What You Need to Know Before Accepting or Rejecting an Offer

May 8th, 2018

Steve Hollander – Hollander Real Estate
HouseLogic

It’s not always about the money (except when it is).

The day will come — and it will be a wonderful, joyous, do-a-happy-dance day — when you receive an offer, or multiple offers, for your home.

And on that day, you’re going to face a question you may not have previously considered: How do you know if an offer is the best one for you?

Your listing agent will be a big help here. They will understand and help you suss out the merits and faults  of an offer because — believe it or not — it’s not always about price.

One buyer’s beautifully high offer might not look so good anymore, for example, if you discover that it’s contingent upon you moving out a month earlier than planned. Or, conversely, you may prefer speed over price, particularly if you’re moving to a new city.

Your listing agent will have a sense  of what you want financially and personally — and can help you determine whether the offer at hand satisfies those goals.

Before the first offer rolls in, here’s what you need to know about the offer evaluation process, including the main factors that should go into making a decision — accept or reject? — with your agent.

5 Important Things — Other Than Price — to Consider When Evaluating an Offer
Want to fetch top dollar for your home and walk away with as much money in your pocket as possible? Of course you do. You’ve gone through the time-consuming process of setting your asking price, staging your home, promoting your listing, and preparing for open houses — and should be rewarded for your efforts.

Your first instinct may be to just pick the highest bid on the table. But the offer price isn’t the only thing worth considering.

When vetting offers, evaluate these five areas in addition to price:

1. The earnest money deposit. One important consideration when weighing an offer is the size of the earnest money deposit. The EMD is the sum of cash the buyer is offering to fork over when the sales agreement is signed to show the person is serious (i.e., “earnest”) about buying your home. This money, which is typically held by a title company, will go toward the buyer’s down payment at closing.

A standard EMD is 1% to 3% of the cost of the home (so, that would be $2,000 to $6,000 on a $200,000 house). If a buyer tries to back out of an offer for no good reason, the seller typically keeps the EMD. Therefore, the higher the earnest money, the stronger the offer.

2. The contingencies. Most offers have contingencies — provisions that must be met for the transaction to go through, or the buyer is entitled to walk away from the deal with their earnest money. Contracts with fewer contingencies are more likely to reach closing, and in a timely fashion.

Here are five of the most common contingencies:

  • Home inspection contingency. This gives the buyer the right to have the home professionally inspected and request repairs by a certain date — typically within five to seven days of the purchase agreement being signed. Depending on where you live, you may be required to make home repairs for structural defects, building code violations, or safety issues. Most repair requests are negotiable, though, so you have the option to haggle over which fixes you’re willing to make.
  • Appraisal contingency. For a mortgage lender to approve a home buyer’s loan, the home must pass appraisal — a process during which the property’s value is assessed by a neutral third party. The appraisal verifies that the home is worth at least enough money to cover the price of the mortgage. (In the event the buyer can’t make their mortgage payments, the lender can foreclose on the home and sell the property to recoup all — or at least some — of its costs.) Generally, the home buyer is responsible for paying for the appraisal, which typically takes place within 14 days of the sales contract being signed.
  • Financing contingency. Also called a loan contingency or mortgage contingency, a financing contingency protects the buyer in the event their lender doesn’t approve their mortgage. Although the timeframe for financing contingencies can vary, mortgage lenders report that buyers generally have about 21 days to obtain mortgage approval.
  • Sale of current home contingency. Depending on the buyer’s financial situation, their offer may be contingent on the sale of their home. Usually, buyers have a window of 30 to 90 days to sell their house before the sales agreement is voided. This contingency puts you, the seller, at a disadvantage because you can’t control whether the buyer sells their house in time.
  • Title contingency. Before approving a mortgage, a lender will require the borrower to “clear title” — a process in which the buyer’s title company reviews any potential easements or agreements that are on public record. This ensures the buyer is becoming the rightful owner of the property and the lender is protected from ownership claims over liens, fraudulent claims from previous owners, clerical problems in courthouse documents, or forged signatures.

These contingencies are standard for most real estate sales contracts. There’s one exception: the sale of current home contingency, which tends to be used more often in strong buyer’s markets, when buyers have greater leverage over sellers.

That being said, contingencies are always negotiable. (The caveat: Mortgage lenders require borrowers to have appraisal financing contingencies, or they won’t approve the loan.) It’s up to you to decide what you’re comfortable agreeing to, and your agent can help you make that decision.

3. The down payment. Depending on the type of mortgage, the buyer must make a down payment on the house — and the size of that down payment can affect the strength of the offer. In most cases, a buyer’s down payment amount is related to the home loan they’re taking out. Your chief concern as a seller, of course, is for the transaction to close — and for that to happen, the buyer’s mortgage has be approved.

Generally, a larger down payment signals the buyer’s financial wherewithal to complete the sale. The average down payment, according to the NATIONAL ASSOCIATION OF REALTORS®, is 10%. Some mortgage products, such as FHA and VA loans, allow for even lower down payments.

If, by chance, the appraisal comes in higher than your contract’s sale price, the buyer with a higher down payment would more likely be able to cover the difference with the large amount of cash they have available.

4. The all-cash offer. The more cash the buyer plunks down, the more likely the lender is to approve their loan. That’s why an all-cash offer is ideal for both parties. The buyer doesn’t have to fulfill an appraisal contingency — whereby their lender has the home appraised to make sure the property value is large enough to cover the mortgage — or a financing contingency, which requires buyers to obtain mortgage approval within a certain number of days. As always, having a sales contract with fewer contingencies means there are fewer ways for the deal to fall through.

5. The closing date. Settlement, or “closing,” is the day when both parties sign the final paperwork and make the sale official. Typically, the whole process — from accepting an offer to closing — takes between 30 and 60 days; however, the average closing time is 42 days, according to a report from mortgage software company Ellie Mae.

Three days before closing, the buyer receives a closing disclosure from the lender, which he compares with the loan estimate he received when he applied for the loan. If there are material differences between the buyer’s loan estimate and closing disclosure, the closing can’t happen until those amounts are reviewed and approved. But this is rare.

Some transactions can take more time, depending on the buyer’s financing. For example, the average closing time for a Federal Housing Administration (FHA) loan is 43 days, according to Ellie Mae.

Whether you want a slow or quick settlement will depend on your circumstances. If you’ve already purchased your next home, for instance, you probably want to close as soon as possible. On the other hand, you may want a longer closing period — say, 60 days — if you need the proceeds from the sale to purchase your new home.

When Should You Make a Counteroffer?
Depending on the circumstances, you may be in the position to make a counteroffer. But every transaction is different, based on the particular market conditions and your home. In some circumstances, you can be gutsy with your counteroffer. In others, it might serve your goals better to give in to the buyer’s demands. Your agent can provide helpful insight about when and why a counteroffer will be the right thing for you.

For instance: If you’re in a seller’s market — meaning that homes are selling quickly and for more than the asking prices — and you received multiple offers, your agent may recommend you counteroffer with an amount higher than you would have in a buyer’s market.

If you choose to write a counteroffer, your agent will negotiate on your behalf to make sure you get the best deal for you.

A caveat: In many states sellers can’t legally make a counteroffer to more than one buyer at the same time, since they’re obligated to sign a purchase agreement if a buyer accepts the new offer.

When Does an Offer Become a Contract?
In a nutshell, a deal is under contract when the buyer’s offer (or seller’s counteroffer) is agreed upon and signed by both parties. At that point, the clock starts ticking for the home buyer’s contingencies — and for the sweet moment when the cash — and home — is yours.

Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

The Markets In A Minute

May 7th, 2018

Steve Hollander – Hollander Real Estate
Jackie Doran – Capital Partners Mortgage, LLC

The Economy

The PCE index, the Fed’s preferred inflation barometer, rose to 2% year-over-year in March. This is the biggest jump since Feb ’17 and could pressure rates.

The Fed voted unanimously not to raise policy rates at this month’s FOMC meeting. However, they are expected to raise rates at the next meeting in June.

The labor market shows no signs of slowing, as new applications for unemployment benefits last week fell to the lowest level since 1973.

Housing News

Pending home sales were down 3% year-over-year in March, the 3rd straight month of annual declines. However, sales were up 0.4% compared to February.

Increases in mortgage rates saw applications to buy a home drop 2% last week. However, purchase applications were still 5% higher than a year ago.

Rising raw material costs are another way that inflationary pressures are starting to affect housing. Spending on new housing projects fell slightly in March.

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

Jackie Doran

Capital Partners Mortgage, LLC
Loan Officer
NMLS # 364090
Jackie.Doran@CapitalPartnersMtg.com
(561) 716-0448
www.mortgagesbyjackie.com
© 2017 Capital Partners Mortgage, LLC. All Rights Reserved. This communication does not constitute a commitment to lend or the guarantee of a specified interest rate. All loan programs and availability of cash proceeds are subject to credit, underwriting and property approval. Programs, rates, terms and conditions are subject to change without notice. Other restrictions apply. Jackie Doran NMLS # 364090, . 11290 Legacy Ave, North Palm Beach, FL 33410. Capital Partners Mortgage, LLC  1515 N. University Drive, Suite 102D, Coral Springs, FL 33071. Corp NMLS# 1084639 (www.nmlsconsumeraccess.com). Equal Housing Lender. 

How to Price Your Home to Get the Highest Offer

May 4th, 2018

Steve Hollander – Hollander Real Estate
Trulia Guides

Not sure how much your home is worth? Use these techniques to get top-dollar offers.

Are you wondering how to price your home before it goes on the market? While improving the appearance of your home — sprucing up the lawn, decluttering your home, or updating lighting fixtures — is an important factor to consider in attracting higher offers, there are pricing strategies that don’t involve any physical labor.

How to Price Your Home to Attract the Highest Offers

Price your home competitively.
Setting the right price for your home is the single most important decision you will make when deciding to sell. Go too high, and you risk turning off every buyer in the marketplace, go too low, and you leave money on the table. One simple but powerful technique for pricing your home is to spend time looking at comparable homes. By doing so, you will be seeing the world through a buyers’ eyes and gain a better understanding of what a reasonable listing price looks like.

Be brutally honest with yourself. Compared to the competition, what price would position your home as the best value proposition for buyers in your marketplace? The best listing price could be anywhere between “too high” and “too low” depending on the local market and time of year. This is when having an experienced agent who knows the market and how buyers respond comes in handy.

Use strategic price points.
A home buyer’s target price range is typically raised or stretched incrementally, and this allows for an easy way to get more out of a home offer. Just like you might be more compelled to buy a gallon of milk at the grocery store for $4.99 rather than $5.00, think about how you can get the most out of an offer at a specific price point. Similarly, if you’re listing your home at a specific price, like $227,900 dollars, you’re not going to attract the highest offer in that price range.

Since home buyers tend to consider homes between price ranges that are separated by five to ten thousand dollar increments, consider setting your price near one of these natural price points. For instance, a price $229,900 would probably net you exactly the same number of buyer inquiries as a price of $227,900, but moving your home down to $224,900 (the next price point down) would widen your potential buyer pool.

Consider value range marketing.
Another pricing technique that may be the ticket to more showings and higher offers is to use value range marketing. Value range marketing is a pricing technique in which you choose a listing price based on what you would sell for today if a buyer wrote you a check. You then choose another lower price — one that you wouldn’t reject if offered, but would use as a starting point negotiate towards some middle ground. So instead of listing your home at a specific price of $496,000 dollars, consider listing the home between $459,000 and $496,000.

Hire an experienced listing agent.
Not all listing agents are created equal. An agent who knows your local market and what comparable homes have sold for recently, will know your home’s potential. To find an experienced real estate agent, take the time to research local real estate agent, talk to friends and colleagues about who they recommend, and interview multiple agents before making a hiring decision. In addition, be sure to come to an agreement about a specific, documented marketing plan before signing a long-term listing agreement with your agent.

Encourage two-way critiques.
Successful sellers aren’t afraid of a little (or a lot) of constructive criticism. In fact, they invite agents to give them helpful suggestions on everything, from pricing to curb appeal, to help them secure the highest possible price for their home. On the flip side, when hiring an agent, be sure to find an agent who is open to suggestions and review his or her marketing plan for your home. For instance, as a seller, you may find ways to improve advertising copy, flyers, photographs, or even virtual tours.

Offer incentives & prepaids.
A buyer who has narrowed their search down to two or three top choices may need a little push to motivate them to take action. To encourage buyers, many sellers offer incentives like buying the interest rate down on the purchaser’s loan, paying for closing costs, inspections, or repairs, or providing allowances or credits for home upgrades after closing. In addition, many sellers prepay for services like internet services for a year, taxes or homeowners association dues, or even golf club memberships.

Use a pre-appraisal and pre-inspections.
A pre-appraisal is an appraisal of the home before a buyer has made an offer. By having this done early you will have an objective voice that has provided a value for the property independent of your own opinion and could be a great tool in talking with buyers. In addition, many sellers do pre-inspections of the home to provide buyers with a clear whole home inspection or pest and dry rot inspection. (A word of caution: anything discovered during a pre-inspection will likely need to be disclosed whether you fix the issue or not).

Learn to fail fast.
If something isn’t working, successful sellers have the strength to fail fast by making adjustments to their strategy quickly. For instance, if after implementing your marketing plan, buyers don’t begin to view your home on a regular basis, this is a clear indication that the market is rejecting your price. There is only one solution: lower your price. On the other hand, if you have a steady stream of buyers touring your listing, yet you aren’t receiving any offers, this is often a symptom of buyers rejecting, not the price, but the home itself. Something about the home is turning them off. Savvy sellers attempt to identify the problem and take proactive action to correct it.

Read more:

Things To Do This Weekend

May 3rd, 2018

Steve Hollander – Hollander Real Estate

Clematis By Night – Thursdays
Clematis by Night is the place to be for great live music, a taste of mouth-watering foods and fun people all in the hip ambiance of an energized downtown waterfront. Centennial Square at the end of Clematis Street in Downtown West Palm Beach.
100 N Clematis St. – West Palm Beach, FL 33401  Clematis By Night

SunFest – Now to Sunday
Florida’s largest music, art and waterfront festival will take place in Downtown West Palm Beach featuring more than 50 performances over four days. End your evening on Sunday with an amazing firework show at 9:00 pm.
Intracoastal Waterway in downtown West Palm Beach    SunFest

West Palm Beach Antique Festival – Friday to Sunday
We are a monthly event showcasing great merchandise for sale that includes all things Vintage, Antiques, Collectible and Retro. Our Dealers come from all over the United States to bring you one of a kind, unique items to add to your collection, resell or decorate your home.
9067 Southern Blvd – West Palm Beach, FL 33411   Antique Festival

Swamp Tromp – Saturday
Take a walk on the wild side during this hike through cypress swamps, cabbage palm hammocks, and saw grass marshes. Be prepared to get wet and muddy! This hike is on a rugged trail that requires stepping over and ducking under vegetation and other obstacles. Bring closed-toe shoes that can get wet, water, hat, sunscreen, towel, and change of clothes.
8264 Northlake Blvd. – West Palm Beach, FL 33412  Swamp Tromp

Cinco de Derby – Saturday
Come celebrate Cinco de Derby with us at Roger Dean Chevrolet Stadium. Two great celebrations spun into one great event! Enjoy great drinks from mint juleps to refreshing margaritas, as well as tasty tacos. Show off your best Derby hat and you could win a prize.
4751 Main Street – Jupiter, FL 33458    Cinco de Derby

Rocco’s Cinco de Mayo Block Party – Saturday
Join us for our annual Cinco de Mayo Block Party! All day and all night. DJ and bands. Drink special and giveaways.
224 Clematis Street – West Palm Beach, FL 33401  Rocco’s Cinco de Mayo Block Party

Abacoa Cinco de Mayo Block Party – Saturday
The street fiesta kicks off with activities for both adults and children. Face-painting, glitter tattoos, mini golf and other active games will be at the east end of the street until 6 p.m. A piñata may also surprise the kids. DJ Flash will spin his tunes in the middle of the street, where you can expect a multi-generational dance party, per usual. A cornhole tournament will be ready to go at the west end of the block, and beer pong tables out in front of DAS Beer Garden. The real fun starts at 8 p.m., with Mariachi Pancho Villa serenading the crowds.
1200 Town Center Drive – Jupiter, FL 33458  Abacoa Cinco de Mayo

Cinco de Mayo Block Party at Calaveras Cantina
The party starts early with live music, drink specials and plenty of delicious Mexican food during Calaveras Cantina’s annual Cinco de Mayo Block Party. The Harbourside Place restaurant will up the ante this year with an outdoor Taco Tent, 3 outdoor bars, and chihuaha races benefiting Jupiter Dog Rescue!
125 Dockside Drive – Jupiter, FL 33477  Harbourside Cinco de Mayo Block Party at Calaveras

Mats and Bats – Sunday
Enjoy pre-game yoga on the field courtesy of Tribe Studio from 11:15am to 12:15pm. Once the yoga’s concluded enjoy great minor league action as the Palm Beach Cardinals host the St. Lucie Mets.
4751 Main Street – Jupiter, FL 33458   Mats and Bats

The Gardens GreenMarket – Sundays
At the Market, you can shop an abundance of just-picked, orchard-grown goods, a wide selection of seasonal vegetables and fruits, fragrant herbs, honey, homemade old-fashioned breads, pies, cheeses, sauces, handmade crafts and much, much more. This event is rain or shine.
10500 Military Trail – Palm Beach Gardens, FL 33410   The Gardens GreenMarket

What Is Home Equity?

May 2nd, 2018

Steve Hollander – Hollander Real Estate
Trulia Guides

Want to use your biggest asset to make a purchase? Find out if you can by calculating your home equity.

How much of your home do you actually own? You may be the owner of your house, but many homeowners are in various stages of paying off the purchase of their property, so another party has a financial stake in it as well. That means your home equity is a work in progress. What is equity? Finding out will help you understand how your financial relationship with your home changes over time—and how it benefits you as your stake in it increases.

What is equity?
Home equity is your financial stake in your home. Essentially, it’s how much of the home value you’ve already paid for, versus how much your mortgage lender is still financing.

Your equity in your home is constantly changing. It’s low at first and then increases over time as you pay down more of the principal on your mortgage. You could gain equity or lose equity depending on whether you pay down your loan or take out a second mortgage and whether the value of your home goes up or down. You can also leverage your home equity to buy other things. But before thinking about doing so, it’s a good idea to find out what your equity is.

How do I calculate my home equity?

  • Figure out your property’s value.
    To get an idea of how much equity you have, you’ll first need to find out your property’s market value. One way to do this would be to check your Zestimate on Zillow. Another would be to look up recently sold homes similar to yours in your area. You might find that your property’s value is about what you paid for it. But your property’s value could have risen or fallen as well. This depends largely on the current market.
  • Find out how much you owe.
    You can find out how much is left on the balance of your mortgage on your monthly statement, or even on an online portal if your mortgage lender offers one. If you can’t find this info on your own, call your mortgage lender, and they can help you.
  • Do the math.
    Next, subtract your loan balance from your property’s value. What you have left is your home equity. Let’s say your house is worth $250,000, and you owe $200,000. Your home equity is $50,000. Your home equity increases as you pay down the loan. It also increases if your property’s value rises—from home improvements, market conditions, or both.
  • Check market conditions and adjust.
    Let’s say your home appreciates in value from market conditions. “You build equity without doing a thing,” says Dan Thompson, owner and founder of Wise Money Tools. “Suppose the home you bought for $100,000 could now sell on the market for $120,000 because the market value has increased. You just added $20,000 in equity simply being the owner.” On the flip side, your equity decreases if you take out a second mortgage or if your property’s value falls. Depending on when you plan to utilize your home equity, you’ll want to monitor market trends to forecast how your home value may continue to change.

How can I access my home equity?

  • Choose the right purpose for using home equity. Although home equity represents cash, it isn’t liquid, meaning you can’t buy box seats for your favorite sporting event or a new wardrobe with it. And that’s probably a good thing since those aren’t good uses for home equity. Typically, people use their home equity to fund their next home when they move, improve their existing house, finance a college education, pay off credit card debt, invest in the stock market or real estate, get a reverse mortgage for retirement, go on vacation, or buy a car. 
  • Take out a home equity loan. 
    You can take out a home equity loan (also called a second mortgage) when you want to use the equity in your home. With a home equity loan, you get a lump sum payment to use any way you like. Note that you must repay the loan with interest (usually a fixed rate), just as you pay your first mortgage or car loan. “Failure to pay can mean foreclosure on your home, so use a home loan wisely for purchases,” says Thompson. You can typically get a large home equity loan—if you have adequate equity—since your house is the collateral. Another benefit: The interest rates are usually lower with home equity loans than they are with credit cards or personal loans.
  • …OR, take out a home equity line of credit.
    Another way to access your home equity is with a home equity line of credit (HELOC). With a HELOC, you get approved for a certain amount, but you use only what you need. You use a HELOC as you would a credit card. You must also pay back the money you borrow with a HELOC, and the interest you pay is usually a variable rate, which means it can change over time—like marriage—for better or worse.

Read more:

The Market Preview

May 1st, 2018

Steve Hollander – Hollander Real Estate
Jackie Doran – Capital Partners Mortgage, LLC

A New Home on the Range
The Long-term has arrived sooner than expected.

We have said repeatedly this year that the trend in mortgage rates will be higher over the long term. We offered this opinion last week: “Odds are that mortgage rates will rise longer term. Predicting with accuracy when the short term will give way to the ‘longer term’ is never a sure bet.”

Indeed, it’s never a sure bet. It turns out the short-term was shorter than we expected.

Mortgage rates have moved meaningfully higher over the past few days. They’ve moved high enough to establish a new range. The old range of a 4.5%-to-4.625% rate on a prime 30-year fixed-rate mortgage (at the national level) has given way to a 4.625%-to-4.75% range. No one should be surprised above the move north, though.

The yield on the 10-year U.S. Treasury note made for the heavens over the past week. The yield jumped nearly 20 basis points over just a few trading days. The yield hovers around 3% as we write. The 10-year note hasn’t offered so high a yield since the waning days of December 2013.

It’s all circular, really: Yields on mortgage-backed securities (MBS) take their cue from the yield on the 10-year Treasury note. Long-term mortgage rates take their cue from yields on MBS. Mortgage rates had no choice but to establish a higher range.

A combination of factors has served as fuel for the interest-rate rise.

Another Federal Reserve interest-rate hike is one. More market participants are gaming for four increases before the year is over. Most were gaming for three at the start of the year. The next increase will likely occur in June.

Consumer-price inflation shows increasing signs of moving to a higher range. According to the Federal Reserve’s Underlying Inflation Gauge (UIG), the 12-month inflation growth was 3.13% in March. That’s the highest rate recorded in nearly 12 years. The last time the UIG was this high was in July 2006, when it was at 3.2%

Wage inflation, which has remained mostly subdued since the last recession, also has market participants on edge. The unemployment rate at 4.1% is low; demand for labor (qualified labor, to be specific) is high. Something has to give on either the wage or demand fronts. Most market watchers expect it to give on the wage front.

Companies continue to make money at an elevated rate. FactSet reports that 17% of S&P 500 companies have reported first-quarter financial results. Eighty percent of the reporting companies reported a positive earnings surprise (above the consensus estimate). S&P 500 earnings are expected to grow 18.3% year-over-year for the quarter. That’s the highest annual increase since 2011.

It’s all good for the U.S. economy, which means it’s mostly bad for the interest-rate trend. With the information we have today, we see little reason not to expect quotes of 5% or higher on a 30-year conventional mortgage by the end of the year.

Sales Up, But for How Long?
Both existing and new homes posted monthly sales gains for March.

Existing-home sales rose 1.1% to post at 5.6 million on an annualized rate for the month. This was the second-consecutive increase, but it still leaves sales down compared to a year ago. Sales are down 1.2% compared with the year-ago period.

It’s common knowledge why sales-grow lags – lack of inventory. The number of existing homes increased slightly in March, but it’s still down 7.2% compared with a year ago. At the current sales pace, only 3.6-months’ supply is on the market.

Sales of new homes were surprisingly spry in March. Sales were up 4% to post at 694,000 on an annualized rate. Through the first quarter of 2018, new-home sales are running 10.3% higher than a year ago.

The surge is less impressive, though, when the composition of the trend is considered. The increase was overwhelmingly driven by sales in the red-hot West, which were up 28.3%. Sales were also concentrated at a higher price point. Sixty percent of sales were for homes priced $300,000 or above. Two years ago, these homes accounted for 53% of sales. Affordable entry-market new homes remain a rare commodity.

And prices, they continue to rise.

The latest reading of the S&P CoreLogic Case-Shiller Home Price Index shows home prices rose 6.3% year over year in February. The West again led the index. Seattle, Las Vegas, and San Francisco all posted double-digit year-over-year price gains.

It’s all mostly good. Nevertheless, the trends in home prices, mortgage rates, and inventory could cool sales in the coming months, even in the red-hot West.

Jackie Doran
Capital Partners Mortgage, LLC
Loan Officer
NMLS # 364090
Jackie.Doran@CapitalPartnersMtg.com
(561) 716-0448
www.mortgagesbyjackie.com
© 2017 Capital Partners Mortgage, LLC. All Rights Reserved. This communication does not constitute a commitment to lend or the guarantee of a specified interest rate. All loan programs and availability of cash proceeds are subject to credit, underwriting and property approval. Programs, rates, terms and conditions are subject to change without notice. Other restrictions apply. Jackie Doran NMLS # 364090, . 11290 Legacy Ave, North Palm Beach, FL 33410. Capital Partners Mortgage, LLC  1515 N. University Drive, Suite 102D, Coral Springs, FL 33071. Corp NMLS# 1084639 (www.nmlsconsumeraccess.com). Equal Housing Lender. 

The Markets In A Minute

April 30th, 2018

Steve Hollander – Hollander Real Estate
Jackie Doran – Capital Partners Mortgage, LLC

The Economy

Concerns over inflation and a spike in Treasury yields drove rates up this week. The 10-yr Treasury broke the 3% yield mark for the first time since 2014.

While inflation is growing domestically, lack of inflation is still a concern overseas. The ECB is continuing economic stimulus, helping to keep rates lower here.

Consumer confidence rebounded in April, pointing to underlying strength in the economy. Strong confidence is likely to fuel an increase in consumer spending.

Housing News

New home sales, which account for 11% of the housing market, increased 4% in March. That’s an 8.8% increase from a year ago, a big jump.

Home prices continue to surge, even as mortgage rates rise. Home values jumped 6.3% in February over the previous year, according to Case-Shiller.

The number of homeowners benefitting from the mortgage tax break is expected to drop by half in 2018. Only about 20% of all taxpayers have used the break in recent years.

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

Jackie Doran

Capital Partners Mortgage, LLC
Loan Officer
NMLS # 364090
Jackie.Doran@CapitalPartnersMtg.com
(561) 716-0448
www.mortgagesbyjackie.com
© 2017 Capital Partners Mortgage, LLC. All Rights Reserved. This communication does not constitute a commitment to lend or the guarantee of a specified interest rate. All loan programs and availability of cash proceeds are subject to credit, underwriting and property approval. Programs, rates, terms and conditions are subject to change without notice. Other restrictions apply. Jackie Doran NMLS # 364090, . 11290 Legacy Ave, North Palm Beach, FL 33410. Capital Partners Mortgage, LLC  1515 N. University Drive, Suite 102D, Coral Springs, FL 33071. Corp NMLS# 1084639 (www.nmlsconsumeraccess.com). Equal Housing Lender. 

What to Know About Your CC and R and HOA

April 27th, 2018

Steve Hollander – Hollander Real Estate
Trulia Guides

Being unaware of community restrictions could spell trouble for you when it comes time to move in.

When you move into a new home, there’s a long list of things that you’re probably wondering: how to work your heat and air conditioning system, what day is trash pickup, and what your neighbors are like. But there are two important items to check off your list before you purchase your home: your homeowners’ association’s (HOA) powers and your neighborhood’s covenants, conditions, and restrictions (CC&R) — the handbook outlining your community’s household dos and don’ts.

When it comes time to add that screened-in porch you always wanted or a flagpole in your front yard,the community restrictions could spell trouble for you. Here’s what you should know about HOAs and CC&Rs.

5 things to to know about your HOA and CC&R

The HOA is not out to get you
It may seem as if your HOA is trying to make your life miserable by placing certain restrictions on things such as what color you can paint your home, but the truth is, “HOAs actually are set up as a corporation that benefits the membership by increasing property values and allowing each member to enjoy the common-area amenities,” explains Joe Winkler, vice president of marketing with Keystone Pacific Property Management in Irvine, CA. “This can be done by reasonably enforcing the governing documents and making sure the association is clean, attractive, and provides ways for members to build a sense of community.”

So while it can be frustrating to receive a notice about your lawn’s scraggly state, it’s in the best interest of the whole neighborhood — including yours — to mow it and keep your yard in check.

The rules are amenable
It’s true that most HOAs have a fair amount of power, but the people who run the organization can make all the difference. “As a member of the corporation or community, each member has the power to elect fellow members who they feel best represent the values of the overall membership,” says Winkler. “In addition, each member can run for the board themselves or get on a committee like architectural or landscape. This is a great way to give positive input on how the association is run.”

Bottom line: If you don’t like the way your HOA enforces the rules (or you don’t like the rules themselves), it might be a good idea to take on a role within the organization, or attend the HOA open forum to voice your concerns.

Assuming what you don’t know about the CC&R can’t hurt you
Oh, but it can. “The wrong way to learn the rules is to break them,” says Vera Kiser, a licensed property manager and former community association manager in Atlanta. “If there is something an owner likes to do on the exterior of their home, like wash or fix cars, let neighbors parallel-park, hold pool parties, or remove trees from their property,” it’s wise to read the rules before buying the home, says Kiser.

If you or your tenant break a rule detailed in the CC&R, many HOAs are given the power to place liens on your home, and if they do, selling that home can be difficult, if not impossible. Worst-case scenario? Your home could be foreclosed on and the property could be sold to settle your debt.

Your vote matters
In many instances, not voting causes more problems than there are in many communities with active neighbors. “This [thinking] is exactly how lunatics get in and make poor or personal decisions with your HOA dues,” says Kiser. “Always vote. As the saying goes, ‘Don’t vote, don’t complain.’”

You’ll still have a voice in a neighborhood with only CC&Rs
Not so, says Sharon Voss, president of the Orlando Regional Realtor Association. “Homeowners whose CC&Rs are not being upheld can often turn to their local city or county government code enforcement,” she explains. “CC&R specifics frequently run parallel to municipal codes, so a violation against a CC&R is likely to also be a violation against a municipal code.”

Tenants are more likely to behave under CC&R
“I’ve professionally managed both renters in covenant communities and owners in the same,” says Kiser. “I’ve found that renters often care for the property better than the absent owner, and it’s the owner that is throwing the wild parties and leaving trash at the pool. Tenants are extremely responsive to CC&Rs if they know about them before they are blindsided with a violation letter. Tenants know they are looked down upon anyway and can be forced out of a community faster than an owner can, so who do you think will want to keep the lowest profile? Tenant or an owner?”

HOA membership is rarely optional
In a word: rarely. “If you want to be free to do whatever you want with your home, or don’t want to pay dues if you don’t use the pool, be sure you know if you are buying into a mandatory HOA or an optional one,” advises Kiser.

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Things To Do This Weekend

April 26th, 2018

Steve Hollander – Hollander Real Estate

Clematis By Night – Thursdays
Clematis by Night is the place to be for great live music, a taste of mouth-watering foods and fun people all in the hip ambiance of an energized downtown waterfront. Centennial Square at the end of Clematis Street in Downtown West Palm Beach.
100 N Clematis St. – West Palm Beach, FL 33401  Clematis By Night

Columbus Ships, the Nina and the Pinta Land in Jupiter – Now to Sunday
The ‘Pinta’ and the ‘Nina’, replicas of Columbus’ Ships, will open in Jupiter at Harbourside Place from Friday, April 20 thru Sunday, April 29. The ‘Nina’ was built completely by hand and without the use of power tools and is considered “the most historically correct Columbus replica ever built.” In 2005, the ‘Pinta’, was launched in Brazil and is the first ship to sight land in the New World. Both ships tour together as an enhanced ‘sailing museum’ educating the public and school children about the ‘caravel’, a Portuguese ship used by early explorers to discover the world. The public is invited to visit the ships for a walk-aboard, self-guided tour.
200 US 1 – Jupiter, FL 33477   Columbus Ships, the Nina and Pinta

Luxury Motor Home Sale – Thursday to Sunday
Luxury motorhomes on display.
9067 Southern Blvd – West Palm Beach, FL 33411  Luxury Motor Home Sale

Our Kids World Family Fun Fest – Saturday & Sunday
Our Kids World Family Fun Fest is an event designed for children 12 and under. This unique 2-day event offers something for all children! You can enjoy participating in many hands-on educational activities, be entertained by one of two entertainment stages, meet your favorite sports mascots and television characters, or have fun bouncing around in the Fun Zone filled with inflatables!
9067 Southern Blvd – West Palm Beach, FL 33411   Family Fun Fest

18th Annual Sweet Corn Fiesta – Sunday
The annual Sweet Corn Fiesta, is a celebration of the sweet corn growing season buttered with a family festival of children’s games, music, a national eating competition and, oh yes, mouth-watering and locally grown sweet corn. A celebration of Palm Beach County sweet corn spring growing season with those who make it happen! The annual Sweet Corn Fiesta is an event of the Western Palm Beach County Farm Bureau, co-produced by the South Florida Fair and presented by the Sunshine Sweet Corn Farmers of Florida. Yesteryear Village.
9067 Southern Blvd – West palm Beach, FL 33411  Sweet Corn Fiesta

The Gardens GreenMarket – Sundays
At the Market, you can shop an abundance of just-picked, orchard-grown goods, a wide selection of seasonal vegetables and fruits, fragrant herbs, honey, homemade old-fashioned breads, pies, cheeses, sauces, handmade crafts and much, much more. This event is rain or shine.
10500 Military Trail – Palm Beach Gardens, FL 33410   The Gardens GreenMarket

Green & Artisan Market – Sundays
Stroll along the waterfront and shop fresh produce, specialty foods, flowers, fashion, local art and more! This market is free and open to the public. Every Sunday 10 AM – 3 PM.
200 North US Highway 1 – Jupiter, FL 33477  Green & Artisan Market

The Market Preview

April 25th, 2018

Steve Hollander – Hollander Real Estate
Jackie Doran – Capital Partners Mortgage, LLC

Why the Yield Curve is Suddenly the Center of Attention
Media commentary on the yield curve has spiked in recent weeks.

So, why all the chatter and why does it matter?

The yield curve comprises a plot of U.S. Treasury security yields, with maturities ranging from one month to 30 years (11 plots in total). The yield curve is considered “normal” when the plot of each successive maturity is higher than the previous maturity to produce an upward sloping curve.

The yield curve is normal as we write. The issue is that it has continually flattened this year. The spread between short-term yields and long-term yields has shrunk. Markets pay particular attention to the spread between the yields on the two-year and 10-year Treasury notes.

The spread between the two securities was 90 basis points a year ago. Today, the spread is roughly 40 basis points. (The two-year note yields approximately 2.4%; the 10-year note yields approximately 2.8%.)

The yield curve has flattened precipitously this year. The concern is that the curve could continue to flatten and then invert – short-term yields would rise above long-term yields.

The concern is legitimate because every time the yield curve has inverted since 1956 a recession has followed (usually within a year). The yield curve was last inverted in June 2007. We all know what followed shortly thereafter – the Great Recession and the bursting of the housing bubble ensued.

The yield curve is still far from inverting, but its shape is worthwhile to monitor. After all, recessions are a big deal.

As for the height of the yield curve, Treasury yields have risen across the board since January. This includes the influential 10-year Treasury note, which has risen 35 basis points this year. The 10-year note has taken a breather. The yield has hovered around 2.8% for the past three weeks.

As the yield on the 10-year note goes, so go mortgage-rate quotes. Quotes on the prime 30-year fixed-rate loan continue to hold the 4.5%-to-4.625% range on the national scene. Quotes also continue to hold closer to 4.5%, as they have for most of April.

Recent U.S. hostilities with China and Russia (in Syria) have put financial-market participants on edge. Treasury securities provide a haven for edgy participants. Therefore, mortgage borrowers with a low-time frame and a high-risk threshold might consider floating their loan.

“High-risk threshold” is the operative term. The risk could easily outweigh the potential benefits.

We can’t forget that all commercial interest rates — e.g., the rate quoted on a mortgage — flow from the federal funds rate on a cost-plus basis. The Federal Reserve is keen to raise the fed funds rate at least a couple more times this year (after raising the rate in March).

Odds are that mortgage rates will rise longer term. Predicting with accuracy when the short term will give way to the “longer term” is never a sure bet.

The Shortage: Nationally and Locally
We frequently present national numbers when presenting data. Homes for sale on the national level are in short supply. This is reflected in the monthly data offered by Realtor.com and other sources on home sales and supply. Neither has been able to gain traction.

When the national numbers are distilled to local markets, they frequently change. The national number frequently has no direct bearing to a particular local market.

Then again, the national number might have a direct bearing. We find that the national numbers on home supply mirror the numbers in many local markets. The housing shortage is a big deal in many local markets.

The Wall Street Journal recently drove home the shortage point in a recent article titled “Just How Widespread Is the Housing Shortage?” The article reveals that shortages aren’t merely cloistered in the coastal markets (which would skew the national data). The Journal tells us shortages are widespread.

In a separate survey of 117 American mayors, “housing costs” (a corollary to supply) was the top reason why residents moved away. The survey’s author, Katherine Levine Einstein, says, “Those numbers hold exactly the same when you look at the northeast, the southeast, the southwest and the northwest or when you look at rich cities or poor cities.”

Unfortunately, housing starts this year are unlikely to meaningfully increase supply. We see little reason why we shouldn’t expect home prices to ratchet higher and for supply to remain stubbornly tight.

Jackie Doran
Capital Partners Mortgage, LLC
Loan Officer
NMLS # 364090
Jackie.Doran@CapitalPartnersMtg.com
(561) 716-0448
www.mortgagesbyjackie.com
© 2017 Capital Partners Mortgage, LLC. All Rights Reserved. This communication does not constitute a commitment to lend or the guarantee of a specified interest rate. All loan programs and availability of cash proceeds are subject to credit, underwriting and property approval. Programs, rates, terms and conditions are subject to change without notice. Other restrictions apply. Jackie Doran NMLS # 364090, . 11290 Legacy Ave, North Palm Beach, FL 33410. Capital Partners Mortgage, LLC  1515 N. University Drive, Suite 102D, Coral Springs, FL 33071. Corp NMLS# 1084639 (www.nmlsconsumeraccess.com). Equal Housing Lender.