What To Know About Closing Costs

 

Now that you’ve decided to buy a home and are ready to make it happen, it’s a good idea to plan ahead for the costs that are a typical part of the homebuying process. And while your down payment is probably the number one expense on your mind, don’t forget about closing costs. Here’s what you need to know.

What Are Closing Costs?

Simply put, your closing costs are the additional fees and payments you have to make at closing. And while they’ll vary based on the price of the home and how it’s being financed, every buyer has these, so they shouldn’t be a surprise. It’s just that some people forget to budget for them. According to Freddie Mac, this part of the homebuying process typically includes: 

• Application fees
• Credit report fees
• Loan origination fees
• Appraisal fees
• Home inspection fees
• Title insurance
• Homeowners insurance
• Survey fees
• Attorney fees

 Some of these are one-time expenses that are baked into your closing costs. Others, like homeowners’ insurance, are initial installment payments for ongoing responsibilities you’ll have once you take possession of the home.

How Much Are Closing Costs? 

The same Freddie Mac article goes on to say: 

“Closing costs vary greatly depending on your location and the price of your home. Typically, you should be prepared to pay between 2% and 5% of the home purchase price in closing fees.”

With that in mind, here’s how you can get an idea of what you’ll need to budget. Let’s say you find a home you want to purchase at today’s median price of $422,600. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $8,452 and $21,130.

 But keep in mind, if you’re in the market for a home above or below this price range, your numbers will be higher or lower.

Tips To Reduce Your Closing Costs

If you’re wondering if there’s any way to inch that down a little bit, NerdWallet lists a few things that could help: 

• Negotiate with the Seller: Some sellers are willing to cover part or all of these expenses — especially since homes are staying on the market a bit longer now. Sellers may be more motivated to compromise, and you’ll find you have a bit more negotiation power. So don’t hesitate to ask them for concessions like paying for the home inspection or giving you a credit toward closing costs.
• Shop Around for Home Insurance: Since rising home insurance is a challenge in many areas of the country right now, take the time to get a clear picture of all your options. Each insurance company offers their own policies and coverage, so get multiple quotes and see how they compare. Choosing a policy that provides reliable coverage at a competitive rate can make a difference.
• Look into Closing Cost Assistance: Just like there are programs out there to help with your down payment, options exist to get support with closing costs too. While they’ll vary by area, there are programs for various income levels, certain professions, and specific towns or neighborhoods too. If you want to learn more, Experian says:

“Your real estate professional should be able to steer you toward applicable programs, and the U.S. Department of Housing and Urban Development (HUD) maintains a helpful resource for finding homebuying assistance programs in every state.”

Bottom Line

Planning for the fees and payments you'll need to cover when you're closing on your home is important – and it doesn’t have to be a big surprise. For more tips and expert advice, partner with a team of trusted real estate professionals, including a trusted agent and lender.

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Buy Now, or Wait?

 

Some Highlights

• If you’re wondering if you should buy now or wait, here’s what you need to know.
• If you wait for rates to drop more, you’ll have to deal with more competition and higher prices as additional buyers jump back in. But if you buy now, you’d get ahead of that and have the chance to start building equity.
• Should you buy now or wait? Connect with us and talk through it together, so you can make your best decision.

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Don't let your mortgage tie you down.

Don't let your mortgage tie you down. 

Together we can find a home where you can truly relax and live your dream. 

Reach out today to start your journey!

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Veteran advisor explains what interest rate cut means for retired people

 

The Federal Reserve’s surprising 0.5% cut to the federal funds rate will have trickle-down effects on consumer lending and the stock, labor, and housing markets.

While lower interest rates aim to increase consumer confidence, spending, and business growth, some financial products may also be impacted. However, conservative low-risk investments preferred by retirees, such as Certificates of Deposit (CDs) and annuities, may see lower returns.

We spoke with Bob Powell, CFP and editor of Retirement Daily, to unpack what retirees can expect from this rate cut and future rate cuts through 2025. Lower rates may prompt some retirees to reexamine their investment portfolios.

Retirees should focus on investments with returns above inflation rates

Retirees tend to have risk-averse investment portfolios, as most have passed the “accumulation” phase of their lives and are more focused on maintaining their savings and offsetting inflation risk.

Powell suggests that retirees focus on money market funds and CDs to accrue interest in a less risky way.

More on retirement:

• The average American faces one major 401(k) retirement dilemma
• How your mortgage is key to early retirement
• A few simple tasks can help you thrive in retirement

“I think one thing that retirees might consider doing is investing in a way that allows them to take advantage of the existing higher interest rates that may be around,” he said. “So you could invest maybe in a money market fund and earn 4%, which is above the inflation rate.”

“In fact, it's one percentage point above inflation at the moment,” he explained. “So that puts more money in your pocket any time you can earn a nominal rate of return that's higher than the current inflation rate, you get a real rate of return that's positive.”

CD ladders can help offset inflation

A CD ladder allows retirees to open multiple products with different maturity dates, giving access to different portions of their money.

“Think about investing in those instruments like money market funds or consider laddering CDs,” Powell said.

“At the moment, you might be able to ladder 1 to 5-year CDs that offer higher rates than what inflation is at the moment, and then that can also put real money back in your pockets, too,” he explained.

Retirees can reap the benefits of getting higher interest rates in the short term while having investments secured that can withstand inflation and market volatility. CD ladders typically allow retirees to earn more across multiple products than if they were to put all of their savings in one long-term CD.

“Those two things should go a long way toward helping retirees invest in a way that — ultimately one of the goals of investing in retirement, or even in your pre-retirement years — is to outpace inflation.”

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“A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.”

If you’ve been hesitant to list your house because you’re worried no one’s buying, here’s your sign it may be time to talk with an agent.

After months of high rates keeping buyers on the sidelines, things are starting to shift. Rates are already coming down due to a number of economic factors. And yesterday the Federal Reserve cut the Federal Funds Rate for the first time since they began raising that rate in March 2022. And while they don’t control mortgage rates, this sets the stage for mortgage rates to fall even further than they already have – especially since more cuts from the Fed are expected into next year. And lower mortgage rates are bringing more buyers back into the market. Lisa Sturtevant, Chief Economist at Bright MLS, says:

“A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.”

The best part? You can take advantage of that renewed buyer interest.

As Rates Fall, Buyer Activity Goes Up

The graph below illustrates the relationship between falling mortgage rates and rising buyer activity. The orange line represents the average 30-year fixed mortgage rate, while the blue line shows the Mortgage Bankers Association (MBA) Mortgage Application Index, which tracks the number of mortgage applications.

As you can see, as mortgage rates (orange) come down, the Mortgage Application Index (blue) rises, showing more people start to re-engage in the process (see graph below):

What This Means for You

According to the National Association of Realtors (NAR), home sales increased in July, which was a welcome shift after four straight months of declines. If you’re a homeowner thinking about selling, this uptick in buyer activity works in your favor.

More buyers means more competition, which can lead to higher offers and shorter time on the market for your house. And, according to Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), this trend is expected to continue:

“MBA is expecting that slower home-price appreciation, coupled with lower rates, will ease affordability constraints and lead to increased activity in the housing market.”

All in all, the market is becoming more accessible to a wider range of buyers, which could result in even more people looking to purchase a house like yours.

With more buyers entering the market, now’s the time to start getting your house ready to sell.

Bottom Line

The recent decline in mortgage rates is already driving more buyers into the market, and experts project this trend will continue. Work with a local real estate agent to take advantage of this increased buyer demand and get your house ready to sell.

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Is Your House Priced Too High? PATTI LEE PROPERTIES TEXAS REALTOR WISE COUNTY

Every seller wants to get their house sold quickly, for as much money as they can, with as few headaches as possible. And chances are, you’re no different.

But did you know one of the biggest things that could jeopardize your success is the asking price for your home? Pricing your house correctly is one of the most crucial steps in the selling process.

So, how do you know if you’re missing the mark? Here are four signs your high asking price might be turning potential buyers away—and why leaning on your real estate agent is the best way to course correct.

1. You’re Not Getting Many Showings or Offers

One of the most obvious signs your house may be overpriced is a lack of showings. If it’s been on the market for several weeks and only a few buyers have come to see it—or worse, you haven’t gotten any offers—it could be a clear indication the price isn’t matching up with what buyers expect. Because buyers who have been looking for a while can easily spot (and write off) a home that seems overpriced.

Your real estate agent will coach you through this, so lean on their experience for what you may want to try to bring more buyers in, including considering a price cut.

2. Buyers Have Consistent Negative Feedback after Showings

And if after the showings you do have, comments from the potential buyers aren’t great, you may need to course correct. Feedback from showings is an important part of understanding how buyers see your house. If they consistently say it’s overpriced compared to other homes they’ve seen, it’s time to reconsider your pricing strategy.

Your agent will gather and analyze this feedback for you, so you can look at how your house stacks up in the market. They can also suggest specific improvements or staging changes to better justify your asking price, or recommend one that aligns with today’s buyer expectations. As the National Association of Realtors (NAR) explains:

“Based on all the data gathered, agents may make adjustments to the initial price recommendation. This could involve adjusting for market conditions, property uniqueness, or other factors that may impact the property’s value.”

3. It’s Been on the Market for Too Long

And that lack of interest is ultimately going to lead to it sitting on the market without any serious bites. The longer it lingers, the more likely it is to raise red flags for buyers, who may wonder if something is wrong with it. Especially in today’s market with growing inventory, a long listing period means your house is stale – and that makes it even harder to sell.

Your real estate agent will be able to give you perspective on how quickly other homes in your area are selling and walk you through what’s working for other sellers. That way you can decide together if there’s something you want to do differently. As a Bankrate article says:

“Check with your agent about the average number of days homes spend on the market in your area. If your listing has been up significantly longer than average, that may be a sign to reduce the price.”

4. Your Neighbor’s House Sold Without an Issue

And here’s the last one to watch out for. If similar homes in your area are selling faster than yours, it’s a clear sign that something is off. This could be due to things like a lack of upgrades, outdated features, or a less desirable location. Or, it may be priced too high.

Your agent will keep you up to date on your competition and what changes, if any, you need to make your home more competitive. They’ll offer advice on small updates that could increase your home’s appeal or how to adjust your strategy to reflect the reality of the market today.

Bottom Line

Pricing a home correctly is both an art and a science. It requires a deep understanding of the market and buyer psychology. And when the price isn’t drawing in buyers, there’s no better resource than your agent on what you may want to do next. Let's talk. Contact us today!

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"It's A Nightmare To Maintain": Homeowners Are Revealing The 23 Worst Things They Regret Spending A Ton Of Money On

This is very interesting...

When  the homeowners of Reddit were asked to share the worst thing to splurge on when it comes to owning a house, we were all ears. From lawn work to hot tubs, here are the things homeowners don't think are worth spending extra money on:

1."I sound crotchety and old, but NONE of my appliances need to connect to the internet, of all things. What the hell does a fridge need Wi-Fi for?"

2."Fancy rugs. Nobody cares. Get them on clearance and call it a day!

3."Pools. Everyone always wants a pool, but they are extremely expensive to put in (especially where I live). The cost doesn't add half the value to the overall value of the property, and depending on where you live, pools can be up to several hundred dollars a month in electricity for the pump, chlorine, and other general maintenance stuff. Oh, and that doesn't even include the fact that the pump and filter need to be replaced about every six years or so."

4."Don't get nice new furniture if you have pets and/or small kids. They destroy everything. Once the kids are a little older, we might try to get a nice new couch, but until then? An old and busted couch is perfectly sufficient for toddler parkour."

5."Bathroom remodeling. You just go in there a few times a day to use the toilet and shower — why did we as a society decide that it should look like the most luxurious room in the house?"

6."You don't need to call a handyman or pro for every little thing. YouTube and a couple trips to the hardware store (okay, maybe more than a couple) will save you a ridiculous amount of money. Not just that, but you'll learn some new skills, too."

7."A pool table. Unless you're a big billiards player and you're going to be using it all the time, it'll most likely just end up in storage."

8."I think the worst splurge is on anything that you have to be super careful about keeping nice. Like, if you got a butcher block counter but are continuously worrying about it getting marked up from normal kitchen activities, then maybe it wasn't a good choice."

9."Don't splurge on those gross three-season rooms. No one ever uses them and they always end up smelling like mildew. Do a screened porch instead."

10."We regret splurging on the patterned cement tiles on our bathroom floors. They're beautiful and look gorgeous, but they are a huge pain in the ass. The tiles crack, chip, scratch, and stain easily, and we have to use a special cleaner on them. I wish I'd done a bit more research before buying them. They do look great, though."

11."I will get flamed for this, but I think splurging on high-end tools is definitely not needed. 99% of homeowners will do just fine with some Harbor Freight or garage sale tools. Like, if I'm building my once-in-a-lifetime project, saving 90 seconds by using a shiny new $400 saw doesn't matter to me."

12."The worst things you can splurge on are marble countertops. They are an absolute nightmare to maintain, and even WATER will stain them."

13."I think the worst thing you could splurge on is painting your cabinets. The way trends change, you'll be regretting it in a few years. Luckily, I never got past the 'thinking about it' phase, which is good because my house has real wooden cabinets."

14."Electric radiant floors. In my bathroom, it's really nice during the wintertime. But in my office? Three out of the five sections died after a year, and now I can't keep that room warm enough without a space heater. They're very expensive and not serviceable without ripping up the floors for renovation, so I wouldn't recommend."

15."Hiring a professional for painting, landscaping, or power-washing. I painted my whole house, did all my landscaping, and will be borrowing a power washer to wash my house once it gets a little cooler out. All of these things cost me a couple hundred bucks to do myself versus thousands of dollars if I'd hired others to do it."

16."Gutter guards. You still have to clean your gutters, but now you have to disassemble them first."

17."Saunas and hot tubs. Don't get me wrong, they're really cool, brag-worthy, and exciting...for the first couple of months. After that, you don't really use it all that much because it's either 'too much trouble' or 'it costs too much to heat.'"

18."Replacing a lawn with pavers, especially if you have a south-facing yard. The reflected heat and radiated heat makes everything twice as hot for twice as long."

19."I might get some flack for this, but lawn work. My mower, weed-eater, and other attachments will pay for themselves in about two months because I'm not paying someone else to do the lawn work for me."

20."I think the worst splurge is remodeling things that are in perfectly good shape just to chase the latest trend. You want to remodel a bathroom from the '70s? Good plan. You want to remodel a bathroom that was just redone in 2014? Now that's a huge waste of money."

21."If you have kids, pets, or live with people with mobility aids, hardwood flooring is kind of a waste. I paid a shit ton for hardwood floors in our main living room, and now three years later, it looks like shit. But our laminate flooring? That was a fraction of the cost and it still looks new."

22."The worst splurge is when you're too impatient. Don't do anything major within the first couple of years of living in your home. If you don't want to wait a couple of years, then wait at least a year or two. See what it's like to live and move in the space, and then determine what's most important to spend money on."

23.Lastly: "This might sound somewhat sarcastic, but it's for real: Do NOT get a koi pond to improve your landscaping. Those fish will suck you dry because of the maintenance — special food, filtration systems, the whole lot. The first pond you put in will be too small, and you'll want to redo it and get a much larger, more elaborate one every few years. You'll join the local koi pond club and will eventually want to import fancy fish from Japan. You'll visit other club members' homes and get jealous of their ponds and begin dumping even more money to improve your own pond. Trust me — just don't do it."

If you're a homeowner, what are some things you think aren't worth spending a ton of money on? What are some things that are absolutely worth splurging on?  

Let us know here!

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