Monthly Archives: July 2019

Should I Refinance My Mortgage at Today’s Rates?

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With interest rates below 4%, many homeowners may be asking the question, should I refinance my mortgage?  The answer may be easy, and it could be complicated.

Should I refinance my Mortgage?

Should I Refinance My Mortgage?

With rates around 3.75%, it may make sense to refinance anything over 4.5%, depending on how long you want to stay in your current home.  In the old days, experts used to tell people you’d better save 2% or more on rates because the refinance costs were so high.  Keep in mind you will be asked to pay for a new title policy for the new lender, appraisal in most cases, and other closing costs.  It’s not free to refinance, so you’d better save money by doing it.

If rates today are 3.75% and you take out a new 30-year loan on $250,000, the principal and interest portion would be $1,157.19.  If you had a loan at 4.5% on $250,000 the P&I payment would be $1,266.71  So the savings would be $109.52/mo or $1,314,24/yr.  Closing costs might be $4,000-$5,000, so that could take 3,8 years just to break even on the deal.

Does Your Home Suit Your Needs?

The other question you must ask yourself is, does this home suit my needs?  If so, for how long?  Is my family growing or shrinking?  Might my job take me somewhere else?  How is my health?  Will the property be too much to take care of 5 years from now?

If your situation could change in the next 5 years, it probably wouldn’t make sense to refinance.  It might make sense to make the move now while rates are low.  If you wait 5 years to make the move, rates could go up a few percent.  Each percentage point rate gain costs a buyer 11% purchasing power, so essentially you could qualify for 22% less home.  Or, it could cost you a lot more in payment per month.

If you’re 1-2 years away from making a move, is there a way you could make that move while rates are this low?  It’d be a shame to spend all that money refinancing for a home that won’t suit you in a few years and miss the low rates on the next home.

If You Did Move, Where Would You Go?

Many people in SW Florida are contemplating this very decision right now.  What makes it complicated is they’re not sure where they’d move to, and how they would pull it off.  That’s where a real estate consultant comes in.  A consultant isn’t there to sell you anything.  They’re there to present you with your options, and let you choose what’s best for you.

The Ellis Team at Keller Williams Realty are consultants.  We want you to make the best decision for you.  We know about inventory you might not know about, like homes hidden from MLS or new construction.  It may make sense for you to make a move now, and it might not.  Until you know the cost of where you’re going, and how much you’d net if you sold your home, it’s impossible to make a fair decision.

You can’t base your current home’s value off those online valuation models.  They can be wrong, and they don’t figure in how much you’ll net in the end.  We can help you with that.  Making a good decision is like putting a puzzle together.  You must identify all the pieces, turn them right side up, and put them in their correct position.  Only then does the picture become clear, and your decision gains clarity.

Call Sande Ellis or Brett Ellis 239-489-4042 Ext 4.  We’ll help you get a fair value of your current home, make some suggestions on where you could go based on your needs, and figure up what it will cost to do it.  You’ll have the best advice, and you might just make that move you’ve been talking about.  Or, you might decide you love your current home and it’s the place for you.

We look forward to speaking with you.  Good luck and Happy House Hunting!  And remember, always call the Ellis Team at Keller Williams Realty.

Be Careful Which Sites You Sign Up On

Real Estate Platform Versus Bolt-On Technology

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Consumers and agents may not understand the difference between real estate platform versus bolt-on technology, but they soon will.  Let’s discuss why it matters to both consumers and agents.

Real Estate Platform Protects Your Privacy

From a consumer perspective, information about your home, your finances, and your preferences is worth a lot of money to big companies and could cause aggravation if in the wrong hands.  Data security is important now more than ever.  Uploaded contracts, disclosures, inspection reports, agreements, and other reports aren’t always encrypted.    Who owns that data?  What if your data were released without your knowledge?

As a consumer, who you do business with matters.  The same is true with brokerages and agents.  Does your brokerage have agreements with 3rd party vendors on who owns data and what can be done with it?  Does your brokerage own its own real estate platform, or do you employ bolt-on technology by outside companies to run your business?

Bolt-On Technology

CEO’s of national brand companies say they’re going with bolt-on technology as opposed to real estate platform technology so as not to disrupt agent’s business.  They say they want to give agents the freedom to choose whatever software they prefer using through sodapdf.com.  The truth is, agents prefer not to change, so they stick with who they’ve used for years, even if it’s not great.  Agents tailor their business around what their software can do, not what is ideal for their business.

If agents could design the perfect software, it would look and work much differently than what they have now.  Most agents don’t have the time, money, or expertise to do this, so they stick with the status quo, even though it’s holding them back.

When consumers sign onto apps and real estate websites their data becomes free game.  Consumer search preference data is valuable for advertisers and as a result, consumers are being bombarded with calls and emails from all kinds of companies.  Consumers don’t like it.  They just didn’t realize what they were giving up to get real estate information.  Agents who advertise on those sites fund this behavior because they want the leads.  Ironically, agents are purchasing the very data consumers hate giving up.

A Better Way

There is a better way.  Consumers will give you everything you want if you give them everything they want and agree not to sell or give away their data.  If you can protect the consumer, they don’t mind if their agent emails them with real estate information they care about.  Consumers information to be relevant to them., and they don’t want to be spammed.

This is exactly why our company has been developing its own platform for a few years now.  We don’t want to be reliant on outside companies with ulterior motives.  We want to control and own the data so that consumers can trust they won’t be bombarded with offers from companies they don’t know.  However, the consumer experience must be first class and offer things consumers want and nobody else has.

Real Estate Platform Local Data

The Consumer Experience

It’s all about the consumer experience.  We’ve studied the items consumers like best.  For instance, we tested over 1 million consumers and found that they like neighborhood information better than at the zip code level.  In fact, they spent on average over 4 minutes on site per neighborhood versus a zip code, in such cases you can use a free zip code api where you can get access to free world wide postal codes.  Consumers want information like the home’s DNA score, commute times to places they choose, and more.  Because we’re developing our own platform, we can deliver all these consumer preferences, and more.

Real Estate Platform Versus Bolt-On Technology

 

Keller Williams’ Realty consumer mobile app is in testing pending release.  Currently Google employees are testing out the platform for us and providing feedback before we release to the public.  It will not only be best in class; it will offer privacy and confidence to the consumer.  Our desktop websites are working now, and we’re still tweaking and improving those.  If you’d like us to send you our app or provide you a local neighborhood website, we can do that.  Just email me at Brett@topagent.com and we’ll get you started.

It’s a work on progress, and we believe it’s one the consumer will love and appreciate.  In fact, we believe it’s the Future of Real Estate.  We’d love your feedback.  Try it out and let us know what you think!

Check out this weekend’s open houses on our current mobile app which will be upgraded automatically when we release the new app.

 

Lee County Florida Median Home Prices Rose 1.6% in May

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Lee County Florida median home prices rose 1.6% in May to $265,000, up from $260,700 last year. Average home prices rose too, up 3.3% to $375,899.  The average number last May was $363,829.

While home prices aren’t changing dramatically, this is good news for Lee County home sellers.  Sometimes a steady housing market is better than rapidly rising prices which can lead to rapidly declining prices down the road.

Lee County Florida Median Home Prices Rose 1.6% in May

As you can see by the graph, Lee County Florida median home prices and average home prices didn’t really participate much on the upside the past few years, so we didn’t have far to fall if the market shifted.  We feel the market did indeed shift, and SW Florida for the most part fared well.

Of course, we know real estate is neighborhood specific, so some areas and price ranges can be doing better than others.  Therefore, it’s always important to evaluate what your home or neighborhood offers relative to the market.

For instance, let’s say you have two golf course communities.  Both offer a similar style, look good, and are in relatively the same part of town.  The difference however is the mandatory fees.  One has an equity membership fee of $90,000 plus yearly fees of $15,000 between golf, club house, HOA fees, etc.  The other golf community has an equity fee of $30,000 and yearly fees of $9,600.

If both courses are similar, which one will buyers gravitate to?  The same is true with non-golf properties.  Buyers look at the total cost of ownership, and what they get for it.  Some communities have gates, some don’t.  Some have clubhouses, cable TV, swimming pools, tennis, you name it.  Buyers look at the home or condo, and they also look at the amenities and what it all costs.

Let’s say you don’t live in a community.  Do buyers still look at yearly costs?  Yes, they do.  They look at what are the annual projected maintenance costs.  Does the home need renovation?  Will the home need a new air conditioner or new roof soon?  How old is the home?  This affects the price of home insurance.  Is the home in a flood zone?  If so, what is the elevation of the home?  This affects the yearly price of flood insurance.

Having answers to all these questions is critical for the buyer.  The buyer won’t make a decision without these facts, or they’ll back out of a contract after inspection once they discover facts that didn’t fit in with their projected financial outlays.

Having the information upfront can temper expectations and keep deals together.  Pricing your home to meet these conditions helps as well.  If your home needs a new roof, you don’t want to price your home the same as homes that just had a new roof installed, all else being equal.  The hard part is, all else isn’t equal.  Each home is unique, down to where it sits.  A good Realtor or appraiser looks at your land value relative to other sales.  Additionally, they’ll look at age of home, features, replacements, and anything else that can affect value.  You throw it all in the pot and come up with a value.  Even then it’s difficult because all buyers don’t view value the same way.

Some buyers appreciate the view differently.  Some value privacy while others may value beauty.  One buyer may desire a lakefront lot while another may value a preserve view.  Appraisers can set a lake value differently than a preserve view but, in the end, value is in the eye of the beholder.

Therefore, it’s critical to be honest and view your home like a buyer.  You must take off the seller’s glasses and put on buyer glasses.  If you tried to sell your home and it didn’t work, chances are you looked at it like a seller, didn’t have all the information a buyer needs to decide, or your home wasn’t marketed properly.

If you’re thinking of selling, call Brett or Sande Ellis 239-489-4042 Ext 4.  Or, go online www.SWFLhomevalues.com to get a Free instant computer evaluation of what your home could be worth.  Of course, we’d love to talk with you when you’re ready.

Good luck, and Happy House Selling!

See Last Week’s Article:  Low Interest Rates Fuels Surge in Real Estate Closings

Low Interest Rates Fuels Surge in Real Estate Closings

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Low interest rates fuels surge in real estate closings locally and nationwide.  Nationally home sales for homes and condos were up 2.5% from April, albeit down from last year 1.1%.

Low Interest Rates Fuels Surge in Real Estate Closings

In SW Florida single family home sales were up 8.1% over last year.  With rates remaining low for the short term, we could see a continuation of good times for real estate for the rest of the year, if not longer.  New pending sales were up 1.4% in May, and new listings were down 3.2% in May.  All these are great signs.

We still have 7.7% more inventory than we did last year, and pending inventory was down 2.3% in May, so it’s not all Boom time ahead.  Overall, we have a fairly balanced marked with an official 5.7-months’ supply of homes on the market.  That’s more than the 5.4 months’ supply last year but could get better if rates stay low.

One of the indicators we look at is total dollar volume of sales in the market.  In May of 2019 we reached $569.1 million in sales in Lee County.  In 2018 that number was $509.4 million.  That’s an 11.7% rise in volume, which is a good sign going forward.

What’s the takeaway from these official numbers?  It’s a good time to buy, and a good time to sell?  You might ask, how can it be both?  The answer is it deeply benefits both sides to buy and sell right now.  Buyers benefit from lower rates.  This could save them tens of thousands on the mortgage of 30 years.

Low Interest Rates Fuels Surge in Real Estate Closings

It’s also a good time for sellers because today buyers qualify for 11% more home than they did last year.  This means more buyers just popped up into your price range, assuming you priced your home where it should be.  Who wouldn’t want more buyers shopping and qualifying for your home than last year?

And, as a seller, chances are you’re going to buy another home somewhere.  If you sell while rates are low, you get to purchase your next home while rates are low.  So, it’s a double win for sellers as they have more buyers for their home, and they get to save on their next home.

The challenge most sellers have is, what do I have to do to get my home ready to sell, and where would I go?  These might be easier answers than you think.  A knowledgeable Realtor can give you information on both options.  We can even refer you to another great Realtor somewhere else if you’re not staying in the area.

Some improvements are necessary.  Some are a waste of money and won’t put money in your pocket.  Others won’t add much money, but they will help your home sell.  Call Sande or Brett 239-489-4042 Ext 4 and let’s talk about your options.  Sometimes we can suggest resources to a problem so it’s not really a problem.

Let’s Talk

Sitting down with us and going through the MLS can help you identify if there are better options for your next home.  We also know about new communities and incentives the public doesn’t always know about.  We might be able to get you into a new home for a lower payment than you have now.  The advantage to that may be lower insurance premiums and lower maintenance costs going forward.  Newer homes tend to be energy efficient as well, so not only would your payment go down, but also all your other costs.

The thing is you don’t want to rush anything.  You want to take your time and explore your options.  We don’t know how long these rates will stay this low, so starting the process now may be a good idea.  After a first meeting, you’ll know your options and you can decide if it’s worth exploring further.  We have a team of agents that focuses on finding your next property that fits your needs, and a team dedicated to maximizing your current home’s value and make it sell as quickly as possible.

There’s no sense in moving unless you improve your situation.  Many want to do that; they just don’t know where to start.  Call Sande or Brett to explore your options, or go to www.SWFLhomevalues.com to get your home’s value online for Free!

Lee County Housing Inventory Falls Since April