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A Note from DeLois...

by DeLois Smith

A Big Welcome to September and the delights of Autumn! We have been longing for the invigorating cooler temperatures, brighter day time and night time skies, the seasonal changes of landscape colors, the sounds of our graceful guests from Canada as they soar over area lakes and skies.

The busy Fall schedules and activities are evident everywhere with heavier traffic patterns. So many athletic and educational events and long check-out and admission lines. Our Mississippi Association of Realtors convention is in early October where Adam will be installed as the 2019 State President. Our team will be in full support at his inaugural event in Pointe Clear, Alabama- a big celebration, indeed!

Just four more short months in 2018! A wake-up call to review our personal and professional goals for 2018 that are yet to be met. Checking my own list, I note that Lavon and I have not cruised the Mississippi River on the Mississippi Queen. I also observe that my 20 pound weight loss goal is stuck between 3-4- ugh! There are a few of you on our mailing list who could remind me that your property does not yet have a SOLD sign on it. I pledge to you and to myself that I will use that extra energy from upcoming cooler temperatures to focus with renewed vigor! Thankfully, our entire team is focused on generating the best possible results!

Recent Stats to Demonstrate Quicker Results for Our Sellers

Christy McLemore, team listing coordinator, recently studied the 13 listings which our team has listed this year after a competing real estate company failed to sell. The findings were pretty amazing! The 13 properties were listed by the other real estate companies for an average of 268 days. After our team listed these same properties, they were all sold within an average of 59 days. This “team difference” makes these results achievable!

            Another interesting fact was recently brought to our attention by Christy’s research. In 2018, our team has sold 23% more of our listings taken than other competing companies in our area MLS and 13% more of our listings than our closest competitor. Of course, this does not mean that we accomplish the sale of every property; however, selling every listed property is our goal!

Congratulations to Ki Bradford, team Client Care Specialist! She was accepted and is now enrolled for evening classes in the Masters of Communications program at USM. Ki expects to complete the program in 2019.

New Fall Inventory- Go to our website (www.allstarteam.com) to view some interesting new properties coming on the market this month! Also, note that some of the properties on larger lots or on a lake or golf course have drone videos available including some community amenities.

Midtown in Motion- A new face has already developed between US Highways 59 and 49 and beyond on Hardy Street into Southeast Hattiesburg and below US 59, especially the former Oak Grove strip shopping area. Forrest General Hospital, Hattiesburg Clinic, and USM are central and critical foundations for the new development which is rapidly taking shape. Hotel Indigo, the first of this world-wide chain of boutique hotels in Mississippi, is now open for business. In addition to trains and timber which represent Hattiesburg’s history, Hattiesburg’s Indigo features Camp Shelby Joint Forces Training Center and the University of Southern Mississippi.

“Midtown” is the new buzz word in the residential community, and it has already begun to impact home vales and demand. We are grateful to the visionary leaders and investors who have so successfully launched this far-reaching, quality of life development for our greater Hattiesburg area.

Truly, it is an exciting time in the life of our Hattiesburg area. While we share an abundance of challenges, we are grateful for the many opportunities before us. We trust we will be good stewards of our numerous resources.

It is a joy for our team to have the privilege to serve as your Realtor. Happy and blessed Autumn to each of you!

DeLois & Team

Congratulations to our All-Stars! Yesterday, Adam Watkins was awarded 2018 Realtor of the Year by the Hattiesburg Area Association of Realtors and DeLois Smith along with Judy Corts, Wesley Breland, Gwen James, and Don Nace were inducted as REALTORS Emeritus by the National Association of REALTORS for 40 years or more of service in the industry.

Fair Housing Makes U.S. Stronger

by Christy McLemore

2018 marks the 50-year anniversary of the passage of the Fair Housing Act of 1968. The National Association of Realtors has been celebrating this milestone all year long with the slogan, “Fair Housing Makes U.S. Stronger.”

The history of the fight for fair housing in the United States is a convoluted one, beginning in 1866 with the passage of the Civil Rights Act shortly after the conclusion of the Civil War, which declared that all United States citizens of every color or race would have the same rights to own, occupy, and transfer real estate. Of course, this was not the end of the fight, but merely the beginning, as a series of laws and policies to promote segregation were put in place, and subsequently struck down, for the next 102 years.

The assassination of Martin Luther King, Jr. was the catalyst to prod Congress to pass the Fair Housing Act after two years of failed attempts, in April of 1968, a little more than a week after King’s murder. The Act prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, or national origin. Gender, handicap, and family status were later added as protected groups.

Upon signing the law, President Lyndon Johnson said, “I do not exaggerate when I say that the proudest moments of my Presidency have been times such as this when I have signed into law the promises of a century… It proclaims that fair housing for all--all human beings who live in this country--is now a part of the American way of life.”

The National Association of Realtors, to which all of The All-Star Team Realtors belong, is a strong advocate of fair housing practices. The NAR Code of Ethics Article 10 states, “REALTORS shall not deny nor be party to any plan or agreement to deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.”

 The NAR believes that “Where people live has a direct impact on the quality of their health, education, and access to economic opportunities”: From the NAR website, abbreviated, and emphasis added:

  • Where someone lives affects both their physical and mental well-being. Fair housing has a role in fostering healthy people and neighborhoods.
  • Housing factors that affect education include housing quality, residential stability, affordability, and neighborhood location.  Communities with high concentrations of poverty and a history of disinvestment may have less access to the type of housing that can bring about positive change to local schools. Fair housing has a role in creating and expanding educational opportunities.
  • Neighborhoods are becoming more segregated economically. The number of poor people living in neighborhoods with concentrated poverty doubled from 3 million in 2000 to 6 million in recent years. The stability provided by affordable housing can help households secure and maintain employment, increase their savings, and take steps to become self-sufficient. Fair housing has a role in creating neighborhoods that are economically diverse.               

Your Realtors at The All-Star Team are proud to be at the forefront of those who are ensuring fair housing here in the Pine Belt, which leads to economic growth that is good for not only the real estate industry but the U.S. and local economies as a whole. All of us benefit when fair practices are the norm!

To learn more about the Fair Housing Act, how to get involved in promoting fair housing in your community, or to lodge a complaint, visit Hud.gov/fairhousing.

Time Flies When You're Having Fun!

by Adam Watkins

And just like that, our kiddos kissed their summer vacation good-bye and set out to start another school year!  It's hard to believe that Amelia and I have both of our children in school now!  Abigail is entering Fourth Grade at Petal Elementary, and Hannah will begin First Grade at Petal Primary.  They're both excited, but as parents, Amelia and I greet each new school year with a bittersweet feeling.  We know they enjoy their routines, but we really enjoy our summers.  Each year Amelia sits down with the girls to create a "Summer Fun To-do List."  (What can I say, we are a family of three first-borns and one achievement-oriented second-born; we like to check things off lists!)  This summer was no different, and the girls really look forward to creating their lists as each school year closes.  It gives us (Amelia especially), a way to focus on maximizing fun experiences with our kids throughout the summer.  It can be as simple as visiting the library, or as complicated as going to Disney World.  (Both were on their lists this Summer; and if you haven't visited Disney or it's been a while since you've been - boy, has it become complicated!)  Anyhow, our girls managed to check everything off their lists just in time to start the new school year on August 8th.  I guess that's what makes the close of summer break a little bittersweet to us; we cherish all that summer fun, and then its time to get back down to the business of school, and dance, and soccer.  Best wishes to all of our area families as they start this next school year. For some, it's preschool, high school, college, trade school, and graduate school; for others it's a new career or job.  Several of our team members have children and grandchildren in all of these stages of life, and it's always interesting for us to share in those experiences with our team members as well as our clients and friends.

One of our big memories this summer was our team's July 4th Celebration at Canebrake Clubhouse.  It was another fabulous event that celebrated many of our community's finest citizens, in particular, our Vietnam Veterans, as we commemorated the 45th Anniversary of the ending of that conflict.  By the looks on everyone's faces, a good time was had by all.  We enjoyed the Victory Belles from the National World War II Museum in New Orleans as well as plenty of food, fellowship, and ICE CREAM!  Be sure to like and check out more photos on our team's Facebook Page...just search for "The All-Star Team REALTORS," and like the page - feel free to tag yourself in a photo!

The market has been active throughout the summer, as we would expect.  Overall, the market is still lacking inventory in our median price ranges which has led to increased competition amongst buyers for those types of properties.  Still, tremendous opportunities remain in nearly every price category.  Much of our focus recently has been on identifying potential properties to sell, and we are anxious to help you or someone you care about place their property on the market.  Our Listing Manager, Christy McLemore, recently led in a small research project where we examined our efficiency rate in moving the homes we list on the market.  We felt strongly that we were outperforming our competitors, but it always helps to verify that to be sure.  The sales data provided by the Hattiesburg REALTORS MLS Service showed that The All-Star Team, REALTORS, was the MOST EFFECTIVE REAL ESTATE BROKERAGE in successfully selling its listed inventory over the past year - in fact we were nearly 50% MORE EFFECTIVE than other brokerages in the Greater Hattiesburg Area!  We also identified a total of 13 homes in the last 12 months that had been previously listed with other brokerages, and were successfully sold after listing with The All-Star Team, REALTORS.  Those homes spent and average of approximately 280 days on the market prior to listing with The All-Star Team, REALTORS, where we sold them in an average of 59 Days!!!  It was refreshing to see evidence of our commitment to creating effective selling strategies for our clients, and it underscores our commitment to fulfilling the mutual goal of clients who list with our team - to SUCCESSFULLY sell their properties!

So who do you know who is in need of a team that is seriously committed to helping them sell or purchase property?  We're always honored by your referrals and your willingness to call on us....again....and again!

Sayonara Summer '18, you've been a blast!

Adam & Team 

How to Mask or Kill Odors

by Realtor.org

Are ready to sell your home but your home smells? This is a major turnoff to buyers and it needs to be addressed before you put your home on the market.

Maybe it’s a lingering, stale cigarette smell or a musty odor wafting up from the basement. Perhaps the home seems perfect and ready for the market—until you reach a room with the pungent smell of sweat, dirty laundry, and old shoes, even though it appears spotless. It’s difficult to imagine getting any buyer interested in your property unless you dispel such unpleasant odors. 

Lingering cigarette smoke: When smokers blow nicotine and tar into the air, it disseminates onto every surface in the home, including light bulbs, rugs, and moldings. First, remove all porous surfaces, including carpeting, curtains, and anything that absorbs odor. Wash until yellow stains stop coming off. Finally, repaint the room—because paint is an odor neutralizer.

Mold: Put a few containers of activated charcoal in an out-of-reach and inconspicuous space. Activated charcoal absorbs moisture and will help remove mold and mildew smells. You can find it at most pet stores.

Rotting garbage: The smell of garbage that’s been left in the kitchen too long starts to linger. You can boil sliced citrus fruit and herbs in the microwave, then separate the citrus from the boiling water. Pour the water into the dishwasher and runs a cycle with it, while dumping the citrus down the garbage disposal for an instant scent upgrade. Once you clear the garbage disposal, sprinkle some baking soda into the bottom of it.

An active child’s room: Soiled clothing laying around a teenager’s unkempt bedroom can cause a distinct odor that likely will offend prospective buyers. When smelly items have been allowed to sit for long periods of time—which enables the smell to “marinate” into the surroundings one of the better methods is to use an ozone machine. The machine removes strong smells by destroying the spores and bacteria that cause them. Ozone essentially attaches itself to the other molecules, thereby changing their structure, which eliminates the odor. Most ozone machines, depending on the sophistication of their features, can be purchased for a couple of hundred dollars, but they may be more effective in smaller spaces.

Dirty laundry or sweat: An alternative to the above for dealing with this type of odor is to combine one-fourth of a cup of vinegar and a gallon of water, and then add the mixture to a spray bottle. Spray the walls and wipe them down, along with woodwork, closets, air vents, and windows. Change the carpet and pads, and try painting the room including the ceiling. If a mattress smells sweaty, sprinkle baking soda directly on it, and let it sit for 15 minutes before vacuuming it up.

Pets: If there is a specific area of the home that smells, mix one part distilled white vinegar and six parts water, says Dean Davies, a professional carpet cleaning technician at London-based Fantastic Services. Pour the mixture into a spray bottle and generously spray over pet stains. Rub the solution into the stain using a carpet brush or a toothbrush, and then blot it using a white towel. To remove vinegar residue, apply an oxygen or enzyme-based cleaner. Let it sit for 10 to 15 minutes, and then blot the surface. If you have entire areas of a carpet or rug that are affected, sprinkle baking soda onto the smelly areas, let it sit for 12 to 14 hours, and then vacuum the surface. If the stench is still there, you may have to replace your carpet, says Nancy Wallace-Laabs, SFR, co-founder of real estate investment company KBN Homes. In extreme cases, problems resulting in pet odor could lead to damaged flooring and sub-flooring. “Remove smells from the sub-floor with a combination of vinegar and water, let set, rinse, and repeat,” Wallace-Laabs says. “If the odor remains, use Kilz spray to neutralize the smell.” But if the wood is under the pad and it still smells, you’ll need to replace that as well.

Stuffy, closed home: When windows and doors have been shut all winter (hello, spring!), don’t just let fresh air in. Add some house plants, which clean the air through phytoremediation (organic air purifiers). 

How to repair bald spots in your lawn

by HGTV.com

Does your yard have bald spots?

Before turf can be treated, you need to determine the cause of the problem. If you eliminate fungi, bugs, grubs or other pests as causes, you may just need some seeds.

Once the ground temperature warms to about 52 degrees, seeds will grow. Good seed-to-soil contact will get the seeds germinating fast. Using a sharp spade or shovel, cut the area around the dead turf. Then, use the flat part of the spade to lift off the dead turf. Because you are removing at least a couple of inches of thatch and grass, fill in the area with some clean topsoil to keep it level with the rest of the yard.

Rake out the area until it is smooth and there are no big clumps in the soil. Cast a thin layer of seeds on the area, and then gently rake the seeds into the topsoil. Cover it with straw to hold in moisture and protect the seeds from birds.

If your lawn seems thin all over, try over seeding it. The basics are the same as patching. Rake the area well, picking up any leaves and debris in the turf. Cast the seeds over the turf, and then spread about a half an inch of compost or topsoil on the lawn. To get good seed-to-soil contact, gently rake the seeds and soil into the grass.

Water the seeds in the early morning and evening until they germinate. Once they start to sprout, water the lawn every day. It will be ready for a light application of fertilizer before the heat of summer begins.

If the turf has been damaged by pet urine, it will resemble a patch of straw in the center with a dark green ring around the outside. The urine acts much like a fertilizer burn. Ohio State University scientists recommend watering the area to dilute the concentration of urine. If you are able to keep the pet off the lawn, the grass can be reseeded.

2018 Great American All-Star

by Linda Seifert

Our Great American All-Star for 2018 is Colonel Charles W.L. Hall, Ph.D., an Educator, Psychologist and Minister who has served our Nation, State and Community with distinction and honor.  A longtime resident of Mississippi, he is the father to 12 natural children and 14 adopted children, several of whom are Vietnamese adopted after the war.  He holds numerous degrees and accreditations in ministry and education.  Colonel Hall has been very involved with the Boy Scouts organization over his lifetime, having served as Scout Chaplain locally with the Pine Burr Area Council as well as to the Boy Scouts of the Philippines and the South Vietnamese Boy Scouts during his active military career.  Since 2004, he has been a chaplain with the Mississippi State Guard Third Brigade, 3rd Battalion, Camp Shelby, MS., Associate Pastor and Youth Minister at Central Christian Church in Hattiesburg, Ms.    

A career officer of the U. S. Army’s Adjutant General Corps and a war veteran of the Cold War, Gulf War and Vietnam War, Colonel Hall retired with over 30 years’ service.  Since his retirement, he has been an active member of the American Legion serving in numerous capacities from Post Commander to Post Historian, a position held with Post #24 since 2008. 

Colonel Hall hails from a family of military men and women including his great grandfather, Confederate States Army Brigadier-General Dudley Hall, PACS, 46th NC Infantry, Cooks Bde, ANV., 1861-1865;  His grandfather, a Sergeant , Army Quartermaster Corps, Pershings Division, 1917-1919;  His father, A United States Navy Chief Petty Officer from 1941-1946 and USN Reserve 1946-1961;  His uncle, The United States Navy as a Seaman 1st Class, 1950-1954;  His mother, a 2nd Lieutenant Army Nurse from 1942-1946.  These family members continued their military careers stretching into other conflicts of their era such as the Spanish - American War, World War One, World War Two and the Korean War.  Colonel Hall has traced his family’s military service even farther back in American and British history proving a long line of Hall family warriors.     

A student of the War of Southern Independence for over fifty years, Colonel Hall has been a past Commander of Camp #1329, SCV (Sons of Confederate Veterans).  He has written four books that are interesting reads for anyone wishing to know more about the history of the American Civil War and they are:  Books to Bullets, Revivals to Revolvers, Coopers Adjutants and Plowshares to Bayonets which is based on a part of Mississippi’s involvement.

In addition to his military and civilian affiliations, Colonel Hall has been a National Director for The Kadets of America.  The Kadets of America is a tax-exempt and a non-profit youth organization of civic club sponsored Kadet Show Troop units.  The Kadets of America work to develop professionalism, leadership, sportsmanship and precision teamwork among American youth and in-depth understanding of America’s military system.  He is also Camp Director for Camp Powell West, a Boy Scout and church camp located in South Lamar County, Mississippi.     

The All-Star Team is a proud supporter of our United States Military, our State Military and all of our law enforcement community for the daily sacrifices of the enlisted men, women and their families.  Thank you Colonel Hall for your military and civilian service to others exemplifying a life well lived.    

The question, how much house can I afford, is one where a lot of people have gone wrong in calculating their house affordability. Unfortunately if you get this wrong, it can end up ultimately ending in foreclosure. You need to fully understand how much a house will cost not only upfront but long term as well. To make sure that you can afford not only to get into your house but you can actually afford to live there. I have outlined some tips below. You will find a mortgage calculator and affordability calculator here as well.

More Savings and Less Debt Equals = More Home Buying Power 

Before you begin the home buying process, it's important to determine exactly how much money you can afford to spend on your new home. Knowing this information upfront can save you a lot of time and effort and is one of the keys to long-term successful home ownership. Here's how. To determine how much you can realistically afford you'll want to determine how much you'll have for a down payment. In general, you will need to have at least 10% of the homes price for a down payment. If you want the best loan terms, you should plan to have at least 20% for a down payment. When making lending decisions banks also consider the cost of housing in comparison to your income. Your monthly housing expenses including your mortgage, taxes and insurance should be no more than 28% of your monthly income. Of course your other debts also play a factor. In general, lenders want your total debt to income ratio, which includes things like credit card debt, car loan and student loans to be no more than 36%.

Conventional lenders want you to spend no more than 28% of your gross monthly income on your mortgage, taxes and insurance and up to 36% in total debt. Total debt includes student loans, car loans, credit card debt, personal loans and any other debt you may carry. So if you don't have any more loans, then you can spend up to 36% of your gross monthly income on your mortgage, taxes and insurance.
Let's see how this plays out in real life. Assuming you earn $60,000 a year or $5,000 per month gross. You'll want 28 or 36% of that $5,000 or $1400 a month to be spent on your taxes, mortgage and insurance. If you have additional debts, that's all you're going to be able to spend. But if you don't have additional debts, you can spend up to 36% of your gross monthly income on these items for a total of $1800 a month.

So in addition to a good credit history, these are some of the things that lenders are looking for. It's very important to remember that qualifying for a loan and being able to afford that loan are two very different things. So before you make such a large commitment you'll want to consider a number of other factors too.

Different Types of Mortgages Have Different Costs Both Upfront and Long Term

From the time you start looking for your house through closing, the first thing you're going have to consider is your mortgage costs to close the loan. Your mortgage makes a big difference on how much you're going to end up paying when it comes to your closing.

There are really two types of main mortgages. There's a fixed-rate and an adjustable rate mortgage or an arm. Fixed rate as you know the rate is introduced at the time when the loan is enacted and then it just continues all the way through the loan term until either you sell the house, you refinance or you pay it off. The interest rate stays the same for the entire time in a 30year fixed or 15year fixed mortgage.

Adjustable rate mortgages are a little bit more complicated. There are three, five and seven year mortgagee loans and so you'll lock in an interest rate and then later on it could adjust down the road. Different reasons why people might want the adjustable rate over the fixed rate is if you already know you're going to sell anyway or if you want to build up equity faster. Honestly, adjustable rate mortgages are being chosen less and less right now because interest rates are already so low. So the adjustable rate mortgages don't actually offer that much lower of an interest rate than the fixed rates. If you can qualify for a fixed-rate, I would highly recommend just locking in a nice low interest rate and sticking with it.

Because Fixed Rate Mortgages are so low now, I highly doubt that they could go much lower and the direction that they could go is up. So locking in a good interest rate right now would be a better idea.

The other types of mortgages would be conventional or FHA, those are the two main types. There's the regular conventional, which start with about 5% down. The 5% connventional mortgage offer the least requirements out of all of the mortgages out there. Which is great. So again if you can qualify for a conventional mortgage, I'd highly recommend going for that.

Jumbo Loans

The other type of conventional mortgage is what they call a jumbo loan. Jumbo loans you have to have a higher income to qualify for. You have to have a really high credit score and you have to have a large amount of money to put as a down payment. Also Jumbo loans have higher interest rates because you borrow so much in terms or price. A jumbo loan starts at a loan amount of $417,000. So with all of the money that you would have to put down on the house, these are for buyers that are looking who are looking for a home price of $500,000 and above.

Back when we had the housing crisis in 2007, the highest end houses were the ones that fell the most in value. Whereas the lower end houses really didn't have that far to fall, so they didn't really fall that far. But this was a really sad time because many states across the US were affected by foreclosures. You can lose a lot of equity really fast on a really expensive house as well as a lower priced home.

The other type of main mortgage would be the FHA. FHA loans are actually done through HUD. HUD stands for United States Department of Housing and Urban Development. These FHA loans are not just for first-time home buyers. There's a huge misconception that FHA loans are mainly for first-time home buyers. Although FHA loans have different kind of qualifications. So if you can get a conventional loan that's probably a better choice. The main reasons to get a conventional loan over an FHA loan is costs. With a FHA loan you a Mortgage Insurance Premium is required for the life of the loan if a you put down less than 10% as your down payment. Conventional loans have no upfront private mortgage insurance (PMI) and the PMI payments cancel when the Loan to Value (LTV) reaches 78%. Additional benefits of a conventional loan is the guidelines on the homes condition.

You have a better chance to get a fixer upper or a home with some repairs needed with a conventional.
FHA loans have some stringent guidelines on the home's condition before approving you for a FHA loan.
Either way I totally believe in homeownership, regardless of the loan you get. Compared to renting, you will be better off having your own place and owning it. If you really need help with mortgage loans, I have a great Mortgage guy I can recommend. So be sure to message me here.

FHA Loan Benefits

FHA loans can be a good choice for people because the down payment start as low as 3.5%. There are some issues with FHA loans however. They do require mortgage insurance for the entire life of the loan. Mortgage insurance ensures the people who loan you the money in case you default. Homeowner insurance protects you while PMI or Private Mortgage Insurance protects the lender. Many graduates I know, even Doctors with high student loans, started with FHA then switched to conventional. This is very common. Homeowner insurance and Mortgage insurance are two different things. Keep that in mind. Also there may be situation where a personal loan from a close relative may help you close the deal. Be aware there are strict guidelines to follow for this. So prep for this scenario as well.

With the Mortgage Insurance situation, you basically get nothing out of this and yet you're required to pay it. In a lot of cases it can be kind of pricey. So this adds to your payment instead of having say a $1,200 mortgage payment you may end up having a $1,300 mortgage payment. That's definitely something to consider if you are willing to have a little bit less to put down as a down payment.

I think the best case scenario which is really difficult for some people to do is actually to put 20% down so that you can eliminate that private mortgage insurance altogether and qualify for a conventional loan.
Owning a house with any mortgage is probably better than not home buying a house at all. In certain instances buying a house of course isn't right for everyone. If you want to buy a house and you have to choose a different type of mortgage in order to do so, by all means go for it.

VA and USDA Loans

A couple of other loans that FHA offers is a VA. VA loans are for veterans. The main benefit of VA loans is that they don't require any money down. You can buy a house with as little as $0. Just the closing cost and a few other things are required to close. Another type of FHA loan is a USDA loan. These are for rural people who have low or modest incomes. You have to make less than 115% of the median income in your area. So you have to make at least around what the median is or below. When home buying a property in a rural location in order to qualify for these loans, you will find different qualifications as well.

The Closing Costs - Upfront Costs of Buying a Home

This is one of the most underestimated things that are out there. People will say, okay well I want to put 20% down on my house. I want to spend about $250,000 on it and I have $50,000 saved. I can easily buy a house right? No! There are a whole lot of other costs to consider. When you actually go to the closing table on your house, that's when you pay your whole down payment, earnest money and associated closing costs. You have to pay closing costs depending on where you shop for your mortgage. If you want a good solid estimate of closing costs, be sure you contact a local Realtor or Mortgage professional. They are both valuable resources.

When it comes to closing costs, there are a lot of different closing costs. There are tons of different types of fees. Some people have administration fees, underwriting costs, origination fees, title fee and so on.

A lot of times you have to pay the prorated taxes. You have to pay the taxes on your house upfront for that year. You have to pay for an entire years worth of homeowners insurance at the time when you close as well. Determining real estate taxes is easy. Depending on where you live property taxes are generally 2-3% per year of the price of the property. This is just a guideline but if you have a property worth about a hundred thousand dollars, you can safely assume you'll have to pay $2,000-$3,000 a year in property taxes. Make sure to get a good estimate on the cost of your insurance premiums as well.

Oftentimes you have to pay for an appraisal to make sure the house is worth what you are buying it for. You have to pay for an inspection which I highly recommend that you don't skimp on because otherwise you can get yourself into a house that's a big problem. When we bought our home in Florida, we were so emotionally excited to get into it and just wanted to close and move in asap. We just had a friend inspect it. But after moving in we found so many problems we had. We spent over $7,000 on repairs. Installing new plumbing, electical and a water softener to name a few.If we only had a professional inspection done.

Interest Costs of the Mortgage Loan

Oftentimes you have to pay interest from the time that you buy the property until the first of the next month before the interest starts getting calculated toward your monthly payment.

So if you were to close on the house on the 15th, you have to pay the interest from the 15th through the 30th or 31st. Whatever you know for that month has how many days it has upfront at closing. Then the next interest is paid in arrears. So that when you pay your mortgage the next following month on the first you're paying all that interest in your first mortgage payment. Hopefully that didn't confuse you but yes there is some interest toward the loan that you're getting right now due at closing depending on what time of the month that you get it. It is lower at the end of the month when you close at that time. The interest is higher if you close on it at the beginning of the month because there are more days of interest you're actually paying off.

Oftentimes they'll charge you to get a credit score and so you'll have to pay for that. You'll have to pay for title insurance to check to see if your house is in a flood zone and the title is clear of any liens. Some places charge you fees if you have to start an escrow account.
Sometimes you have to get a survey. There could be even more fees on here that I don't even have listed. 
Then again not every loan is going to require this. Maybe you buy a house that doesn't require an escrow account.

Not all these fees are going to be charged every time, but there are other fees that may be charged. So it's definitely important to ask and get the right Realtor to help you in the hombuying process. In some cases you can get the seller to pay some closing costs and or repairs.It really pays to have a Realtor on your side.

You just kind of fill that in and then it gives you an amount that you would probably be able to be pre-approved for through a reputable company. Either way you will need a pre-approval letter when submitting offers on a home. So be sure to get this done prior to any home search. Do not waste your time looking at homes you can't afford.

So when I put that same in with the same exact criteria I was using from the sketchy online sites, it says that with a 30 year mortgage, I could borrow $376,000. On a 15 year mortgage, I could borrow $366,000.

However, I have found that a lot of times when you get pre-qualified through anyone in person it is a whole different situation than what you get from online sites. Oftentimes they'll say, okay what is your gross income? You give them your gross income. What are your basic debts? Your social security information so that they can check your credit. Then they'll give you an amount that you can spend. Well, honestly it happens all the time. A monthly mortgage home loan is related to your household income when you want to determine how much house you can buy. Loan calculators are great, but you still need a holistic approach with all the variables. Even if you have bad credit, you can in some situations qualify to buy a home. Monthly spending, frontend ratio,backend ratio and the like are best handled with a mortgage professional.

Mortgage Pre-Qualification VS. Pre-Approval

In a initial Pre-Qualification lenders and banks will give you a number like $376,000. So you go and shop for a house and you put out you know a house under contract that's worth $375,000.

But then once you're under contract they start processing your application. Give us your last two years tax returns, pay stubs and the like. Then their answer is, oh well you know your overtime isn't consistent so we really can't count that overtime income. Your last year's tax return was good but the one year before that it was less. We have to take the average of those two.

Or we see that you're self-employed and you buy all these office supplies. So we're going to assume you have to buy every time. All of a sudden that pre-qualification number that a lender gave you and the actual pre-approval number for isn't what they can actually use when processing your loan. They can be two different numbers.

For example the lender will say, okay I'm sorry but that original pre-qualification of $375,00 that we originally quoted you for because of all the information that you've given us now, you can only be pre-approved for $350,000.

Well but you're already under contract for this house that's $375,000. So basically that contract falls apart due to the actual pre-approval. Now you have to go look for other houses and you probably paid some of those closing costs toward trying to buy that house. Maybe you've already got an appraisal. Maybe you've already got an inspection. So you've paid all this money to try to make the deal go through and then it falls apart.

That can actually cost a lot of money. That's why I highly recommend becoming pre-approved rather than pre-qualified. That means when you actually shop around for your mortgage you choose who you want to go through. You submit all of your information then. Whatever it is they require from you. You give them your tax returns and all the necessary paperwork. The lender or bank will look it over and will tell you exactly how much you could borrow.
That way you don't have these kind of instances come up later.

Consider your final Mortgage Payment plus Hidden Costs

Look at what the payment would actually look like. This is extremely important. Sometimes people will be like okay $350,000 sounds like a lot but they say that's what I can borrow so great.

Then they sit down at the closing table and it's like oh my gosh that's a $2,300 monthly payment. I can't afford that! My rent right now is $1500. That's quite a bit more than that. So when you get pre-approved or pre-qualified make sure you look at what they tell you that payment would look like and then consider that according to what you normally pay now.

Also look at some of the other costs that come up. There are of course other continuing costs when it comes to living in your house.

There's not only that mortgage payment but there's also going to be repairs. There may not be repairs now, but as you're living in that house there will be repairs later. The more services that you have, for instance a live-in engineer, a live-in doorman or 24-hour security, the higher the total costs will be and you'll have to account for that. When lenders look at this, they subtract those costs from the total amount you can spend on your mortgage, taxes and insurance.

If you own a single-family house you'll have expenses to maintain the yard, snow removal, tuckpointing, gutter cleaning and repair. You're going to want to get your systems flushed out as well. Depending on where you live you could easily spend $5,000-$8,000 a year maintaining your home and that doesn't include extras like replacing appliances when they fail every five to thirteen years. Think carefully. If all you can do is afford $2,000 a month and you're not going to earn any more than that ever, you will need to save 5-10% of that amount or a $100-$200 a month just for maintenance. With newer homes you'll probably pay less in the beginning. With older homes, you're likely to have to pay a lot more.

So it's important to budget for those types of costs and sometimes people buy fixer uppers that really do need repairs now. Sometimes there are outdated houses. So while the sink works fine that super bright pink countertop with that blue sink just doesn't work for you in your style so you want to upgrade it. So that's another cost.

Utility Fees

Sometimes when you close on your house a utility company can charge you turn on fees or will try to get a deposit to get your utilities switched on. Of course there's always the monthly utilities. That's important to consider too because again if you're renting say a small apartment now and then you're buying a much larger house your utilities could easily double or even triple depending on what you have included in your rent and how much bigger the house is.

I know there are some districts around us where water is like double the price it is where I live now.
So monthly utilities is definitely something you want to consider and definitely don't skimp on asking about this.

I've been shopping for a house and I've been wondering about what the utilities are in the different houses we've been looking for. In many cases I had to ask the sellers agent hey what are the utilities for this house? What does an average monthly bill look like when you're heating it in the winter? I've never been told that the seller won't disclose this information. Every time I've asked it the seller agent has always been able to produce this information so that I can consider all my costs. I'm not going to end up buying a house that I can't afford.

There's the yearly taxes you're going have to pay on your house for the entire time you own it. It does not matter how long you own your home, you're still going to have to pay taxes. In some states, you can get into a foreclosure situation by not paying your real estate taxes. They can put a lien against your house and even if you own your house in full without a mortgage, they can foreclose on your house to take the taxes out of that sale price.

Not everywhere is this allowed of course so you know it can change according to where you live and what not. But yes taxes are definitely something you need to account for. Sometimes it's included in your mortgage, sometimes it's not. It depends on what kind of mortgage you have.

That's also important to find out because if you have that $1200 mortgage payment when you're used to $900 and in addition $1000 in taxes isn't even incorporated into that. You can see how people can get themselves in over their heads.

There are sometimes HOAs or Homeowner Associations where you have to pay additional monthly fees. Other dues including yearly insurances. Sometimes that's included in your mortgage, sometimes it's not. Again you want to find that out or yourself. Of course there's all this money or there are some things that you might need for landscaping. Especially if you're not used to having a home of your own or being a homeowner. You're going to want to consider the cost that it's going to take to either have somebody do the landscaping or do it yourself.

I would highly recommend looking at the whole list of costs, adding up all the stuff that pertain to you and balance it according to how much you're used to paying now. So that you can make sure that you're not going to get in over your head on the deal.

Final Note for home buyers and how much house can you afford.

House affordability is rather complicated but rewarding at the same time. You will feel better, have more pride knowing you own something. Best part is you can make it your own and benefit from it's appreciation or value increase over time. Who knows, it might pay off your student loans or debts at some point. The added benefits really outweigh all these monthly expenses with owning your home. 

Slaying Myths About Buying A Home!

by

Hattiesburg Area Local Market Update

by DeLois Smith

Shortage of good housing inventory for today’s home buyers versus the challenge for home builders to builder affordable replacement inventory was the theme of last Thursday’s Hattiesburg Area Association of Realtors/Greater Hattiesburg Home Builders Association Spring Program featuring a panel of, including our own, Adam Watkins - incoming President-Elect for the Mississippi Association of Realtors, David Saulters - President-Elect for Mississippi Home Builders Association, and Mark Wise - MAR Vice President of Government Relations.

Challenges Discussed –

  1. Shortage of available lots in home buyer preferred location
  2. Recent cost increases in building supplies and labor shortage
  3. Appraisals not keeping pace with building costs
  4. Millennials having big student loan debt

2018 homes closed year-to-date as per local MLS is 709 versus 752 sold on this date in 2017. That is a -6 percent drop at the same period we have a 9 percent increase in active real estate member of Hattiesburg Area Association of Realtors.

The good news for you who are currently or have been seller clients is that our team has the beat the average by 34 percent over the past year for percentage of homes listed and closed and we have beat our closest competitor by 15 percent.

**Printed in Star Chat June 2018 Edition. Stats as of May 25, 2018.

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Contact Information

The All-Star Team, REALTORS®
Bringing you home...again and again!
4 Willow Bend, Suite 2A
Hattiesburg MS 39402
601.545.3900
800.335.6477

The All-Star Team, REALTORS brings you over 200 years of accumulated experience along with the most innovative marketing strategies in the real estate industry. We specialize in the real estate properties located in Hattiesburg, Oak Grove, Petal, Sumrall, Purvis, Columbia, and the entire Pine Belt region. Put The All-Star Team, REALTORS® to work for you as you consider your next home sale or purchase. Experience the team approach to real estate and make us your REALTOR® for life! See how The All-Star Team, REALTORS® really is bringing the Pine Belt home again and again.