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VA Loans for First-Time Homebuyers: A Basic Guide
If you’ve served in the U.S. military, a VA loan might be an excellent way to finance your first home. If you’re interested in using this benefit, it’s important to know the steps involved. Here is a basic guide to buying your first home with a VA loan:
Get Your Certificate of Eligibility
A certificate of eligibility from the VA shows you meet the requirements to apply for a VA loan. These could be either personal military requirements or surviving spouse requirements. While you won’t need this document until it’s time to close on the loan, it’s best to get it as early as possible to avoid paperwork delays.
Compare Lenders
Comparing lenders when applying for a mortgage is especially important if you’re wanting a VA loan. Not every lender offers VA loans, and some who do specialize in a specific type of loan or type of client. Find a lender who offers first-time buyer benefits to veterans through your state.
Prepare Cash
VA loans don’t require down payments, but it’s still important to prepare some cash to pay for other expenses. Some of these costs include the earnest money deposits and moving expenses. You can also increase your odds of approval if you have strong cash savings, as lenders use this as a determining factor in your loan application process.
Find the Right Agent
Finding a real estate agent who has experience working with military clients will benefit you in many ways. It also pays to find an agent who has worked with first-time homebuyers and can help you navigate the system with confidence. Try interviewing a few agents and asking about their prior experience and expertise. It can also help to inquire about any special training or certifications they might have received for working with military clients.
Buying your first home can be stressful, but if you’re a military veteran, you have great opportunities for financing. Remember these tips when considering your loan options to make the best decision.
How to Prepare Your Home for an Inspection
Preparing your home for sale is a complicated process. Home inspections are a key part of that process, and many buyers and sellers aren’t sure what to expect. As a seller, it can be your best chance to negotiate pricing and terms with your potential buyer as well as identify any major issues that could be deal-breakers. Here’s what sellers can expect from a home inspection:
What Will the Home Inspector Look For?
A home inspector will carefully evaluate the condition of your home’s features. This includes major systems like heating, air conditioning, electrical and interior plumbing. They’ll also examine the roof, walls (inside and out), ceilings, floors, doors and windows. Basements and attics are also on the list, as are major structural components like beams, pillars and the foundation.
There are also special home inspections for specific things like mold, termite damage and detailed foundation reports. These extra inspection reports can be optional, but be prepared for a buyer to request them.
How Can I Prepare for a Home Inspection?
The best way to get a complete and detailed report is to make the home inspector’s job as simple and efficient as possible. Here are some things to consider doing to prepare:
- Provide clearly-labeled keys for things like basement storage and electrical panels.
- Turn on the pilot lights for fireplaces and furnaces to make it easier to check the heating components.
- Remove or tidy anything that could prevent access to the basement, attic or other parts of the house. This includes providing easy access to appliances that are usually hidden away, like water heaters, HVAC units and furnaces.
- Keep the yard neat for the inspector to access crawl spaces, drainage points and examine the foundation. You don’t need to completely redo your landscaping, but clearing the area of debris will help the inspector do their job.
Bottom Line
Use the inspection report as an opportunity to improve your chances of selling your property and getting the best price possible.
Planning to Retire? It Could Be Time To Make a Move.
If you’re thinking about retirement or have already retired this year, you may be planning your next steps. One of your goals could be selling your house and finding a home that more closely fits your needs.
Fortunately, you may be in a better position to make a move than you realize. Here are a few things to think about when making that decision.
Consider How Long You’ve Been in Your Home
From 1985 to 2008, the average length of time homeowners typically stayed in their homes was only six years. But according to the National Association of Realtors (NAR), that number is rising today, meaning many homeowners are living in their houses even longer (see graph below):
When you live in a home for a significant period of time, it’s natural for you to experience a number of changes in your life while you’re in that house. As those life changes and milestones happen, your needs may change. And if your current home no longer meets them, you may have better options waiting for you.
Consider the Equity You’ve Gained
Additionally, if you’ve been in your home for more than a few years, you’ve likely built up significant equity that can fuel your next move. That’s because the longer you’ve been in your home, the more likely it’s grown in value due to home price appreciation. Data from the Federal Housing Finance Agency (FHFA) illustrates that point (see graph below):
While home price growth varies by state and local area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by over 50%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time.
Consider Your Retirement Goals
Whether you’re looking to downsize, relocate to a dream destination, or move so you live closer to loved ones, that equity can help you achieve your homeownership goals. NAR shares that for recent home sellers, the primary reason to move was to be closer to loved ones. Plus, retirement played a large role for those moving greater distances.
Whatever your home goals are, a trusted real estate advisor can work with you to find the best option. They’ll help you sell your current house and guide you as you buy the home that’s right for you and your lifestyle today.
Bottom Line
Retirement can bring about major changes in your life, including what you need from your home. Let’s connect to explore your opportunities in our local market.
Ready To Sell? Today’s Housing Supply Gives You Two Opportunities.
At first glance, the increase in housing supply compared to last year may not sound like good news for prospective sellers, but it actually gives you two key opportunities in today’s housing market.
An article from Calculated Risk helps put the inventory gains the market has seen in 2022 into perspective by comparing it to recent years (see graph below). It shows supply has surpassed 2021 levels by 58%. But the further back you look, the more you’ll understand the bigger picture. And if you go all the way back to 2019, the last normal year in real estate, we’re roughly 35% below the housing supply we had at that time.
Opportunity #1: Take Advantage of More Options for Your Move
If your current house no longer meets your needs or lacks the space and features you want, this inventory growth gives you even more opportunity to sell and move into the home of your dreams. With more houses on the market, you’ll have more to choose from when you search for your next home.
Partnering with a local real estate professional can help you make sure you’re up to date on the homes available in your area. And when you do find the one, a professional can advise you on how to write a winning offer.
Opportunity #2: Sell While Inventory Is Still Low Overall
But again, despite the growth, inventory is still low compared to more normal years, and that isn’t going to change overnight. For you, that means your house should still be in demand among potential buyers if you price it right.
As an article from realtor.com says:
“Today’s shoppers generally have more homes to consider than last year’s shoppers did, but the market is still not back to pre-pandemic inventory levels.”
Bottom Line
If you’re a homeowner looking to sell, you have more homes to choose from and can still sell your house while inventory is low overall. Let’s connect to get started, so you can have the best of both worlds.
You May Have More Negotiation Power When You Buy a Home Today
Did the frequency and intensity of bidding wars over the past two years make you put your home search on hold? If so, you should know the hyper competitive market has cooled this year as buyer demand has moderated and housing supply has grown. Those two factors combined mean you may see less competition from other buyers.
And with less competition comes more opportunity. Here are two trends that may be the news you need to reenter the market.
1. The Return of Contingencies
Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or the inspection, in hopes of gaining an advantage in a bidding war. But now, things are different.
The latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection or appraisal is down. And a recent article from realtor.com points out more sellers are accepting contingencies:
“A year ago, sellers were calling all the shots and buyers were launching legendary bidding wars, waiving contingencies, and paying for homes in cash. But now, the shoe is on the other foot, and 92% of home sellers are accepting some buyer-friendly terms (frequently related to home inspections, financing, or appraisals), . . .”
This doesn’t mean we’re in a buyers’ market now, but it does mean you have a bit more leverage when it comes time to negotiate with a seller. The days of feeling like you may need to waive contingencies or pay drastically over asking price to get your offer considered may be coming to a close.
2. Sellers Are More Willing To Help with Closing Costs
Before the pandemic, it was a common negotiation tactic for sellers to cover some of the buyer’s closing costs to sweeten the deal. This didn’t happen as much during the peak buyer frenzy over the past two years.
Today, data suggests this is making a comeback. A realtor.com survey shows 32% of sellers paid some or all of their buyer’s closing costs. This may be a negotiation tool you’ll see as you go to purchase a home. Just keep in mind, limits on closing cost credits are set by your lender and can vary by state and loan type. Work closely with your loan advisor to understand how much a seller can contribute to closing costs in your area.
Bottom Line
Despite the extremely competitive housing market of the past several years, today’s data suggests negotiations are starting to come back to the table. To find out how the market is shifting in our area, let’s connect today.
What To Expect From the Housing Market in 2023
The 2022 housing market has been defined by two key things: inflation and rapidly rising mortgage rates. And in many ways, it’s put the market into a reset position.
As the Federal Reserve (the Fed) made moves this year to try to lower inflation, mortgage rates more than doubled – something that’s never happened before in a calendar year. This had a cascading impact on buyer activity, the balance between supply and demand, and ultimately home prices. And as all those things changed, some buyers and sellers put their plans on hold and decided to wait until the market felt a bit more predictable.
But what does that mean for next year? What everyone really wants is more stability in the market in 2023. For that to happen we’ll need to see the Fed bring inflation down even more and keep it there. Here’s what housing market experts say we can expect next year.
What’s Ahead for Mortgage Rates in 2023?
Moving forward, experts agree it’s still going to be all about inflation. If inflation is high, mortgage rates will be as well. But if inflation continues to fall, mortgage rates will likely respond. While there may be early signs inflation is easing as we round out this year, we’re not out of the woods just yet. Inflation is still something to watch in 2023.
Right now, experts are factoring all of this into their mortgage rate forecasts for next year. And if we average those forecasts together, experts say we can expect rates to stabilize a bit more in 2023. Whether that’s between 5.5% and 6.5%, it’s hard for experts to say exactly where they’ll land. But based on the average of their projections, a more predictable rate is likely ahead (see chart below):
That means, we’ll start the year out about where we are right now. But we could see rates tick down if inflation continues to drop. As Greg McBride, Chief Financial Analyst at Bankrate, explains:
“. . . mortgage rates could pull back meaningfully next year if inflation pressures ease.”
In the meantime, expect some volatility as rates will likely fluctuate in the weeks ahead. If we see inflation come back under control, that would be good news for the housing market.
What Will Happen to Home Prices Next Year?
Homes prices will always be defined by supply and demand. The more buyers and fewer homes there are on the market, the more home prices will rise. And that’s exactly what we saw during the pandemic.
But this year, things changed. We’ve seen home prices moderate and housing supply grow as buyer demand pulled back due to higher mortgage rates. The level of moderation has varied by local area – with the biggest changes happening in overheated markets. But do experts think that will continue?
The graph below shows the latest home price forecasts for 2023. As the different colored bars indicate, some experts are saying home prices will appreciate next year, and others are saying home prices will come down. But again, if we take the average of all the forecasts (shown in green), we can get a feel for what 2023 may hold.
The truth is probably somewhere in the middle. That means nationally, we’ll likely see relatively flat or neutral appreciation in 2023. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:
“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”
Bottom Line
The 2023 housing market is going to be defined by mortgage rates, and rates will be determined by what happens with inflation. The best way to keep a pulse on what experts are projecting for next year is to lean on a trusted real estate advisor. Let’s connect.
City Spotlight: Salem, OR
Located an hour south of Portland is Oregon’s capital: Salem. This city is split by the Willamette River, with several great locations for fishing, boating, and tubing. The waterfront also has great activities to enjoy with your kids, including Minto Brown park, the Gilbert House Children’s Museum, and the Riverfront Carousel.
Salem’s historic downtown is filled with eclectic shops, adorable coffee shops, and some of the best restaurants in town. Locals rave about Word of Mouth, a bistro that serves breakfast, lunch, and dinner all crafted to perfection. Another downtown dinner spot is Wild Pear, where you’ll find refreshing dishes of different types of cuisine.
Over in East Salem, you can dine at The Yard Food Park, a pod of food trucks with covered seating. If you cross the bridge into West Salem, then you must try Annette’s Westgate Cafe for a meal that feels just like home. Salem is also located only twenty minutes south of Oregon’s one and only In-N-Out Burger!
Known for its beautiful hills and mountain views, Salem uniquely offers either city or country living. It is a great place to come explore!
Brunchin’ in Portland, OR
The Portland metropolitan area is home to some of the west coast’s most famous food spots. Whether you’re looking for home style cooking or a more eclectic scene, this city is a foodie’s paradise.
The perfect way to get a taste of all that the Portland food scene has to offer is exploring the many brunch options scattered throughout the districts. There is a variety to choose from that offer anything from a casual dining to a more formal experience.
At Tusk in Kerns, you will enjoy a light meal prepared with fresh fruit and vegetables, and inspired by a Mediterranean style. Their bright colored plates have a cheery aesthetic that is very photogenic. They also offer several platters of shareable foods, making this a great spot to hit with friends on a weekend in the city.
Hazel Room is a cozy Victorian style location known for their breakfast teas and stacked sandwiches. Locals also rave about their biscuits and gravy, as well as the lattes! This is the perfect place to enjoy classic brunch foods made right.
If you are looking for a sweet and savory pairing, then Hunnymilk is the spot for you! Their two course prix fixe menu includes a drink, a savory, and a sweet. The popcorn chicken paired with the apple churro-nut donut is a must-try!
Over at Proud Mary Coffee, you can enjoy a peaceful ambience filled with green plants, plenty of seating, and some of the best avocado toast around. It is an Australian cafe, serving many authentic pastries and beverages that you cannot find elsewhere in Portland.
Lastly, Kingsland Kitchen in downtown is the perfect central location to meet up with friends at and enjoy perfected omelets, biscuits and gravy, and a classic English hash. Nearly everything on the menu here is worth trying, including their savory grilled cheese.
Portland’s list of must-try brunch spots is seemingly endless. There are many different cultures represented that provide a wide spectrum of flavors to experience depending on where you choose to dine. If you enjoy trying unique flares to your everyday breakfast foods, then head to Portland!
Real Estate Market Check-In with Dave Ramsey
There is a lot of uncertainty circulating the housing market this year. Whether you’re trying to buy, sell, build, or invest, it can be difficult to strategize and understand how the market can work in your favor. The biggest factors contributing to the rising panic right now are interest rates, an impending crash, and the increasing price of houses.
Dave Ramsey is a great resource to utilize when trying to navigate these questions. His nearly objective perspective is explained in his article, “Is the Housing Market Going to Crash?” It gives expert insight on the state of the current market and how we can interpret it in the future.
He explains that housing prices have been steadily increasing since 2008 and many potential buyers are wondering if and when they will go down. While we cannot be certain that prices will ever experience a drastic drop, we can know that they will even out over the next few years. Even though it appears that interest rates are exceptionally high, Ramsey points out that our country has seen much worse in previous decades and that cannot be an excuse to hold off on buying.
The key factor in today’s market is that the number of people wanting to purchase homes is far greater than the number of homes available, resulting in higher prices than we’ve seen in the last few years. As Ramsey puts it, this is a simple supply and demand concept that should not induce fear, but rather explains the increase in home value.
What we can learn from this is that we should not let the fluctuation of the market create a hesitation to investing in real estate. Ramsey is pointing out that this pessimistic mentality about the market is not an accurate reflection of the current situation. By gaining true perspective, we can learn to understand the patterns of real estate.
Ramsey, D., 2022. Real Estate Reality Check | RamseySolutions.com. [online] Ramsey Solutions. Available at: <https://www.ramseysolutions.com/real-estate/reality-of-housing-market>
Pacific City: A Hidden Gem on the Oregon Coast
The coast of Oregon is a beautiful feature of the Pacific Northwest. There are endless year-round activities to explore, from aquariums, and surfing, to whale-watching, crabbing, or checking out the famous tide pools! The scenery is unbeatable, and you can find some of the best hikes in the state!
If you’re a resident of Oregon, you probably already have a favorite beach town that you always head over to on a sunny day. Located thirty minutes south of Tillamook, is Pacific City, Oregon. It is a small town with just over a thousand residents, and dozens of quaint local businesses to explore.
The main attraction is Cape Kiwanda, a coveted surf spot, natural park, and viewpoint. It is also home to Oregon’s highest sand dune at nearly 240 feet high, where you can find many visitors sand-boarding down or hiking up for a great lookout! There are also a few bike trails to choose from that will help you tour the town and enjoy the views.
Just off the coast is a giant sea stack, the iconic visual associated with Cape Kiwanda. The beach has a lot of space and never feels too crowded. Pacific City is also known for having several different types of habitats, which makes for a diverse spectrum of wildlife viewing! Most famous are the friendly beach bunnies, but you will also be able to spot otters, porpoises, whales, peregrine falcons, and bald eagles.
Right off the beach, overlooking the water is Pelican Brewing. With both outdoor and indoor seating options, it’s a great sit-down meal after a day on the water. There are several quick stops as well, including Ben and Jeff’s Burgers and Tacos. Across the street from the parking lot is Cape Kiwanda Marketplace, where you can grab snacks or Tillamook ice cream to enjoy throughout the day!
There are endless things to love about this town, and plenty of activities to entertain your whole family! Whether you’re a day-tripper or looking for a weekend getaway, Pacific City will fulfill all of your beach daydreams.
