8 Reasons You Need a Realtor to Ease Your Home Purchase

If you’re shopping for a house, or even just considering buying one, there’s one person that you absolutely need on your side: a Realtor. Potential buyers often think they can go it alone, but there are a number of things they may not be considering.

What is a Buyer’s Agent and How are They Compensated?

A Buyer’s Agent is your representative throughout the transaction. When you choose a Buyer’s Agent to represent you, they’re going to keep your best outcome in mind. They’re not only legally bound to protect you throughout a real estate transaction, many Buyer’s Agents are also naturally protective of their clients.

Many people are nervous about choosing a Buyer’s Agent because they’re under the impression that they may have to pay an extra fee for their services. However, the fees that the real estate agent and their company earn are set long before you walk in the door. Buyers don’t typically pay their agent directly since the brokerage commission is figured into the price of the house. So cost is not typically an issue for a buyer.

Buyer’s Agents Make Everything Easier for You

Furthermore, your Buyer’s Agent is a lot more than a pencil pusher. They can help make your purchase so much easier in a million ways. Here are just eight of them:

  1. Knowing the market inside and out. There’s only so much you can learn about your housing market from looking at houses online. A Buyer’s Agent can tell you what part of town is poppin’ and which areas are not as popular. Getting in on a little-known up and coming neighborhood can mean a very happy long term financial forecast. Remember, typically Realtors are long time members of the community(s) they service.
  2. Wanting you in the right house, not just any house. Good Realtors will understand their clients wants and needs. Your Buyer’s Agent is going to pound the pavement looking at houses for you while you’re off working or having a life. Then they’ll make a shortlist, saving you time and effort by eliminating houses you’d never buy, and take you shopping! Most will keep at it until the right house appears, no matter how long it takes.
  3. Being a shoulder during the stressful buying process. There’s no better way to say it, buying a house is emotionally draining. It becomes exponentially harder when you add a spouse or partner in the equation. Your Buyer’s Agent has walked lots of people from home shopping to the closing table and will be there for you when you start to panic or the stress is just too much.
  4. Giving you advice on creating a reasonable offer. Your Buyer’s Agent has typically written lots of offers, some that were accepted, some that were not. You can take advantage of their professional experience and ask for help creating an offer that will stick. After all, if you offer too little, the seller may not even respond and if you offer too much, you might kick yourself later.
  5. Protecting you and your rights throughout the buying process. Your Buyer’s Agent is basically a human shield that stands between you and all the worst things in the market. They’re the ones who will point out shoddy workmanship in homes you’re considering, as well as recommending home pros who can fix it. They also go to bat when it’s time to negotiate repairs after your home inspection. With every step, your best interest is their first priority.
  6. Fighting for you if a contract goes south. Hiring a Buyer’s Agent (or a Seller’s Agent when you’re selling, for that matter) is a little like taking out an insurance policy. They help you write your contract and walk you through the buying process, but they also have another vital role to play. If things go sour, they’re going to help you fix it. Buyer’s Agents are the ones helping you weave your way through messy issues, like who should be getting the fridge or whether or not certain items remain with the home.
  7. Spotting value you may not see. You’ve decided on a budget and certain specs you want in your home. Well, maybe you can achieve those goals by knocking down a wall or converting an attic into a bedroom. Oftentimes it is very hard for buyers, especially first time buyers, to see beyond the listed specs of a home. Good Realtors have seen and experienced all kinds of renovation projects, conversions, purchases and sales — and can add a perspective you may not be considering on a home that may not check every box you initially thought you needed.
  8. Serving you even after closing. Buyer’s Agents don’t just drop you once they’ve cashed their checks. They’re around for you no matter what it is that you need help with, real estate-wise. Need the name of a good painter? A place to buy architectural salvage? Your Buyer’s Agent can set you up.

There’s a Lot to Know About Owning a Home…

But even after closing, you don’t have to worry. Not only is your Buyer’s Agent going to be there to help with questions, your HomeKeepr community is waiting with the doors wide open. Here, your real estate agent can recommend home pros from all kinds of specialties. You won’t ever have to worry about the quality of the workmanship they will provide. What a relief!

Market Shifts – Is There One Coming?

Where we have been – the Seller’s Market

For the longest time, we have been in a ‘Seller’s Market’ resulting from historically low inventories. The problem with low inventory began when the market plummeted leaving so many homeowners with diminished equity and thus, an inability to sell. Short Sale programs were successful in helping some homeowners move in the down market, but many chose to stay put and postpone any thought of selling.

Months of Supply

This chart shows the Greater Tampa area months of supply for the past six years. A healthy and balanced market should have between 5 and 7 months of inventory. As this chart shows, the Greater Tampa area has had less than 4 months of inventory (mostly less than 3 months) for a very long time. 

Unemployment and Growth

When markets lack supply, there is an increase in demand. In the Greater Tampa area, demand has continued to rise mostly due to the decline in unemployment. 

And, as reported by Joel Kotkin, contributor at Forbes Magazine, in his article, The Best Cities for Jobs 2018 , Tampa ranks 20th in the nation for jobs. According to the United States Census Bureau, Pasco county growth estimates between April 2010 and July 2017 showed an increase in the population of 60,946. And Hillsborough county on track for an increase in the population of 179,430.

Where we are going – the Buyer’s Market

We know that jobs create growth and, in turn, create demand. But what could possibly happen that would decrease demand? The answer: the decrease of a consumer’s buying power as a result of rising interest rates. 

 

 

Interest Rates

According to Freddie Mac and their report on 30-year Fixed Rate Mortgages since 1971 interest rates in 2007 were at an annual average of 6.34%. 2007 was the year that mortgage interest rates began their historical fall to as low as an annual average of only 3.66% in 2012 – a whopping 2.68% drop in mortgage interest rates in just five years.

As of May 2018 the going rate, according to Freddie Mac is up to 4.59% and climbing. 

Interest Rates and Buying Power

I like the article published by Shamrock Financial Corporation, How a 1% increase in interest rate affects your home purchasing power. This article was published in August of 2015 but the message is timeless. Imagine being pre-approved for a loan in the amount of $245,000 (interest rate of 4.5%) and before you find your new dream home – rates rise to 5.5%, now your approval amount is reduced to $219,000! That is an 11% reduction in your buying power!

The Shift

As interest rates rise, buyers become discouraged. For those buyers who are new to the market (First Time Home Buyers), they struggle with the remnants of the ‘Seller’s Market’ (inflated prices) while they absorb the impact of high-cost loans. Inflated prices along with high-interest rates coupled with reduced buying power = Less Demand. 

People who currently own their home had likely refinanced when interest rates were at their lowest. These homeowners will be reluctant to trade their low-interest rates for a higher rate on a new purchase. = Less Demand.

Once demand has decreased, inventory will begin to grow with higher days on market = Shift. 

As inventory grows, and supply exceeds demand, values will begin to fall. = Buyer’s Market

Market Shift

With a market shift likely on the horizon, it is important to analyze your current situation and decide if you need to make ‘the move’ now. If rates are most likely to rise – you should buy now. If inventory is likely to grow – you should sell now. If you are a homeowner who is currently on the market, pay close attention to your competition and be competitive in your pricing. Don’t get stuck chasing the market ‘down’ with small incremental price reductions. 

http://tampahome360.com/freddie-no-more-record-low-mortgage-rates/

Financial Calculators

How well do you know your roof?

Toni shares her knowledge of recent insurance standards that impact homeowners and potential home buyers every day. These policy changes seem to creep up on sellers and buyers as they make their way to closing. 

How well do you know your roof