Steve asks Terry what he should have done when his golf ball hit the window of a home in the middle of the course.  While the window didn’t break, Steve wants to know who would have been responsible if it had? May 2nd, 2018

According to a recent study, 30% of parents in the United States are helping to buy their child a home.  Terry and Steve discuss 3 ways parents can go about this. April 25th, 2018

In spite of a small climb in housing inventory, pending home sales rose 3.1%.  Inventory levels, however, are still low.  So, we won’t be seeing a big change in prices until there are more homes to sell.  If you’re thinking of selling, it’s still a good time.

Mortgage rates are also on the rise—increasing from 3.5% in 2015 to 4.25% today.   It’s all relative though, as Steve reminds us that 4% interest rates are still low enough to make the cost attractive.

For this Real Estate Round-Up, Terry Story is “in the house”, in person with Steve, and kicks off the conversation with how good credit can help you, even as a renter.  When Terry does a rental, the first thing she looks at is the tenant’s credit score.

As Terry puts it, a landlord’s major goal is to get paid every month and to make sure that his property does not get trashed.  A good credit score demonstrates that the tenant has managed finances responsibly and makes it easier to forgive other things, such as the desire to have a pet because there is a correlation between a good credit score and the way that people keep up a house

Steve begins Real Estate Round-Up by asking Terry Story for an update on home flipping, which was big back in 2004-2005.  Homes bought for the purpose of flipping represented about 5.9% of all single-family homes and 5.7% of all condos sold in 2017, so 94% are buying homes to live in them.

A handful of Florida cities—Orlando, Tampa, St. Petersburg, and Miami—ranked at the top of the list on flipper homes, even after a slight decline in flipping in the Miami area.

As a financial advisor, Steve often gets asked if today’s ultra-low mortgage interest rates might soon be gone forever.  Terry Story notes that rates are now the lowest she has ever seen in her lifetime and doesn’t think they can go any lower.  With the economy doing well, she believes rates are only going to rise.

Terry reminds listeners that rates were artificially suppressed in order to pull us out of the housing crisis, but now that we’re in a strong seller’s market, it’s time for the party to end on low-interest rates.

Steve kicks off Real Estate Round-Up by noting that home prices have risen to such a degree that small mom-and-pop investors are starting to partner up with others in order to afford them.  Investment properties have surged about 25% from 2014 to 2016, according to the National Association of Realtors, and have attracted investors who are keen to flip homes to try and make some money.

The market is very tight in the $300,000 entry-level range, so investors are teaming up to buy more expensive homes where competition is not as pronounced.

Continuing on last week’s Real Estate Round-Up thread, Terry Story believes sellers are often unclear about a buyer’s “as is with right to inspect” a property before completing a sale.  This leads to confusion and frustration, especially after sellers have completed price negotiations on an as-is sale and believe it’s a done deed.

The right-to-inspect clause gives a home buyer the right to have the property inspected before concluding the sale.  If they don’t like the results of the home inspection, buyers have three choices: a) accept the property and move forward, b) renegotiate price and repair terms with the seller, or c) just flat-out walk away.

Steve kicks off Real Estate Round-Up with a study which shows that first-time home buyers tend to, on average, pay about $2,200 more for their homes than regular, non-first-time home buyers.  Terry says this is because first-time home buyers generally purchase lower-priced starter homes, which is a really aggressive market compared to larger homes.

First-time home buyers are competing against investors and other first-time home buyers and have likely lost out on a few previous bids. Since they are eager to close a deal, they tend to pay a little bit more than seasoned buyers who might sit back a little and wait it out.  First-time buyers typically focus on the positives, don’t really concentrate on or even evaluate the negatives, and often let their emotions get the better of them.  Fortunately, though, paying a few thousand more doesn’t really matter in the long run.

Another common issue deals with the home inspection disclosure of defects in a house that’s up for sale.  On this, The Supreme Court (Johnson vs. Davis) ruled that the seller must disclose all facts that materially affect the value of the property.  Realtors, too, have an obligation to disclose issues that impact the value of a property.  The straightforward path is to be honest and disclose everything up front to avoid problems and expensive litigation down the road.