5 Ways To "Turn Off" A Potential Homebuyer

Posted by New England Landmark Realty ltd.

Jan 4, 2015 5:02:37 PM

5 Ways To "Turn Off" A Potential Homebuyer


You want to sell your home, but your presentation may be driving potential buyers away. The appearance of your home is important. It isn't enough to have a solid foundation, a new furnace, and a good roof to interest people in your home. If your home doesn't look good, inside and out, it will be difficult to sell for the price you are asking.

A Dirty House

It is amazing how many people do not "super" clean their home before it is shown to a prospective buyer. If the carpets cannot be cleaned, they need to be replaced. If the house is heavy with pet smells, some buyers will turn around and leave. Tile and grout should be steam cleaned, and every inch of each bathroom must be scrubbed, painted, and shined. Windows and sills are another area owners often neglect. It's also important to know many real estate brokers don't want to show a dirty house and may choose not to give you a listing.

Old Wallpaper

Unless you are selling a historic home with period wallpaper, get rid of it. Sellers tend to look at wallpaper as another chore for the homebuyer to do, but the buyer sees it as a large negative. People who like wallpaper choose designs to match their tastes and interests, and not those of a future homebuyer. Strip off the old paper, and paint the walls a neutral color.  


Outdated Fixtures

There is a difference between old and antique. Old is not attractive and turns buyer's attentions elsewhere. Outdated light fixtures, cabinet handles, ceiling fans, and appliances should be replaced. If your plan is for the buyer's to replace all the fixtures, you are not going to get the best price for your home.



Homebuyers want to see your home, not your collection of 250 sets of salt and pepper shakers or your coffee mugs from every state capital. Pack up your collections if you intend to move them to your next home, or put them in a yard sale. If you like displaying framed photos around your home, reduce the number drastically and pack them up. Buyers want to see space, not the homeowner's personal clutter.  


Leave When Your House Is Being Shown

Don't be anywhere on the premises when the real estate agent arrives with the prospective buyer. Owners who hang around and try to insert information into the conversation between the agent and buyer, can kill a sale in minutes. Your real estate agent is a trained and licensed professional and knows how to present your home in the best light. You are paying for his or her expertise, and it's important not to undermine it by intruding.  

Follow these few simple guidelines and increase your chances of a quick sale.


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Topics: National Real estate trends, VT Real estate trends, Home Improvement, Home Sale Tips

Homeownership and Wealth Creation – NYTimes.com

Posted by NYTimes.com

Nov 30, 2014 12:02:57 PM


Homeownership and Wealth Creation – NYTimes.com

By THE New York Times EDITORIAL BOARD NOV. 29, 2014

Since the housing bust, renting has been in and owning a home has been out, especially among young adults who in earlier decades would have been first-time home buyers. As the rate of homeownership has declined, from a peak of nearly 70 percent in 2004 to a 20-year low of 64.3 percent recently, the number of owner-occupied homes has barely budged, while the number occupied by renters has increased by nearly 25 percent.

Those trends have led to questions about the future of homeownership. Would more and longer rentals be a bad thing? Are the benefits of homeownership overrated? The answer to the first question is yes; the answer to the second is no.

Homeownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth.

A recent study by researchers at the Joint Center for Housing Studies at Harvard University analyzed the reasons for these differing outcomes. Paramount among them is that homeownership requires potential buyers to save for a down payment, and forces them to continue to save by paying down a portion of the mortgage principal each month.

Renting, in contrast, offers the potential for comparable wealth building only if renters invest an amount equal to a down payment plus any savings from renting. As a practical matter, most renters do not do that. Even in instances where renters have excess cash, saving a substantial amount is difficult without a near-term goal, like a down payment. It is also difficult to systematically invest each month in stocks, bonds or other assets without being compelled to do so.

The analysis does not downplay the risks of homeownership or the devastation of the housing bust. But the lesson of that debacle is not for individuals to avoid homeownership or for policy makers to devalue its importance. Rather, the lesson should be to foster conditions under which middle- and lower-income Americans can sustain homeownership and avoid the ruin of foreclosure.

For starters, legal and regulatory protections against practices that inflated the housing bubble need to take root. The Dodd-Frank financial reform law, for example, requires lenders to ensure that borrowers have the ability to repay their home loans and outlaws complex mortgage terms that enrich lenders but expose borrowers to payment shocks.

The law also established the Consumer Financial Protection Bureau, with the purpose of looking out for consumers’ interests in financial transactions. The C.F.P.B. has gotten off to a good start, but Republicans, who now control Congress, have consistently tried to weaken the agency and the provisions of Dodd-Frank generally. President Obama must be prepared to veto legislation to repeal or weaken mortgage-finance and consumer-protection reforms.

Equally important, larger economic forces that make homeownership less possible for working people need to be in the forefront of political debate — even if Republican control of Congress makes actions to address them unlikely. Long-term wage stagnation, for example, has made it increasingly difficult to accumulate enough for a down payment, and has led many homeowners to refinance their mortgages in order to pull out equity for consumer purchases.

The solution is to lift wages, not only with new policies like higher minimum wages and toughened labor standards, but also with approaches to managing the economy to ensure that a fair share of growth goes to wages and salaries, rather than going disproportionately to corporate profits.

Renting can make sense as a lifestyle choice or because of income constraints. As a means to building wealth, however, there is no practical substitute for homeownership.

via Homeownership and Wealth Creation – NYTimes.com.

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Topics: National Real estate trends, Home Ownership and Wealth

How Much Home Can You Afford?

Posted by Craig Donofrio

Nov 24, 2014 10:59:34 AM


Looking at sprawling villas in the suburbs and 2,000-square-foot condos in the middle of downtown is one thing. How much home you can afford may be entirely different.

Of course, there’s nothing wrong with looking. But when it comes down to finding a place that fits perfectly in looks, size and price, you need to know your affordability factor.

What Is Your Family Plan?

It’s not just how much you make; it’s also what you plan to do with it.

Do your best to anticipate what the next five years or so will be like for you and your family. Are you planning to have kids in the next few years? Is your teen graduating from high school? Will they need you to co-sign for a college loan? Are you planning for a wedding? All these can raise your debt-to-income ratio.

Even if you can afford a mortgage with a 40% debt-to-income ratio now, life events like having children can bring that ratio up to and over 50%.

Do your best to map out what the next five years or so will look like and keep an emergency fund for the unexpected. Plan for the house you can afford today—not what you can afford a few years from now when the raise kicks in.

What Is Your Payment Approach?

Do you want to plan conservatively, moderately or aggressively? The difference can determine the type of home within your ballpark range.

For example, if you make $73,000 a year, have a $40,000 down payment, $350 in monthly debts and want to buy a house in Ridgefield, CT, these are the scenarios to consider:

The conservative approach: no more than 28% of your income goes to housing expenses and 36% goes to debts. House affordability range: $303,000

The moderate approach: no more than 33% of your income goes to housing expenses and 38% goes to debts. House affordability range: $349,000

The aggressive approach: no more than 36% of your income goes to housing expenses and 41% goes to debts. House affordability range: $362,000

The more aggressive the approach, the more budgeting discipline you need.

You also will need better credit, as you will be taking on more debt for a more expensive home.

Figure out which works best for you—remember, it’s better to err on the safe side rather than be strapped for cash each month.

Check out the realtor.com® affordability calculator to see what spending approach looks like for you in the area of your choice.

What Is Your Preferred Location?

You might not have the means to afford a house in a central location. If that’s the case, consider a ZIP code in a neighboring area.

To get a feel for houses in your price range, use our affordability calculator for a nearby area and then check the listings at the bottom of the page. If you can’t find something you like, you can always go down in price or continue to rent until you have the means to afford that dream home.

What Are Other Homeownership Costs?

Home ownership isn’t as simple as paying the mortgage. You can be sure other expenses will pop up.

For example, if you can’t make at least a 20% down payment, you will need private mortgage insurance. If you have an FHA loan, you will have to budget for premiums.

There’s also property tax and home insurance on top of closing costs. Repairs, general maintenance, condo fees, utilities and buying new furniture for your new home also need to be anticipated.

The more thorough your budgeting, the more comfortable you’ll be when shopping for a home.

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Topics: National Real estate trends, Homes Sold, VT Real estate trends

Tips for Creating the Perfect Atmosphere for a Winter Home Sale

Posted by nelrealty

Nov 18, 2014 9:16:23 PM


To successfully sell your home, you must take advantage of every showing. This can be especially hard in winter when the light is poor and your yard is not looking its best.

Luckily there are a few simple things you can do boost your home's charm offensive.  

1. Turn up the heat Impressing buyers in winter means literally turning up the heat. Pop on the heaters at least an hour before potential buyers come round. The warmth will give them a good feeling as they step in from the cold. If you have an open fire, light it. Nothing screams warm and cozy like a beautiful fire.  

2. Banish the gloom Nobody likes dark places. If your property looks good in daylight, try to schedule your viewing when daylight is at its strongest. For evening viewings, switch on the center lights and add table lamps and up-lighters to brighten gloomy corners. A few scented candles in strategic places like the bathroom, the living room or the bedroom can add a homely, romantic feel.  

3. Clean light sources No seller should underestimate the power of a good clean. But if you are selling in winter, you need to pay particular attention to your light sources and window dressings -- window glass, curtains, blinds, shades and light bulbs. A dusty light bulb or dirty shade can obstruct as much as half the light, which will make your home look gloomy.  

4. Exploit the season Christmas is just around the corner and with it comes lights, ornaments and the smell of mulled wine! By using these decorations wisely, you can really sell a lifestyle to potential buyers. Remember that you want to create the illusion of space, so don't go overboard. Buyers want to imagine family celebrations in your property, not get trapped between the sofa and a ten-foot Christmas tree.

5. Reduce noise for a soothing atmosphere A house is a shelter from the hustle and bustle of everyday life. Would-be buyers want a home that will make them feel comfortable and relaxed, especially in winter, when they are more likely to curl up with a book in front of the fire than kick a ball around the park. Create a soothing atmosphere by limiting the noise. Do not start the washer, dryer or dishwasher before receiving visitors. Turn off the TV. Background music is fine, but  keep it soothing.    

6. Pay attention to your outdoor space A winter garden need not be a neglected garden. Keep it tidy by deadheading old flowers, raking leaves and mowing your lawn. Consider planting some evergreen or winter flowering shrubs to add a splash of color to a yard or patio. A fire pit or patio heater is a great way to open up you outdoor pace if you are still getting some last-minute winter sun.   

If you make your property as welcoming as possible, you will stand the best chance of selling your property during the quieter winter season. Good luck!

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Topics: VT Real estate trends, Home Improvement

Four Things To Do If Your Property Doesn't Sell

Posted by Jayne Thompson

May 19, 2014 3:18:34 PM

House-For-SaleAll the signs suggest that we're in a seller's market. By rights, there should be more would-be buyers than houses for sale. Basic rules of supply and demand draw us to the conclusion that, in this market, your home should be selling in a matter of weeks, if not days. Yet here it is, dwindling on the market. Why are buyers not biting and -- more importantly -- how can you turn it around?

These four tips should get your home out of its rut. 



1.         Refresh Your Advertising

Today's buyers have access to thousands of listings on the internet, and many look at properties well in advance of purchase. Some research the market for years. If your listing and photographs remain unchanged for months on end, your pool of  would-be buyers will notice -- and disregard you as a result.


To shake up your advertising, begin by refreshing your photographs. Pictures spark interest, so it pays to get them right. Ask a friend to give you an honest opinion about the quality of your shots. Are they too dark or out of focus; do they show dirty dishcloths on the countertop? If your shots aren't accentuating the positive, have them redone. It's a small investment for potentially huge rewards.  


Next, review the language of your promotional material. Work with your agent, if you have one, to come up with new and creative ways to sell your home.  Aim your pitch directly at your target market. For example, if you're selling a family home, wax lyrical about the play room, child-friendly yard and great school district.  Take a look at your competition, vary your tactics and when the buyers schedule an inspection, press home your advantage.


2.         Lower Your Price


Location is one thing, but the two most important factors in selling a property are presentation and price.


  No matter what the market is doing, price is a sensitive metric. Financially, buyers put a cap on what they can afford. Psychologically, few buyers look at properties that exceed their financial cap, even if there's scope for a price negotiation, for fear of falling in love with a home that's simply beyond their means.    

  For sellers, this offers certain marketing advantages. Buyers tend to categorize properties in price bands, for example, $200,000 to $225,000.  A downward price shift of just one to five thousand dollars can be enough to spark interest among a whole new price-category of buyers, who feel a purchase is possible.

 3.         Give Your Property A Face Lift

When a property's not selling, it's time to find out what buyers really think. Solicit feedback. Ask everyone who passes through your doors for their honest opinion -- the good, the bad and the ugly.


You may find that the changes you need to make are relatively small -- a lick of paint perhaps, or a new bath tub. If the feedback's negative without being specific, invest in home staging.  The keen eye of a professional stager can capitalize on your chances of sale for comparatively little cost.


4. Take A Break From the Market


This sounds counterintuitive, but three things tend to happen when you keep your property on the market for a long time without generating a buzz. First, buyers will avoid it. A classic example of group think, buyers typically discount homes that linger on the market because they assume that other buyers have seen them and discounted them for some reason. Second, clever buyers will leverage your misery as a negotiating tool, and hit you with a low ball offer. Third, buyers will pass you over completely, because they've seen your listing so often it becomes part of the background.


If you can, take your property off the market for a few months. Use the time to refresh your decor, your price point and your marketing campaign and, by the time you're ready to re-list, a whole new batch of buyers will be waiting for you.


Above all, remember to stay positive. Everything sells in the end.



"The Edge" Auto Luxury Home Search

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Topics: Homes Sold, VT Real estate trends

What's Wrong With Modern Home Design?

Posted by nelrealty

Apr 22, 2014 3:47:00 PM

To Keep Or Not To Keep..

Home designs have traditionally been as diverse as the people who inhabit them. From log cabins of the frontier to stucco villas of the southwest, houses were usually influenced in style and design by the building materials readily available in the environment. A few features, however, were universal. Efficiency, room usability, and utilization of outdoor space were a few concepts instinctively considered when building a home.

Today, a home is often built en masse along with dozens of others. Developers are business people whom have contributed positively to the home experience by providing affordable and available homes, but their priority is cost-effective quantity. Even
custom built homes are subject to influence from the neighborhoods and homes already in existence. Property owners take cues from existing homes, thereby perpetuating home features which may not even meet their needs.

Certain home features of the last few decades have served their purpose but are outdated, while others from the past need to be resurrected. With these topics in mind, let's explore some of the possibilities for improving homes.


1. The Walk-Out Basement. Get Rid of It.

The walkout basement became a pervasive feature of many homes in the 1990s and 2000s. Finished basements in the 1970s and 1980s were often unavoidably dark or claustrophobic no matter how luxuriously they were finished. Walkout basements with direct access to the outside and possibility of large windows seemed like an ideal way to make the basement not only an extra living area, but a prominent and comfortable one as well.

This design logically meant putting the main floor of the home a story above the ground
in back. Therefore, with the exception of a deck and a steep flight of stairs, it eliminated the main floor access to the backyard. The habits of people, however, did not change. The basement still felt disconnected and navigating down several stairs to reach the yard took effort. The family backyard traditionally an extension of the home directly off the main living areas -became a thing of the past. Many backyards of homes with walkout basements are barren and underutilized. It is not uncommon to see homeowners trying

to create a backyard atmosphere in their front yard, complete with lawn chairs near the curb and the family pet tied up next to the car. This is based on a natural tendency to walk out the door with the quickest, most level access to the yard.

There is simply little reason for a walkout basement. Basements are meant to be disconnected, and window designs and lighting have evolved to help create a more comfortable space underground. Homes built with easy, direct yard access add to the enjoyment of the property.

2. The Front Porch. Bring It Back.

Regardless of the home style, most homes until the 1980s featured a front porch. Social and outdoor connection was so important that people often used valuable square footage for porches rather than indoor rooms. Front porches present a welcoming image that encourages others to visit. They promote neighborly interaction and allow a comfortable place from which to watch the children and enjoy the fresh air.

At some point in time, homeowners made privacy a top priority in home design. Front porches were eliminated and entrances are often indented into the house footprint rather than built as a central focal point. This discouraged visitors from feeling welcome to spontaneously knock on the door. Screen doors and sidewalks were also eliminated, lending more uninviting aspects to neighborhoods.

The demise of the front porch and the buried front entrance may be the saddest changes in home design. They create an aura of isolation and unnecessary privacy. Bringing back the front porch, repositioning entrances prominently, and creating connecting sidewalks should be strongly considered in new home design.

3. Garages as the Prominent Focal Point. Get Rid of It.

The current trend of garages being the dominating feature of the front of the home is outdated. Entire neighborhoods are built of homes where an enormous garage door juts out from the house footprint and often times nearly hides the home. This feature strongly connects to the problem previously listed in which home entrances are indented into the house footprint while large garages are given prominence.

Garages should ideally be regulated to the side or back of a home and should fit into the main house footprint rather than dominate it. If circumstances demand the garage entrance be in front, then it, rather than the front door, should be built to appear as noninvasive as possible.

4. Architectural Detail. Bring It Back.

Getting the most square footage for the money is a defining factor for most builders. This is an understandable viewpoint, but it often comes at the expense of features than make a home unique. These features are aesthetically pleasing and can add efficiency to a house. Builtin book cabinets with glass doors, strategically placed shelving, or small closets built into "dead space" are some examples of architectural details that were standard in older home designs. These types of features were often whimsical yet functional. Window details or pretty banisters may not have been necessary, but in many older homes they were considered just as important as square footage. Architectural details contribute beauty and functionality to a house and often pay for themselves by using space that would normally be forgotten.

5. Open Floor Plan. Get Rid of It.

By the 1990s and continuing today, one of the top requests for home design is the open floor plan. The open floor plan has become a substitute for good room flow. This plan consists of a large, totally open space that includes all or most main living areas: kitchen, dining, living room, den, and entrance. The design was initially sought after in the hopes it would encourage family interaction, make a home feel lighter and larger, and not isolate those working in the kitchen. It was also a feature intended to promote entertaining.

While the open floor plan might have enabled a few nice parties and created the illusion of a bigger house, there were better qualities it made obsolete. It made privacy impossible. People could no longer mingle in small gatherings without the drone of the entire house. Turning on the TV meant the all main areas were subjected to it. Kitchen smells and messes permeated the entire home. Every inhabitant or guest automatically became a part of what every other inhabitant or guest did or said, whether it was the TV, a conversation, or a sink full of dirty dishes.

Homes are better served by separate rooms, each one with it's own purpose. The light and open effect can be achieved with wide hallways, tall ceilings, large doorways, and ample windows. These features respect the purpose and privacy of each room and still maintaining an easy, unencumbered flow between areas.


6. The Garden Shed. Bring It Back.

Older homes often featured a shed to store items like lawn mowers, garden tools, and yard furniture. They were not only functional but often a charming, outdoor feature. However, at some point in the evolution of America home design, all things outdoor
were relegated to the garage. In some ways this made sense the car is an outdoor thing
so why not store everything outdoor related with it? The problem was the garage became cluttered and inefficient. Some homeowners not only built garages big enough for three cars, but also expanded them in order to store seasonal items. This is a factor that resulted in the enormous garages that contributed to some of the previously mentioned home design mistakes.

Homeowners associations have contributed to this mistake. Many home associations forbid outdoor sheds and other structures. There is no reason for this type of neighborhood rule when common sense guidelines can be followed. Hopefully, homeowners associations will eventually ease up on these restrictions. Small, inexpensive, garden sheds need not be an eyesore. They can free up valuable home square footage, provide easy access to outdoor items, and lend charm to the property.

Home design is a constantly evolving art form. Functionality, efficiency, longevity, and aesthetic appeal must always be considered when creating something as permanent as a house. Today, potential home builders can be better served by adapting a fresh perspective on features that are outdated trends and home characteristics from the past they may wish to revive.

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Topics: VT Real estate trends, Home Improvement

Jawdropping views of cozy homes built in an abandoned office tower, a lagoon, a recycling heap and more

Posted by nelrealty

Oct 16, 2013 8:58:46 PM

Home can mean so many different things to different people around the world. What does home mean to you? What does it look like?

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Bringing Fall Into Your Home

Posted by nelrealty

Oct 14, 2013 9:16:53 PM

With over half of all homeowners planning to make some type of improvement to their home this year, the question is, what exactly are they changing? Homeowners are choosing to wait until the high temperatures break and cooler weather hits to begin outdoor work, and home improvement companies are looking to unload new products to prepare for the new season, allowing homeowners to grab some great deals as autumn begins.

The most common fall home improvement projects include fencing, interior and exterior painting, window work, flooring, and roof repair, all of which are in preparation for the cold winter weather when home improvement projects are not at the top of your priority list. By getting these projects done before winter, you can put your home improvement projects to rest until spring without worrying about leaky roofs, cold air coming through cracks in the windows, and maintaining the value of your home with fencing and a fresh coat of paint.

"The cooler autumn temperatures make for the perfect time to focus more on the home and any remodeling projects," says Jeremy Floyd of Fence Center. "Such projects like adding in bamboo or aluminum fencing, not only increases your family's security, but the value of your home. Now that autumn is officially here, people are likely beginning to get these home improvement projects rolling."

[gallery columns="4" link="none" type="rectangular" ids="258,257,262,261,265,264,259,263"]

When the weather begins to turn cold, take cues from fall to warm up your world. Think about the decorating styles that appeal to you and use the following tips for guidance:

Look to Elemental Colors: Air, Earth, Fire and Water; nature inspires the most beautiful colors. Colors reflecting air will make your home breathe. Earth inspired colors will ground and calm a room. Colors pulling from water inspire playful fun, and lastly those reflecting fire will say bold confidence.

Take Natures Cues: As the air turns cool, nature gives us clues as to which colors make your home feel warm and cozy in the fall. Look around at the fall foliage and you'll see vibrant golds, rich reds, deep chocolate browns and toasty oranges. These colors inspire life and energy as the days get darker and cooler. Look for ways to incorporate these colors and scenes into your room decor. National Geographic Wallpaper or wall murals can help create this inviting nature setting.

Go Natural: With the increasing focus on the environment, there are abundant products available today that reflect and are good for nature. These products often incorporate earthy colors and textures; a perfect theme for fall. Choose eco-friendly shades which are PVC-free and 100 percent recyclable.

'Tis the Season: Carve out a tall pumpkin and use it as a flower vase or use small pumpkins for candles. A throw pillow, bowl of fresh citrus fruit or a bouquet of cut flowers are inexpensive ways to provide some color pop while welcoming your guests with the feel of nature.

Come Together: Gather around the fireplace. Rearrange your furniture to set your fireplace, instead of the TV, as the focal point of the room. Footstools, ottomans, and floor pillows by the fire create an inviting, warm atmosphere that will get you through the harshest days of winter. If you don't want the hassle of starting and maintaining a fire, try placing tall white candles in the fireplace for a similar glow.

Go Vibrant: Add a few splashes of vibrant color. They enrich any look and keep you from feeling drab. Deep colors also inspire confidence. Use an area rug to add warmth and personality to any room.

Go Circular: Designing a wreath is one of the easiest DIY projects you could hope for. And this time of year there is an abundance of colorful items to choose from at your local craft store or around your home. Get the kids involved and make it a family project.

Prepare for Winter: Now is the time to prep your home. There are several easy steps you can take. Consider insulating cellular shades or lined window treatments such as thermal curtains or foam-backed draperies for older, drafty windows. Insulate your water heater with insulation wrap. Seal leaks and drafts with caulk or weather strips. Clean your furnace and change your air filter. And lastly, but certainly not least, install a programmable thermostat. This allows you to conserve energy during the day while you're at work and at night while you sleep, but still come home or wake up to a warm, cozy home.


A fun fall project: Create an indoor play area

John Powell (powellrenovations.com) at Powell Custom Homes and Renovations of Des Moines, Washington provides these tips:

play-areaImage source: happytobeathome.net

Choose a theme - Plan the entire room around a single thematic element based on a child's favorite subject, game or character. Or use the theme to create variety, such as a “story time” theme with your child’s favorite storybook characters incorporated into the decor. A themed, “special” room will give your child more incentive to spend time there, and will even help him or her to keep it clean.

Go crazy with colors - Neon paint colors are just fine here; don’t worry about matching or clashing.  Think about the fantasy worlds your children are seeing on television - the more outlandish, the more tempting the space will be for them.

Think small - Kids love spaces that are sized for them. Plan the space for smaller people, but think ahead so your kids don’t outgrow the space within the year.

Kids play rough - No matter how bomb proof you make the space, someone is bound to knock his head against the side of any piece of furniture or anything built into the space. Try to find things with rounded edges. If you buy a piece of furniture with hard corners, ask your contractor to sand it down.

Reprinted with permission from RISMedia. ©2013. All rights reserved.

Feature image: thetutorializer.com

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Topics: National Real estate trends, VT Real estate trends, Home Improvement

The Ups and Downs of Interest Rates

Posted by nelrealty

Oct 4, 2013 4:29:24 PM

We all know interest rates go up and down. But do we know why or how that affects each of us on a personal level?

In the last 12 months we have seen interest rates as low as 3.375% on a 30-year fixed mortgage and as high as 5.00% on the same loan. Currently (9/30/13) the interest rates are sitting around 4.50%.  What has caused the large shifts in rate?

Mortgage interest rates typically inversely follow bonds, specifically the 10 year T-bill.  As the cost of the 10 year T-bill goes up and the yield on return goes down, so do interest rates.  As the price of the 10 year T-bill goes down and yields go up, interest rates typically go up.  Over the last few years you may have heard the term QE (quantitative easing).  This is an economic stimulant program from the Federal Reserve (The Fed) with which they have been putting “cash” into the market by buying assets such as mortgage back securities (MBS).  By purchasing mortgage back securities The Fed has been able to artificially drive down the mortgage interest rates.  The private investor purchasing MBS is looking for a higher return, while the Fed is more concerned with driving the economy as a whole, not padding their pocket.

As the economy struggled, the Fed continued to purchase assets, thus we had QE 2 and QE 3.  The Fed has been buying billions of dollars of MBS per month, continuing to drive the interest rates down.  As the economy has slowly improved, the Fed has threatened to slow or stop completely their asset purchasing program.  In August, there was discussion that the Fed would begin pulling back as early as the 4th quarter.   Interest rates jumped up to most recent highs of 5.00%.   In September they reevaluated the economy, jobs and the GNP to realize they may have overestimated the economic growth.  At which point, the Fed announced that they did not plan to stop or slow their asset purchasing program and rates began to drop again to our current rate of 4.50%.

How does this affect you, the home buyer?

Here is a quick example:
On a $200,000 loan at 4.50% you will pay $1,013.37 / month for principal and interest. At an interest rate of 5.00% you will pay $1,135.58 / month for that same $200,000.  That is an increase of almost 11%.
To look at this differently, at a 5.50% interest rate, if you borrowed 10% less or $180,000 you would have a monthly principal and interest payment of $1,022.02.  With a 1 percent increase in rate you have reduced you borrowing power by approximately 10%.
As the price of houses go up and interest rates go up you have reduced your buying power by over 10%.  My suggestion, get out there and buy now while your purchasing power is still really strong.

Article written for NELR by Jeff Teplitz, Mortgage Loan Officer, EverBank - Dedicated to helping clients throughout the mortgage process, with over 8 years of mortgage experience and a thorough knowledge of the Vermont and Northern New England markets.

Featured image: homesolid.com

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Topics: National Real estate trends

Vermont Life Magazine Youth Exodus? » Vermont Life Magazine

Posted by nelrealty

Sep 27, 2013 4:28:38 PM

Vermont Life Magazine Youth Exodus? » Vermont Life Magazine.

For a long time the myth has been that young people are leaving the state, leading to economic, social, and cultural downfalls. Recently, Vermont Life Magazine has painted a different scene and with ample research found that, "Universally, the young people we spoke to said they prize Vermont’s intimate scale and interconnectedness, its natural beauty and easy access to the outdoors, its down-to-earth priorities and its indefinable vibe. Vermont has a bright future. Vermont is also admired. People want to live here, and with the Web and telecommuting, more and more of them can." They do point out that indeed many young people are leaving, but they are also returning to the state with the wealth and knowledge gained from travel and life experience. They said, "The youth-flight narrative, with its aversion to nuance and context, overlooks the flow of people who return in mid career."

If more young people are going to stay in the state, they need to be able to thrive in their career and find a home to match their lifestyle. Vermont Life Magazine looked at the case of Dealer.com, "everybody’s idea of what Vermont needs to stop young people from leaving the state." Dealer.com is, "a fast-growing business that provides digital marketing systems for the automotive industry, in a setting, with about 750 other employees, that has all the toys and perks of Silicon Valley culture: brightly colored warrens of open cubicles, organic café with espresso, on-site gym, rooftop solarium with putting green and a renovated building that, it almost goes without saying, is a model of green design." Sean Hurley, director of advertising and social products for Dealer.com said that, "It’s a mistake for anyone to think that there aren’t real businesses here making real money." In fact there are many examples of thriving local business in Vermont in order to keep young people in the state engaged and challenged within their careers. Luckily, there are also many opportunities to help first-time home buyers settle in the state.

With all of these opportunities at an arm's-length away, what young person wouldn't want to make a home in Vermont?


Please contact us for more information on buying a home in Vermont or consult the following information meant to educate first-time home buyers.


Further information for first-time home buyers:

"First-timers now represent nearly 30 percent of all existing home purchasers," said Ray Brousseau, executive vice president of a nationwide lender. "That's a big percentage, but it could be a lot higher because there are many ways first-time purchasers can finance with little down and little hassle."

The big barrier for many first-time buyers is cash. It takes cash for a down payment, and it takes cash to close. Lenders are generally looking for buyers with 20 percent down, but given that the typical home sells for more than $200,000, there are a lot of first-time homebuyers who have not accumulated the $40,000 or more that lenders prefer. The good news: There are many ways around the 20 percent requirement with traditional loan options. "It doesn't take a lot of up-front cash to buy a home today," said Brousseau. "FHA and conventional financing are all available with little down, while VA borrowers can qualify for mortgages that require no down payment." The way such programs work is that they substitute insurance for the 20 percent down that lenders would otherwise want.

Mortgage Assistance Plans

According to DownPaymentResource.com, there are more than 1,500 assistance plans administered by more than 1,000 agencies nationwide for would-be buyers, many aimed specifically at first-time purchasers. In looking at these programs it's important to understand what the term "first-time buyer" means. It typically does not mean someone who has never owned a home; instead the usual definition for program qualification purposes is someone who has not had title to a home during the past three years. This definition is important because it provides a way for people to re-enter the housing marketplace.

"Another important point about mortgage assistance programs is that many are specifically designed to encourage local home purchases by public-sector employees such as teachers, police, firefighters, nurses, and corrections workers," said Brousseau. "There are millions of people who qualify for such assistance."

The benefits available through mortgage assistance plans vary. For instance, borrowers may be able to get financing at below-market interest rates. Down payment grants may be available, essentially meaning that little or nothing down will be required. Another approach includes programs that offer tax credits. Mortgage interest is generally deductible, but a "tax credit" is arguably more valuable. With what are called "mortgage credit certificates" or MCCs, borrowers can deduct directly from their actual tax bill. For instance, if you have $8,000 in mortgage interest you might be able to directly reduce your taxes by $1,600 while the remaining $6,400 can be treated as an itemized deduction.

"Given low interest rates and a firming housing sector, this is a terrific time to consider entering the real estate market," said Brousseau. "With today's financing choices, many buyers can own their own home a lot quicker than they might have thought."

Reprinted with permission from RISMedia. ©2013. All rights reserved.

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Topics: Business, Vermont culture/events, Travel