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Home Ownership Matters to Americans

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Written by June Holder

In a poll taken by the Wilson Center Survey, it greatly has shown that Americans are still in love with the American Dream of owning their own home.

May 17, 2012 some 13,800 Realtors from 50 states, three territories, and Canada joined in rally near the Washington Monument, to show their goal to keep ownership central to the American Dream.  Too many laws have tried to turn a corner on the ability for people to be able to make that American Dream come true.

In previous years we have had such a challenge of the results of illegal and harmful lending practices; thus causing a negative effect on the nation’s economy.  We have met that challenge head-on as a country with positive aggression as we see how the nation has begun to heal itself.

Woodrow Wilson International Center for Scholars put together a national survey released in May; voters did show their support for the American Dream.  On a scale of 0 to 10; 62 percent of voters rated home ownership as a 10.  A mean score of 8.6 was the total score from all the voters proving that owning a home is one of the top priorities over-all average among Americans.  An amazing 91 percent of the voters listed “home ownership is part of the American Dream.”

What a great show of that stalwart American Stick-tuitive-ness – Go America!!

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My First Week as a Real Estate Agent

Written by Paige Marsh

Why do many people get into the real estate industry? A few simple answers come to mind –  a short educational licensing course, a high earning potential, being your own boss – the list can be added to but these cover the main bullet points.

I personally did it for control. Being a real estate agent allowed me to gain control over elements of my life that a corporate job did not. But back to the topic – I have heard many people belittle the real estate profession saying that realtors get huge commission checks but don’t do anything. I am here to give you a glance into how “little” real estate agents do.

Over the course of 4 days time, I have put just under 150 miles on my car. I have trudged in high heels through the weedy, stickered yards of about a dozen properties. I have climbed a loose dirt hill to get a higher viewpoint to look at the top of a shed roof. I have gone on a search looking for evidence of attic space or crawl space. I have submitted offers. I have shown properties for my teammate Scott when he was not available. I have had my heart stop when showing a client a garage only to turn around and find his wife had climbed onto the home rooftop to inspect it for any damage. (That personally was my favorite!) This is just a handful of the tasks required of me from this job this week.

I have also met about 2 dozen new people that I had not previously had any contact with. I have spent each day doing both desk work and being allowed to be outside in the fresh air – where my heart lives. I have been supported by an amazing group of co-workers that don’t compete with each other but rather lend a helping hand when it’s needed. Needless to say, this first week of being an agent has been nothing but another adventure to add to my checklist of “Things Accomplished” and I look forward to seeing what next week brings!

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What Causes People to Buy at this Time with this Market?

Written by June Holder

Home sales have shifted from investment buyers from previous months, to buyers who either were previous owners or new home buyers.  What motivates these buyers to push forward?  Obvious reasons are low market and low interest rates!!

Buyers getting in at the low point of the market cycle will inevitably receive higher wealth gains over the next few years; even though financial gain is not their principal motivation.  History shows that when buyers purchase in the low cycle of the market, will be set financially more stable than purchasing in the high cycle.

Unfortunately, many who would like to buy are either stumped by tight credit requirements or earning too little to qualify.  At this stage in the cycle, it is imperative to encourage young people to stay in school.  High school dropouts are far more likely to struggle economically throughout their lives than those who graduate.  Even though we keep hearing the same old thing that an education is so important; no other time in the history of our country since the “Great Depression” has this been shown to us.

Now is the best time to purchase as we have seen a level off of the market; and in some instances it has turned and is beginning to rise.  Utah has started to heal from the wounds of unemployment and is rising to a higher level.  It is great to see people buying again and being responsible for their actions.  We live in a great community, great state, wonderful country and the future looks just a little bit brighter each day!

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Housing Affordability Reaches Record Highs

Written by Brandon Schank

For the median-income family, buying a home has never been more affordable, new surveys by the National Association of REALTORS® and National Association of Home Builders show.

Housing affordability reached a record high for the second-straight quarter in the first three months of this year, the National Association of Home Builders/Wells Fargo Housing Opportunity index shows. Nearly 78 percent of all new and existing homes sold in the first quarter this year were affordable to families earning the national median income of $65,000, according to the index.

NAR’s quarterly Housing Affordability Index also showed a record high in affordability in the first quarter. NAR first began keeping records on affordability in 1970.

According to NAR’s index, the median-income family earning under $61,000 could afford a home costing $325,000 — more than double the national median existing single-family home price of $158,100.

“The median monthly mortgage principal and interest payment for a median-priced home would take only 13.5 percent of gross income,” according to NAR’s affordability index.

Source taken from http://realtormag.realtor.org/daily-news/2012/05/21/housing-affordability-reaches-record-highs

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Common First-Time Buyer Mistakes

Written by June Holder

When we have a first time home buyer call us and have a desire to start their adventure of finding their first home, we have a few steps we try to help them begin with.

1.  Make sure you ask enough questions of your lender, get pre-qualified in the beginning so you won’t end up missing out on the best deal.
2. Be prepared and ready to make a decision, sometimes you cannot act quickly enough to make a decision and someone else buys the house while you are trying to make up your mind.
3. Make sure you find the right agent who’s willing to help you through the whole home buying process, sometimes it takes several offers on homes to get the right one.
4. Often times the buyers are timid and don’t do enough to make their offer look appealing to the seller.  Just raising the earnest money,  going without a home warranty, or being able to close quickly can be a big help in a multiple offer situation.
5. Make sure you think about resale before you buy, the average first-time buyer only stays in a home for four years.  Also, keeping up on repairs will be a big plus when it comes time to resale your property.

Make this adventure a fun one by being prepared and trusting in your realtor to help you make the right decision for your first time home buying experience!  Good Luck

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New Construction Homes

Written by Brandon Schank

As realtors, we many times create strategic partnerships or relationships with different people or companies that we have worked with many times over and over in order to give the best referral possible to our clients.

In our current inventory climate, one of the best relationships we can have is a builder who can build what our clients need if the product can’t be found.  The builder that I work with the most is Son Builders, Inc.  While they build a quality, affordable product, they are also known for their custom homes as well.

Son Builders, Inc. , www.sonbuilders.net is a Utah based construction and real estate development company. The company is owned 100% by Brian Peterson, who serves as President. Mr. Peterson has over 20 years of custom construction experience and is also a successful developer of several residential developments and planned communities. In addition to developing and selling a wide variety of real estate projects for his own account, Mr. Peterson has served on the Board of Directors for the Iron County Home Builders association. The knowledgeable staff at Son Builders, Inc is a group of seasoned and devoted individuals in the Real estate and construction industry.

 

The company builds mostly single family detached housing, twin homes or town homes, as well as some commercial and office buildings all in an active real estate market. The company seeks to acquire or build property in which its can design or build homes superior to those of the competition but priced lower than the competition and still achieve better than institutional grade rate of return.

Currently they have 3 active single family home projects in the Iron County area that they are developing:  Hidden Hills Cove with homes starting in the $200+ range, Mountain Shadows with homes starting in the mid $140’s range, and Gemini Meadows starting in the low $130’s.  Call Brandon Schank for more information on any of these projects.

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Looking to buy? The time is NOW to make your move!

Written by Laura Wise

Whether you are considering a first home, a larger home for a growing family, moving into your dream home, you have just built at Kolob Ranch or perhaps buying a second home or rental property, land or water.

Two key economic factors – Mortgage rates and Home prices, have lined up in your favor. Take a look at how they are working together to give you extremely potent buying power and why you should take action now before these favorable conditions change.

Irresistible Interest Rates
When you read in the newspapers that rates are at historic lows, this is not an exaggeration. Interest rates on home loans truly are at the lowest they have been in decades. At times of slow or no economic growth, the Federal Reserve will lower the federal funds rate in hopes of making credit cheaper to all people and in turn boosting the economy. This is why home mortgage rates have remained so low. The moment the economy starts to truly grow, the Federal Reserve will start to increase the federal funds rate, and home financing loan rates will follow suit.  Right now, mortgage rates are incredibly attractive at around 4 percent.

Home Prices
In terms of home prices, they have been climbing, note the recent sales within our community.  Inventory might be starting to slip, which could see prices go higher. Using simple supply-and-demand, it’s not hard to see that with declining inventory, today’s low prices could go up in the not-too-distant future. This is just as true for today’s rock-bottom interest rates, so it’s not hard to see why savvy homebuyers are responding to the bargains. All-cash purchases of existing homes are accounting for roughly 30 percent of transactions, and investors are accounting for more than 20 percent of purchases. The investors know a good deal when they see one and today’s lending and real estate environment represents an amazing bargain indeed.

The numbers don’t lie. You will most likely never see a better buying opportunity than now. If you are considering a purchase, call me let me give you all the information to make an informed decision;

Laura Wise, associate broker, Stratum Real Estate Group, Sales manager Kolob Ranch; Member of both the Washington and Iron County MLS Boards.

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Most Important Room in the House–the Kitchen!

Written by June Holder

Planning to sell your home?  One of the most important rooms to upgrade or improve is the kitchen.  It seems to be that the kitchen is a center of congregation for the family and also “where there is food”, we all want to be there!  When the kitchen is appealing to buyers, it most certainly helps in the sale.

If the kitchen is near the entrance of the house, it has all eyes upon it at first glance.  Planning to upgrade a little gives the seller the ability to capitalize on the changes made; a little paint, new faucets, new pulls, and upgrade in appliances can go a long way.  It is a great idea to visit homes around your neighborhood that are for sale, in order to see how much of an upgrade you may want to take on.  A project can turn into much more money to complete than first anticipated; I have to say that has happened to me many times.

Here are some steps to take to get ready for that:
o Get with your realtor and see what similar homes in your area are selling for in comparison to yours.
o Look in magazines or online for different ideas on what will work for you in your budget for any changes you want to make.
o Find out from a contractor, or check supplies if you are planning to “Do It Yourself”; what the bottom line price will be to do the upgrading.
o Make sure you don’t out-price your market; investing too much money in a project that cannot give a return when the house is sold.
o Have your realtor or someone who has experience in the market to help you see your options.

This is a great time to do upgrades and fix-ups; when the time is right for you to list your home, you will be ready.  No time like the present to get things started–Good Luck!!

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What You Can Do To Improve Your Credit?

Written by June Holder

What You Can do to Improve Your Credit?

Part 2

Last month we discussed some issues that can have an effect on your credit score and how the credit bureaus gather that information about a buyer.  Here are more tips

and education on improving your credit score.  Credit scores, along with your over all income and debt, are big factors in determining whether you’ll qualify for a loan and what your loan terms will be.  So, keep your credit score high by doing the following:

1. Check for and correct any errors in your credit report.  Mistakes happen, and you could be paying for someone else’s poor financial management.
2. Pay down credit card bills.  If possible pay off the entire balance every month.  Transferring credit card debt from one card to another could lower your score.
3. Don’t charge your credit cards to the maximum limit.
4. Wait 12 months after credit difficulties to apply for a mortgage.  You’re penalized less for problems after a year.
5. Don’t order items for your new home on credit – such as appliances and furniture – until after the loan is approved.  The amounts will add to your debt.
6. Don’t open new credit card accounts before applying for a mortgage.  Too much available credit can lower your score.
7. Shop for mortgage rates all at once.  Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.
8. Avoid finance companies.  Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

*This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie May Foundation.  To obtain a complete copy of the publication, “Knowing and Understanding Your Credit”, visit www.homebuyingguide.org.
We will be giving more information out to new buyers with their utmost safety and interest in mind.  Our company is dedicated to bringing information to our clients that will help them make the best decision for them and their families.  We are most concerned in happy clients, Good Luck with the search on your new home!

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Opportunity or Saturation?

Written by Brandon Schank

Opportunity or Saturation?

Currently in Iron County, many investors are finding opportunity in buying residential rental properties and becoming landlords.  This month I wanted to discuss another segment of the market not talked about as much, and that is land.

Currently there are 594 available building lots in the Cedar City/Enoch areas of Iron County.  The prices on many of these lots have dropped into the low ranges of $10k each.  As a broker who focuses on the new construction and development in the area I view this as an opportunity because of the developments costs to develop that same lot.

Let’s take a ¼ acre lot for example.  In today’s dollars, it would cost over $20k to develop that said lot.  You have to connect the sewer to the main lines in the road, same with water, gas, power, phone lines, etc.  Then you have to install curb, gutter and sidewalks and on top of that you need to put asphalt down to have access to the lot.  Next we have to talk about the cost of the dirt.  Let’s say you find a piece of land selling for $9k/acre.  For simplicity sake, you can get 3, ¼ acre lots out of 1 acre of developable property. (You lose a little once you have installed the roads, etc.)  So the cost of the land for our ¼ acre lot is $3k per lot.  So on the low end of the spectrum; it will cost us $23k to provide an improved building lot for somebody to build a home.

Now I don’t know about you, but as a developer and broker, I don’t like to work for free.   I have interest costs, sales commissions, overhead, and hopefully a profit in the end for developing the land.  All in all, if you sell the lot for $25,000 nobody is getting rich off the deal.  The vision I am trying to create is that currently, many building lots are selling below the replacement cost.  Anytime you can buy a product that is priced less than it costs to replace is a good investment….Right?

In the last 12 months, there have been 78 building lots in the Cedar City/Enoch areas sell or are going to sell within the next 30 days.  One looking at these numbers may say, “The market is over-built” and there isn’t a demand for building lots.  In the last 12 months there has been 75 building permits pulled for new homes in the same areas of Iron County.  Part of the low demand for building lots is the availability of funding for contractors to pay for the homes.   Contractors don’t have the funding to build “spec” homes and are ultimately at the mercy of the buyers in the market.  These same buyers are finding deals they can’t pass up and are buying existing inventory rather than contracting to have a new home built for the same price.  With this lack of demand prices of lots could continue to drop even lower and may not be a good investment….Right?

One looking at either option may find they lean one direction or another.  As a real estate broker, our job is to provide you with the market information and help you make an educated decision about your investment plans.  As your broker, I would challenge you to think about the future.  Is the market going to continue to be like it is today forever?  No.  Is there a point where somebody says, the prices of building lots are so low, I am going to buy a large chunk of them and hold on to them for the future?  Yes.  What happens at that point?  They control the market and the pricing of those building lots moving forward.   Don’t look back 10 years from now wishing you had bought some building lots for $10k-$15k poised to double your money that you never invested.

Brandon Schank
Branch Broker/Partner

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