Why 2019 Might Be a Good Year to Buy a Home

If you’ve bought or have been trying to buy a home over the last several years, you know that the market has been absolutely crazy, and that includes Prescott!

Homes would go under contract before officially being on the market. Homes would go active and within one day there would be multiple offers on the property, and people would find themselves in a bidding war. Homes were going for over asking price and more than they were actually worth. This is called a Seller’s market and it was hot, and it was not slowing down for anyone!

With all that going on, unless you were a cash buyer, could put in an offer on the property within the first day, or could make an over asking price offer, your chances of landing the contract were slim.

Because Prescott’s market is higher priced than others, the affordability that 2019 seems to be promising might not affect us greatly, but some help is better than none, right?

Here are a few key changes in the market this year:

There will be more homes available to buy. With tight inventory on homes, many buyers have decided to wait it out because by the time they call their agent, the home they were looking at has already sold. Who can compete in a market like that? How this will be changing is more new builds in our area, which brings increased inventory. The problem is that new inventory might not always be in your price range, or if it is (most in the 200-300k area), it also seems to be a lot of other people’s price range and you’ll still have some competition.

Soaring prices will slow down. Even though the inventory of homes has been tight over the last few years, the prices of those homes have done nothing but rise (like we said, it’s a seller’s market). In 2019, that looks to be slowing down slightly. Home prices will continue to rise to be sure, but they will rise at a much slower pace now. According to Realtor.com, there will be a “2.2% increase in home prices this year – compared with a nearly 5% increase last year.” Prices don’t look like they’ll stop rising completely, so it’s best to buy as soon as possible to begin building on your home equity.

Rents are rising and will not stop. Speaking of rising prices and building equity, another reason to buy is so that you can stop wasting your money on renting and start investing in your home. While buying a house is a very expensive adventure and can seem scary, keep in mind that along with home prices, rental prices are rising as well. A top dollar market means that those who are able to buy and turn those homes into rentals for extra income have to charge more for rent. Think of how much they need to make on rent just to cover the mortgage, not to mention make a profit off their investment. We know that buying is a lot of cash up front, but it is also a lot of cash saved later on by building equity in your home and not having to give your money to a landlord every month.

Mortgage rates are lowering. Mortgage rates were predicted to rise in 2019, but they have actually been dropping. Lower mortgage rates are good news for buyers because it significantly helps with home affordability. Higher rates means a higher mortgage, which means pushing a home’s price over what you’ve been pre-qualified for, where obviously, lower rates means the opposite. However, Realtor.com thinks these lower rates are only temporary because of the long-term direction of mortgage rates seems to point to them going back up because of our strong economy.

We hope these pointers give you some hope about trying to buy a home this year, or at least make you consider that perhaps you’ve waited long enough and it’s time to take the plunge. If you’re waiting for another crash, it doesn’t look like that is going to happen. The time to buy is now!

To talk about possibly buying a home, or to get a better idea of what this might look like, we would love to help! You can call us at 928-771-1111.

Most Essential Home Features for Buyers

Last week we talked about older homes and renovation loans. In conjunction with that topic, we thought it would be interesting to take a look at what home features new home buyers and future home buyers would consider the most essential in their house hunts.

When you’re looking to renovate your home, or perhaps are getting a renovation loan to remodel the new home you’re buying, it is always important to not only think of what you like and want, but what other buyers might like and want when you go to re-sell your home someday. You may not believe this is applicable to you if you plan to stay in your home for the rest of your life, but you never know what life will throw at you and it is always best to be prepared. Perhaps you will get a sudden job relocation and have to move, or decide to move to be closer to your family and grandchildren? Whatever the case, never say never.

With that in mind, here are some of the high-priority home features The National Association of Realtors (NAR) found that buyers today have on their checklists when looking for a new home:

  1. Laundry Room
  2. Energy Star Windows
  3. Patio
  4. Energy Star Appliances
  5. Ceiling Fans
  6. Garage Storage
  7. Exterior Lighting
  8. Walk-in Pantry
  9. Hardwood Flooring
  10. Double Kitchen Sink
  11. Energy-Star in the whole house

As you can see, most of the home features on this list might not be ones we would think of first. While having things such as an updated kitchen and bathrooms, new flooring, and fresh coats of paint are nice, they weren’t in the top ten high-priority features among buyers. What buyers really seem to care about are things that help them save money on utility costs, give them extra storage in the home, and help make the outdoor living of the home better.

Talking about utility costs, NAR states, “While consumers may rank certain energy-saving features highly, they may not be motivated to pay more for them. Sixty-eight percent of consumers said they are concerned about the environment and would like an environment friendly home, but they were not willing to pay extra for one. However, when asked if they would pay more for a home to save $1,000 a year in utilities, the responses changed. Forty-six percent of respondents said they’d pay an average of $1,000 to $9,999 more for a home to save $1,000 per year on their utility bills; 37 percent would pay $10,000 or more.”

This is definitely something to keep in mind if replacing your appliances is on your list of things to do or to budget for in your home renovation.

Other features that ranked high among buyers in this survey included:

  1. An open layout where kitchen and dining room are open
  2. Wash and dryer on first floor
  3. 9-foot ceilings on first floor
  4. Want 2 – 2 ½ bathrooms

In conclusion, if you are thinking about renovating your home or getting a renovation loan in your new home purchase, you might want to consider these features. These are what other buyers find desirable and would perhaps pay more money for, which would maximize on your investment when you sell one day. We aren’t saying spend all of your renovation money on these things – you have to make your home your own and do the things that you want as well – but keep them in mind when considering what’s really important and where perhaps a portion of your budget should go.

Agent Feature – Jodi Petkovich

We’d like to introduce you to our amazing agent Jodi Petkovich. Jodi and her husband John have lived in Prescott for ten years now with their three kids, and they have loved every moment.

As a former teacher, Jodi brings ‘class’ to her duties as an agent as well as a fabulous sense of humor, constantly making those around her laugh. Her kindness, generosity and professionalism are what you’ll love most about her and are what make her unforgettable. She studies the needs of her clients to help them achieve their transactional goals, always seeking her client’s best interest at heart. Her extracurricular activities include making melodies and spending time with her husband and three children and serving in intercessory ministry.

Her husband John owns his own successful plumbing business called Bar None Plumbing. They do everything from basic plumbing issues to water heaters, to flood prevention services, and seek to bring the highest quality service to their customers.

John and Jodi’s three children are Ronnie, Taylor, and Riley. Ronnie is recently married and a worship pastor at a local Church in town. Taylor is currently making his nation and family proud; serving in our country’s military, though he is missed every day by his family. Lastly, Riley is a freshman at Prescott High School and she loves soccer, playing on her schools high school team as well as on a club team.

We love Jodi and we know you will too! Here are some things that Jodi’s clients have had to say about her:

“Jodi Petkovich was a great help and went out of her way to be accommodating for us to get through our purchase. She was super quick to respond every time I contacted her.”

“We worked exclusively with Jodi Petkovich and we couldn’t be more pleased with our experience. During the entire process Jodi was, to put it into simple terms, a wonderful gift. We were looking at Prescott very seriously and clicked on a property for more information and within minutes we got a call from Jodi. Over the course of many months she went above and beyond to help us find the right property and was at our side every step of the way through a challenging buying process. You can’t find a harder working, dedicated, responsive and knowledgeable professional than Jodi. I’ve dealt with many real estate agents in the past (one was a high school friend) and while all were very good at their job, I’d put Jodi on the top of the list when it comes to my experience. My wife and I highly recommend her services and the team at the Kathleen Yamauchi Group.”

“Where to start? Jodi was amazing her professionalism and knowledge was top notch. She listened to what we wanted and found the right home for us in record time. The loan officer we had even said the closing went so well because of Jodi and her quick response and attention to detail. I highly recommend her.”

Jodi is amazing!

Why Buyers and Sellers Shouldn’t Trust Online Real Estate Price Estimates

Whether you’re looking to buy or sell a home, chances are you’ve looked at a few real estate websites to see what the market is like out there right now. A lot of these sites, while very helpful in other ways, can tend to be a bit misleading when it comes to prices.

If you’re a buyer, these sites take the price the home is listed for and then break it down to give you an estimate of what your monthly mortgage might be. While sites like Zillow and Trulia state that these numbers are just estimates, a lot of times people see them and believe that is truly what they will have to pay monthly, and have hope they would be able to afford the home they’re looking at. These mortgage estimate numbers can be wrong because it doesn’t take into account how much of a down payment you will be paying, which can vary depending on your loan and loan program you’re using, or how much you can afford. Some loan programs are as low as 0% down payment, while others require the 20% customary down payment. Another reason these numbers might not be accurate is that money such as taxes and Escrow payments that get tacked onto your monthly mortgage may vary greatly depending on when you buy.

So then, what should you do if you are a buyer trying to figure out what you can afford? We recommend first speaking to a lender and getting prequalified to buy. This will not cost you anything and it will give you an accurate dollar amount of what you can afford in a home and in a monthly mortgage payment.

If you’re a soon to be seller, you go on these sites to look at what they’re predicting your home might be worth. Sites like Trulia, Zillow, and Realtor will have an estimate of what a home is worth when you look up the address, and this may be a number you look at to help you determine what your home is worth. The problem with these numbers is often times they are derived from automated valuation models and can be very inaccurate. What your home is worth depends entirely on what kind of real estate market you are in (because it varies from town to town), what your home looks like compared to other homes, the amount of land you have, upgrades done, and so much more!

What we suggest for people looking to sell their home is calling a real estate agency. Most agencies will do a CMA for free. A CMA is a Comparative Market Analysis, which compares your home to others like it that have sold in the area with similar criteria (area, year built, number of bedrooms, upgrades, etc). This will hopefully give you a very accurate idea of what your home is worth and what you can list it for rather than just having a guesstimate.

We don’t want to shoot down the real estate sites we love, we are just saying to read what even they say on their websites… that those numbers are estimates and can be inaccurate and not precise depending on your home, your situation, and so many things. For more accurate numbers, follow our tips above about seeing a lender or contacting an agency.

If you need help with either of those things, we would love to assist! You can call our office today at 928-771-111 to speak to an agent about helping you get pre-qualified or creating a CMA for your home to find out how much it could be worth.

Frequently Asked Questions by Sellers

When it comes time to put your home on the market, there are many things sellers begin to ask themselves. We’re going to take a look at some of the most frequently asked questions by sellers and give you some advice from what we’ve found to be true in our collective years of real estate experience.

What do I need to do to my house before I list it?

The answer to this question is really on a case by case basis, but for the most part, sellers do not need to do a ton of work to their homes before they list. While many sellers can get very anxious and worried about all the things they imagine they’ll need to do to their home, most only require a good cleaning and perhaps a little staging, but that’s it. There is no need to drop a lot of money into your home in order to get it ready because that is money you may not get back when you sell. Unless otherwise advised by your real estate agent, the preparation to list is minimal.

How much is my home worth?

This is a question no good real estate agent should answer without first seeing your home and running what we call a comparative market analysis. A comparative market analysis, or “CMA” as we call it, looks at houses that have sold in your area that are similar to your own in order to generate a good price point for your home. This price will depend on many factors including the home’s size, neighborhood, location, amenities, upgrades, and so much more. Many sellers believe there home is the best home on the block, which it may very well be, but prepare yourself to be realistic about how nice your home is compared to others because you don’t want to overprice it. If you price your home too high, then it will likely sit on the market for far longer than you expected. However, if you price your home too low, then you aren’t maximizing on your investment the way you could be. Therefore, make sure you speak with an agent and listen to their advice so you can collectively land on a good price for your home.

How long will it take to sell my home?

According to Realtor.com, homes in the United States are spending an average of eighty-three days on the market. However, again, the answer to this question will vary greatly depending on the home. Some areas that are nicer sell far quicker than others, likewise, certain price points, no matter the home, will sell quicker than others. There are far too many factors here to have a cut and dry answer, so we would urge you again to speak to your real estate agent to make sure you are at the best price possible to make good on your investment, but to also sell relatively quickly.

Should I be present for showings of my home?

Most real estate agents would agree on this one when we say, “No.” When buyers go looking at homes, it can be either a very fun experience, or a very stressful one, either way, having the owner of the home at the house will only make the buyers feel uncomfortable. With the seller there, the buyers don’t feel free to be themselves, ask questions about the property to their agent, or voice any concerns they have as they view the property. The last thing you want is to scare off any potential buyers and their offers on your home with them, so it’s best to stay away.

How much do I pay my real estate agent?

This is something that can vary depending on the agency and town, but that will be something you and your agent discuss and agree upon before listing your home. A common commission is typically 6% of the home’s sales price, which is then shared with the buyer’s agent, giving each side of the transaction a 3% commission of the sale’s price. That may seem like a lot, but you have to keep in mind that agents don’t get paid by the hour, they get paid from sales. So, they don’t make money unless they sell your home. They are spending a lot of time and money networking, and advertising your home so it is seen by as many potential buyers as possible. However, not all agents are created equal, so make sure you find the right agent for you who will truly seek your best interest and do whatever they can to help you sell your home.

 

In all of your real estate adventures, remember to breath and take it easy. Find yourself a good agent who will make your transaction smooth and stress free, and not one full of fear and anxiety.

If you’re looking to list your home, you could call our office today for a free Comparative Market Analysis! Our number is 928-771-1111. We would love to help you sell your home!

Purchasing a Fixer Upper: Things to Consider Before Buying

On television today, there are so many different fixer upper shows that it is hard to keep track. With these shows growing in popularity – show hosts taking that beaten up old home on the corner and turning it into their clients dream home – the purchase of fixer upper properties around the country have become increasingly common. Who doesn’t want to buy a home for pennies on the dollar and turn it into the home they’ve always dreamed of while still remaining under their budget?

However, when it comes to purchasing a fixer upper home, not all of them are created equal. While some offer the opportunity to create your dream home while also having a ton of appreciation, other fixer uppers become monster projects that do nothing but steal your money (ever seen the movie “The Money Pit”?). So, how do you know the difference?

Here are some issues to think about first when considering buying a fixer upper home.

  1. Is the home in a bad neighborhood?:

There’s a saying in the real estate industry that states, “Location, location, location,” which is why this is the number one thing you need to consider when purchasing a fixer upper. On the television network HGTV’s website they state, “When it comes to renovating, almost anything can be done if you’ve got the budget, but there’s one thing you’ll never be able to change – location. If the house is located next to a sewage treatment plant or in a high-crime area, it doesn’t matter what you do to the property, it’s automatically unappealing to most buyers.” While you might see the potential in the home, you always have to think of resale, or what living would be like in the home if you are purchasing it as an investment property. Would another person want to buy or rent in that area/neighborhood, or say for example, in a flood area? If the answer is no, then it’s probably not a good idea for you to either.

  1. Is the home structurally sound?:

This one seems like a no brainer, but you would be surprised. When it comes to fixer uppers, a general rule you want to follow is making sure the home’s structure is more or less intact. There is a very large difference – in money – between some new cabinets and fresh coats of paint, and a home in such disarray that you move from a home makeover to a major home renovation. Forbes magazine said it well when they said, “If the home has structural or foundational issues, but the ‘lipstick on the pig’ looks good, then it’s too good to be true.” One idea is to bring along a home inspector with you to look at properties if you’re looking at fixer uppers. Though this might cost some money upfront, it could also save you a lot of money in the long run if they unearth any large structural issues.

With a fixer upper, there may also be larger ticket items that need attention like replacing the HVAC unit, putting on a new roof, or updating the plumbing. None of those are terribly horrible like a faulty foundation or structure, but are still more costly. So, make sure you ask yourself how far you are willing to go in renovating whatever fixer upper property you end up purchasing. Are you looking for that home in need of minor upgrades such as flooring and cabinets, or are you okay with a larger renovation project?

  1. Will the cost of renovating the home be too great to make a profit?:

If you’re looking to buy and flip a fixer upper in order to resell and make a profit, this is definitely something you need to be thinking about! For example, if you buy a home for $150,000, put $50,000 worth of renovations into it, but can only sell the home for $190,000, then you are out 10k on that project, not to mention closing costs! On top of that, you have to look at other homes in the area. What are they selling for? Will the amount of renovations you want to do to the home, and therefore the price at which you need to list in order to remake that money, be too expensive for that neighborhood? If so, then you might end up having to sell for way less than what you were originally asking for and what you need to profit in order to get your money back.

 

If you’re looking to purchase a fixer upper home either for yourself, or to flip and resell, these are just a few of things you should think about first. Fixer Upper home projects can be great! You get to create the home you’ve always wanted, or flip a home to make it a dream for someone else while making a profit for yourself, but don’t forget to use caution!

In this next fixer upper adventure we wish you happy hunting and good luck!

Home Remodeling: Which Projects Are Worth It?

With home prices on the rise not only in Arizona, but also in almost every state, a lot of sellers have begun to opt for home remodels rather than selling their home. Or, they’ve decided to invest some money into upgrading their homes in hopes it will bring a good return when they do go to sell. Either way, any homeowner looking to do some remodeling must ask themselves this question: which projects are the most essential in increasing the value of my home?

While some may have the funds to do not only the maintenance to their homes, but also the expensive upgrades, in most cases we are left choosing between the new kitchen we’ve been dreaming of or replacing the old roof that is only going to last a few more years. So, the question is, which do you go for? The cosmetic upgrades to make your home more appealing to the eye, or the general maintenance that isn’t as easily noticed, but is often vital to the longevity of your home?

In most circumstances, realtors and contractors would agree that when it comes to choosing your projects for updating your home, the most important ones to tackle first are the ones that upgrade your home in its structural maintenance.

In Remodeling Magazine, the upgrades on homes that received the most money back for the value were projects such as replacing the siding (a 92.8% recoup) and replacing roofs and windows (an 80% recoup).

That isn’t what most of us want to hear, especially if we plan on staying in our homes and all we can think about is tossing those dirty kitchen cabinets or worn down carpets, and putting in nice wood. However, when you think about it realistically, it makes sense.

If you are staying in your home, you will spend all that hard saved money on a new kitchen, only to be hit with a larger bill a few years down the road when the roof or siding needs to be replaced.

For those selling sooner rather than later, it does not matter if the kitchen is sparkling new with granite counters and a farm tub sink, if there are too many big general repairs to be done, buyers will stay away. For example, the buyers may love the new kitchen you’ve installed, but if the roof is old and leaking, or the HVAC unit is at the end of its life, they will be scared away, or they’ll end up asking for those high end repairs at the end of the inspection period, at which point they could choose to walk away.

While Remodeling Magazine also showed that remodels such as minor kitchen updates (about $15,000 worth) also brought in about a 92.8% return on cost, in most cases, it’s the maintenance repairs that bring the most return on cost and that buyers would prefer to be done. These updates make sure the home is structurally sound and will last without a sudden tens of thousands of dollars repair.

No fancy kitchen is worth a faulty foundation or dilapidated roof, and most buyers will agree.

Creating Your Bedroom Retreat

When it comes to buying new furniture, there are often many questions one asks themselves.

What do today’s trends look like? What is my style? What kind of look am I going for?

These are just a few things you might consider when looking to buy new furniture. When it’s your own bedroom, there may be even more. Your bedroom is a place you should be able to come and relax, a place that helps you de-stress from a long day of work, or running the kids around, or one of the many other things that fill your day.

In order to do this, there are so many important decisions when re-doing your room. What will your color scheme be? Do you want rustic, or modern, or some other style of furnishings? Do you want clean lines and an open feel, or pops of color and zest? Whatever your style and tastes are, the more you make a room your own, the more it feels like a home and becomes a place you can truly come to kick up your feet and feel at ease

In this article from furniture.com titled “How to Create a Bedroom Retreat,” they walk you through the best ways to make a room your own and the importance of each piece of furniture in your room from drapery to throw pillow, each adding to the feel and relaxation of your space.

Along with their blog, furniture.com also offers a one-stop-shopping experience for furniture across the country and they offer a handy local sales finder, so you can find the furniture you love and have it shipped straight to you!

If you’re looking to re-do your room, or any room in your house really, we hope you find their article helpful and that it gives you some good ideas on how best to make your room your own little paradise.

Today’s Smart Home

In conjunction with the blog we posted earlier this week titled “Senior Smart Homes,” we wanted to take a look at smart homes in general and what that means for homeowners today.

In years passed, technology in our homes has advanced far more than we think to give it credit for. Garage doors used to have to be opened manually, now we press a button and it opens electronically for us. Homes went from using open windows and fireplaces for heating and cooling, to having central systems that do that for you. Even windows advanced from single pane to dual panes that help keep in your hot or cold air.

Fast forward to today, and those technological improvements seem very basic compared to what we have now.

In a blog post by Michelle Lind of Arizona REALTORS, she wrote, “In the past five years, we’ve seen a surge in home tech, with builders starting to integrate technology like smart thermostats and doorbells into new home construction. Devices such as Alexa and Google Home are becoming commonplace, and even appliances are getting connected through mobile apps and voice controls. In the near future, these home systems and entertainment devices will be fully integrated through a single control panel or app.”

These smart home technologies include things like being able to open your garage door from your phone… while you aren’t even home! Nest thermostats, which can be adjusted from your Smartphone as well, turning off when you aren’t home and turning back on when you return. That means, for example, you could be at work when it starts snowing and go on your phone to turn the heat up in your home so it’s warm when you arrive.

There are also smart home locks, with key code entry and motion detecting cameras. These locks allow you to see who is at your front door whether you are home or not, open you door by mobile device to let the UPS guy in to drop off packages so they don’t get stolen, or allow you into your home should you accidentally lock yourself out. The possibilities with these locks are endless.

These few things mentioned are possibly the most popular in today’s homes, but are just the tip of the iceberg when it comes to how vastly our technology within the home is expanding.

Smart refrigerators with touch screens. Lights that turn on and off as you enter and leave rooms. Smart shower heads that allow you to manage pressure, play music, and answer phone calls.

According to Statista.com, in 2019, 33.2% of households will be using some sort of smart home technology. That number is expected to hit 53.9% by 2023!

Our world and our homes are changing! What are some smart home technologies you use in your home? We would love to hear about them in the comment section below!

Senior Smart Homes

 

For this article, we’ve partnered with our friends over at allconnect.com who’ve outlined all the ways a home can be made into a smart home for seniors today. Not only will this make your home more up to date, but it will also make living easier and more convenient for those of us who need a little extra help. Read the article below by Allison Robins, Communications Coordinator at Allconnect, or visit the Allconnect Smart Home Page to get some very helpful tips and tricks!

 

Senior Smart Homes:

For many families, the idea of an assisted living can serve as an appealing solution for their loved ones; but with the rise of smart home technology independent living for seniors is a more realistic and budget friendly idea to explore.

From everything to automatic stove turn-off devices and medication dispensers to health monitoring sensors there is technology to help your loved one in every stage of independent living, making the aging in place process a more comfortable and less invasive possibility.

Door Locks and Security Systems: A smart security system allows your family to monitor entrance activity to your home, so they’ll always know you’re safe. Smart door locks let you lock your door no matter your location.

Smart Doorbell: Communicate with visitors from anywhere inside of your home; smart doorbells come with video surveillance, speakers, and microphones for added home protection.

Wi-Fi Enabled Refrigerators: Your smart refrigerator keeps track of your grocery list and delivers it to a participating grocery store near you. You can even view the inside of your refrigerator from an app on your smartphone.

Automatic Stove Turn-Off Devices: Automatic stove turn-off devices come with a timer, motion sensors and an automatic shut-off feature to ensure that your kitchen equipment powers down when you want it to.

Automatic Medication Dispenser: Automatic medication dispensers can ensure all your medications are taken on schedule and according to the doctor’s orders. Your dispenser alerts you or your family of missed medications and even provides your physician with detailed reports regarding your medication activity.

Health Monitoring Sensors: Wearable health monitoring sensors communicate physiological data directly to your healthcare providers in real-time. Monitoring sensors can be worn in a variety of accessories to track heart health, exercise activity, chronic conditions and more.

Smart Light Switch: Control the lights in your home using timers or voice command with the help of your smart home assistant or via an app on your smartphone.