your up-front expenses. Borrowers are allowed to receive funds gifted from family members or friends for their down payment. You just need a letter from the donor stating that they do not want you to pay them back. Home buyers can also use assistance programs such as grants to pay for the down payment.

·         Closing costs. The seller is allowed to pay up to 6% of the purchase price toward closing costs and incentives.

·        Better rates. Because FHA loans are backed by the federal government, they're more likely to offer better rates than commercial lenders.

      More security. Created in 1934, the FHA is long established and not going away. If lenders encounter problems the FHA offers options to help avoid foreclosure. 

What are home buyers next steps if interested in an FHA loan?

·         Talk to a lender and see how much you qualify for.

·         Create a budget and see what monthly payments you can afford.

·         Clean up any problems on your credit report.

·         Save enough for at least 3.5 percent down.

       Get with a Realtor and start looking at properties.

Are the holidays a good time to buy real estate?

You’ve gone Black Friday shopping and now everywhere you see are sales, sales, sales. Did you know now could be a great time to get a deal on what you really want? Is a new home at the top of your loved one’s wish list? Or perhaps you are looking to buy your dream home, weekend getaway or investment property. Real estate is a great gift for yourself or a loved one and you don’t have to put it off until next year. Who says house hunting during the holidays needs to be a headache? There are many benefits to buying a home at year’s end.

1.       Price Reductions & Discounts

First off, those sales you’ve been seeing? Count on discounts in the housing market as well. Look for upgrades, price drops, money toward closing costs and motivated sellers willing to negotiate.

2.       Motivated Sellers

Homes that are on the market during the holidays need to sell otherwise the sellers would wait until after the holidays to put them on the market. Why disrupt the holidays, right? This could mean the home has been on the market a while, they need to relocate for a job, or the seller hopes to close by the end of the year. Whatever the reason, sellers are motivated during the holidays. Use that to your advantage.

3.       Less Competition

There is still plenty of inventory, but less competition. Many other buyers take a break from house hunting or hold off to attend to their holiday events and commitments. You’ll have less buyers competing for the home that meets your needs and you’ll have more leverage when you go to make your offer.

4.       Tax Break Deadlines

Take advantage of tax breaks for investing in real estate or buying a home by the end of the year. Tax deadlines are approaching, so buy a home now and get your tax breaks.

5.       Lower Interest Rates

Lock in lower interest rates now as they are predicted to continue to rise in the New Year.

6.       Quicker Closing

Buying a home during the holidays generally means a quicker closing because everyone involved will want to get the transaction on the current year’s books. Be proactive and have all your paperwork in order from the beginning to make things go as smoothly as possible and be patient as people may be on vacation. Closings can only go so quickly.

Looking for a home this holiday season? Contact Conrad Realty Group today!

Buying your first home? It’s more than looking at listings online. Here are 15 steps you’ll take during this exciting time.

1. Improve your credit. Don’t wait until you’ve found a home to work on your credit. This should be done well in advance. Your credit score makes a big impact on mortgage loan qualification. Credit cards should not be maxed out. Make payments on time and in full whenever possible if not then always pay more than the minimum amount due. Paying off debt will positively impact your debt to income ratio which will help you qualify for and afford your monthly housing payment.
2. Save Money. Save for a down payment. Typical down payments are 20% of the price of the home, however there are many loan options some with down payments as low as 3.5% of the home price. You’ll also need to save for closing costs (sometimes they’re written in the offer but plan on being responsible for them). In 2018 in Florida, the average origination fees paid to the lender totaled $1,050, while third-party fees averaged $1,157 for a total of $2,206 in closing costs on a $200,000 home (Investopedia).
3. Research. Look at listings online to see what homes you like, research neighborhoods, schools, etc. You won’t know your budget yet, but you’ll get a feel for the market and be able to identify your must haves in a home (size, layout, location).
4. Find a great agent. They will help you find a home that meets your specifications and budget as well as help you throughout the home-buying process including making an offer and completing paperwork. (See what is the difference between an agent and a realtor).
5. Choose a mortgage lender. Ask your agent for their top two or three people they’ve worked with as a referral.
6. Get preapproved. Determine how much you qualify for and which type of loan is right for you. You’ll need to have proof of income, bank statements and other documents. Your lender will run your credit report and work with you to get all the items needed for preapproval.
7. Decide how much you can afford. Just because you’re qualified for a certain amount does not mean you can afford it. Don’t forget your budget, your regular expenses and debts you’re trying to pay off. Your monthly housing payment is not just the mortgage. The following can impact monthly payments: Down payment.The more you put down, the less your monthly payments are. PMI - If it is less than 20% on conventional loans you’ll be required to pay monthly primary mortgage insurance (PMI) which protects the lender in the event you stop making payments on your loan and your home goes into foreclosure. PMI fees vary from 0.3 % to 1.5 % of the original loan amount per year and it depends on your credit score and the size of the down payment. FHA and VA loans do not require PMI as they are backed by the government. Homeowners insurance. Property taxes. HOA fees.
8. Find your dream home. View listings in person via private showings and open houses based on what you and your realtor find that meet your search criteria.
9. Secure financing. Work with your lender to secure financing for your mortgage loan.
10. Make an offer. Allow your agent to use their experience to negotiate the best price and terms for you. If your offer is accepted you’ll sign a sales contract.
11. Home inspection. Most sales contracts have a home inspection contingency. Safety, quality and overall condition of the home is checked by a trained, certified home inspector. If the inspection goes well you should be almost ready to close. If serious problems are found that were not disclosed by the seller, you’ll be able to rescind your offer and get your deposit back. Other options are to negotiate that the seller to make repairs or reduce the selling price.
12. Appraisal. The property value is assessed to see if it is enough to cover the mortgage. If it is close to the purchase price, you can move forward. If it appraises low your lender will not give you a loan for more than the home’s appraised value. There are multiple reasons why it could appraise lower and your realtor can help you navigate what to do if this happens. If your home appraises higher, congratulations you have instant equity.
13. Closing. This involves a lot of paperwork, but your realtor is with you to help get you through everything that makes your home ownership official.
14. Move in. Congratulations! You are now a home owner and have the keys to your new home. Time to make any minor repairs, add personal touches and move in!
15. Keep saving. You never know when an unexpected repair or just regular home maintenance is needed. Have an emergency fund readily available.

Ready to buy your first home? Contact Conrad Realty Group today. 

Selling your home? Focus on these areas to add instant value to your home and bring a faster, better offer.

1.      Curb Appeal

In real estate, people do really judge a book by its cover. If the yard and exterior of the home are not maintained, it does not reflect well on the rest of the care of the home. Some home buyers will avoid going into a property all together just by how the outside looks. That’s why curb appeal is so important. At a minimum the grass must be mowed, trees and bushes trimmed and lawn free of weeds. Try these extra improvements to draw buyers inside: pressure wash pavers, paint the front door, add potted plants and flowers, upgrade lighting, replace house numbers and/or install a new mailbox.

2.      New Paint

Bold isn’t beautiful to all home buyers and the bright colors, nail holes and crayon marks need to go. You’d be surprised how many people get scared off by painting. Fresh, neutral colored interior paint appeals to more buyers and makes your home more “move in ready.” This simple change is an easy way to update your home without spending a lot of money.

3.      Upgrade Fixtures

At the bare minimum make sure there are working, matching light bulbs in every fixture. Increase the wattage to brighten your home. Buyers will notice as they tour your property. For more impact, change your fixtures to more contemporary looking ones. Outdated lighting is a thing of the past. Trade your brass for brushed nickel. The same is true for faucets, handles and hardware. Not sure where to start, upgrade the bathrooms and kitchen. If anything is broken or outdated, replace it. Have a little extra money in the budget for upgrades? Buyers love track and recessed lighting.

4.      Install New Flooring

Home buyers see dollar signs add up when flooring has stains, wear and tear, is mismatched or outdated. Unless your home is priced as a fixer, you stand to gain more by spending the money on replacing carpet or upgrading the floors yourself. If your carpet has to go, pick a low priced neutral carpet with really good padding for a low budget fix that will sell your home faster. In Florida, a popular option is to install new flooring such as tile throughout the home and into the bedrooms.

5.      Minor Repairs

Closet door off track? Blinds broken? Leaky faucet? Minor repairs are a must when listing your home. If anything is broken repair or replace it when you list your home or you will turn off buyers.

6.      Clean

It’s important to have a blank slate and a clean home for new buyers. While you’re packing, de-cluttering and depersonalizing, hire a service to come in and do the dirty work. In addition to the kitchen and baths, make sure to clean curtains and blinds. Also professionally steam clean the carpets and the tile grout. You may even avoid step 4 with a good cleaning!

Looking to sell your home in Brevard County? Contact Conrad Realty Group today.

By Danielle Babcock Sapienza

The term real estate agent is often used interchangeably to mean licensed agent, broker and REALTOR^®. But is the difference between them? Yes.

A real estate agent provides a variety of services to help people buy or sell a home. Real estate agents can be:

·         Buyer’s agents - who work with home buyers.

·         Seller’s agents or list agents - who help you sell your home.

·         Dual agents who represent both the buyer and the seller in the same transaction. Note, dual agency must be disclosed to both parties.

Real estate agents in Florida are licensed professionals who must first take a 63 hour pre-licensing class then pass the course’s final exam. Then they must sit for the Florida real estate licensing exam and pass with a 70% grade or higher. After that they must be sponsored by and work under the direction of a broker who activates the agent’s license. Later they complete a post-licensing course of 45 additional classroom hours.

In Florida, a licensed real estate broker has at least two years of experience as a licensed real estate agent, then has taken 72 hour pre-licensing course (this additional education is primarily in the area of real estate law) and passed an exam for real estate brokers with a grade of 75% or higher. Then post-licensing, brokers complete an additional 60 hour course.

Unlike agents, brokers may work independently. Brokers can legally sign listing agreements and other transactional paperwork. They are able to be their own boss, own agencies and manage teams of real estate agents under them. They still act as an agent for clients, but have additional responsibilities such as: run their business, keep up with real estate law, and maintain escrow accounts.

Associate brokers have a broker’s license but do not want to own their own business so they choose to work under the management of another broker.

A REALTOR^® can be a broker or an agent. REALTORS^® belong to the National Association of REALTORS^® (NAR). REALTORS^® follow a strict and enforceable code of ethics to protect the interests of not only their clients but all parties involved in the real estate transaction. If an agent or broker is not a NAR member, they cannot call themselves a REALTOR^®. 

Place your trust in a REALTOR^®. Buying or selling your home in Brevard County? Contact the team of REALTORS^® and staff at Conrad Realty Group today.

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