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Why Buyers Need an Expert Agent by Their Side
Tag Archives: REALTOR
Home Ownership – A Great Hedge Against The Impact Of Rising Inflation
If you’re following along with the news today, you’ve heard about rising inflation. Today, inflation is at a 40-year high. According to the National Association of Home Builders (NAHB):
“Consumer prices accelerated again in May as shelter, energy and food prices continued to surge at the fastest pace in decades. This marked the third straight month for inflation above an 8% rate and was the largest year-over-year gain since December 1981.”
With inflation rising, you’re likely feeling it impact your day-to-day life as prices go up for gas, groceries, and more. These climbing consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they’re still worthwhile.
If you’ve been thinking about purchasing a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation.
Homeownership Helps You Stabilize One of Your Biggest Monthly Expenses
Investopedia explains that during a period of high inflation, prices rise across the board. That’s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership.
Buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost. When you have a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankrate, says:
“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same. That’s certainly not the case if you’re renting.”
So even if other prices increase, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don’t have that same benefit, and you won’t be protected from rising housing costs.
Investing in an Asset That Historically Outperforms Inflation
While it’s true rising home prices and higher mortgage rates mean that buying a house today costs more than it did even a few months ago, you still have an opportunity to set yourself up for a long-term win. That’s because, in inflationary times, you want to be invested in an asset that outperforms inflation and typically holds or grows in value.
The graph below shows how the average home price appreciation outperformed the average inflation rate in most decades going all the way back to the seventies – making homeownership a historically strong hedge against inflation (see graph below):
So, what does that mean for you? Today, experts forecast home prices will only go up from here thanks to the ongoing imbalance of supply and demand. Once you buy a house, any home price appreciation that does occur will grow your equity and your net worth. And since homes are typically assets that grow in value, you have peace of mind that history shows your investment is a strong one.
That means, if you’re ready and able, it makes sense to buy today before prices rise further.
Bottom Line
If you’ve been thinking about buying a home this year, it makes sense to act soon, even with inflation rising. That way you can stabilize your monthly housing cost and invest in an asset that historically outperforms inflation. If you’re ready to get started, let’s connect so you have expert advice on your specific situation when you’re ready to buy a home.
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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.Search
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We believe every family should feel confident when buying and selling a home.
RELATIONSHIPS AND REAL ESTATE
A REALTOR’s® Relationships with Colleagues, Partners and Vendors Can Save a Transaction.
A REALTOR’s® job (in a nutshell) is to procure the sale of real estate between a willing buyer and seller.
We have all been part of, or witnessed, a transaction that does not go well. Whether it is buying/leasing a car, or retaining the services of a contractor, unless the parties are successful in communicating extremely clearly, there is always a possibility for a “miscommunication”. This can lead to wounded egos, unhappy parties, or an issue to be resolved by litigation. Can a Relationship save a transaction?
My relationship with my network is essential to client-satisfaction. Whether referring a client to another REALTOR® a thousand miles away, or a local lender, I have extreme confidence in my referral partners. When you are looking for a REALTOR® to partner with, it is essential that he/she have strong relationships with their referral network.
As a Full-Time REALTOR® for over a decade, I am fortunate that I have not had anything worse than the “wounded ego” (mine) experience in my business. Live-and-
Learn. One of the ways I have virtually eliminated the chance of these types of “miscommunications” is by putting all important communications in writing. Additionally, I am very selective when choosing business partners and vendors to whom I refer business. My partners and vendors are full-time (so they aren’t distracted by another job,) professional (they conduct themselves and behave appropriately,) ethical (they don’t put anything in front of the client’s best interests,) and licensed, and insured. Having established relationships with people of this caliber, reduces the chance a client will be unhappy with me, because of an experience they had with a referral partner.
My colleagues who are also at the top of their game usually have strong networks of referral partners that they rely on for their clients’ needs.
There are lots of good REALTORS®, but what sets some apart is the strength of the relationships they have with their referral network. There have been times when I have to request that a partner, or vendor, to go the “extra (ethical) mile” to help bring a transaction to the Closing Table. Maybe it is as simple as asking my preferred moving company to squeeze in an extra moving job for a client who scheduled a move with another mover whose truck broke down, or calling North Smithfield Tree Service to remove tree limbs that the Seller couldn’t get removed and it’s the day before Closing.
The difference between success and failure maybe the extra effort exerted as a result of a relationship between the REALTOR® and a someone in their network.
That is why Relationships are essential in the business of Real Estate. YES, a relationship CAN save a transaction.
Joe Luca is a full-time REALTOR® who helps buyers and sellers achieve their real estate goals.
Why Should I Work With a REALTOR®?
Not all real estate practitioners (Licensees) are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. REALTORS® are required to do more than comply with the law; REALTORS® must conduct themselves in an ethical, professional manner in all dealings with colleagues and consumers.
Here are several reasons why it pays to work with a REALTOR®.
- You’ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.
- Get objective information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
- Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.
- Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
- Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals,
Enter a caption friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
- Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.
- REALTORS® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.
- Buying and selling is an emotional process. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.
- Ethical treatment. Every member of the NATIONAL ASSOCIATION of REALTORS® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a REALTOR®, you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for REALTORS® to take the Code of Ethics orientation and they are also required to complete a refresher course every four years
- Relationships. Real Estate is a relationship-driven business. Experienced, Full-Time REALTORS® have relationships with licensed, insured, experienced, practitioners in many different parts of the business: Home Inspectors, Moving Companies, Plumbers, Electricians, Painters, Fencing Companies, Attorneys, and more. You won’t have to worry about finding someone, your REALTOR® can refer them to you!
Additionally, Full-Time, Experienced REALTORS® understand the market; they work with Buyers so they know what Buyers like and dislike, and they know what “competition” is on the market. Full-Time, Experienced REALTORS® know Millennials (The Largest Generation of Home-Buyers in history) have different expectations than Gen X’ers and Boomers. Each group has different needs, wants, values, and ways of communicating during the buying process.
Last, but not least important, is Safety. Your home, or you, can be seen as an “opportunity” by individuals with bad intentions. REALTORS®, especially Full-Time, Experienced ones, are trained in how to minimize your exposure to situations which could compromise you and your family’s safety.
So, why should you work with a REALTOR®? If you want to buy or sell a home on YOUR schedule, with minimal stress and surprises, and receive more value from the transaction (buy lower, sell higher) you should hire a Full-Time REALTOR®
Here are a few of our Preferred Partners:
50 Years Of Fair Housing
April 11 marks the 50th anniversary of the signing of the federal Fair Housing Act. Why is the commemoration a top priority for the National Association of REALTORS®?
The right to own property, and to own a home, is the foundation of our business.
NAR has taken an active role in promoting, and educating REALTORS® about, equal housing opportunity for 50 years.
The Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex, familial status, or disability.
NAR incorporates all of those requirements, as well as equal opportunity on the basis of sexual orientation and gender identity, into our REALTORS® Code of Ethics, because it makes our association, our industry, and our country stronger.
NAR’s commemoration of the Fair Housing Act is vital because it highlights how far we’ve come in promoting equal housing opportunity—both as a society and as an association—and, more importantly, that our work is on-going.
When Title VIII of the Civil Rights Act was passed in 1968, many in organized real estate had a far different view of fair housing. The new era of openness and equality in the sale or rental of housing clashed with hardwired beliefs at that time; and many believed that fair housing law posed a threat to individual property rights.
President Lyndon Johnson, as he signed the Fair Housing Act on April 11, 1968, famously declared that the right to fair housing “is now a part of the American way of life.”
That right also became every REALTOR®’s responsibility. For all the progress made to raise awareness and end discriminatory practices, as specified in the law and the REALTORS® Code of Ethics, the challenges for the industry and society persist. Fifty years later, REALTORS® commitment to upholding the principles of fair housing remains a top priority.
Despite all of the strides that have been made in Fair Housing, we must learn from the past. Housing is not a special interest; it is a human right. NAR and the RI Association of REALTORS® is committed to safeguarding this right.
Our vigilance must continue so that future generations may also enjoy the benefits of Fair Housing.
Some areas of concern include:
1. How to avoid Steering claims in the age of big data;
2. How emotional support animals like therapy dogs are finding their way into fair housing law;
3. Illegal discrimination based on familial status.
While we may not be able to predict the adversity of our society, or the challenges of the market place, in the future, we must always work together as a nation, and as REALTOR® professionals, to protect the right of Fair Housing for ALL who live here in the greatest country on earth.
The FED Raised Rates – Is It Still A Good Time To Buy/Sell A Home?
As was widely expected, The Federal Reserve raised interest rates, and indicated that they will continue to do so throughout the year. This actually indicates that things are good in our economy… a positive sign that consumers are spending money, and prices are being pushed upward by the forces of supply and demand. Interest rates are like a “brake system” on a train, when things start moving too fast apply the brakes, to slow the train down. Likewise, when the economy starts to “move too fast”, prices are getting pushed higher (Inflation) so a slight increase in interest rates will temper, or slow down, these price increases. Inflation, like our debt, diet, and data, needs to be managed so it doesn’t become a problem. Which was why The Fed repeatedly lowered interest rates during the depths of The Great Recession – to spur economic activity (buying stuff.)
What will this mean for me? If you have a 30 year mortgage of $250,000, at a fixed interest rate of 5%, the monthly payment (not including taxes and insurances) would be about $1,342. A rate increase to 5.25% would raise your monthly payment by about $35. Most consumers spend more than that on coffee every month. Will that be detrimental for some consumers? Probably. However, rising incomes, should mitigate that affect. The US unemployment rate is 4.1%, and Full Employment is considered to be about 5%. Many economists believe that this dynamic pushes wages higher so (theoretically) more people should be able to afford the extra $35/month.
If you are considering Selling your house, you should act sooner and not later. Inventory is tight, so there is not much competition at this time; but more people may list their homes for sale increasing the competition. You best option is to contact a Full Time, Experienced, REALTOR® to get the answers to your questions for your situation. Feel free to call me, Joe Luca at 401-580-9797. All questions are welcomed and answers are free and without obligation.
FUTSAL and Life in Real Estate
I was at a FUTSAL clinic with my daughter this evening and, among other things, the coach was trying to get these aspiring soccer players to understand that when on defense, the should be playing a “tighter” formation and when on offense they should play in a “loose” formation with more space between them. Which almost seems counter-intuitive, especially as a little kid. They want to run to the ball, steal it from the opponent and then kick/dribble/run it down the field to score a goal. What they need to do is play intelligently, watch the ball, but also read the opposing player to determine what his options are and anticipate where the ball is going to be after his next kick or pass.
There is a lesson that many adults in the business world could take from this clinic. It is an experienced, knowledgeable, and confident individual who understands “the game” of business (or real estate in my case) and intuitively knows when to play in a “tight formation” and when to back off and play in a “loose formation”. Sometimes you cannot force a transaction to consummation. It may fall apart if all parties are not ready to consummate, or you may get your wish but the outcome is not what was expected (that usually means you lose money). Life, business and real estate are not always as simple as offense and defense in soccer. However, it is extremely important to know when to play in a “tight formation” aggressively pursuing the “deal”, and when to back off, gain some perspective, and “see where the ball is going to be when it leaves your opponent’s foot.” Maybe this isn’t the “play” for you, maybe there is another opportunity to “steal the ball” or make the deal that you cannot see when in the middle of the “scrum” – to borrow a term from rugby.
So whether you are looking for that next house to “flip”, a “buy and hold” investment, or another big move, maybe you should consider taking a step back, play a “loose formation” and see if it helps score that goal.
Joseph Luca, CDPE
Associate Broker
Realtor
RE/MAX Preferred
The Mercurio Group
1417 Douglas Ave
North Providence, RI 02904
Congress Needs To Act To Ease Credit/Lending For Challenged Commercial Markets
Jim Helsel, the Treasurer of the National Association of REALTORS® testified before a House Panel on July 29th. He stated that a strong commercial real estate sector is vital to millions of U.S. jobs and helps keep the national economy afloat. Perhaps the esteemed members will listen to testimony “from the trenches” of small business. Tax credits and assistance to hire employees are of little value if there is no capacity to retain them. Businesses need access to capital when cashflow slows to maintain or increase inventories, acquire other businesses, or for new construction. Small business vitality is what would help “prime the pump” of our economy; it needs to grow from the bottom up, not the top down. Lending institutions are relucant to lend because of the presence of “Big Brother” and restrictive regulations.
Congress has acted to help address the situaton; the Small Business Lending Act of 2010 is greatly appreciated but we need more. We are not asking for money, or tax breaks; rather small businesses need access to capital (which is not a “handout” from the government) for QUALIFIED business borrowers. Hopefully they will hear us and respond positively.
Thanks for stopping by.
May you Be Healthy, Wealthy, and WISE.
CupOfJoeLuca 