The Super Popular Homebuying Trend That Will Stick Long After the Pandemic

The Super Popular Homebuying Trend That Will Stick Long After the Pandemic

Over the past year or so, Lauren Reynolds, a real estate agent in Westport, Connecticut, has noticed a trend: More people are moving to the ‘burbs to give their pets a better life. 

“There’s a meme that’s been going around about millenials buying homes for their dogs,” Reynolds says. “And although it seems ridiculous, it’s absolutely true. I’ve had clients refuse to see properties with less than an acre because their dog needs space to run.”

In addition to the extra acreage, builders are catering to this cohort of buyers by adding pet-friendly features — things like doggy wash stations built into mudrooms, Reynolds says. 

Underscoring these types of anecdotes from real estate agents are several new surveys that show just how much pets are affecting the homebuying process, a trend that’s linked to the pandemic pet boom. Not only are pets influencing where people live and what types of homes they search for, these furry friends are nudging their humans to become homeowners.

Of the 1,600 homeowners surveyed by homes.com, two-thirds indicated they moved from rentership to homeownership specifically to either get a pet or keep the one they have happy. More than half of the respondents said they’ve dropped plans to purchase a particular home because it wasn’t a good fit for their four-legged companions.

Another joint survey from Rover and Zillow found that 62 percent of parents consider moving to a new home to better accommodate their dog and 86 percent list pet-friendly features as an important factor to housing.

“This year, we spent an extraordinary amount of time with our pets, and many of us relied on their companionship more than ever,” says Kate Jaffe, trends expert at Rover. 

As a result, Jaffe says, our emotional bonds with our pets also strengthened. Now, pets are taking on an even greater role in our families, so it’s no surprise that our dogs’ needs are a top priority.

When Cara Berkeley was searching for homes in Nashville last year, the needs of her dog Nyla, a morkie, were of utmost importance. 

“She has arthritis in her legs, which causes occasional limping,” she says. “Stairs seem to make the issue worse, so I bought a home with the master suite downstairs.”

And New Jersey real estate agent Rupa Kale has witnessed the trend from the perspective of both a buyer and a Realtor. Her family welcomed a standard poodle named Kylo into their home and they quickly discovered they needed more space, prompting a move this year. 

“We definitely wanted a big, fenced-in yard so that our dog could play outside,” Kale says. “And that seems to be the general direction of most people looking for homes in suburbia.”

Chase and Patti Michels, who sell homes in the western suburbs of Chicago, say they’ve seen a surge in the number of young couples trading high-rise apartments for homes with spacious yards. In fact, the majority of the 55 homes they’ve sold this year have been to people leaving the city and moving to the suburbs for more space for themselves and their pets.

The dog house? It’s actually quite nice these days.

4 Real Estate Agent-Approved Tips for Setting Your Home’s Listing Price

4 Real Estate Agent-Approved Tips for Setting Your Home’s Listing Price

This past summer, I saddled up at the Adult Table and did the scariest thing I’ve ever done: I listed my condo for sale. Like a pupil anxiously seeking out after-school calculus tutoring, I sat across from my top-of-the-class real estate agent. I took notes as she explained the current market, the procedures for listing, and general logistics. Just as I thought I couldn’t possibly retain any more real estate knowledge, my Realtor posed the final question: what number did I have in mind?

It was like that scene in Austin Powers when Dr. Evil just starts throwing out comically absurd numbers: “One MILLION dollars!” Not so fast, Sarah. Thankfully, my Realtor settled in and walked me through her expert tutorial of four key factors to consider when setting a home’s listing price. And trust me, these considerations truly are key — and with their guidance, I sold my one-bedroom condo in less than two weeks! 

What’s selling in San Francisco won’t match the real estate market in Boise, no matter what trends are being generalized nationally. Amy Wu, Chicago-based Realtor, magical real estate wizard, and all around genius, shares, “While selling patterns in certain regions may illustrate a particular picture of the market, this should not be assumed for other regions.” Paying attention to local and regional trends before and during your home sale prep will make all the difference. 

Even within a city or neighborhood, the types of homes selling might differ. “In assessing market trends, it is also important to further dissect the data and analyze the types of properties that are selling,” Wu says. “For example, these days a high-rise condo may not sell as quickly as a detached property.” 

When selling my condo, the building landed just on the cusp of the definition of a high rise. That meant it was also a very short high rise, putting it in an oddball spot that could go either way. My Realtor effectively factored this into our pricing, and sellers can look to their agent for this same guidance. 

I hereby grant all house sellers permission to copy off your neighbors. Seriously, act like this is Mr. Terasaki’s high school chemistry class and just cheat (sorry, Mr. Terasaki — I went into writing, predictably, and not medicine). This also is the perfect time for your Realtor to tap into their databases that are closed to the public.

“A great comparable (aka ‘comp’) is a similar property in type, layout, age, condition, location, and school district that has sold within the past 3 to 6 months,” Wu says. Examining similar properties that recently sold will set sellers up for success.

As I mentioned, Realtors have a little more scope into the back-end of selling as well. Wu advises, “When looking at comps, also take into account whether those particular sellers had offered any concessions to the buyers (aka ‘seller’s credit’) — this helps determine if concessions are common in a specific area,” she says.

Location, Location, Location

There’s a reason Harold Samuel’s iconic “Location, location, location” mantra has thrived in all topics of the real estate for nearly a century. Wu explains why, sharing, “the location is the most important aspect when considering a property because it is the one thing that cannot be changed.” We’re seeing this in real time, as many buyers approach homes in locations facing serious climate change with newfound concerns for long term living. 

During my home search, I walked away from an otherwise perfect home because it was adjacent to a busy gas station, and another because its driveway was impossible for backing out my car. “If a property in a subdivision sits on a busy street, it might call for a lower value than a property that is on a residential street within the same subdivision,” Wu says. “Is the property near an industrial site, cemetery, landfill, etc.? All of these may have the potential to deter some buyers, which would ultimately result in a lower selling price.” For the record: I ended up buying a home next to a cemetery and am thrilled about it because I am a Halloween Queen year-round, baby!

No one wants to move in the Chicago winter, which is where I live. Parallel parking a moving van in the snow and during dibs season? Get out of here! As it turns out, the time of year that a seller lists can make all the difference. “The spring and summer seasons are usually the best times to sell because the time of year attracts the most buyers — school is finishing up or on break, the weather is obviously much better to coordinate showings and moving,” Wu says.

While this is pretty typical, the world has learned over the past couple of years that extraordinary circumstances can and will occur. (Ya know, like the pandemic.) Wu shares, “During COVID and due to low interest rates, the winter season of 2020 going into 2021 felt just as busy for many real estate professionals.” Prioritize checking in with your Realtor about the best time to list and what outside factors might be affecting your area’s market. And good luck!

Sarah Magnuson

Contributor

Sarah Magnuson is a Chicago-based, Rockford, Illinois-born and bred writer and comedian. She has bachelor’s degrees in English and Sociology and a master’s degree in Public Service Management. When she’s not interviewing real estate experts or sharing her thoughts on laundry chutes (major proponent), Sarah can be found producing sketch comedy shows and liberating retro artifacts from her parents’ basement.

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5 Unsafe Design Trends Home Inspectors Wish You’d Stop Doing

5 Unsafe Design Trends Home Inspectors Wish You’d Stop Doing

When it comes to home design, the popular trends don’t always heed a “safety first” warning. That’s according to home inspectors — the people tasked with inspecting properties for immediate or potential problems. As more homebuyers renovate fixer-uppers or look to Pinterest for DIY design inspiration, home inspectors are spotting some design tactics that may look nice but aren’t necessarily safe. 

Here are five home trends that give property inspectors pause because of their potential for health and safety issues.

Floating shelves in the kitchen are a neat way to show off your pretty stoneware or, in the living room, they can provide a gallery space for your favorite books or trinkets. While adding floating shelves may seem like an easy task, Valentino Gecaj of Valentino Home Inspections in Westchester, New York, says many of the DIY installations he’s seen don’t have adequate support. If you’re attaching a floating shelf to, say, plaster or drywall, you need molly bolts or wall anchors. “Floating shelves are much easier to overload with weight than traditional shelves,” Gecaj explains. 

Vintage appliances may add a little whimsy and a pop of pastel to your kitchen. But not only are replacement parts hard to source should you need a repair, some of these appliances can spell danger. “They hold a much higher chance of starting electrical fires,” Gecaj says. Many vintage stoves also aren’t outfitted with modern safety features like anti-tip technology and sealed electrical components. If you love the retro look, there are many appliance manufacturers who are replicating the designs to meet modern standards.

With the ability to add charm and character to any room, exposed brick makes a statement. But brick is porous, and a not-so-great insulator, Gecaj says. Not only does this mean your home is less energy efficient, but “exposed bricks can bring in excess moisture and a variety of insects into your home,” he says. If you do move into a home with exposed brick walls, be sure to apply a sealant to the wall to help protect it from dirt as well as the aforementioned moisture (which can lead to mold problems).

Handrails may not be the most exciting design element in your home. Still, they exist for safety reasons and can help prevent nasty falls. Over the past several years, though, Welmoed Sisson, a home inspector and author of “101 Things You Don’t Want in Your Home” has taken note of a dangerous trend: Homeowners removing the graspable handrails attached to their walls and replacing them with things like rope for a nautical vibe or hockey sticks for a sports theme. Those DIY handrails wouldn’t pass the muster in a home inspection.

On the topic of stairs, Joe Tangradi, director of technical services at HouseMaster, a Neighborly company, has taken note of sleek staircases being built in both new construction and renovated homes. But these ultra-contemporary, floating staircases are often plagued with safety problems. For one, a handrail is required when four or more risers are installed, he says, but many modern stairs throw caution to the wind and don’t have handrails, or have ones that wouldn’t be considered graspable. Also, risers may be open as long as the spacing doesn’t exceed 4 inches. (If it’s any bigger, there’s a risk that young children or pets can slip and fall to the floor!)

Use These Checklists for Buying a House in 3 Years, 1 Year, Or 3 Months

Use These Checklists for Buying a House in 3 Years, 1 Year, Or 3 Months

You’ve got your mind set on buying a home. Maybe you’re playing a long game, slowly but steadily building up that “down payment” savings fund. Or perhaps you’re hoping to be moved in and settled by the start of the new year. Wherever you are in your homebuying journey, experts say there are a number of steps you can take to gain solid financial footing and make the whole process a bit more seamless.

Consider this your homebuying roadmap, no matter if you’re aspiring to purchase your very own home in three years, one year, or three months. 

If You’re Planning to Buy in 3 Years…

If you’re eyeing homeownership in the next few years, now is a great time to rein in any outstanding debt and start saving for a down payment. You’ve got a few years to get your financial situation in tip-top shape so use this time to build your financial fitness.

1. Get your debt under control.

Not only does carrying a debt load make it more difficult to save for a house, but it can also make it more difficult to qualify for a mortgage, says Andy Taylor, general manager of Credit Karma Home. Lenders take into account how much of your income is going towards paying debts, which is known as your debt-to-income ratio (DTI). Most lenders look for a DTI that is less than 43 percent. 

“Your DTI is an important factor because it shows a lender that you won’t be using up all of your remaining cash on making your house payment,” he says. While you may not be able to pay off your entire car loan or your student loans in the next few years, you can reduce the balances and pay down your revolving debt, like those credit card balances. Not sure where to start? Try downloading a money-saving app like Digit, which rounds up dollars and cents on your payments and adds them to a savings account. Then, you can use this extra cash to chip away at your credit card balances.

Home prices, interest rates and, most likely, your own salary, will fluctuate over the next three years. But it’s smart to get a snapshot of how much you’ll be saving for a down payment and closing costs, says finance and savings expert Andrea Woroch. This way, you can start stashing away money with a goal in mind. Woroch recommends using online mortgage calculators to help you figure out how much you can afford on living expenses, layering in factors like taxes and HOA dues. 

You may have heard that 20 percent is a gold standard for a down payment, but that’s a bit of a myth these days. While a larger down payment will help you avoid costs like private mortgage insurance, the minimum down payment for an FHA loan is just 3.5 percent, and conventional loans require as little as 3 to 5 percent down. (Here are the pros and cons of lower down payments). Closing costs, meanwhile, tend to be 2 to 5 percent of a home’s sale price, so remember to add a cushion to your budget to account for them

3. Develop good credit habits.

Not only will excellent credit help you qualify for a mortgage, it will also help you nab a competitive interest rate. For most conventional loans, you’ll need a credit score of at least 620. You’ll get the best interest rates with a credit score of 760 or above. Paying all of your current bills on time will help build (or solidify) a healthy credit score, says Ron Wysocarski, a real estate broker based in Port Orange, Florida. Thirty-five percent of your credit score is based on your payment history. Some other good credit habits to establish include keeping your credit card utilization under 30 percent and checking your credit report regularly, disputing any errors. 

With a few years to go before you want to buy your home, think about how you can increase your down payment savings and fast track your debt repayment, Woroch suggests. “There are plenty of flexible side hustles you can do from home and in your spare time even if you feel limited with your current schedule,” Woroch says. For instance, you can sign up as a tutor through VarsityTutors.com and help students for an hour here or there in the subject of your speciality via Zoom, or make extra money by pet sitting via sites like Rover.com. Here are more ideas for side hustles to help you increase your income. 

5. Set up a high yield savings account.

Open up a specific high yield savings account for your home fund, says Brittney Castro, a certified financial planner with Mint. Since your goal is to purchase a home within three years, you don’t want to take on too much risk with your money by investing it, she says. It’s smart to reduce risk and accept the lower rate of return you get from a high yield savings account to ensure your principal will be there when it comes time to buy. To make sure you stay on track with your savings goals, you can set up automatic transfers.

If You’re Planning to Buy in 1 Year… 

In addition to keeping your credit score in good shape and paying off existing debt, you can spend the next year learning about the homebuying process, which will grow your confidence and position you as a savvy buyer. 

Hit the open house circuit! This is a low-commitment way of scoping out what the market is looking like and you can get an idea of the type of home you’d like to purchase, says Jennifer Gale, a real estate agent in Ontario, Canada. As you start to zero in on which features are important to you and what neighborhoods appeal to you, you’ll get to see what homes in your price range look like. Plus, you’ll meet some potential real estate agents, Gale says. 

2. Research loan programs.

Now is the perfect time to get a solid understanding of the different types of loans that are available and start considering which ones might be a best fit for you, says Brandi Wright, a strategic real estate advisor at Real Estate Bees in Denver, Colorado. 

For instance, Federal Housing Administration, or FHA, loans are popular among first-time homebuyers because of their lower credit score requirements. With FHA loans, you can have a score as low as 500 so long as you bring a 10 percent down payment to the closing table. Conventional loans (i.e. loans that aren’t federally backed) typically require a credit score of 620 or higher. 

Beyond loan types, you’ll also want to get familiar with loan terms. Fixed-rate loans lock you into an interest rate for the duration of your loan (ah, predictability!) while adjustable-rate loans, which have fallen out of favor while interest rates are at record lows, offer low, introductory rates and then are subject to adjust on an annual basis. You’ll also need to decide if you want to take on a 30-year mortgage with lower monthly payments or a 15-year mortgage that’ll save you on interest over the life of your loan.

“Knowing which loan products work for you will help you interview loan officers and it’s extremely important to know that not all lenders are able to offer the same loan products, or they could be inexperienced with the loan product you are interested in,” Wright says.

3. Look for homebuyer grants.

Not only should you get familiar with loan products, but it’s a savvy move to start researching first-time homebuyer programs and down payment assistance programs, Wright suggests. 

There are more than 2,500 down payment assistance programs available, according to The Mortgage Reports. Some are from non-profit organizations, but the majority of them come from state and area housing finance agencies. Most of these programs are aimed at helping first-time buyers, but if it’s been a few years since you’ve last owned a home, you may qualify.

4. Take a first-time homebuyer class.

When you’re starting to get serious about shopping for a home, taking a first-time homebuyer class can help arm you with some confidence. Topics covered include things like understanding your credit score and reports, how to get a mortgage, how to close on a mortgage loan, and how to avoid defaulting on your loan. 

Classes typically cost under $200, though many are free. Here are four helpful courses for first-time buyers.

5. Interview local agents and lenders.

Assembling a savvy team of real estate professionals is especially important in this unprecedented market. While it’s nice to hire your friend or a former classmate, remember that buying a home is likely the biggest financial decision of your life, Wright says. With that in mind, you should look to hire an agent or lender who has a proven track record in your market and is knowledgeable and passionate, she says. 

If You’re Planning to Buy in 3 Months…

During these next few months, you want to keep your financial situation stable. This means you shouldn’t take out a new car loan or max out your credit card, because it could jeopardize your ability to close on a mortgage. Ahead, find a few more homebuying tips for the home stretch.

1. Gather your documents.

The mortgage application process requires a lot of documentation, and requests for things like bank statements or tax returns will come at you quickly. To help expedite this process, put together a binder of important documents, suggests Alex Leduc, principal mortgage broker at Perch, a Canadian digital homebuying platform. Here are a few of his suggestions:

Also, if a family member or a friend is giving you a financial gift to help shore up your down payment, you’ll want to have a gift letter on hand that states the money is, indeed, a gift. Lenders want to ensure the money isn’t an informal loan that you’ll need to pay back, potentially putting pressure on your budget.

2. Get prequalified for a mortgage. 

Now is the time to get prequalified for a home mortgage loan, says Brittney Castro, a certified financial planner with Mint. Mortgage rate locks typically last from 30 to 60 days, though some can last to 120 days or more, she says. 

“It’s important to check with your lender as some will offer a free rate lock for a specified period,” Castro says.

3. Sign up for foreclosure listings.

Because of the inventory shortage, some first-time buyers are having luck finding homes before they hit the market. Foreclosures may not pop up on typical listings sites, but you can sign up for these through special feeds, Woroch says. You can find a list of sites to track foreclosures here, Woroch says. A real estate agent can also set up a foreclosure home alert that sends you emails directly about new properties available that meet your criteria. 

“In the end, you may be able to get a deal on a foreclosure, put the money into making upgrades and still end up spending less than if you bought a brand new or recently renovated home,” she says.

4. Nail down your needs vs. wants.

There’s an informal rule in real estate that if a home checks off 85 percent of what you’re looking for in a property, you should put in an offer. It also helps to determine your needs vs. wants when looking for properties. For instance, if you and a partner are remote workers, a home office may be a top priority. But don’t rule out an otherwise great home because it doesn’t have, say, granite countertops, Bridges says.

5. Have an emergency savings fund built up.

You don’t want to wipe out your savings account when buying a house, cautions Ralph DiBugnara, president of Home Qualified, a real estate resource site. No matter how much you plan, there will likely be unforeseen expenses that pop up, he says. Many people will buy a home and then use credit cards to buy furniture, but those interest rates can be up to 10 times as much as a mortgage interest rate, he cautions. 

Bookmark these checklists for your homebuying journey — and happy house-hunting!