Thursday, May 21, 2015

How much is too much? Planning for housing expenses

Summer is a popular time to go looking for a new home, whether it’s a starter house, a bigger condo or an apartment closer to work. As you begin looking at your options, one of the first questions you’ll tackle is how much house or apartment you can afford. You may be surprised to find that when it comes to housing, your paycheck doesn’t go as far as it used to.

How Much Is Too Much to Spend?
Many Americans would agree the household budget can feel uncomfortably tight at times. However, a startling number of Americans are experiencing what experts call a severe burden when it comes to housing expenses.
In recent years, rental costs have increased around three percent per year, outpacing overall inflation of 1.5 percent. Some metro areas, such as San Francisco, have seen economic growth accompanied by skyrocketing rents and home prices.
A new report confirms that nearly one in four renters spend more than half their income on housing. That’s more than 11 million Americans. The problem extends beyond renters, too. More than six million homeowners are estimated to spend more than half their monthly income on mortgage payments and other necessary housing expenses.
How Do You Crunch the Numbers?

For some, falling into these circumstances may have been unavoidable. However, if you’re shopping for a new home or apartment this summer, there are some steps you can take to prepare yourself, which could help you avoid overspending.Renters and buyers should take into account the total cost of housing, not just an apartment or home’s sticker price. To avoid being stretched too thin, your housing budget should include more than just rent or mortgage payments. Take note of these other regular housing expenses that can add up.
Homebuyers should factor the following into their budgets:
     Mortgage payments
     Property taxes
     Homeowners insurance
     Mortgage insurance
     HOA fees
     Utility charges
     Routine maintenance

Buyers should also set aside a little money each month to prepare for future major repairs. At the outset of buying a home, you may need cash upfront for initial repairs or remodeling, depending on the condition of the home. Lastly, don’t forget you may be asked by the seller to pay the closing costs.
For renters, regular expenses can include:
     Rent payments
     Renters insurance
     Pet rent
     Utility charges
     Parking fees
Additional costs could include laundry expenses, gym fees or other incidentals. Renters should also ask upfront about the lease deposit, which may require a nonrefundable fee plus first and last month’s rent. In some metro areas, renters may also have to factor in a rental broker’s fee to their budget, but that is most often a cost shouldered by your prospective landlord.

How Much Should You Spend?
Conventional wisdom says that no more than 28 percent of income should go toward housing. With housing costs confined to this percentage of your income, you’ll have enough income left to cover other necessary expenses, as well as entertainment costs and savings and investments.

However, this figure may be too small for renters in many high-priced metro areas. Apartment Therapy recommends doing some calculations to see how much you can afford. For example:
Say you wish to spend 35 percent of a $60,000 salary on housing. That’s $21,000. Divide by 12 months, and you’ll find you could afford to spend up to $1,750 on rental expenses.
For this example, it’s important to keep other costs in mind that could limit your rental budget. Taxes, student loans and credit card debt all could mean you have less to devote to housing. Remember that some expenses, such as entertainment spending, can be cut back, while others like loan payments cannot.
Homebuyers should also crunch the numbers before jumping into the market. A tool like one of these mortgage calculators can help. In this case, factors such as the size of your down payment, interest rate and the property taxes in your area could have a huge effect on what you’re able to afford. 
What Should You Do First?
If you’re thinking of looking for a new home this summer, there are several steps you can take to make sure you set yourself up for success. Planning ahead can help buyers secure better terms, which will reduce costs in the long run. Renters can avoid a financial crunch by getting their affairs in order.  
Review Your Credit
A free copy of your credit report these days is just a simple Google search away. Review your credit score and check the report for errors. Get those errors fixed to improve your score. Many lenders have lowered requirements to scores of 620 or more, but a better score will get you a much better interest rate. Landlords also take your credit score and rental history into consideration and may require a higher deposit for lower credit scores.
Start Saving
Homebuyers should plan far enough ahead to save for a sizeable down payment. Five to 20 percent of the purchase price is standard, with higher down payments reducing your monthly mortgage costs for your future home. Renters also should start saving. Application fees, non-refundable deposits, first and last month’s rent and moving or storage costs can all add up.
Consider All Your Options
Buyers should also be aware of the variety of financing options available. From GSE and FHA loans to commercial lenders, buyers have a lot of choices when considering who they decide to do business with. Forbes recommends taking special care when choosing between 15-year or 30-year mortgage terms, as both can be advantageous, depending on the needs and plans of the buyer.
A Few Final Thoughts
If you are going to buy a new home or rent a new apartment this summer, be careful not to overextend yourself. Be on the lookout for hidden costs which could stretch your housing budget too thin. Crunch the numbers before you start looking and stick within your budget as much as possible. If you do have to stretch, plan ahead and know what you can and can’t do without. Lastly, enjoy the hunt. The search for a new home can bring new opportunities and adventures and give you a completely new environment to explore.

Friday, May 1, 2015

Boomerang Kids: Multigenerational Living on the Rise

In a growing trend, a number of young Americans, aged 25-34, are now spending part of their post-college years back home living with mom and dad. These “boomerang kids,” as they’re called, are living at home due to a variety of reasons, including student loan debts, high rents, and other economic factors.

Data from the Pew Research Center reports that the number of boomerang kids living at home has been increasing for some time. Roughly one in four young adults (23.6 percent) lived in multigenerational households in 2012, up from 11 percent in 1980.

Boomerang Kids and Housing Decisions

A new report released last month by the National Association of Realtors suggests that all these boomerang kids are influencing home buying trends, as well. In 2014, 13 percent of homebuyers surveyed reported being part of a multigenerational household and 23 percent cited “children over the age of 18 moving back home” as a primary reason for their home purchase.

When broken down further by the age of the homebuyer, it was the younger baby boomers, aged 50-59, who most often cited boomerang kids as the reason for their purchase — at a rate of 37 percent. Older boomers cited boomerang kids 30 percent of the time as a reason for their home purchase. These percentages are significantly higher than some other reasons given for maintaining a multigenerational household, including taking care of or spending time with aging parents.

For current homebuyers, it’s far more likely a boomerang kid will be the one living in the mother-in-law suite, an additional living quarters on the property usually intended for guests or elderly family members.

Furthermore, research from Pew confirms that the number of multigenerational households is on the rise. The Pew study says the number has doubled since 1980 to a record 57 million Americans. That’s more than 18 percent of the U.S. population.

Boomerang Kids and Retirement

Out of the 47 million baby boomer households, eight million are supporting adult children according to Hearts and Wallets, a research organization monitoring retirement trends who spoke to the Huffington Post. A recent story by CNBC even claimed that boomerang kids were ruining their parents’ retirement.

There’s a stark contrast between the financial situation of baby boomers who are providing support to their children and those who aren’t. According to the Huffington Post, 52 percent of baby boomers whose adult children are self-sufficient are now retired. For boomers who are supporting adult children, that number is 21 percent.

Having boomerang kids to support also causes many parents to feel more anxiety about money matters and less secure in their retirement plans. Chris Brown, co-founder of Hearts and Wallets, told CNBC these boomers are “more concerned about saving for retirement than outliving their assets.”

How to Survive Boomerang Kids Moving Back Home

If you have an adult child at home, sitting down to hash out a plan and set some goals can reduce anxiety and make for a better outcome. For nearly all families, it’s a temporary situation. Families can make the most of it by focusing on how to help propel the boomerang kid back out into the world as a self-sufficient adult. Bankrate offers a series of practical tips for living with a boomerang kid, including: 

     Have a talk, make a plan. Discuss ground rules for living together. Make a plan as a family for how your boomerang kid will use this time to learn new marketable skills, save for the future, or get hired at a job that pays a living wage.
     Share household expenses and chores. Most millennials aren’t unemployed or unemployable, their problem is repeated underemployment. Collect a modest rent from your new tenant. Use it to reduce your overall housing costs, put it towards your retirement fund or set it aside to lend back to your child, if the need arises. If your boomerang kid is out of work, they can take a more active role in day-to-day chores.
     Set time limits. Without a timeframe for getting a plan off the ground, your boomerang kid could lose direction. Whether the plan is learning skills, job hunting or saving up, a time limit for how long you’ll help out can push your child to work harder for results.
     Make loans, not handouts. For some parents, lending money now could pay off in the future. Most adult children don’t want to be a burden to their families. Having a loan to pay back can add a sense of purpose. A loan can also be an investment in your family. Help your boomerang kid start a successful business or land a high paying job, and they may be in a stronger position to return the favor in your later years.

In a photo essay and story last summer, the New York Times painted a picture of ambitious young adults who remain optimistic about the future despite challenges and setbacks, so baby boomers may not have their kids living at home for long.

For parents with adult children living at home, it’s about striking a healthy balance. The key is to provide some support and coaching to boomerang kids without damaging your own prospects for a rewarding and financially healthy retirement.

Thursday, April 2, 2015

Title Source's Books for Breakfast

 
In schools across the country, March is a month of celebration. Not only is it Dr. Seuss’ birthday month, but it’s also considered National Reading Month. Title Source wanted to join in on the festivities in each office, so we hosted several children’s book drives last month, which we have dubbed “Books for Breakfast.”

Team members didn’t waste any time collecting. In return for a brand new book, they were treated to a free breakfast. These fresh, tasty meals were served up by none other than our own Title Source team leaders!

Texas was the first office to participate, and they started off strong! The line was out the door in the Denton office, which has just under 60 team members. They were able to wrangle up 98 books to be donated to the Wheeler House Library.

Detroit followed up with an assortment of 460 books that were given to some very excited students at Nichols Elementary School as well as the Detroit Public Schools Foundation. A group of team members were able to spend an hour reading with students every Thursday during the entire month.

California didn’t disappoint. The office that has nearly 30 team members was able to donate 86 books to Nuffer Elementary School! That’s almost a whopping three books donated per team member. Way to go Cerritos!

Pennsylvania finished out National Reading Month by donating 134 books to Highland Elementary School. The enthusiastic students even got to spend some time listening to team members who stopped by to read to the class.

This first-time event received a positive response from team members and the recipients of our donated books. By helping support our local libraries and schools, we’ve written another chapter in the story of our community involvement – and this one’s got a very happy ending!
 
 

Wednesday, March 25, 2015

How to stage your home for a faster sale

You never get a second chance to make a first impression.

This well-known saying applies to not only meeting someone for the first time, but when someone is meeting your home for the first time as well. When selling a home, staging it can make a big difference. A Zillow survey of real estate agents indicates that homes sell faster and for more money. The survey indicates that only 10 percent of homebuyers can actually visualize the potential of a home. As a home seller, you need to encourage buyers to see the potential and see the home in the best light.

Jennifer Riner from Zillow offers five home staging tips that can help you sell your home faster -- and get a better price. Here they are from first to last.
 
 
 

1.       Clean Thoroughly

“Deep cleaning your home can help your best assets sparkle,” says Riner. A little elbow grease can go a long way toward presenting your home in the best light. Don’t forget to clean the outside of your home as well. Curb appeal factor matters! When potential buyers approach the house, they should see a clean and welcoming home. While you might need to hire someone to clean the outside of your home, and to wash the windows, you can deep clean the inside on your own. “No purchase is required as long as you have soap, a mop, and a vacuum on hand,” says Riner.

2.       Keep it Neutral

“Crazy colors tend to deter potential buyers because they struggle to imagine themselves in the space,” Riner says. “It just doesn’t feel like home to them when there are clearly other personalities being showcased.”

Neutral colors are compatible with almost everything. If you have colors that stand out a lot, or personality-based themes in your home, consider repainting your home so that it looks more generic. Potential buyers should be able to walk in and see themselves in the house. “Try to keep the decor as basic as possible,” Riner suggests. “A blank slate is much more appealing to house hunters imagining their future abodes.”

 
3.        Declutter

“Clutter makes spaces look smaller and it is distracting,” says Riner. Clear up as much of the clutter as possible. It might even be worth it to rent a small storage unit for your things. Spending $100 or $200 to store your clutter for a month or two might be worth it if you can sell your home for more by removing the clutter.

As you stage your home, try to remove items that are personal as well. Remove family pictures, and consider removing especially unique artwork or decor. You don’t want to strip your home bare, but you do want to remove the items that crowd your home and make it seem more like your house than the potential buyer’s house.

 
4.        Brighten

Now that your home is clean and decluttered, the next step is to brighten things up. “Open the blinds and change the lightbulbs prior to showing,” says Riner. “Buyers are usually looking for spaces with ample natural light. Even if your home lacks direct sunlight, you can imitate sunlight using recessed LED bulbs and well-appointed track lighting.”


Good lighting, combined with a lack of clutter and neutral colors, can show your spaces at their best, including helping your rooms look bigger and more inviting. An appealing home is far more likely to sell quickly (and at a better price) than a home that doesn’t make a house hunter feel comfortable.

 
5.        Furnish

“Don’t let the house sit empty,” says Riner. “It appears cold and uninviting.” She recommends keeping the furniture simple and well-suited to the space. Stay away from items that are ornate and large. “Don’t try to squeeze a king-sized bed into a small office space and claim it as an extra bedroom,” says Riner.

Remove furniture that doesn’t fit the home. In some cases, it can make sense to hire a professional home stager to come in and arrange furniture in an attractive manner. If none of your furnishings will work, many home stagers will bring in their own pieces to create an attractive space.

“Design each room according to its intended purpose,” continues Riner. “There should be a dining table in the dining room, and a full or queen bed in the guest bedroom.” She points out that, even if your family uses rooms for different purposes, staging the home should be about looking conventional. “If you’re using your guest bedroom as a yoga studio,” Riner says, “remove the mats and incorporate a small bed or futon.”

There is no way to completely guarantee that you will sell your home quickly and for the price you want. However, if you want to increase your chances of a quick sale and a good offer (or even multiple offers), staging your home can be a relatively easy way to encourage buyers to see your house as their new home.

 

 

Thursday, March 19, 2015

eSignings

Real estate industry technology trends continue to favor a move toward less hardcopy paperwork. The use of eSignings is on the rise, as is the incidence of eRecordings. The Federal Housing Administration (FHA) has expanded its own policy on eSignings, and the number of counties accepting title eRecordings continues to grow. If you plan to complete real estate paperwork in the future, it’s a good idea to understand how eSignings work so that you are prepared for the changing process.

 

What are eSignings?

The Electronic Signatures in Global and National Commerce Act (ESIGN) was passed in 2000, and provides for the use of electronic signatures in commerce. This law followed on the heels of the Uniform Electronic Transactions Act (UETA), which was meant as a way for states to adopt uniformity in the way they handle electronic records and signatures.

Thanks to these pieces of law, it’s legal to use an eSignature on most paperwork. The use of eSignatures is voluntary based on the business policies involved, but the law recognizes documents that are eSigned as valid and binding.

For real estate transactions, particularly mortgages and refinancing, eSignings provide a way for consumers to sign most of their paperwork from the comfort of their homes. Many closing agents and others also encourage eSignings from computers in their offices or from their laptops. As long as the right credentials are available (sometimes in the form of a broadband card), it’s possible to complete an eSigning from almost anywhere.

Benefits of eSignings

In the world of real estate transactions, eSignings can speed up the process. After the FHA’s eSign policy was instated in 2014, there were reports of faster closings. According to an article from National Mortgage News, the eSigning process takes about 15 minutes as opposed to the hour it takes to ink-sign between 100 and 200 pieces of paper during a real estate closing.

On top of that, National Mortgage News reports that eSignings can speed up the funding process, allowing for same-day funding in some cases. According to the article, the funding process can take one to two days when documents are handled in a more traditional manner. The use of eSignings speeds up many aspects of the process, and can ensure that closings are smoother.

Embracing technology also means that it’s possible to complete the process from across the country. The ability to sign documents when real estate transactions take place between parties in different geographic areas can reduce inconvenience, since it means that travel isn’t necessary to perform required signings.

How eSignings Work

 For the most part, eSignings are very straightforward. A closing agent needs to have the right document software for eSignings. There are a number of programs and technology solutions that can help real estate agents, mortgage lenders, title companies, and consumers all remain on the same page. These programs help manage paperwork and workflow, and generate the needed forms.

 With eSignings, the documents are prepared in the software programs and then sent to the involved parties. It’s possible, with the click of a mouse, to sign the documents using an eSignature. This eSignature can either be in the form of a generated font for initials and signatures, or there might be a signature box. With the signature box, it is possible to sign by using a mouse or a trackpad to “draw” the signature. This creates a situation where the signature looks more like the handwriting associated with the signer.

Because electronic signatures are valid, signing the paperwork this way is legal. However, not all paperwork can be signed this way. It’s important to note that many real estate transactions require that some documentation be signed in the presence of a signing agent. When the signing takes place at a title company’s office, or in the presence of closing agents and others, it’s possible for the transaction to go forward with eSigning since there are eNotary services available, along with electronic availability for every other step of the real estate transaction process.

 Even with these advances, though, there are some cases in which at least one of the parties might need to sign hardcopies of paperwork. However, oftentimes notarized paperwork represents a small portion of the transaction, so it’s possible to eSign most of the documents while using hardcopies for documents that need to be signed in ink. While not as convenient as completely eSigning a document, the hardcopies can be sent via overnight mail when necessary.

At the end of the process, all of those involved in the transaction receive electronic versions of the paperwork. It’s possible to save the paperwork in an encrypted file on the computer, or even print it out for records, if a consumer prefers a hardcopy.

No matter where they take place, eSignings are becoming an important part of the real estate landscape. With the FHA and other federal regulators encouraging eSignings and a more streamlined process, and with mortgage lenders and others ready to acknowledge the financial benefits of eSignings, these transactions are likely to become increasingly popular.

Friday, February 27, 2015

Title Topics: What is a Survey?


A property survey will provide you with a bird's eye view of your property. It shows the boundary lines of your lot, and details any encroachments between you and your neighbor’s property.  This map will also indicate any physical features of the property, such as: rivers, creeks, roadways, elevation, and even soil density. Surveys are performed during the original construction of the home and usually given to the buyer of a home at the time of purchase. If the survey is not provided, it might be found at the city planning department.

Why do you need a property survey?

The survey is an official record that can be used to determine ownership history and property lines. If you are interested in adding a fence, pool, or deck to your property, the survey will advise the boundaries in which you can make improvements to your property. If you do not abide by the boundaries of the survey when building an addition, and the structure is built partially on your neighbor’s property, it is called an encroachment. Surveys also indicate easements. Easements indicate the right of others to access certain areas of the property. For example, you may grant your neighbor the right to use a road that is on your private property and therefore, your neighbor has a non-possessive interest in the land.

How is a survey different from a property description?

The legal property description will be located on the deed to your property, on the title policy, and on your mortgage. It’s merely a description of the property, versus a detailed map that the survey provides. 
Any questions or comments?  Please let us know!

Friday, February 6, 2015

3 Real Estate Industry Tech Trends for 2015

The real estate industry isn’t always known for its tech savvy. Technology has become more prevalent in the industry in recent years, though. More agents are listing homes online, complete with virtual tours, and various aspects of the real estate closing process are being completed electronically.

As we move into 2015, you can expect to see technology used more in the real estate industry. Here are three real estate industry tech trends likely to gain ground in the coming year:
 
1. Mobile Devices Become More Prevalent in House Hunting

 Listings have been online for years. However, as the demographic for house hunters begins skewing younger, mobile devices are likely to become a major part of shopping for a home. Millennials might not quite be ready to buy homes, but there are some indications that some in the younger generation could start thinking about home ownership in 2015.

Last year, a report from Millennial Media and comScore indicated that only 44 percent of online content is consumed on desktops. Mobile-only users are growing at a pace nine times faster than new Internet users, and desktop users continue to decrease. This trend is making its appearance in online real estate searches as well.

A joint study by the National Association of REALTORS and Google indicates that 89 percent of new home shoppers use a mobile search engine. Not only that, but about 45 percent of homebuyers use their mobile devices to ask for more information about listings. A partnership between Uber and Trulia only further emphasizes the integration between mobile apps and real estate apps.

All of this means that your real estate website should be more accessible to mobile users. Mobile is the wave of the future, and it’s already the platform of choice for today’s homebuyers.

2. eRecording Continues to Expand, Along with Title Production and Closing Integration

As of November 1, 2014, the Property Records Industry Association (PRIA) reports that more than 1,200 recording jurisdictions use eRecording in real estate transactions. This only represents about one-third of the recording jurisdictions in the United States, but eRecording is growing at a rapid pace, increasing by more than 20 percent between August 2013 and November 2014, according to PRIA information.

Not only is eRecording becoming more prevalent, but the process is becoming increasingly integrated with title production and closing integration. Companies like reQuire and SnapClose offer technology solutions that integrate every aspect of a real estate transaction. Title companies can use these technology offerings to perform searches as well as complete all of the paperwork associated with title production.

Programs designed to streamline the process from start to finish offer title companies and closing agents an easy way to communicate with lenders, buyers, and sellers, connecting all the parties, all while managing the process. When combined with eRecording, the process is even easier to manage, including for those buyers and sellers whomight be separated by thousands of miles. With new closing compliance disclosures and regulations going into effect, look for more proprietary programs and retail platforms designed to streamline the process and help those in the real estate industry better manage their transactions.

 3. Drones for Real Estate Photography

The world seems obsessed with drones. A number of videos are available showing images captured using drones. This technology is something that is likely to be adopted by the real estate industry. According to Zillow, drones might be very useful in real estate photography for the following reasons:
     The ability to get high-quality, elevated images inexpensively, without the need for helicopters and planes.
     Showing homebuyers what the entire property looks like, as well as the neighborhood and surrounding area.
     Allowing homebuyers to visualize the walk to school or the drive home.
There is still a debate over the use of drones, and there are privacy concerns, but by and large Zillow points out that there are plenty of people eager to use them more, and they could take real estate photography to the next level.

It’s already becoming popular to show 3D walkthroughs of homes and include video tours of homes on listings. As more homebuyers want the “real” experience of a home without actually going to the home to check it out, these technologies are likely to grow in popularity and use during the coming year.

Bonus: 3D Printed Homes

It looks as though the 3D printing industry is picking up steam. It’s true that 3D printers have been around for years, but they are just becoming popular. Now, it appears that it’s even possible to use 3D printing to create homes. According to reports, a Chinese company called WinSun has been printing homes, including a five-story apartment building and a luxury villa (complete with decorative elements).

While this technology for homes isn’t likely to take off in 2015, it’s not inconceivable that 3D printing could provide inexpensive real estate options for more buyers in the coming years.