A newer home may actually cost less than an older home, even if it initially costs more. If that statement seems contradictory… read on!
Older homes are often less expensive to buy than newer homes because of the lack of different amenities, square footage, upgrades, and more. However, over the long term, the less expensive older home may actually cost buyers more.
Recent data shows what’s obvious… older homes come with bigger annual upkeep expenses because key items are beginning to wear out or they don’t have the energy efficient technology newer homes do. When all the operating costs for the year are weighed, newer homes often come out ahead.
According to a report by the NAHB, homes built before 1960 have more than double the maintenance costs of homes built after 2008. This same research showed that for the same overall cost, a consumer can pay 23% more for a newer home and still have the same operating costs in the first year.
In a new or older home, paying attention to key items with regular maintenance can mitigate operating costs significantly.
- Water damage – Grading, clogged gutters and downspouts can wreck havoc on siding, windowsills, and can even cause water issues in the foundation and basement if not addressed.
- HVAC – One of the simplest and most inexpensive ways to maintain furnace and air conditioning performance is by changing the filter every month. Dirty filters mean more than dirty air, which is bad enough. It also means the unit has to work harder, which can also shorten its lifespan.
- Windows – Regular caulking and painting can keep window trim from rotting under the elements sooner than it should.
By making new homebuyers aware of the whole financial picture of new and older homes instead of focusing just on the monthly mortgage payment, they may consider a wider range of homes than they would otherwise.
“The sales funnel isn’t really a funnel anymore.” – Google
Gone are the days that consumers followed a predictable singular path from interest to action when buying a home. Today, with plentiful online resources and a motivated consumer who’s actively seeking information, you need a multi-faceted approach that includes online and offline marketing in order to reach buyers.
Consider these facts when it comes to digital:
- 90% of homebuyers searched for a house online.
- Real estate-oriented keyword searches are up 253% over the past four years, in a lukewarm housing market!
- 52% of any action taken on a real estate site comes directly from a local search.
Is your website, blog, or social media efforts optimized so your company appears when prospective buyers search? They are essentially raising their hand, asking for a real estate professional to connect with them!
According to Google’s most recent data, below are rising keywords in real estate. Compare the list to your website content. Are you using any of these words in an intentional way to drive results to your pages?
Renting an Apartment
Renting vs. Buying
House Buying Process
Renting a House
Home loan/Home loans
Buying a home
Home mortgage calculator
Retirement homes houston
Best retirement communities
Retirement homes denver
Homes in foreclosure
Vacation home rentals
Rental vacation homes
Rent vacation homes
For additional marketing tips and information, watch for future Mortgage Fortunes!
Google & Compete Home Shopper Study, 2011; Google & Compete New Home Shopper Study, 2012, 2012 Profile of Home Buyers and Sellers; Google Trends, Q3 2012, 2012 Profile of Home Buyers and Sellers 2. Google Internal Data, Q3 2012
In less than 30 days, the cost of an FHA mortgage will become more expensive for the vast number of borrowers who choose them for a competitive interest rate, relaxed underwriting, and low down payment requirements.
For all FHA case numbers on June 3, 2013 and later, the annual MIP cancellation policies will change dramatically and make an FHA loan more expensive for every borrower, regardless of the term of the loan or amount of the downpayment.
- All FHA loans will require MIP, regardless of the loan’s loan-to-value or loan term. The difference for homeowners after June 3, 2013, is how long they must pay the MIP.
- FHA loans that are 90% LTV or greater = MIP for the life of the loan. It’s perpetual, with no options for canceling the MIP other than refinancing to a new conventional mortgage.
FHA loans of less than 90% LTV = MIP for 11 years regardless of their equity position. There are no exceptions that will reduce this time period other than refinancing into a traditional, non-FHA mortgage.
This is a huge change to the FHA MIP policy, so it’s vital to let your homebuyers know this week that they must secure an FHA case number before June 3, 2013, to avoid these more costly MIP requirements.
It’s imperative to partner with a lender who is adept at working with FHA, particularly in a time like this where mistakes will be much more than just frustrating, but extremely costly for a homeowner.
Shelter Mortgage has highly knowledgeable loan officers who understand FHA inside and out and who would be happy to walk you through the upcoming changes in more detail.
More square footage, basements, in-law suites, walk-in closets. Those are just some of the amenities that recent respondents to the National Association of Realtors’ 2013 Profile of Buyers’ Home Feature Preferences said they wanted when buying a new home.
This survey looks at homes that people have bought as well as the amenities they would like or would pay extra to have in their home. This year’s survey, which uses data from purchases between 2010-2012, highlights a number of preferences.
- · Slightly more than half of new homes purchased are single story.
- · The typical home was built in 1996 and is 1,850 square feet.
- · The average purchase was of a three bedroom, two-bath property.
- · 78% of homes purchased had a garage and 41% had a basement.
- · Buyers confirmed that they would be willing to pay more for homes with a basement and mother-in-law suite.
In a list of 33 features that they may or may not have in their homes, the most important to these homeowners were:
- · Central air conditioning – 65% said it was important.
- · Walk in closet – Important to 39% of those surveyed.
- · Internet/cable ready – 94% did indeed buy a home with this set-up.
Geographic and regional differences also affects what features a buyer wants in a new home:
- In the south, buyers tend to buy the biggest homes when compared to other regions – 2,000 square feet on average. They also value homes that are less than five years old, have central air, of course, and sit on wooded lots.
- Midwesterners are more likely to look for homes with garages and basements.
- Northeasterners are more likely to want a home with hardwood floors and formal dining rooms.
For more information on what future homeowners are looking for, please visit the National Associations of REALTORS® website for the full Profile of Buyer’s Home Feature Preferences report.
Insurance companies are in the business of protecting property, while also minimizing risk. One new technology may allow them to do both more effectively.
FLIR cameras, which are straight out of a 007 movie, have dropped in price and are becoming more common in the insurance industry. FLIR stands for forward-looking infared. A FLIR camera detects infared radiation, which is typically created by a heat source. In homes, they can be used to detect excess heat, which might indicate an electrical problem. Or lack of heat, which can be caused by moisture, mold or lack of insulation. In either case, the FLIR camera may alert homeowners – and their insurance company – of problems hidden behind walls so they can be addressed before they become serious or even life threatening.
Fireman’s Fund Insurance Company already uses FLIR technology in the high-worth homes it insures. CNA has also offered it to qualifying customers since 2005. Home Depot has even gotten into the act, renting out FLIR cameras to its customers. However, gathering accurate readings is not easy for an inexperienced homeowner.
Technology continues to march along, but as it does, what will happen to an individual’s privacy within his own home? Several insurance companies are seeking patent approval for other technologies that monitor property conditions. How far will it go? How far should it go? Let us know your thoughts – post your comments on our Facebook page!
Is it ever advisable to let a customer go? Difficult clients can threaten your sanity, but also your bottom line! You have two choices if you want to move past the status quo… change the dynamic or be willing to let the customer go.
Here are some questions to ask:
1. Does one client monopolize your time?
If so, you are probably shortchanging other clients or projects important to your business. Plus, it can be mentally draining. They might be an indecisive seller who keeps contacting you but never pulls the trigger. Or a buyer who looks at a lot of homes, but nothing seems right. Difficult clients are a part of business, but so is managing them!
2. Are there adjustments you can make to improve the relationship?
Can you set boundaries or be proactive so time spent is more effective for both of you?
For example, for clients who want daily or hourly updates, consider emailing or texting every morning with a quick note on what’s happening.
3. Did you set expectations early on?
It’s tempting to be all things to clients when you’re trying to win them. However, you have to deliver, and with demanding clients, that can be a big job! You may have created the very situation you dread today.
Set expectations you can live with right up front. Once you start taking calls at 10 pm or returning messages on the Fourth of July, it will be expected. If the client is unhappy with the boundaries, it may be okay to let them go.
4. Can you afford to lose the customer?
Sometimes, you can’t let a customer go, no matter how much you want to. That may be a sign you need to broaden your client base. If you can’t, know that the lessons learned with challenging clients can help you better serve future clients.
The traditional home buying process is being transformed by technology! First time homebuyers and seniors are going online for an increasing amount of the home buying process! (30% of seniors surveyed found the home they eventually purchased online!)
A huge growth area is mobile. By 2014, predictions are that more people will use mobile devices to browse the internet than desktop computers and laptops.
Growth of Mobile and Tablet Usage
According to the latest Pew research:
- 31% of households in the US now own tablets, a huge jump from just 4% that owned them in September 2010.
- 45% of adults own a smartphone and – an even higher number – 66% of adults aged 18-29 own one. That’s your first time homebuyer!
- 31% of cell phone users say they do most of their internet browsing on their phones instead of a computer.
How are buyers using mobile devices in their home search?
- 78% have used a smartphone for directions to see a home.
- 35% have used their phone to search properties on a listing site.
- 21% used their mobile to contact a listing agent.
- Searches on tablets are exploding, too! Year over year, searches for home builders grew by 362% and broker searches increased by 300%!
How are you positioned for mobile usage of your website?
Are you providing the information that buyers are looking for when they go online?
Does your online marketing include the information buyers are seeking?
Watch for a future Mortgage Fortune in which we share data on common search terms that first time homebuyers, empty nesters, and seniors are using when they begin the home buying process!