Hot Tip! Don’t Forget to Budget for Closing Costs!

When buying a home, it’s important to have a budget and make sure you plan ahead for certain home-buying expenses. Saving for a down payment is the main cost that comes to mind for many, buy budgeting for the closing costs required to get a mortgage is just as important.

What are closing Costs?

According to Trulia: “When you close on a home, a number of fees are due, They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees and more.”

For example, for someone buying a $300,000 home, they could potentially have between $6,000 and $15,000 in closing fees. If you’re in the market for a home above this price range, your closing costs could be greater. As mentioned above, closing costs are typically between 2% and 5% of your purchase price.

Trulia gives more great advice, explaining:

“There will be lots of paperwork I front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender and attorney, if you have one, to get all the documents you need ahead of time.

The most important thing to read is the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll het this form about three days before closing since, once you (the borrower) sign it, there’s a three- day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask- your real estate agent is a great resource for getting you all the answers you need.”

Bottom Line: As home prices are rising and more buyers are finding themselves competing in bidding wars, its more important than ever to make sure your plan includes budgeting for closing costs. Let’s connect to be sure you have everything you need to land your dream home.

How Much Time do you Need to Save for a Down Payment?

One of the biggest hurdles homebuyers face is saving for a down payment. As you’re budgeting and planning for your home purchase, you’ll want to understand how much you’ll need to put down and how long it will take you to get there. The process may actually move faster than you think.

Using data from the U.S. Department of Housing and Urban Development (HUD) and Apartment List, we can estimate how long it might take someone earning the median income and paying the median rent to save up for a down payment on a median- priced home. Since having a down payment can be a great time to practice budgeting for housing costs, this estate also uses the concept that a household should not pay more than 28% of their total income on monthly housing expenses.

According to the data, the national average for the time it would take to save for a 10% down payment is right around two and a half years (2.53). Residents in Iowa can save for a down payment the fastest, doing so in just over one year (1.31). The map below illustrates this time (in years) for each state:

What if you only need to save 3%?

What if you’re able to take advantage of one of the 3% down payment programs available? It’s a common misconception that you need a 20% down payment to buy a home, but there are actually more affordable options and down payment assistance programs available, especially for first time buyers. The reality is, saving for a 3% down payment may not take several years. In fact, it could take less than a year in most states, as shown in the map below.

Bottom Line:

Wherever you are in the process of saving for a down payment, you may be closer to your dream home than you think. Let’s connect to explore the down payment options available in our area and how they support your plans.

To Renovate or Not to Renovate before you sell?

Wondering if you should renovate your home before you sell it? Here is some advice for you.

When thinking about selling, homeowners often feel they need to get their house ready with some remodeling to make it more appealing to buyers. However, with so many buyers competing for available homes right now, renovations may not be as vital as they would be in a more normal market. Here are two things to keep in mind if you’re thinking of selling this season.

There aren’t enough homes for sale right now.

A normal market has 6- month supply of houses for sale, but today’s housing inventory sits far below that benchmark. According to the National Association of Realtors (NAR), there is only 1.9 month supply of homes available today. As a result, buyer competition is high and homes are only on the market for about 21 days, during which time many receive multiple offers from hopeful buyers.

In a competitive market, that’s moving so quickly, it makes sense to sell your house when buyers are scooping homes up so fast as they’re being listed. Spending costly time and money on renovations before you sell might just mean you’ll miss your key window of opportunity. While certain repairs on your house many be important, your best move right now is to work with a real estate advisor to determine which improvements are truly necessary, and which ones are not likely to be deal-breakers for buyers.

Today, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after, even if it means putting in a little extra work. Home advisor explains:

“When it comes to the number of home improvement projects completed, Gen Z homeowners are leading the pack, completing an average of 3.5 projects. Millennials closely follow Gen Z, taking on an average of 3.3 projects, followed by Gen X at 2.8 projects. Boomers completed an average of 2 projects, and the Silent Generation completed the fewest projects, on average, at 1.8 per household. Compared to 2019, millennials are spending 60% more on home improvements and doing on average 30% more projects.”

In this market, it may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars are time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over- investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing without overdoing it.

Focus on getting a good return on your investment

When planning any bigger project to tackle, you and your real estate agent will want to discuss the potential return on your investment and if those projects are worth the cost. Some homes do need a kitchen or a bathroom renovation, roof repairs or other major work, but not all of them. You might be surprises by how well your house could fair in today’s sellers’ market. Hanley Wood states”

“The 2020 Cost v Calue reports shows a predictable increase in costs for all 22 remodeling projects but a consistent dip on the perceived value of those projects at the time of home sale, as estimated by real- estate professions in more than 100 metro areas across the U.S. This results in a slight downturn on the return on investment for nearly all projects relative to the trends we saw in last year’s report.”

Ideally, homeowners getting ready to move should try to avoid over-investing in big renovations if they won’t make that money back when they sell their house. According to the 2020 state of home spending report from home advisor: “The average household spending on home services rose to $13,138, an increase over last years survey results, where homeowners who did projects spend $9,08 on average in 2019.”

Before you renovate, contact a local real estate professional to see if it’s the best course of action. You may find out that putting your house on the market as-is will help you sell quickly, and it may result in the best return on your investment. Every home is different, but a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.

Bottom Line

We’re in a string seller’s market and that means you have the leverage to sell your house on your terms. Let’s connect today to determine if renovating is really the best way to spend your time and money before you sell.

Just Listed For Lease!

For $3,000 per month, this wonderful corner unit located in the heart of downtown can be yours!

Get ready to fall in love with this bright and fun 1Br/1Ba + office at the One Hawthorne. Built in 2010, this coveted corner unit is characterized by a spacious open floor plan, floor to ceiling windows on two sides, lots of wall space for art, and stylish wood floors throughout. Enjoy cooking and entertaining in a sleek open kitchen with high-end Bosch stainless steel appliances,  including gas range, handsome gray quartz counters with breakfast bar, and Studio Becker soft close cabinetry. There is a spacious bedroom, large bathroom, in-unit washer dryer, and additional den space that could be used as a home office or child’s play area. One Hawthorne is a well maintained building with great amenities, including  24-hour staffed lobby, valet parking and on-site management. Offering a fitness center with cooling deck, bicycle storage, and impressive roof deck that has a deluxe barbecue, dining and lounge areas.  Close to wonderful cafes, shopping, theaters and nightlife easily.  Enjoy living in the center of the city near the new SF MOMA, Metreon and Yerba Buena for the Arts. Close to BART, MUNI and freeways.

Is it a Good Time to Sell?

Hint- YES!

Last year, many homeowners thought twice about selling their houses due to the onset of the health crisis. This year, however, homeowners are beginning to regain their confidence when it comes to selling safely. The latest Home Purchase Sentiment Index by Fannie Mae shows that 57% of consumers believe now is a good time to sell.

Doug Duncan, Vice President and Chief Economist at Fannie Mae Explains:

“Overall, the index’s monthly increase was driven largely by a substantial jump in the share of consumers reporting that it’s a good time to sell a home, with many citing favorable mortgages rates, high home prices, and low housing inventory as their primary rationale.”

Normally, spring is the busiest season in the housing market- the time when many homeowners decide to list their houses. While this is obviously not a normal year since the pandemic is still very much upon us, experts are optimistic that consumer positivity around selling will lead to more homeowners making moves this year. Duncan continues to say:

“We will pay close attention to see if this newfound optimism develops into a trend.”

What does this mean if you’re thinking of selling your house?

The fact that there are so few houses available for sale today is one driver that’s encouraging consumers to think more positively about selling. The National Association of Realtors (NAR) states:

“Total housing inventory at the end of the January amounted to 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million).”

With so few homes available to buy, your house will be more likely to rise to the top of an eager purchaser’s wish list in this competitive market. Today’s high buyer activity is creating upward pressure on home prices and more multiple- offer scenarios. According to the Realtors Confidence Index Survey from NAR, the average home for sale is receiving 3.7 offers today, up from 2.3 offers just one year ago. This makes selling even more enticing.

In this kind of seller’s market, you have a huge advantage in the process. And here’s another win- you can also use your equity toward a down payment on a new home when you move.

Wondering where you’ll go if you try to move while it’s so challenging to find a home to buy? Well, in many areas, there are more homes available at the higher end of the market, so finding a move-up home may be less of an issue if you’re ready to search for your dream home this spring.

Bottom Line

If you pressed pause on selling your house last year, now may be the best time to put your plans back into motion while inventory is so low. Let’s connect today to get the process started.

New Condo Listing!- 199 New Montgomery #1007

Sunny 1-BR/1-BA in Vibrant Yerba Buena

Located in the heart of the vibrant Yerba Buena, this sunny one bedroom corner unit enjoys a rare floor plan and expansive windows that capture views of downtown and bring the space to life. Filled with natural light and high up on the 10th floor facing historic New Montgomery Street, the home features glistening hardwood floors and a flexible open floor plan, ideal for living, working, and entertaining (post covid). The kitchen seamlessly flows into the living and dining space, with handsome wood cabinets, lots of granite counters space along with breakfast bar, stainless steel appliances, and views of downtown. The bedroom has its own set of windows and a large walk in closet great for storage. A large bathroom, in unit washer and dryer as well as parking make the home all that more comfortable. Building amenities include a 24 hour front desk attendant, incredible Roof deck with wrap around views, barbecue and lounge area. Constant activity and entertainment surrounds the building including Michelin rated restaurants, museums and shopping. Near the Financial District, Union Square, Embarcadero. Easy access to Muni, Bart, and highways.

Just Listed- 355 1st Street #S1808

Spectacular 1 BR/1 BA overlooking the city at the Metropolitan

Property Website

Experience luxury highrises condo living at its finest on the 18th floor of the exquisite urban-modern Metropolitan. This 1 BR 1 BA condo offers a flexible live/work space in the heart of San Francisco. The floor to ceiling windows invite in an abundanc of natural light filling the open space and bedroom. The expansive chef’s kitchen features state of the art stainless steel appliances, granite countertops and opens to the living space, wonderful for cooking and entertaining post COVID. The upgraded condo has gorgeous bamboo floors throughout, freshly painted walls, in unit washer and dryer as well as storage and a coveted parking space. The unit is located in the luxurious Metropolitan with an abundance of wonderful amenities including a 24 Hour Doorman, movie theater, indoor pool, huge gym, business center, conference room, bike parking, and concierge services. Not to forget, the prime lotion of the unit in the heart of south beach, this condo is in walking distance to world class restaurants, the Embarcadero, the Ferry Building, Financial District, Union Square, AT&T Park, and CalTrain.

It’s a Sellers’ Market

  • Over the past year, homeowners have gained an unprecedented opportunity to sell with great success while buyer demand is soaring.
  • With homes selling twice as fast as they did last year at this time, getting multiple offers, and rising in price, homeowners are in the driver’s seat.
  • Let’s connect today if you’re ready to learn about the leverage you have as a seller in today’s housing market.

Where Have all the Houses Gone?

In today’s housing market, it seems harder than ever to find a home to buy. Before the health crisis hit us a year ago, there was already a shortage of homes for sale. When many homeowners delayed their plans to sell at the same time that more buyers aimed to take advantage of recording- low mortgage rates and purchases a home, housing inventor dropped even further. Experts consider this to be the biggest challenge facing an otherwise hot market whole buyers continue to compete for homes. As Danielle Hale, Chief Economist at realtor.com explains:

“With buyers active in the market and seller participation lagging, homes are selling quickly and the total number available for sale at any point in time continues to drop lower. In January as a whole, the number of for sale homes dropped below 600,000.

Every month, realtor.com releases new data showing the year- over-year change in inventory of existing homes for sale. As you can see in the map below, nationwide, inventory is 42.6% lower than it was at this time last year:

Where Have All the Houses Gone? | MyKCM

Does this mean houses aren’t being put on the market for sale?

Not exactly. While there are fewer existing homes being listed right now, many homes are simply selling faster than they’re being counted as currently inventory. The market is that competitive! It’s like when everyone was trying to find toilet paper to buy last spring and it was flying off the shelves faster than it could be stocked in the stores. That’s what’s happening in the housing market: homes are being listed for sale, but not at a rate that can keep up with heavy demand from competitive buyers.

In the same realtor.com report, Hale explains:

“Time on the market was 10 days faster than last year meaning that buyers still have to make decisions quickly in order to be successful. Today’s buyers have many tools to help them do that, including the ability to be notified as soon as homes meeting their search criteria hit the market. By tailoring search and notifications to the homes that are a solid match, buyers can act quickly and compete successfully in this faster- paced housing market.”

The Good News for Homeowners

The health crisis has been a major reason why potential sellers have held off this long, but as vaccines been more widely available, homeowners will start making their moves. Ali Wolf, Chief Economist at Zonda, confirms:

“Some people will feel comfortable listing their home during the first half of 2021. Others will want to wait until the vaccines are widely distributed.”

With more homeowners getting ready to sell later this year, putting your house on the market sooner rather than later is the best way to make sure your listings shines brighter than the rest.

When you’re ready to sell your house, you’ll likely want to sell as quickly as possible, for the best price, and with little to no hassle. If you’re looking for these selling conditions, you’ll find them in today’s market. When demand is high and inventory is low, sellers have the ability to create optimal terms and timelines for the sale, making now an exceptional time to move.

Bottom Line

Today’s housing market is a big win for sellers, but these conditions won’t last forever. If you’re in a position to sell your house now, you may not want to wait for your neighbors to do the same. Let’s connect to discuss how to sell your house safely so you’re able to benefit from today’s high demand and low inventory.

Construction Update! The Serif

Serif, a chic, urban condo residence has been making much construction progress!

Located in Mid- Market, 950 Market Street, San Francisco, this 12 story new construction is working to create a space that is more than just your home, but also your lifestyle combining theater, art, retail, dining, and nightlife in a up and coming dynamic area in the city.

Here are a few updates:

  • Mockups of the interior finishes and fixtures are in progress including countertops, cabinetry, some appliances, bathroom tile, shower enclosures, plumbing fixtures, and door hardware.
  • Cabinets are being installed in homes on the 3rd floor.
  • The final construction hoist will be removed and exterior paneling completed in February. 
  • The framing of the lobby has begun and the Market St. entry structural steel is installed.
  • The structural steel of the rooftop solarium is in place and undergoing fireproofing and painting.

Come Spring, the sales gallery will be ready to view and explore.

Head over to the property website to learn so much more about the personal residences available, building including amenities, exclusive features, and so much more about this new chic story building in San Francisco.

*information sourced from website and email updates