Rick Floyd, National Director of Retail Sales for Real Estate Mortgage Network Inc. discusses current home trends and the best times to buy and sell a home in 2011.
When is the best time to buy a home and what percentage should you have in the bank for a down payment?
It depends on who you are and what stage of your life you’re in. Most families with children look to purchase homes in the spring and summer, so they can be settled in a new location before the school year starts. People without children in the home tend to have more flexibility when making a purchase. If you can wait for the ‘off season’, you may be able to find a better value, but sometimes the selection can be limited because home owners won’t have their properties on the market during winter months.
In terms of a down payment, the buyer should look to put down at least 5-10 percent of the total cost of the home down, but it depends on what their credit profile looks like and their personal situation. There are options out there to put less money down, but if you really want the best rates for your loan, you should aim for at least 5-10 percent.
What are some homeowner trends that are waiting to sell their home?
We’re seeing some people wait for the market to bounce back before putting their home on the market, but it really depends on your personal situation. Some people have the luxury of waiting it out, but othersare more anxious to sell their home and move on.
For those waiting, little improvements can go a long way when showing your house to a potential buyer. You don’t need to install a new pool or even redo the master bath, but touch-ups, such as a new coat of paint or simply making sure your landscaping is crisp,can go a long way. Little things, such as removing clutter from coffee tables and washing the floors in advance, can go a long way as well.
What are some trends for those waiting for the best time to buy a home?
With gas prices as high as they are, many people are looking to lessen their commute when buying a home, so location continues to be a big factor.
Another trend we’re seeing is that home buyers are becoming more interested in distressed properties and FHA 203(k) programs. In short, a 203(k) is a mortgage and home improvement loan combined into one. This benefits the home buyer because they can wrap the home improvement loan into their mortgage, usually at a better rate and all in the same process. In essence, you’re securing a home improvement loan and a mortgage at the same time, through the same lender.
We just started offering 203(k) programs to our customers and have seen some great success. One of the issues we’ve seen in the industry is when a lender outsources the home improvementportion of the loan to a third party. While there’s nothing wrong with that, there could be a delay in securing payment for the home improvement side, which could cause issues with the contractors hired to renovate. To help prevent those problems and delays in payment, REMN is now handling the entire203(k) initiative in house. It is extra work on our end, but helps ensure the process runs smoothly and customers are satisfied with the end result.
What are the best resources to use when looking for a home?
Your personal network should be a top choice. Speak with someone you trust that has fully gone through the home buying process already and ask them for recommendations.
If you don’t know anyone in your area that has been through the process recently, local real estate agents and mortgage professionals should be able to provide you with references to the quality of their own work. Makesure to get a few references from each.
What’s your scope ofthe current real estate market?
We know that in the last few years, the mortgage industry has come under a lot of fire. For the most part, the people that gave the industry a bad name no longer have anything to do with it. Those that are still involved, care about the industry and helping make people’s dreams of home ownership a reality. When you’re ready to purchase your first or next home, look hard at the companies you’re dealing with to make sure they have the experience you need, but also provide the customer service you deserve.
River Edge, NJ-based Real Estate Mortgage Network (REMN) has been in business more than 20 years and is one of the largest, privately-held mortgage lending firms in the U.S. REMN is more than just a brokerage firm and combines the services of a large-scale wholesale brokerage with those of consumer facing retail branches and online channels, so customers benefit from the unique insight into all of the changes and challenges taking place in the lending industry.