Finding the right home to purchase today is one of the biggest challenges for potential buyers. With so few homes for sale and construction of newly built homes ramping up, you may be wondering if you should consider new construction in your search process. It’s a great question to ask, and one to look at from the pros and cons of what it means to buy a new home versus an existing one. Here are a few things to consider when making the best decision for your family.
When buying a new home, you can often choose more energy-efficient options. New appliances, new windows, a new roof, etc. These can all help lower your energy costs, which can add up to significant savings over time. With programs like ENERGY STAR, your home also helps protect the environment and reduces your carbon footprint.
Lower maintenance that comes with a newer home is another great benefit. When you have a new home, you likely won’t have as many little repairs to tackle, like leaky faucets, shutters to paint, and other odd jobs around the house. With new construction, you’ll also have warranty options that may cover portions of your investment for the first few years.
Another solid benefit to new construction is customization. Do you want a mudroom, stainless steel appliances, granite countertops, hardwood floors, an office, or a multipurpose room to homeschool your children? These items can be customized to your specific needs during the design phase. With an existing home, you’re buying something that’s already completed, so if you want to make changes, you may need to hire a contractor to help get your home ready for your family.
When buying an existing home, you can negotiate with the current homeowner on price, which is something you generally don’t get to do with a builder. Builders know their material and construction costs, and they have a price set for the model you’re buying. So, if you want to negotiate, then maybe an existing home will be best.
For many families, having an established neighborhood is also important. Some buyers like to know the neighbors, if it’s family-friendly, and traffic patterns before making a commitment. When you buy new construction, you won’t have a full view of some of those details until the lots around you are sold.
Finally, timing comes into play. With an existing home, you can move in based on the timeline you agree to with the sellers. With new construction, you need to wait for the house to be built. Depending on the time of the year you’re buying and the region you’re in, the weather can also be a factor in the timeframe. This is something really important to keep in mind, especially if you need to move sooner rather than later. Over the past few months with COVID-19 and social distancing regulations, some areas for new construction have been delayed.
Whether you want to buy a newly built home or one that’s already established, both are great options. They each have their pros and cons, and every family will have different circumstances driving their decision. If you have questions and want to know more about the options in your area, contact Preferred Properties today so you can feel confident making a decision about your next home.
While homeowners insurance protects your home against unforeseen circumstances, a home warranty, which costs an average of $550 per year, is a convenience program that covers the normal wear and tear on the major mechanical and electrical systems in a house, says Art Chartrand, counsel and administrator of the National Home Service Contract Association. Your home’s heating, ventilating and air-conditioning systems, the water heater, sump pump and kitchen stove are some of the items covered by a home warranty.
Home warranties, also called home service contracts, are nothing new, but more real estate agents have recommended them in recent years as the housing market has been flooded with foreclosures and short sales — properties that were often neglected or poorly maintained.
“A home warranty is like an insurance policy that protects you after the home sale, but you have to pay close attention to what is and isn’t covered,” says Tony Martinez, a real estate agent with Re/Max North San Antonio in San Antonio, Texas. “Do your homework and research companies online, and make sure you document all of your communications with the warranty company and the service technicians they hire on your behalf.”
Read the fine print
Consumers sometimes make the erroneous assumption that a home warranty covers structural defects or insurable incidents normally included in homeowners insurance coverage, such as damage from natural disasters, burglary or fires, Chartrand says. Some also mistakenly believe that the policies function as emergency home service contracts, meaning the problem will be diagnosed and fixed within hours, which isn’t the case.
When you file a claim, your home warranty company chooses a local contractor that’s been vetted and sends it out to diagnose your problem for a set service fee, which you’re responsible for paying. If the contractor doesn’t find an issue or you disagree with the findings, you can ask the warranty company to send a different contractor out to give a second opinion, Chartrand says.
Getting a claim approved comes down to understanding what your policy does and does not cover. Most home warranties expire after a set time period and don’t cover every little thing in your home — think leaky faucets or peeling paint. That puts the onus on you to read your contract and ask questions, says Katherine Hutt, national spokeswoman for the Better Business Bureau.
You might opt for a certain level of coverage based on your home’s size, condition and age. Beware of scammers who might offer a half-price home warranty contract, then disappear when you try to file a claim, Chartrand says. Consumers should be cautious of such offers and research home warranty providers before choosing one.
Negotiate repairs in the home inspection
A home inspection won’t uncover every major problem, but it can lay the groundwork for getting the most from your home warranty.
The Big Story
According to Freddie Mac last Thursday, mortgage rates were the lowest ever found below the index. For now it is more interesting to check at the reason why while we will enter the details a bit later on.
In a word, this is being pushed by”uncertainty” If individuals are not certain about the management of the market in the long run, they have a tendency to invest in more powerful assets such as bonds and mortgage-backed securities (MBS) instead of the volatile stock exchange.
The returns on these bonds wind up being reduced because they do not have to be high to draw investors if people are purchasing MBS. They move lower Since mortgage rates are tied into such returns.
There are loads of reasons to become somewhat unsure about the market. New claims for unemployment are still raised north of 1 million while decreasing. It is likely to be a very long way back, although Folks are being rehired.
What’s more, the continued battles of the market have caused the Federal Reserve to depart short-term prices around zero and additional help the mortgage market by purchasing a great deal of service MBS. There aren’t any immediate plans.
A spike in cases, especially across West and the South, have made authorities rethink plans. The market will take to get going if workers in a variety of industries have to return home again.
The fantastic news, as we will see in a moment, is that home has been a bright place. Let us dig into the information!
News You Can Use
Econoday supplied analysis employed within this report.1 Let’s see exactly what happened!
Housing Market Index
The National Association of Home Builders’ housing market indicator went up 14 points in the month of July to emerge in at 72. This really is right back to where it had been before the virus struck.
The numbers are up across the board if it is in visitors of people or terms of sales.
Home starts in June were up 17.3percent to a seasonally adjusted annual rate of 1.186 million. It is still a bit below the 1.6 million rate it was around in the start of the calendar year, but it is an improvement. Single-family starts were up 17.2percent to 831,000 on a seasonally adjusted annual basis.
Meanwhile, licenses were up 2.1% complete in 1.241 million. This comprised an 11.8percent uptick in single-family licenses at 834,000 after accounting for seasonal adjustment.
FHFA House Price Index
Since this runs two months before the information this report deals although it was outside in July. COVID-19 was unquestionably a presence, together with costs alternating 0.3% and the yearly rate of price appreciation decreasing 0.5percent to 4.9 percent.
In a sign of just how much influence the virus needed, trades were roughly a third lower than usual. That sum in cost appreciation informs an excellent narrative on a foundation. It will be intriguing to see how country reopenings in June and July affect these amounts.
Existing Home Sales
Existing home sales were up 20.7percent in June, and it is a record profit. They settled at 4.72 million on a seasonally adjusted annualized basis. While being down 11.3percent as this time one year ago, that is a far cry from the 26.6percent year-to-year fall in May.
Co-op and condominium sales were up 29.4percent to 440,000, while the yearly rate for single-family houses was 4.28 million, up 19.9 percent.
At exactly the exact same period, costs were up 3.8percent over the month at $295,300up 3.5% over the year. Stock no doubt drove Section of the sales cost increase. It moved down from 4.3 weeks to 4 months in the current rate of sales.
New Home Sales
New home sales were up 13.8percent in June to emerge in a seasonally adjusted annual rate of 774,000. Supply is still somewhat thin but becoming better, with gone from 4.7 weeks May to 5.5 months in the current rate of sales in June. As a reminder, 6 weeks’ worth of distribution indicates a industry that is balanced.
Additionally, a residence in June’s cost was up $19,000 to come in at $339,200. There were revenue earnings in all four areas therefore it’ll be intriguing to see for that area particularly.
S&P CoreLogic Case-Shiller HPI
On a average, costs at the indicator are based Contrary to the purchase price Indicator set out from the FHFA. On a seasonally adjusted basis, prices were flat in May and up 0.4percent all around. That brings year-to-year cost earnings of 3.7%. It tends to run beneath the FHFA number.
Pending Home Sales Index
Pending home sales were up 16.6percent to 116.1. That is greater from before the virus’ effect. A June growth in home sales is a fantastic indication for present home sales in July.
Gross Domestic Product (GDP)
GDP was 32.9% complete from the initial estimate for the second quarter published in the end of July, while consumer spending dropped 34.6%.
It is included here because housing is a large driver of the market and slid 38.7percent in the initial quote, dragging down GDP by 1.76 percent. It is worth noting that the next quarter featured a few weeks which were influenced so it will be interesting to see where this heads moving.
MBA Mortgage Software
I am less interested in the amounts than the trends Because this report comes out on a monthly basis. Interest is shown by those trends .
Purchase software are from where they were a year 13, up 22 percent. On the facet that is refinance, it is a 47% growth. Low prices seem to be a main incentive for customers.
They’ve never been improved, and this ought to be a incentive for the customers you serve and you as a realtor.
The average speed on a 30-year fixed mortgage has been 2.88% with 0.8 points paid in prices down 11 basis points over the week and falling by 3.6percent a year ago.
Considering shorter periods, the average speed on a 15-year fixed mortgage with 0.8 points paid fell 7 basis points to 2.44 percent. This is a fall from 3.05percent this past year right now.
Last, the average speed on a 5-year treasury-indexed, hybrid adjustable rate mortgage (ARM) using 0.4 points paid has been down 4 basis points to 2.9 percent, dipping from 3.36percent this past year.
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