Hidden Fees to be Aware of When Purchasing a Home

Purchasing a home is arguably one of the biggest financial decisions you will make in your lifetime. As you start your hunt, don't forget there will be other costs associated with your purchase then the price of the home. Here are 5 fees to keep in mind as you begin to budget.

Home Inspection

This is a crucial step in the home buying process. The findings that come from the inspection can help you negotiate price and repairs. Generally, you can expect to pay between $300 to $500 depending on the home and the location.

Title Services

Title services encompass the transfer of the title from the seller and a thorough search of the property’s records to ensure to no one will pop up with a claim to the property. Additionally, you may need to buy title insurance which will protect the lender or your investment in the home.

Appraisal Fee

Before getting a loan, you will likely be required to get an appraisal of the home to determine its estimated value. This will be conducted by a third-party company and the cost can land anywhere between $300 and $1,000, depending on the size of the home.

HOA Fees

Many communities have a homeowners’ association that enforces monthly fees. This money is used for general maintenance and updates to areas like pools, parks, and more. Typical HOA fees are around $200 per month.

Taxes

The taxes each buyer pays at the closing table differ, but it is not uncommon for it to be up to two months’ worth of county and city property taxes. Additionally, there may be taxes for the transfer of the home title.

Sellers Are Returning to the Housing Market

In today’s housing market, it can be a big challenge for buyers to find homes to purchase, as the number of houses for sale is far below the current demand. Now, however, we’re seeing sellers slowly starting to come back into the market, a bright spark for potential buyers. Javier Vivas, Director of Economic Research at realtor.com, explains:

“Seller confidence has been improving gradually after reaching its bottom in mid-April, and now it appears to have reached an important recovery milestone…After five long months, sellers are back in the housing market; while encouraging, the improvement to new listings is only the first step in the long road to solving low inventory issues keeping many buyers at bay.”

Even with the number of homes coming into the market, the available inventory is well below where it needs to be to satisfy buyer interest. The National Association of Realtors (NAR) reports:

“Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.”

Houses today are selling faster than they’re coming to market. That’s why we only have inventory for 4 months at the current sales pace when in reality we need inventory for 6 months to keep up. But, as mentioned above, sellers are starting to return to the game. Realtor.com explains:

“The ‘housing supply’ component – which tracks growth of new listings – reached 101.7, up 4.9 points over the prior week, finally reaching the January growth baseline. The big milestone in new listings growth comes as seller sentiment continues to build momentum…After constant gradual improvements since mid-April, seller confidence appears to be reaching an important milestone. The temporary boost in new listings comes as the summer season replaces the typical spring homebuying season. More homes are entering the market than typical for this time of the year.”

Why is this good for sellers?

A good time to enter the housing market is when the competition in your area is low, meaning there are fewer sellers than interested buyers. You don’t want to wait for all of the other homeowners to list their houses before you do, providing more options for buyers to choose from. With sellers starting to get back into the market after five months of waiting, if you want to sell your house for the best possible price, now is a great time to do so.

Why is this good for buyers?

It can be challenging to find a home in today’s low-inventory environment. If more sellers are starting to put their houses up for sale, there will be more homes for you to choose from, providing a better opportunity to find the home of your dreams while taking advantage of the affordability that comes with historically low mortgage rates.

Bottom Line

While we still have a long way to go to catch up with the current demand, inventory is slowly starting to return to the market. If you’re thinking of moving this year, connect with a local real estate professional today to better understand what’s happening in your local market. You’ll want to be ready to make your move when the home of your dreams comes up for sale.

Welcome to Magnolia Neighborhood

WELCOME TO MAGNOLIA

A sleepy little community that lies off the beaten path of Seattle offers seductive views of both the city of the future and the waterway to the San Juans. The public pool, wandering Main St. and losing yourself in Discovery Park are the main draws here.

WHAT TO EXPECT

The secluded feel and lack of through-traffic makes living here feel like a daily vacation from the workday grind.

THE LIFESTYLE

Main St. shopping, dining and entertainment. A small town aura wrapped in the shadow of the growing Seattle skyline.

UNEXPECTED APPEAL

Mid-level price points this close to downtown, next door to the largest park in the city.

THE MARKET

Accessible in-town living. Mostly high income singles and couples.

YOU'LL FALL IN LOVE WITH

No wait-times, proprietor-run shops and the reclusive nature of the place.

Credit Availability

Written by: Leonard Steinberg - Compass

These days many of us have to argue with our clients about why waiting for a recession to buy may not be wise: One of the most enticing and plausible reasons to buy now and not wait for a recession to hit the markets (if and/or when that may come) has a lot so with credit AVAILABILITY, not just rates or real estate prices. Right now bank lending standards are somewhat relaxed. Yes, some cash buyers could argue that waiting for great deals during a dip related to a recession is wisest, but for all of those seeking financing (the majority of buyers, about 77%) waiting for the lowest rate assuming that will happen during a recession may be unwise. Why?

* During a recession, interest rates drop almost certainly.
* During a recession, people's job security shifts. One of the key MBA corporate rules is to fire people the minute you smell a downturn: almost no bank will lend if you have no job.
* During a recession, banks become much more restrictive with their lending standards. They are far less willing to take on higher risk.
* During a recession, while prices may (or may not) come down further, those seeking financing under more difficult circumstances will be competing for properties with all-cash buyers: Do you know a seller who would choose a financed offer over an all-cash offer during tough economic times? I have yet to meet that seller....
* During a recession the volume of all-cash buyers matters: the more seeking bargains, the smaller the bargains, if they even happen. Right now the volume of cash accumulated and on standby is exceptional.

SO....waiting for an economic downturn in the hopes of lower pricing and cheaper financing may result in disappointment: Aside from the fact that most high-demand properties sell for a premium (or are withdrawn from the market), it's possible that even if you find that elusive bargain, your banker may not be there for you. Let's also not forget we all have to live somewhere: when fewer people are able to buy, rents often rise. If you are financing the purchase of a home, locking in that monthly payment when you are able to may be worth much more than some theoretical savings down the road.

Chris Doucet - August Newsletter

Happy August!

I hope that you are enjoying this beautiful weather and the last days of summer.

I am settling into my new brokerage and the innovation and support that Compass Real Estate provides. If you haven't downloaded the compass.com app yet, it is a wealth of information.

So fortunate to be a Founding Member.

Market Changes
What is happening NOW

You have seen the for sale signs out longer in front of homes, and I'm sure that you are reading the media--especially if you are a seller. For the first time in over three years, home appreciation is flattening a bit. Down from an 18% increase last year to 5%. This still means that we are in a Seller's Market, but the numbers are influenced by a number of factors.

Inventory has increased since June by 48% in King, Snohomish and Pierce Counties, the first increase since early 2015. The old supply and demand dynamic. Buyers seem to be taking a break from the crazy bidding wars of this spring.

Also of consequence is our lovely summer weather and Seattle area residents taking much-needed vacations before Labor Day. It happens every year but not usually this dramatically.

What this means for buyers is less frenzy and fewer multiple offers, especially in the under $1M price ranges in desirable neighborhoods. This is good news to buyers who were scrambling to secure a home after submitting up to a dozen offers. After two interest rate increases by the FEDS in 2018, the rates are down slightly. Although we have been jaded by interest rates below 4% in recent years, mortgage rates are still historically low. (I remember building my first house in 1981 at 18%).

To sellers, it means that market time is longer and listing prices need to be realistic. This is the time to make sure that your property is well presented and well represented. My team always goes the extra mile to fine tune your home to mint showing condition, marketing to that specific buyer and negotiating to your best interest.

I predicted that the market would stabilize but no need to panic. The dynamics that created the last housing crash are not relevant. A balanced market is 4-5 months of inventory, and we are now between 1.5 and 1.8 (area specific). This is sustainable growth. As long as there is a growing job market (Seattle/Bellevue added 30,000 net jobs through May of 2018) and demand for housing is strong, we should see more movement in September. Labor Day is coming soon.

Remodel Before You Sell

One of my neighbors is looking at moving sometime over the next few years to a luxury retirement community but was struggling with living with a dated kitchen until then. I came to the rescue with a plan to keep the footprint and update the look and a design that would have broad appeal to the next buyer. 

A stainless undermount sink and new faucet, quartz countertops, tile backsplash and new cabinet pulls have brought them joy for today and renovation that will pay off in the future. As a former designer as well as a seasoned real estate professional, I hear too often that the seller wishes that those renovations had been done during their occupancy and not right before listing. Let me help with making the choices that will pay off now and later.

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Insurance

Do you know how much to insure your home? Many of us are dealing with outdated policies but today, I saw one so high it gave me pause. The owners are paying about 30% more than they should. Why? The residence is overvalued as are the contents but even more important is that your insurable value should be placed on the cost of a rebuild and not the land under the home. In Seattle, up to 50% of property values can be in the "dirt". Worst case scenario, you still have the location. Unless a tsunami or an earthquake happens, no need to insure. Save the premiums!

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The Real Estate Sign, Reimagined

I am thrilled to be one of the few hundred lucky Compass agents to procure a new, illuminated and intelligent real estate sign. This is the talk of the real estate industry and the first major improvement to yard signs since the 1940s. A circle surrounded with light, QR code and a link to home information via the Compass app, this sign eliminates those rain-soaked flyer boxes and makes walking the dog an informational experience! Watch for a few of them popping up in the Seattle market soon and here is a video about the sign provided by Compass Real Estate

Chris Doucet | Compass Founding Broker in Seattle
206.819.4663 | chris.doucet@compass.com

© Compass 2018 ¦ All Rights Reserved by Compass ¦ Made in NYC
Compass is a licensed real estate broker and abides by Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting or other professional advice outside the realm of real estate brokerage.