The low supply of homes for sale in many markets means buyers must be prepared for bidding wars. Buyers should be strategic in how they present their offers, and avoid paying too high a premium for their “perfect” property.
Obtaining written confirmation of preapproval for a mortgage is a must, real estate agents say. Sellers looking over multiple offers will likely discard those on which financing is not assured.
In highly competitive markets like New York City, where bidding wars are now the norm, buyers should look in a price range slightly below their maximum in case they have to bid up, said Gea Elika, the principal broker at Elika Associates in Manhattan. “Today, you usually have to overpay to get something that you like,” he said. “The question is: How much do you overpay and how quickly will you recoup that premium?”
Making that calculation can be difficult, but at the very least, Mr. Elika advises buyers not to overpay by much if they plan to stay in a property for only a few years. He usually strikes a verbal agreement with the seller’s broker that his clients will be given a chance to counter in the event of a competing offer. But buyers in many markets are formally inserting that option into their offers in the form of what is known as an escalation clause, said Don Frommeyer, the president of the NAMB, the Association of Mortgage Professionals (formerly the National Association of Mortgage Brokers).
Read more about real estate bidding here.
A current trend in luxury homes is building big on smaller lots. Sure, there’s not much privacy, between you and your neighbor, but there’s less lawn for maintenance. And more importantly, it means that you can get a newer luxury home in an urban area.
This 6,315-square-foot Spanish Revival home at 2240 Inwood Dr. Houston, Texas, is listed at $4.9 million.
Will Holder, president of luxury homebuilder Trendmaker Homes says that homebuyers will see a lot of new construction where homes are built deep and wide on smaller lots. Al Ross Luxury Homes says to differentiate his homes, he is building, a lifestyle not just a home. For example, all of his homes come with a one-year personal concierge maintenance service that offers the homeowner complimentary seasonal flower and plant renewal; driveway and garage concrete cleaning; seasonal spray washing and cleaning of the home’s exterior; gutter and fireplace cleanings; light bulb replacement; dryer exhaust cleaning; maintenance of appliances, plumbing and pipes; touch-up of scuffs and scrapes; and attention to any mechanical, technical or electronic issues — all free of charge for 12 months.
Each home is equipped with such luxury amenities as elevators, energy-efficient air conditioning and heating, backup generators, and state-of-the-art smart home systems that control everything from sprinkler and mosquito systems to sound and video, with the touch of an iPad.
If you are looking for assistance in obtaining financing as a first-time homebuyer and you qualify under CDBG, HOME, SHIP or Surtax income guidelines, you may benefit thanks to the loan program between the Miami-Dade County Public Housing and Community Development and local home mortgage lenders.
Homebuyers in Miami-Dade County now have a chance to own a home of their own at below-market mortgage rates. If you’re a homebuyer looking for a manageable mortgage, this new program may make it possible for you to buy the home you want right now.
Public Housing and Community Development will work with you and local mortgage lenders to provide a low-interest second and/or a third mortgage using the appropriate source of funds to bring your out of pocket costs to an affordable level.
Public Housing and Community Development invites low- and moderate-income persons who are first-time homebuyers to apply for a mortgage loan subsidy through the County’s loan program. Program participation is limited to one time only per family. A maximum 30-year fixed-interest mortgage is available for persons who qualify. You will also be required to obtain a first mortgage from an approved participating lender.
Miami is still proving to be one of the hottest property markets in the United States, as median sale prices were up for condominiums and single-family homes in March. The market is continuing to be popular with overseas buyers and investors.
Last month the median sales price for single-family homes rose by 4.4%, up from $225,000 in March last year to $235,000 for March 2014. Prices have now risen for 28 consecutive months, according to figures from the Miami Association of Realtors. The average sales price for a single-family home rose by 17.8%, increasing from $389,847 in March last year, to $459,102 for March 2014. The article in Propertywire points out that Miami is still attracting worldwide investors, and demand continues to be strong this year. However inventory levels are rising, creating a more balanced market.
To read more, click here.
A recent study from Realtor.com lists Miami as the second most popular real estate market for foreign homebuyers. Of the top three cities, Miami offers investors some of the lowest prices and interest rates. Another key factor in attracting attention from the international scene is the large number of premium, beachfront properties available, catching the eyes of rich buyers looking to invest in the Miami lifestyle or cash in on the recovering housing market.
International clients bought $68.2 billion worth of properties in the U.S. in 2013, and foreign homebuyers are at their second highest level in recent years. As interest in purchasing vacation homes in the U.S. continues to grow, Miami is quickly becoming the premiere destination. The Sterling Luxury Group has experienced a substantial rise in foreign buyers interested specifically in Miami for its natural beauty, richly diverse culture, and tropical climate. With their established Dubai presence, Sterling Luxury Group is a highly sought after authority on high-end real estate in Miami and has been assisting an increasing number of Dubai foreign nationals with locating luxury properties for vacation homes and for investment purposes.
To read more, click here.
According to the chief of the Federal Reserve Bank of Atlanta, steady job growth and a strong real estate market have made South Florida’s economic outlook brighter than the rest of the U.S. Southeast.
“On the measure of development of commercial real estate and investment in residential real estate, as well as the employment picture, I think Miami is a little better off than most of the Southeast,” Dennis Lockhart said Wednesday at a Greater Miami Chamber of Commerce event.
Beyond the official unemployment rate reported by the federal government, Lockhart said he and his Atlanta-based forecasters look at a broader labor pool. Their tally includes so-called marginally attached workers who want jobs but are not actively looking as well as part-time workers who would like to move up to full-time employment. The unemployment rate when you factor in those groups is 12.6 percent, he said.
To read more, click here.
These 10 mortgage tips can help you with your mortgage decisions in 2014.
1.Document your finances: Lenders will be extra diligent when underwriting home loans in 2014, as new mortgage regulations go into effect in January. The rules put pressure on lenders to verify that borrowers have the ability to repay their loans.
2.Lock a rate as soon as you can: Rates will likely climb in 2014 as the Federal Reserve is expected to reduce the pace of the economic stimulus program that has long helped keep rates low.
3.Refinance now — if you still can: Many homeowners lost the opportunity to refinance at a lower rate when rates jumped in 2013. But those who are still paying more than 5 percent interest on their home loans might still have an opportunity.
4.Buyers, use your bargaining power: As mortgage rates climbed, lenders lost a big chunk of their refinance business. In 2014, they will turn their attention to homebuyers and will fiercely compete for their business. Buyers should take advantage of bargaining power they gain with that increased competition.
5.Learn your rights as a borrower: Mortgage borrowers will get many new rights as consumers this year when new mortgage rules created by the Consumer Financial Protection Bureau go into effect in 2014.
6.Take good care of your credit: It’s nearly impossible to get a mortgage without decent credit these days. That will continue to be the case in 2014. If you are planning to get a mortgage, monitor your credit history and score until your loan closes. The best mortgage rates usually go to borrowers with credit scores of 720 or higher. You may still get a mortgage with a score of 680, but lower scores will mean higher rates or higher closing costs.
7.Don’t overspend: Lenders don’t want to give out loans to borrowers who will have little money left each month after they pay their mortgages and other debt obligations such as credit cards and student loans.
8.Consider alternative mortgage options such as ARMs: A homeowner planning to keep a house for seven to 10 years could take advantage of lower mortgage rates by choosing a seven- or 10-year ARM instead of the 30-year traditional fixed-rate mortgage. Rates on adjustable-rate mortgages can be as much as one percentage point lower than on fixed-rate loans.
9.Considering an FHA loan? Reconsider: Mortgage insurance premiums on FHA loans are likely to continue to rise in 2014, and after recent changes, the borrower is now required to pay for mortgage insurance for the life of the loan. Try to qualify for a conventional loan before you apply for an FHA mortgage.
10.Don’t panic:Yes, mortgage rates will likely climb in 2014. But don’t panic, thinking you have to buy a home now to grab a low rate. If you are shopping for a home, do your best to move quickly, but remember that this is one of the biggest financial decisions of your life. Get your mortgage and buy your home when you feel ready.