Friday, August 28, 2015

Your Lifelong Journey Through Homeownership: A Natural Progression of Homebuying Over a Lifetime

For many, buying their first home feels like reaching the top of a mountain. To achieve homeownership in today's market requires financial savvy and the patience to see the homebuying process through to the end. Yet that initial homeownership isn't so much the end of a journey — in many ways it's just the beginning of a lifelong adventure.

The starter home you choose at 30 may not fit your needs at 45, or 65. As your family grows or your needs change, you may upgrade, buy a second home or downsize for retirement. For today's homebuyer, one size doesn't fit all.
So, what type of home is right for you, and when? In this post, we map out what your lifelong journey through homeownership might look like in today's marketplace.

The Starter Home

Starter homes aren't what they used to be. The average buyer is no longer a single-income, mid-twenties newlywed couple. A more accurate picture of the first-time buyer is older — 31 years old on average — and more financially secure — typically multiple income households with an average income of $64,400, according to the National Association of Realtors. While married couples still make up a majority of first-time homebuyers, a good portion — 46 percent — are singles or unmarried couples.

The reasons Americans are jumping into real estate with a first home are likewise evolving. For some, a starter home still represents a rite of passage and buying a piece of the American Dream. Others are thinking more about practical considerations. It's a divide confirmed by recent data.
The 18 to 34-year-old millennial demographic represents about a third of the homebuying market. These are the buyers chasing that American dream. A National Association of Realtors study found 68 percent of millennial buyers were first-time homebuyers, and many cited the desire to become homeowners as their primary reason for buying. For older first-time buyers, making the switch from renter to homeowner often had to do with a new job or a growing family.

A recent U.S. News & World Report article points out that buyers are likely to be in a starter home for five or more years, meaning those buyers should choose a home that won't be outgrown too quickly. PulteGroup, a national single-family home builder, told U.S. News & World Report their first-time buyers often want at least three bedrooms and two bathrooms.
If you're at the point in your life when it is time to consider a starter home, know that you may not be able to get every feature you want — though you should aim for a home that does meet your most important needs. Home builders aren't building as many entry-level homes these days, and housing stock is tight in some areas, so a first home may come with a higher price tag. According to Zillow, the current median sale price for homes in the U.S. is about $223,000.

The Trade-Up

By the time first-time buyers are ready to trade up for their next home, family and financial circumstances have often changed. Kids, pets, and in-laws may now be in the picture. The buyer looking to trade up likely has new, emerging priorities that will influence their next buying decision.

As notes, size, practicality, and location are key factors for buyers in this stage of life. They may want an additional bedroom or two, but shouldn't neglect other family-friendly spaces, such as playrooms or dens. points out that a growing family may need practical features, like a larger laundry room, more storage space, and outdoor areas for the kids. Lastly, school districts are likely to be a high priority, if not top priority, for this type of buyer. With such perks, a trade-up home of this nature is going to cost homebuyers a good bit more than their starter. Still, the trade-off is worth it for many

The Second Home

For some high-income or high-wealth homeowners, a second home may be the next stage in the homeownership journey. These buyers have met the basic needs of their family with a primary residence — now it's time to consider a vacation property for personal recreational use or an investment property that will serve as a longer-term investment.

By necessity, buyers of second homes are usually older and more financially secure than the average consumer. One survey puts the median age of second-home buyers at 42, and homeowners from age 40 to 60 are considered the primary customers in the second-home marketplace. The income for these buyers continues to rise, too — in the case of vacation-home buyers, the median was $94,000 in 2014 – an increase of $9,000 from the previous year. More than half of vacation-home buyers purchase their second home to use as a family retreat, according to a recent National Association of Realtors survey.

More than a third of investment-home buyers in 2014 planned to use their second home for rental income, according to the same survey. The South, with 37 percent of investment sales, was a popular place to buy, although it's likely these buyers were local. Investment home prices had a mean of $125,000 in 2014, and investment-home buyers were found to stick close to their primary residence, in contrast to the 200-mile distance of the median vacation-home buyer.

With price points that are well below the national average, the typical second home is likely to be smaller than a primary residence, and a prime location and turn-key condition are typically second-home buyers’ biggest concerns. Still, buyers typically don't expect to hold onto a second home much longer than a starter home. Survey respondents estimated six years for vacation homes and five for investment properties. 

The Retirement Home

At some point, keeping up with a larger home — or perhaps multiple properties — may lose its appeal. When that time comes, some homeowners may consider buying a home better suited for their retirement needs. Some buyers may downsize in their 50s, after the kids leave home, while others may wait until retirement. Still, others are part of a growing trend to upsize in their retirement years.

Buying a home at this stage of life comes with a unique set of challenges, as well as some exciting possibilities. Unlike a starter home, second home, or even trade-up home, a home you purchase in retirement will likely last much longer than five to 10 years. It may also be your final home purchase, meaning it's important to plan ahead.

Mobility may eventually be an issue for aging homeowners, making single-level homes with doorways and halls wide enough to accommodate a walker or wheelchair a high priority for retirees, according to U.S. News & World Report. And while some retirees and empty-nesters will want to downsize considerably, it's important to consider lifestyle.

Homebuyers who entertain frequently may want a home with space for parties or guests. Buyers may need an extra bedroom for visiting grandchildren, a boomerang kid, or their own aging parent. Indeed, multigenerational households have been on the rise. Nearly a quarter of millennials as well as a quarter of those over 85 live in multigenerational households, according to research by the Pew Research Center.

Location is also a key decision for a retirement home purchase. A recent Bankrate survey found three out of five respondents want to move to a new city or state in their retirement. The primary concern isn't always moving to closer to the children or grandkids, either. Some want a nicer home, while others expect to have more family living under their roof. Moving to a less expensive area can open up such possibilities without breaking the bank. AARP's recent list of top retirement destinations boasts housing markets across the country where prices hover just above $100,000 — well below the national home price average. 


Whether you're shopping for your first home or your fifth, each will be a new experience. Our housing needs are continuously evolving, just like our lives. While this may mean there's always something new to consider when it's time to purchase a new home, it certainly does keep things exciting. Much like life itself, homeownership is about the journey – not the destination.

Wednesday, July 29, 2015

Looking Up: Trends in the Commercial Real Estate Market

While the residential real estate market is just starting to find its stride, commercial real estate has been red hot in several areas across the country for the last several years. Despite its brisk pace, the market isn't showing signs of losing steam.

Things Are Big in Texas

Last year, Texas dominated the U.S. commercial real estate sector and signs point to the trend continuing. The Dallas Morning News said a North Texas boom across multiple commercial property sectors was responsible for putting the state in the top spot according to a report by NAIOP, the Commercial Real Estate Development Association.
The state's direct commercial real estate expenditures totaled almost $42 billion in 2014. California, last year's second-best commercial market, didn't come close, racking up a mere $13 billion in commercial expenditures.

Texas also boasts a large workforce tied to the current boom. An estimated 776,000 Texas jobs were derived in whole or in part from commercial real estate in 2014. Nationwide, the NAIOP estimates that the industry supports about four million jobs.
The Lone Star market doesn't show signs of a slowdown in the near future. "It might be 2018 before we see another downturn," Walter Bialas, a research director with Dallas commercial real estate firm JLL, told the Dallas Morning News. "We are at a really good place in the market in North Texas." 

New York City on Track to Set Sales Record

Meanwhile, New York City is on pace to set a new commercial real estate sales record for 2015. New York Daily News says sales volume of land and existing buildings in the city is expected to top $75 billion this year, according to a report from the commercial brokerage Cushman & Wakefield. The previous record of $62.2 billion was set in 2007. 
Demand for properties in Brooklyn has been particularly high this year. The borough is on track for $9 billion worth of closed deals in 2015, up more than 30 percent over last year. Cushman & Wakefield's Bob Knakal told the paper that $4.3 million was the average price for a building in the second quarter, a price jump of 40 percent over the last year.
Manhattan's more saturated commercial market wasn't too far behind, with $8.53 billion in commercial deals expected this year. Prices have shot up as well – for 2015, the average has reached $665 per buildable square foot, compared to last year's average of $587 and a price of $446 per buildable square foot in 2013.

Fed Chair Eying Price Increases Closely

Such leapfrogging price increases haven't gone unnoticed. The latest pricing boom has caught the eye of Federal Reserve Chair Janet Yellen, who is watching matters closely.
Earlier this month, Yellen's semiannual report to Congress made note of the market's rapid commercial real estate price increases, reports the Dow Jones Business News. "Valuation pressures in commercial real estate are rising as commercial property prices continue to increase rapidly, and underwriting standards at banks and in commercial mortgage-backed securities have been loosening." Though the commercial market was identified as an area of concern, the wider U.S. economy is experiencing a moderation of risks to financial stability.

Wider Commercial Trends

For the wider commercial real estate market, the biggest moves are likely to take place in the rental, office, and retail sectors. Reis, the commercial real estate research organization, notes the national vacancy rate of 4.2 isn't expected to drop much by year's end. A still "insanely tight" vacancy rate of 4.8 is predicted by 2016, despite a "flurry of new buildings" expected to open to tenants in the second and third quarters.
The company's latest report also touches on millennial trends. Noting that while they haven't yet gotten on board with homeownership the same way previous generations did, reports do indicate rental vacancies in central business districts are lower than those in the suburbs. Reis suggests that as millennials begin to start families, they may still move to the suburbs just as their predecessors did. 
Office and retail sectors are also trending up, though at a slower average pace. Reis reports that office vacancies were down to 16.6 percent in the first quarter of 2015 while asking and effective rents were up by 0.9 percent and one percent, respectively. If economic growth hits predicted levels, the vacancy rate could dip even lower.
In the retail sector, vacancies were down to 10.1 percent, while asking and effective rates were up by 0.5 percent. New construction and big changes in the vacancy rate aren't expected in this sector, owing to the retail dominance of e-commerce. The trend looks set to continue.

Commercial Title Insurance Remains a Good Investment

With such a bustling commercial market, commercial title insurance continues to be a good investment for developers and buyers. Some issues affecting the sector can resemble those of the residential market, such as tax record errors or survey errors. However, there are also commercial title issues that are less commonly seen in the residential sector, such as:
     Expired powers of attorney

     Misinterpretation of wills or documents

     Deeds by unauthorized parties

With the volume of deals from the current commercial boom, developers and buyers may find themselves running into such issues more frequently. Title insurance remains a buyer’s best bet in minimizing or avoiding these risks altogether.

Click here to discover how Title Source National Commercial is the prime choice for title, escrow, appraisal and survey management needs.

Friday, July 17, 2015

Title Source takes on Trading Post Trail in Moon, PA

They say on a one year anniversary you should give the gift of paper. After a year of enthusiastic volunteering in Moon Township, PA, Title Source team members from the Coraopolis, PA office presented the Moon Township Board with a nice “piece of paper” – a check in the amount of $3,000.

The money was given as part of a sponsorship of the Olson Park Trading Post Trail. Since April, team members have been dedicating their time and toned muscles to the  Parks and Recreation Department of Moon Township through volunteer work at local parks. Raking, cleaning up debris and beautifying the land are just some of the many ways that they’ve been making a positive impact.

The money will be used to fund a nature camera and to keep up with trail improvements to provide the community with a cleaner, safer park area. The check was delivered by team leader Tricia Somerville and Vice President of Title Services Dan Studeny. Somerville had the following to say about making the donation:

“It was an honor to represent Pennsylvania team members as well as Title Source. We’ve put in many hours to create a beautiful, safe and litter-free environment. I am so proud to be a part of these community involvement efforts!”

To learn more about the Moon Parks and Recreation Department, click here.

Thursday, July 16, 2015

Jobs, Affordability and Interest Rate Hikes: A Look at the 2015 Housing Market's Top Issues So Far

We're halfway through 2015 and the summer homebuying season is in full swing, which makes now a good time to reflect. The housing market has shown clear signs of improving, but affordability and inventory continue to be issues for some buyers. The latest jobs outlook was mixed; not all good, not all bad. Meanwhile, experts continue to debate how these factors and others will affect the prospect of a Fed interest rate hike. As we look ahead to the rest of the year, these are the stories that are likely to come up again and again, so it's worth taking a deeper look at where we are now.

Housing Market Shows Signs of Improving

In a report last month, wrote that the U.S. residential real estate market is on track for its best year since 2006. The article points to the creation of more than three million jobs over the last 12 months as evidence that the economy is seeing real improvement. Moreover, more than one-third of those jobs have reportedly gone to 25- to 34-year-olds, a demographic group that in America often corresponds with first-time buyers.

The Debt Challenge

However, high student loan debts are a new factor affecting those younger first-time buyers in a way traditional first-time buyers didn't have to deal with. The Wall Street Journal recently wrote that a new survey revealed that many Americans remain "financially and psychologically scarred" about their prospects for affording a home.
 The Affordability Challenge
The same article reported affordability to be a serious problem for 60 percent of the survey respondents. Half were reported to have made at least one sacrifice in the last three years, such as taking a second job, putting off saving for retirement, or racking up credit card debt in order to afford rent or mortgage payments.

The Inventory Challenge

One reason affordability remains a challenge for some homebuyers is the current lack of entry-level inventory. In a recent panel discussion, two real estate economists claimed many builders weren't building the type of homes buyers want.
Forbes reported that groundbreakings for May were on track for an annual rate of 1.036 million, yet a figure of 1.5 million groundbreakings this year is reportedly what is necessary to bring supply in line with demand.

Job Growth Is Helping the Housing Market

Speaking of supply and demand, one reason demand for new homes is up is thanks to improvements in the job market. The government's June jobs report was just released with a note of disappointment — a revised hiring estimate was brought down by 60,000 jobs, the labor force shrank as some job seekers left the market and wage stagnation continues to be an issue. However, FiveThirtyEight points out that the country has added jobs for 57 consecutive months, and while no jobs report has been perfect, it's been three years since the country has had a truly bad month for job growth.
Moreover, the outlook for future jobs growth continues to be viewed positively by experts. Doug Duncan, chief economist at Fannie Mae, told Forbes “The pickup in jobs is resulting in some increase in real incomes, so the demand side [for housing] is strengthening faster than the supply side.” Duncan said the country is on track to add two million new jobs this year.
Interest Rates Still Expected to Rise
An improving housing market paired with healthy job growth undoubtedly leads to one question: How soon will the Fed raise interest rates, and by how much? Much of the housing news coverage over the last few months has focused on this question. Despite a lot of coverage and predictions, the answer to that question remains elusive.
In the first quarter, Janet Yellen first raised the prospect of a rate increase sometime this year. Some of Yellen's Federal Reserve colleagues then weighed in with their opinions of how and when such increases should take place. Nearly all predictions were tied to strong job growth, which didn't materialize quite as expected.
The Employment Factor
June's mixed jobs report only added to earlier 2015 data suggesting that while employment was headed in the right direction, progress wasn't as sure-footed as projected. While an earlier prediction had the Fed raising rates in June, that didn't materialize due to less than stellar job reports. September was the revised prediction. Despite the June jobs report, Fed officials still predict a September rate increase.

International Economic Factors

Beyond U.S. employment concerns, wider macroeconomic factors are also in play. A declining dollar in April was part of the reason the Fed decided to put off a rate increase in June. However, experts at the time expected the dollar to still increase over time.
In Europe, a considerable amount of financial attention is going to the situation in Greece, where a default on an IMF payment at the end of June was followed by a historic "no"-vote referendum rejecting Greek creditors' austerity plan. However, Bloomberg reported ensuing declines were "muted."
"After five years, you have to believe a measure of the news from Greece is already built into the market,” said one investment strategist. “How many times can you be concerned about the same news? I think it loses its effectiveness over the near term.”


None of these stories for the first half of 2015 are finished. They're all still being written. We don't have clear answers on how much job growth we can expect and whether it will help home-buying affordability, and it looks as though interest rate hikes may be coming and the Greek crisis may yet add some further uncertainty to the plan.

Thursday, July 2, 2015

Experience IT in Detroit!

Experience IT, launched in 2011, is a new way to bring entry-level information technology professionals to Detroit. It’s a game-changing partnership among leading tech companies, like Title Source, Fathead, Quicken Loans, DTE Energy, Blue Cross Blue Shield of Michigan and more.

 Facilitating the growth of an information technology workforce, this non-profit collaboration works together to teach, train and prepare the next generation of IT professionals over several weeks. The program is led by Title Source’s chief information officer Jeff Hu, who will teach soft skills like involvement and engagement.

 “It’s the culture fit that’s missing – not technology skills. Culture is a mix of people who have the same behavior and work together to achieve the same goals,” said Hu. “Students really build their IT execution knowledge while in college, but some don’t think about their future career until it’s time to graduate. We’ve built this program to activate their social engagement in the workforce.”

 Experience IT attendees are college students who must prequalify for the program. Only 50 candidates from the typical 300 who apply for the program each year will be chosen. And last year, after completing the Experience IT program, 26 candidates were hired at Title Source. This year, Title Source hopes to grant even more candidates full-time positions.

 “We’re giving students the option to actively engage in IT in the real world and help them figure out if they like it or not. It’s not a one hour interview; it’s a two month process,” said Hu.
For more information on Experience IT, visit

Tuesday, June 23, 2015

How to Handle a Bidding War

We'd all like our homebuying experience to be as simple as possible. However, things don't always go according to plan. For Americans living in one of the nation's hottest real estate markets, home buying complexities are likely to include a bidding war.
Bidding wars happen when two or more potential buyers want a property and are willing to pay more than the asking price for it. A bidding war situation requires quick thinking both from the potential buyers as well as the seller. Still, there's an opportunity for both parties to come out ahead — if they're prepared.

For Buyers                                                                                                                               

As a buyer looking for a new home this summer, be aware that the competition is stiff. Inventory across the country is low yet more buyers are entering the market. Now is not the time to make a lowball offer and see if a seller will take it. Should you find yourself in a bidding war for a property, follow these five steps to maximize your chances of winning the battle.
Look at homes priced slightly below your budget
If you know homes in your desired neighborhood are likely to receive multiple offers, choose properties that leave you room to negotiate. Real estate agent Suzy Thomas told Chicago Magazine that a good rule of thumb is five to eight percent below the price you'd feel comfortable paying.
This also goes for pre-approval. You won't be able to compete with other offers if the home is listed at the top of what you'll be able to pay.
Be organized and follow directions
If the seller has asked for a "best and final" offer from a group of interested buyers, make note of the deadline and follow any offer submission directions. If the seller asks for an offer in a specific format, follow suit. It will make it easier to compare the offers received.
Submit an offer that's easy to understand and that doesn't leave room for misinterpretation. Also, offer up your pre-approval documentation.
Ask the right questions
You can also sometimes gain an advantage by asking the right questions. Does the seller want a speedy closing? Would they be interested in a rent-back agreement while they look for their new home? An offer that makes selling their home and moving less of a burden may well be worth more to the buyer than the few thousand extra dollars offered by another buyer.
Offer appealing terms
When you are competing with several other buyers, it can help to offer better terms. Cash can have a winning edge over financing.
Cash offers can be very appealing to buyers who want a quick sale and less risk of financing falling through. Beyond even full-cash offers, making a larger down payment reduces the chance that loan approval problems surface later in the buying process. A robust earnest money offer in excess of one percent can also add to an offer's appeal.
Buyers can also rise to the top of the pile by offering few or no contingencies, or agreeing to pay closing costs.
Stay engaged in the process
Sharon Voss, an Orlando-area Realtor, told Realtor Magazine it's important a seller stay by their phone during a bidding war, because the situation can develop at any moment. "Be prepared to make decisions very quickly and respond very quickly to questions about your offer," Voss noted. Otherwise, you may lose your chance at taking the lead.

For Sellers

Experts give similar advice to sellers engaged in a bidding war. As sellers need to make quick decisions about their available offers, they should also keep in close contact with their agent during a multiple-offer situation. Being clear and direct about requirements or submission directions is also a must. Two other bidding war considerations apply specifically to sellers.

Determine how you will manage multiple offers
Sellers have a few options when it comes to working through multiple offers. The first option is to simply choose the best initial offer received and negotiate the final sale. This can be an easy route, but may leave money on the table from other buyers.
Often sellers will choose to go back to a group of buyers to ask for their "best and final" offer. This lets the buyers know they're in competition and can often yield a better deal for the seller.
Evaluate offer terms, not just price
When a seller does receive multiple offers, he should take care to look at the whole offer package, not just the final number. After all, a higher number that comes with no pre-approval guarantee, average earnest money deposit, or low down payment, is much more likely to fall through during financing than a lower cash offer.
Consider what contingencies, closing cost arrangements, or rent-back agreements would make a deal stand out for you. Every seller's situation is different and some extra perks thrown in may be worth a slightly lower offer price. You might even get an offer of pizza for life, which would certainly be hard to refuse.


With the right preparation, both buyers and sellers can handle a bidding war. Be aware of your local market and ask your real estate agent if you can expect heavy competition and prepare accordingly. Both buyers and sellers have the opportunity to win in such situations. Well-prepared buyers can come away with the home of their dreams while sellers can choose the most favorable terms and price to suit their selling and moving needs.

Thursday, May 28, 2015

Title Source's Brian Hughes to Speak at the 2015 National Notary Association Conference

Title Source’s Chief Operating Officer Brian Hughes will speak at the 2015 National Notary Association (NNA) Conference in Orlando, Florida on June 1st at 5:10 p.m. Hughes is one of four panelists who will be discussing how the Consumer Financial Protection Bureau’s new closing disclosure rules will affect loan signings.

 Effective August 1st, the TILA-RESPA Integrated Disclosure (TRID) rule, which has been dubbed the “Know Before You Owe” rule, will aim to streamline the mortgage application process by combining elements of various forms provided to applicants. Under the new rules, applicants must be provided with a loan estimate form that combines the initial Truth in Lending Act (TILA) disclosure and the Good Faith Estimate (GFE), within three business days of their application. Loan originators will also be required to provide a Closing Disclosure form, which combines the final TILA disclosure and the HUD-1 Settlement Statement, at least three business days prior to the loan consummation.

 The new rule goes into effect nearly two years after having been finalized in November of 2013. While the CFPB expects it will improve the closing process by shortening the length of a typical closing appointment and limiting last minute changes, it also presents the industry with new challenges.

 “The mortgage industry has taught us that it’s dynamic and ever-evolving,” said Hughes. “As we prepare for upcoming CFPB changes, I welcome the opportunity to help our lender clients meet these new regulations with our interactive technology solutions.”

Hughes has 25 years of experience in the national settlement services industry, is a licensed title agent in multiple states, and has been COO of Title Source for nearly 15 years. Hughes holds a degree in finance, has earned Lean Six Sigma Champion and Green Belt certificates, and has completed the Everest leadership program.

 Also participating in the panel discussion will be Ray Callahan, Chief Compliance Officer of Prospect Mortgage, and Sally Freudenberg, Vice President of Business Systems Consultant at Wells Fargo. The three panelists will be giving their first-hand perspectives on the new regulations, and discussing what will change at the signing table on August 1st.

 The NNA is a nonprofit organization that provides educational resources and tools to signing agents. Their annual conference is being held this year in Orlando, Florida at the Hilton Orlando Bonnet Creek Hotel from May 31st to June 3rd. To learn more about the NNA Conference, click here!