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

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

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.

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.

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!!

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!

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

Written by Jan Wilkinson

Commonly asked Real Estate questions

1. Is now a good time to buy property?

Is it less expensive to own a home or to rent a home? The answer to this question helps families make the decision whether or not to purchase a home, I would say this depends on your circumstances and whether you are planning to live in the property long term or not, and by long term I am thinking 5 years or more, if it is a long term plan you will find it less expensive to buy a home as opposed to renting.

If you listen to all the doom and gloom about the economy you could find making this decision extremely difficult, however there are experts telling us that if you want a great deal with great interest rates now is the time to act, from my experience I have seen many of my Clients who previously rented getting into properties paying similar payments to their rent and in some cases paying less, being able to choose a preferred subdivision and having the long term benefit from being able to sell the property when the property market takes its next cycle.

2. I have a low credit score but a good paying job, I would like to buy a home, how do I solve this problem.

The best thing for you to do is to contact a qualified loan officer in your area and seek their advice. If your scores are low there may be information on your report that is wrong and needs to be corrected. The loan officer will be able to advise you on steps to improve your scores and the time frame which will help to give you some hope of when you will be able to buy once you complete all the steps.

3. What does under contract mean?

Under contract means that the seller has accepted an offer,when an offer has being signed by both the buyer and seller, it becomes a legally binding contract.

There are other terms that describe the same situation which are Pending and Contingent; Contingent means that not all conditions have yet been met,  an offer could be contingent upon financing approval, a satisfactory home inspection or the sale of another home, they are just a few examples.

4. We are planning to retire in the near future & wonder if we should pay cash for a house.

I would recommend you seek the advice of an account or investment banker, because the question might be better answered once they have reviewed your entire financial situation, as your investments need to be analyzed to make the best decision.

My thoughts: Once a person retires sometimes their monthly income drops below the acceptable level to make payments and they no longer qualify to buy a home, please consider if this would be the case for you? If so, you may be required to make a larger down payment to make your income match the payment. Interest on a mortgage is the lowest right now so if you need to finance, it’s a good time to do that. Seek advice on whether your money is better off in an interest bearing account, as you may be better off leaving it there.

5. Buying an investment property – smart or foolish?

If you have money available in this property market please seek the advice of a Realtor as with a little research and buying smartly, you will find Real Estate purchased as an investment keeps on giving. With your Realtors assistance find a rental that cash flows from the day you buy it, then it will only get better from there, as rents go up, building values go up over the long-term, and you will get cash flow on a monthly basis and a lot of that cash flow is sheltered by depreciation so check out your options to see if this is a good option for you and your financial situation.

Written by Steve Nelson  

Being a good real estate agent is not an easy thing. As a buyer or seller finding a good real estate agent can feel even more difficult then being a good agent. With a little indulgence I hope to explain how to help both agents who want to be successful and buyers/sellers in picking a good agent.

I doubt that there are many professions that have a higher stress level then that of a real estate agent. In some professions it my be stressful at work but one can then retreat home to their family and leave the worries of work behind. There are different kinds of agents and some may find it easy to leave work behind them, but for me it is very difficult. My personal desire is to make sure people are happy and to never let someone down, is it at times overwhelming. Purchasing a home for most people is the largest financial transaction they will ever make. And if something goes wrong the emotional and financial devastation can be significant. So in order to take good care of my clients it often requires me to work evenings, weekends and holiday’s. It is impossible for me to leave work at work. Times when most people get to spend with their families or recreating an agent spends with taking care of their clients. Even when I try to take a vacation I can’t really relax because I spend most of my time still worrying about what I am not taking care of. This reality can also add stress to an agent’s life because it is even worse to feel like you let your spouse or child down by not being there when they need you. I would submit that if you’re reading this as an agent and can relate, you are a good agent and have the foundational key to being successful. Add some good training and hard work and the sky is the limit in building a real estate business. To truly care about people is what makes a good agent. Now to stay sane and in the real estate business you have to find ways to deal with the stress but that is a topic for another day.

So now if you are a buyer or seller how does this relate to you. The real estate industry has a very low cost of entry. To become an agent you have to fill about 100 hours of desk time and pass a state licensing test. It can be accomplished in about 2 week and will cost you about 2K and off you go to start selling homes. Many get into the business seeing big dollar signs. After all if you sale one house for 200K you make an easy 6K right. So by selling one house a month you can make a pretty good living. (There really are costs and it is much harder to get a sale then you think but if you haven’t done it, it does seem easy) There are many agents that are very successful in terms of selling properties, whose main motivation is making money. My question is does selling lots of property and making lots of money make them a “good” agent and someone you want to work with. I would suggest no. Again keep in mind that if something goes wrong in a real estate transaction the emotional and financial devastation can be significant. So do you want an agent who just wants to close the sale or do you want an agent who will lose sleep at night if they don’t do what is best for you. So when picking an agent be careful to ask questions that will get them to share personal in site into who they are, not just how much property they sale. A good agent who truly cares about you and is committed to taking care of you will consistently out perform an agent driven my money all day long. Yes knowledge and hard work are still important but if the right foundation doesn’t exist in the agent you choose to work with the risk you are taking is not worth it.

Written by Laura Wise

Why Buy Now?   It is a buyers’ market!  Are you ready to buy your first home?

Are you looking for a larger home?   Or are you ready to down size?  It is a huge decision that can be stressful and full of uncertainty. But if you’re ready, now is the time to move, before circumstances change and the market takes a turn that is less favorable to buyers.

Why is NOW a good time to buy a home? Here are two reasons you should consider:
Interest rates are still at all time lows.  However, experts predict they won’t stay this way. If you can get in now before they begin to climb, you can keep your monthly payments low. For those who are new to home ownership, your mortgage payments may be less than rent.  And for those who are considering moving to something bigger or smaller, I think you’ll be surprised at what your current equity will buy you.

There is a surplus of homes on the market. There are still some foreclosures in the area, and the sellers who need to sell have priced their homes competitively — although, just like with the interest rates, prices could start to rise at any time. I have already seen the prices on the rise in many neighborhoods.

Buying a new home is an exciting time, Now is a great time to get a great deal.