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Bill Aims to Help More People Break Into Homeownership

September 27, 2018

Sen. Elizabeth Warren, D-Mass., has proposed a bill that sets out to make homes more affordable for low-income and middle-class Americans. The American Housing and Economic Mobility Act of 2018 calls for construction of new homes and more renovations of existing ones by removing some red tape for builders on regulatory costs and offering more incentives for them to build more affordable homes.
© David Cabrera – Moment/Getty Images

For example, the bill proposes giving local governments incentives to remove or ease some zoning and land use regulations that have stood in the way of increasing building in recent years.

The legislation also calls on providing assistance to low-income renters and home buyers, such as by offering greater down payment assistance to low-income, minority communities. The bill calls for $2 billion to be earmarked to help homeowners who are still underwater on their mortgages, even a decade after the financial crisis. The bill also calls for an expansion of the Fair Housing Act to make it illegal to discriminate against prospective renters and buyers based on sexual orientation, marital status, gender identity, and job.

“Housing is the biggest expense for most working families—and costs for everyone, everywhere, are skyrocketing,” Warren said in a statement. “Rural housing is falling apart and decades of discrimination has excluded generations of black families from homeownership. This proposal will attack the rising cost of housing by helping to roll back needlessly restrictive local zoning rules and taking down other barriers that keep American families from living in neighborhoods with good jobs and good schools.”

The bill would be funded by raising the estate tax and taxes of the 10,000 wealthiest households in the U.S.

The National Association of Home Builders applauded Warren’s move to bring up legislation that targets the affordability crisis in housing and reform local zoning laws to make it easier for builders to add inventory. However, “funding many of the provisions within this broad-based bill by raising the estate tax could hurt many small family-run businesses by imperiling the ability of the owners to pass on their business to future generations,” Randy Noel, the NAHB’s chairman, said in a statement.

Sen. Elizabeth Warren’s New Legislation Aims to Make Homes More Affordable

 | Sep 26, 2018

U.S. Sen. Elizabeth Warren is attempting to put the increasingly expensive housing market into reach for more Americans. To do that, the Massachusetts Democrat is slated to introduce a roughly $476 billion housing bill in the Senate on Wednesday.

It’s unlikely that the bill, focused on creating more affordable housing for low-income and middle-class Americans, would be passed by a Republican-controlled Congress. But the political landscape could change if the midterm elections in November usher in a blue wave of elected officials. Plus, the legislation gives a boost to the national profile of Warren, a liberal favorite who appears to be positioning herself for a presidential run.

The American Housing and Economic Mobility Act of 2018, which may be more of a wish list than a near-term reality, would provide for the construction of new homes and the rehabilitation of existing ones. It would make it easier, cheaper, and faster for builders to put up new homes by giving local governments incentives to get rid of, or ease, some of their zoning and other land use regulations. The incentives could be used for infrastructure, parks, roads, or schools—and the cost cuts to builders could make homes less expensive for buyers and renters.

The legislation would also provide assistance to more marginalized groups of renters and home buyers. For example, the bill would offer more down payment assistance to predominantly low-income, minority communities where residents were historically denied mortgages due to now-illegal policies. It would invest in rural housing. And it would also expand the Fair Housing Act to make it illegal to discriminate against prospective renters and buyers based on their sexual orientation, marital status, gender identity, and occupation.

“The federal government has for many years not stepped up to the extent that it’s needed to preserve and develop affordable housing,” says Edward Goetz, an urban planning professor at the University of Minnesota in Minneapolis. And while this bill isn’t likely to become law anytime soon, he believes “it’s the beginning of a longer strategy.”

In addition, the bill provides $2 billion in support for homeowners who are still underwater on their mortgages a decade after the financial crash.

“Housing is the biggest expense for most working families—and costs for everyone, everywhere, are skyrocketing. Rural housing is falling apart and decades of discrimination has excluded generations of black families from homeownership,” Warren said in a statement. “This proposal will attack the rising cost of housing by helping to roll back needlessly restrictive local zoning rules and taking down other barriers that keep American families from living in neighborhoods with good jobs and good schools.”

It’s projected to create 3.2 million new units of housing and lower rents for lower- and middle-income tenants by 10%, according to an independent analysis by Moody’s Analytics. The unpaid analysis was commissioned by Warren’s office.

The bill would be paid for by increasing the estate tax along with taxes on the 10,000 wealthiest households in America. That’s very unlikely to happen under President Donald Trump.

“There is a gaping hole in the number of affordable housing units, and this helps to fill it,” says Moody’s Analytics Chief Economist Mark Zandi, who wrote the analysis of the bill. “[But] under most scenarios, I don’t see this legislation going anywhere. We have to wait for the next president, the next Congress.”

“When the political window opens, [this legislation can go] through it,” Zandi says.

The National Association of Home Builders lauded the bill, particularly its elimination of “unnecessary local land use rules that drive up construction costs and harm housing affordability,” said the group’s chairman, Randy Noel.

But Noel is concerned that raising the estate tax to fund these changes could harm family-owned small businesses that are passed down from parents to their children.

Clare Trapasso is the senior news editor of realtor.com and an adjunct journalism professor at St. John’s University. She previously wrote for a Financial Times publication, the New York Daily News, and the Associated Press. She is also a licensed real estate agent with Charles Rutenberg. Contact her at clare.trapasso@realtor.com.

 

Pending Home Sales Dip 1.8 Percent in August

WASHINGTON (September 27, 2018) – Pending home sales fell slightly in August and have now decreased on an annual basis for eight straight months, according to the National Association of Realtors®.

The Pending Home Sales Index,* www.nar.realtor/pending-home-sales, a forward-looking indicator based on contract signings, decreased 1.8 percent to 104.2 in August from 106.1 in July. With last month’s decline, contract signings are now down 2.3 percent year-over-year.

Lawrence Yun, NAR chief economist, says that low inventory continues to contribute to the housing market slowdown. “Pending home sales continued a slow drip downward, with the fourth month over month decline in the past five months,” he said.

“Contract signings also fell backward again last month, as declines in the West negatively impacted overall activity,” he said. “The greatest decline occurred in the West region where prices have shot up significantly, which clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points.”

According to the third quarter Housing Opportunities and Market Experience (HOME) survey, a record high number of Americans believe now is a good time to sell. “Just a couple of years ago about 55 percent of consumers indicated it was a good time to sell; that figure has climbed close to 77 percent today.”

Added Yun, “With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains. However, with indications that buyers are beginning to pull out, price gains are going to decelerate and potential sellers are considering that now is a good time to list and bring more properties to the market.”

Yun pointed to year-over-year increases in active listings from data at realtor.com® to illustrate a potential rise in inventory. Columbus, Ohio, Seattle-Tacoma-Bellevue, Wash., San Diego-Carlsbad, Calif., Providence-Warwick, RI-Mass. and Nashville, Tenn. saw the largest increase in active listings in August compared to a year ago.

When it comes to rising mortgage rates, Yun believes that while rising rates are always a deterrent to potential buyers, it should not lead to a significant decline. “We have two opposing factors affecting the market: the negative impact of rising mortgage rates and the positive impact of continued job creation. This should lead to future homes sales staying fairly neutral,” said Yun. “As long as there is job growth, rising mortgage rates will hinder some buyers; but job creation means second or third incomes being added to households which gives consumers the financial confidence to go out and make a home purchase.”

Yun expects existing-home sales this year to decrease 1.6 percent to 5.46 million, and the national median existing-home price to increase 4.8 percent. Looking ahead to next year, existing sales are forecast to rise 2 percent and home prices around 3.5 percent.

August Pending Home Sales Regional Breakdown

The PHSI in the Northeast dropped 1.3 percent to 92.7 in August, and is now 1.6 percent below a year ago. In the Midwest, the index slid back 0.5 percent to 101.6 in August and is also 1.1 percent lower than August 2017.

Pending home sales in the South dipped 0.7 percent to an index of 121.3 in August, however, that number is 1.3 percent higher than a year ago. The index in the West decreased 5.9 percent in August to 89.1 and plummeted 11.3 percent below a year ago.

The National Association of Realtors® is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

NOTE: NAR’s September Housing Minute video will be released on September 28, Existing-Home Sales for September will be reported October 19, and the next Pending Home Sales Index will be October 25; all release times are 10:00 a.m. ET.

https://www.nar.realtor/newsroom/pending-home-sales-dip-18-percent-in-august

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An accepted contract is just the beginning

03/03/2017 | Author: Marty Kramer

As a homebuyer or seller, an accepted contract is exciting. But hang on … the deal’s not done.

Thankfully, if you’re working with a REALTOR®, he or she can guide you through all the potential twists and turns on the way to closing.

An option to back out

For starters, most purchase contracts include a termination option. The buyer pays the seller a fee for a specified period of time during which the buyer can cancel the contract. The buyer can exercise this option for any reason. In fact, he doesn’t even have to explain why.

A closer look at the property

Buyers usually hire inspectors during the termination-option period. Inspections that reveal items in need of repair may prompt a buyer to ask for a price reduction or repairs prior to closing. Or the buyer may simply choose to cancel the deal.

Financing considerations

Transactions sometimes unravel when a buyer cannot obtain the financing specified in the contract or the property does not meet the lender’s requirements. For example, appraisals can come in lower than the purchase price, or there may be issues with obtaining insurance for the home.

The list goes on

Option periods, inspections, and financing are three common trouble spots for transactions, but there are many others. Problems with title insurance or the survey, disagreements about items that convey, issues related to homeowners associations, or damage to the property after acceptance of the contract but before closing are a few examples of issues that can arise.

You have a valuable resource

Communicating with your REALTOR® about each stage of the transaction will minimize surprises and increase the chances that your transaction will proceed smoothly.

https://www.texasrealestate.com/advice-for-consumers/article/an-accepted-contract-is-just-the-beginning

 

No credit score? There’s a new automated home loan option for you

Not having enough credit history for a credit score doesn’t necessarily mean you must go through a drawn-out manual underwriting process to get a home loan. If you have a history of making housing payments on time and references, you could benefit from a new automated process from Freddie Mac, a quasi-public agency that purchases mortgages.

Starting in June, borrowers without credit scores can see if they’re eligible for purchase mortgages or no-cash-out refinance transactions on one-unit owner-occupied homes. Lenders will be able to use Freddie Mac’s automated assessments to quickly approve your loan with greater confidence that Freddie Mac will purchase it. Loans will still be evaluated against Freddie Mac’s credit requirements, but the automated process should allow lenders to more efficiently serve borrowers.

https://www.texasrealestate.com/advice-for-consumers/article/no-credit-score-theres-a-new-automated-home-loan-option-for-you

How Texas REALTORS® are helping homeowners

04/14/2017 | Author: Editorial Staff

Sure, REALTORS® help you buy, sell, and lease property, but they also advocate for public policy that helps consumers.

For example, the Texas Association of REALTORS® recently announced its support for the property tax reforms provided in Senate Bill 2, now making its way through the Texas Legislature. The bill is a positive step forward in ending the common practice of local elected officials misleading taxpayers when budgets are adopted at the local level.

“When local elected officials hide behind increasing property values to justify larger budgets, taxpayers suffer. Senate Bill 2 goes a long way to fix this problem and provide more transparency and honesty in the local tax-rate setting process,” said TAR Chairman Vicki Fullerton.

The bill reduces the rollback rate for local taxing entities and requires an automatic rollback election if the local taxing entity exceeds the rollback rate. Despite some comments to the contrary, the bill does not limit the amount of revenue a local taxing entity may generate.

The association believes the bill will help give property owners transparency during the tax-rate setting process and encourage voter participation. To better understand the property tax process, visit hiddenpropertytax.com.

https://www.texasrealestate.com/advice-for-consumers/article/how-texas-realtors-are-helping-homeowners

You found dozens of homes listed online that you love. Now what?

04/07/2017 | Author: Editorial Staff

It’s nice having options, right? Especially when it comes to making a big purchase like a home. If you’ve started your home search by using online listing sites, you’ve probably found a long list of properties you want to tour.

Even though it’s exciting to see what’s out there, are you wondering how you’ll be able to choose a favorite? Are you overwhelmed with your choices? That’s normal. In fact, research shows that when people have too many options, they have a harder time making a decision and tend to be less satisfied with their selection. Instead of making such an important decision on your own, there’s an easy way to get there faster: Hire a Texas REALTOR®.

Texas REALTORS® can help you quickly focus on properties worth seeing because they can eliminate those that may look good online but don’t actually meet your needs. They also have access to current information about whether a home is still on the market, and when homes you thought are out of your price range might actually be open to negotiations. This is information you won’t find on your own searching online, and even if you could, it would take a lot of your valuable time.

Visit texasrealestate.com to find a Texas REALTOR® who can help you avoid wasting your time and the stress that can come with choosing the perfect home.

https://www.texasrealestate.com/advice-for-consumers/article/you-found-dozens-of-homes-listed-online-that-you-love.-now-what

 

Don’t be fooled by these 3 selling myths

03/17/2017 | Author: Summer Mandell

First-time sellers beware: there are lots of myths out there about the right way to sell your home. While your Texas REALTOR® is your first line of defense against making these mistakes, here are three common selling myths busted:

Myth: I bought a house, so I know what it’s like to go through a real estate transaction. I’ll sell my home on my own and save money by not using a real estate agent.
Truth: Texas REALTORS® don’t work for free, but that’s because they provide valuable assistance through the home-selling process. Selling isn’t the same as buying, and a Texas REALTOR® can help you reduce your risk of making a costly selling mistake. Plus, they help clients with the ins and outs of property transactions every day and are plugged into your local housing market. If you DIY, that means you’ll have to spend time marketing your home adequately, be available to show the home yourself, and navigate your way through a tricky transaction alone.

Myth: If I price my home higher than market value, I’m leaving room for negotiations.
Truth: Buyers have no idea you’re employing this strategy and won’t understand why your price is too high. Many won’t even view your home, much less put in an offer. When your home is priced improperly, it’s more likely to sit on the market, making potential buyers think there’s something wrong it. When that happens, you’ll probably wind up with lower offers than if you had priced the home fairly at the start.

Myth: All I need to do is mow the lawn and hide my stuff in a closet and my home will be ready to show.
Truth: Is a mowed lawn and hidden clutter all it takes to attract you to a home? It won’t work for potential buyers of your property, either. Your Texas REALTOR® might go through your home with you and identify areas that could use some sprucing up to make your home more appealing. Or, he or she might recommend working with a home stager to make the best impression. Be open to those suggestions … your Texas REALTOR® knows what makes a property sell quickly for top dollar.

 

https://www.texasrealestate.com/advice-for-consumers/article/dont-be-fooled-by-these-3-selling-myths

Home-staging tips for a show-worthy home

12/16/2016 | Author: Editorial Staff

Staging your home is a great way to enhance the appeal of your property to buyers. Home-staging and lifestyle expert Tori Toth shares some tips for homesellers.

Add natural touches
Take a cue from the geography surrounding the home and use natural elements that reflect that area. You want to add plants and flowers to soften spaces and subliminally remind buyers that life grows here.

Rearrange furniture
Moving furniture to open traffic flow can make a room feel bigger, or arranging it to create a conversation area gives the space purpose.

Set the mood with lighting
A house that’s illuminated says, “Come on in.” Open your blinds and curtains to let in natural light, and put the maximum allowable wattage in fixtures to boost illumination.

Accessorize the entryway
Add strategic pieces—a table lamp, artwork, mirror, decorative box—to create a statement when welcoming people into a home.

Get more tips, including a free home-staging video series, at toritoth.com.

You sure you want the internet to solve your real estate problems?

10/14/2016 | Author: Marty Kramer

I was reading user comments on a real estate website the other day. The questions buyers and sellers were asking reminded me that real estate transactions can get complicated in countless ways.

Here’s a random sample of issues buyers and sellers were having …

  • A lien the seller didn’t know about is making it difficult to sell the home.
  • A person buying a home is thinking of renting out her current home rather than selling it.
  • The seller accepted the buyer’s offer, and now the buyer has found a home he likes better.
  • The homebuyer wants to move in before closing and rent the home until the closing date.
  • An inspection revealed costly repairs are needed, and the buyer wants to renegotiate the purchase price.
  • A buyer has a contract to buy a home and learned the seller has another a contract with a second buyer.
  • The buyer and seller disagree about what items should stay with the property after the sale.
  • A buyer of a commercial building doesn’t understand the seller’s reply to his offer.
  • The seller wants to know how to handle multiple offers.
  • The seller didn’t show up to closing, and the buyer doesn’t know what to do.

This list could keep going and going.

I understand why people would “ask the internet” about their real estate problems, but I would be wary of the advice found there. You don’t really know what you’re getting.

On the other hand, a Texas REALTOR® is a professional with the experience and knowledge to help you avoid many problems, deal with those that arise, and help you reach the best possible outcome on your real estate transaction.

https://www.texasrealestate.com/advice-for-consumers/article/you-sure-you-want-the-internet-to-solve-your-real-estate-problems

 

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