3 Musts for Property Buying

Home buying is the right decision when the expense and responsibility of ownership seem worth the effort to have a place to call home. People can feel ready as soon as they have a reliable job and money set aside for a down payment. However, there are other things that every first-time homebuyer must do before they sign their name on a mortgage document.

#1. Talk to Lenders

Homebuyers need a pre-approval for a loan before they begin to shop. Pre-qualifying is not the same. Qualifying only shows that buyers can receive a loan if they were correct with their stated income and credit scores. A pre-qualification involves research of credit histories, bank accounts, and more. An approval letter from a lender allows agents and home sellers to know the buyers are legitimate. Buyers have more negotiating power when sellers know the deal will not fall through for the lack of financing.

#2. Know the Area

A dream home can tempt people into buying a house in an unfamiliar area. Inexperienced buyers may think they will learn to love their neighborhood or the commute, but this is not always the case. Research the area to ensure it meets all preferences for services, jobs, community activities, and any other important factors. Make a list of all things that matter to each person who will live in the home and only shop for houses in areas that meet all or nearly all of the preferences.

#3. Buy Below Limit

Lenders may approve a loan up to $200,000, but that does not mean people should only look at houses in that price range. Always shop for houses well below the limit because ownership includes more expenses than many people expect. A less expensive home allows the owners to have money for improvements or repairs, as well as a financial cushion for when property taxes, utility costs, and homeowner’s insurance rates rise – and they will.

Buying a first home could be the start of a line of homes that includes upgrades to a dream home, or it may mean buying something affordable and turning it into the dream. Careful planning and shopping increase the chances of the experience becoming even more rewarding than the buyers expect.

Luxury Real Estate Changes Caused by COVID-19

The luxury homes of the future may look much different than they do today. The change in the needs and desires of the consumer has altered greatly since the COVID-19 pandemic began. Today, people want luxury, but they also demand safety.

More Remote Locations

The ultimate luxury location was once in the most active sections of metropolitan neighborhoods. The coronavirus lockdowns left many people stranded within the confines of their homes. Those who lived in urban areas were unable to leave their buildings, and compromising safety when they did. Homebuyers will not forget that lesson soon, and it shows in the luxury market as investors seek out suburban homes with private yards.

Lower Residence Address

The penthouse of any high-rise has historically been the most desirable location. Home shoppers now dislike the idea of long elevator rides where they may need to stay in a confined area with strangers. People now feel more comfortable with homes that exit immediately outside or are on a low enough floor for them to take the stairs. An exception would be extremely lavish apartments with private rooftop terraces and elevators.

Added Touchless Features

Touch-free door locks and elevator control panels also rank high on the list of preferences. The possibility of germs existing on the surfaces of all communal areas has become a serious concern. Elite shoppers now consider safety to be the ultimate luxury.

Increase in Independence

Large pantries, well-planned kitchens, and extra storage space in closets and laundry rooms also top the list of luxury necessities. People want to stay home in comfort and use fewer services where they may encounter other people.

Different Desirable Materials

Granite and marble were once requirements in any luxury home. Today, copper is the premium material. Copper fights germ naturally, so the homeowner has fewer worries about contamination. Copper counters and countertops made from other antibacterial and antimicrobial surfaces are expected to increase in popularity. Homeowners want protection against any germs brought in with them on handbags, grocery bags, and other items often set on countertops.

The luxury home market will not suffer but it will change. The switch may benefit less wealthy home shoppers who will discover the home of their dreams is now affordable. The change could also bring a boom to the redecorating industry as wealthy homeowners choose to upgrade their current residence rather than move.

Smart Building Strategies

Smart building is a long-term approach to recognize the relationship between the environment and its inhabitants. Smart buildings help owners understand what their tenants need. User experience is essential when designing smart buildings. Several strategies need to be incorporated to achieve this goal.

Pillars of a Smart Building Strategy

The smart building strategy should aim at a good tenant experience. It should aim at enhancing energy efficiency. Operational improvements are essential. Also, establishing a more sustainable environment is necessary. These goals need to be supported by proper security. Smart buildings are vulnerable to cybersecurity, and securing people and their assets from criminals is paramount.

Strategies to Improve Smart Buildings

Owners of smart buildings shape their services to meet users’ demands. Here are some strategies that can be used in smart building:

1.Energy efficiency

Having a holistic energy management option is essential. It should be able to give the energy usage of a specific space as well as the cost. The building should have an energy management option that can also monitor and verify predictive indicators. The options will enable regular energy analysis based on the results predicted. They can be used for tenant billing, green leasing, energy use reporting, tenant engagement, and tenant accountability.

Monitoring power quality and energy usage in intervals are essential. Sub-metering can also be used at a floor level. Tenants should have a dashboard where they can see their energy or power consumption.

2.Air quality monitoring

Tenants need assurance that a smart building is free from unhealthy air pollutants. They need a conducive environment for their health. Constant monitoring of comfort and air pollutant indicators is important.

Air quality parameters should be maintained below the recommended exposure limits. The data should also be available for the tenants on the dashboard. The occupants should also have a way to give their remarks on the comfortability.

3.Space management

The utilization of space is essential in a smart building. The building should have a functional building management system. The occupants should also be enlightened on how different spaces can be used in a smart building. There is a need to have control systems in shared spaces. The areas should also be equipped with a sound lighting control system.

Smart buildings are designed to offer a fantastic experience to its occupants. However, operational efficacy and management are also substantial.

New Affordable Housing Rules

The world of affordable housing can be a complex one. There are many rules and regulations that one must be familiar with when working in the world of affordable housing. Although, some people are advocating for a drastic change in these rules. The proposed change would switch from a voluntary to a mandatory approach to affordable housing.

Results from recent surveys have revealed that a majority of stakeholders would prefer to have mandatory affordable housing requirements that are consistent across the board. What is the motivation for change?

Affordable housing is a lengthy process. Even once the idea is agreed on, seeing the vision come to life can take years. While the process happens, there are often shifts in leadership that lead to changes in policy. Individuals and organizations alike are advocating for consistency in this process.

Another cause of inconsistency is the lack of trust in the industry. This lack of trust means that deals are constantly changing. Specifically, people feel like developers manipulate information and use it unfairly during negotiations. Developers feel this way about councils too. This creates a circle of distrust in the industry that can have a negative impact on negotiations.

The voluntary negations that are in place now mean that each project operates on a case-by-case basis. This means that there are different affordable housing expectations for each project which can create tension when the rules are different for everyone. Advocates for a consistent rate argue that this would create an even playing ground and increase consistency across the affordable housing market.

The United States is different from the rest of the world that mandates affordable housing contributions. These contributions are set at certain rates that are established ahead of time in the developer’s initial feasibility analysis. Some countries base these numbers on financial support from the government. Regardless of the basis for the numbers, they stay consistent across the board.

When individuals in the industry were surveyed, this method was preferred to the case-by-case or voluntary method. The mandated method creates transparency and consistency in the world of affordable housing. It essentially takes the guessing out of the process and eliminates the need to wonder why some organizations get better deals than others.

New Housing Bubble in 2020

Financial analysts look at world economies in the wake of COVID-19 and anticipate a housing collapse to come.

Some 2020 investors see the housing market as capable of striking global economies harder than COVID-19 did. The key ingredient that economists consider as they evaluate the housing market is cashflow. As of July of 2020, a lack of global cashflow disrupted the ability for people to pay their mortgages.

What We had Already Perceived as a Coming Recession

Many economists say that COVID-19 had only sped up what was inevitable in homeownership. Though financiers agree that the coronavirus has caused a recession, the housing collapse likely to follow was already brewing within the financial markets. Below are some reasons why many see the housing collapse to come as unavoidable:

Prices Rising Faster than Inflation

Demand is a driving factor behind the price rises of any financial market.

Rising prices, as they relate to homes, is the result of more buyers than there are sellers. However, prices that rise faster than inflation reveal underlining flaws within home valuations. Yesterday, there existed roughly as many homes as there are today, so “suddenly high prices” express a superficial influx of buyers. Housing markets that correct themselves from inflated prices do so via market crashes. Here’s another factor that can cause a housing collapse:

*Job Losses—Businesses contribute to the influx of unpaid mortgages by furloughing the paid employees they’ve hired. Some homeowners have bought new houses but have been laid off from work and now can’t pay their mortgages. Unemployment is another indicator, though similar to the rate of job loss, that can reveal an economy’s inability to pay its mortgages.

Avoiding a Housing Bubble Entirely

We can avoid a sudden housing collapse by realizing how technology is also influencing prices. Digital technologies not only make homes easier to buy, but business owners have also been buying properties in order to operate Airbnb rentals. We can avoid a housing crash by taking the greed induced by technology out of the market. The challenge that Airbnb merchants have, for example, is a lack of travelers to help them pay the mortgages they’ve acquired.

Changes in Affordable Housing Grants

Affordable Housing Grant Programs are designed to provide houses at affordable rates to families who may need them. This program is having success in Los Angeles County and the Bay Rea where they are on track to receive more than $400 million this year. However, this is not the case for San Diego. The city won’t be getting any funding from a program that was founded to support low-income housing and lower greenhouse gas emissions.

What is the reason that San Diego won’t be receiving any money from these grants? A local nonprofit Circulate San Diego issued a report that stated that San Diego has poor performance in competing for these housing grants and recommends better coordination take place between the affordable housing developers and the local governments. This coordination needs to be reflected in the applications in order for San Diego to effectively compete for the grant money.

An outside factor that could be playing against the city of San Diego is heavy rail stations. San Diego has few heavy rail stations and that is where the Strategic Growth Council prioritizes locations for affordable housing.

Carlsbad-based Chelsea Investment Corp attempted to obtain $20 million to support housing and an additional $10 million to improve public transportation infrastructure around the site of a former Sheriff’s Department crime Lab in Clairmont. This site will provide 404 units of low-income housing. The director of the program is disappointed that their application fell short considering both affordable housing and homelessness crises are getting worse in the city.

While the 404 units are still going to be built, the director states that the money from the affordable housing grant could have significantly reduced the time it will take to build these houses. When the time is reduced on these housing projects, people are able to move into their new homes sooner and the homelessness problem in the city is reduced quicker. This provides hope for those who are working diligently to reduce both problems of affordable housing and homelessness in the city of San Diego. Luckily, suggestions were made to help future applications for the San Diego area. This will help applicants provide stronger applications and hopefully receive money to speed up the build in the San Diego area in the future.

Will City Centers Operate the Same Post COVID-19?

City centers are the life of the party. Pre-COVID-19, people flocked to city centers all over the globe for work, leisure, and of course shopping! Currently, people aren’t making the commute to city centers and a lot of residents who live in city centers have relocated due to the current COVID-19 pandemic. Will things ever return to normal?

Work-Life

If COVID-19 has taught us anything, it is the power of technology in the workplace. When COVID-19 struck, a large percentage of the workforce made the switch from a daily commute to the office to a daily commute to their laptop. Since a lot of people in the workforce have access to a laptop, the business was able to carry on even with major city centers essentially shut down.

For the future, this could indicate that some meetings and work may stay in the virtual world instead of bringing employees to major cities to work. This would allow flexibility in the hiring process since the location would not be a factor. Additionally, employees would not need to live close to the city center if they didn’t have to commute every day. This is not to say that there will be a 100% shift to virtual jobs. This is suggesting that some meetings may take place over the computer instead of the traditional in-person format.

Real-Estate

As mentioned previously, people may not need to live close to the city center anymore. This will put the shift away from small homes inside the city and make larger homes outside the city much more desirable. This will put a damper on residential real-estate inside the city.

On the commercial side, office buildings have already taken a hit during COVID-19 with the rise in online work and shopping. If this trend sticks, it could make commercial space in city centers less valuable than ever. It is unlikely that the trend sticks. When a vaccine is created, people will flock to city centers in an urge to return to life as normal. This will include shoppers, businessmen and women, as well as those who live in city centers. Even then, city centers will be forever changed by the impact of COVID-19 in both residential and commercial areas

Understanding Closing Costs After Purchasing a Home

The home buying process can be a rather complicated and frustrating process to go through. So it comes as no surprise that buyers often get surprised at just how much more they need to pay once a deal has been reached. This last step is called the closing cost. The closing cost process of buying a home is the last obstacle you need to jump through in order to get into your dream home. Therefore it is imperative that you understand the process in hopes that it goes smoothly. Read on to learn some helpful advice as well as a better understanding of the process.

How Much is Closing Cost?

The cost usually falls onto the buyer, but the seller will often need to pay a portion of as well. The cost usually ranges from 2% to 5% of the total cost of the home. You can choose to add this cost to your loan, but you will end up paying interest on it throughout the lifetime of it. Therefore it is highly recommended to simply pay it all at once in order to get it done with and not owe anymore in the future.

Property Costs

Closing costs aren’t just one thing rather a variety of parts from the total sale of the home. Let’s talk about property costs first. Property costs will usually include two main things, the appraisal of the home and the home inspection. You will need a professional appraisal of the property to ensure that you’re actually paying what the property is worth. The home inspection is needed to ensure that the property and the home itself is in good standings and does not contain anything taht will cost you later on.

Loan Costs

The loan cost usually includes the fees related to documents needed to close on the deal as well as paying for any attorney fees you may have accumulated during the process. The biggest and usually most expensive of all the loan costs include the loan origination fee. This is what the lender charges for preparing your loan and submitting all your documents.

Insurance Costs

Lastly, you are going to see a sizable amount from the insurance on the home and mortgage loan. These will include your mortgage loan and mortgage application as well as any FHA, VA, and USDA fees.

An Increase in Home Buying Applications in 2020

When the COVID-19 crisis struck, everyone predicted the worst for the economy. News about looming crashes, recessions, and depressions became an everyday occurrence. The housing market was expected to be particularly hard hit by the crisis, with predictions of a 22% decrease in home purchases for the next few months.

One can easily understand why experts expected the worst for the housing sector. People were losing jobs by the thousands, and few would have the means to sustain their livelihoods, let alone buy new houses.

However, against all the odds, home buying applications started increasing in early April. Some said that this was only a temporary situation and that sales would plummet within no time. Surprisingly, however, sales were still climbing in early May with no signs of waning any time soon. Here are the factors that predicated this unexpected increase in home buying interest among Americans.

How are Home Buying Applications Increasing Despite the Pandemic?

The 54% increase in home buying applications in early April coincided with the re-opening of many states. As soon as people were allowed the freedom to move around, many resumed the house-searching exercises that had been interrupted by lock-down measures.

Statistics also show that a fair number of those looking for new homes are seeking to relocate to the suburbs. This is because houses in the suburbs have more space than downtown apartments. They also come with amenities such as a home office and a backyard. For those who had to spend weeks locked up in a small apartment, the allure of a more spacious home is more than understandable.

A decrease in mortgage rates has also contributed to the sudden interest in home purchases. People are always looking for ways to pay less for homes, and a lower mortgage rate is indeed very enticing.

However, there has been a 0.2% drop in the number of people looking to refinance their mortgages.

There are also concerns that there might be more demand for housing than supply. This typically causes the prices of homes to skyrocket, but some forecasters feel that limited purchasing power among consumers could force realtors to set reasonable prices for their products.

Conclusion

Overall, the increase in home purchasing interest came as a complete surprise to many finance experts. Some, however, feel that if people are forced to stay at home again, the sales will plummet back.

Apartment Hunting During a Pandemic

Many things about the post-coronavirus world look different, and that includes renting an apartment. While the process used to involve in-person tours and signings, social distancing has made those situations a challenge. Here are a few things to expect if you’re searching for an apartment during the pandemic.

1. An in-person tour probably won’t happen.

While it’s nice to visit an apartment prior to signing a lease agreement, social distancing guidelines makes this difficult. Many landlords are offering virtual tours via FaceTime for their potential tenants. Others are allowing interested renters to tour the apartment on their own by giving them access to a lockbox with a special code.

2. It’s still wise to check out the neighborhood before signing a lease.

Even if aren’t able to an apartment in-person before moving in, you still can- and should- check out the neighborhood. Look for things like traffic in the area and businesses that may attract crowds of people. Things like that may deter you from renting if you know that the neighborhood isn’t very quiet. You might even have the opportunity to meet a few of your potential neighbors- as long as you follow social distancing guidelines.

3. Landlords may give you a break on rent, but it’s no guarantee.

With so many people unemployed, some landlords are offering discounts to their tenants like a free month’s rent if you pay several months in advance, or a reduced security deposit. While it doesn’t hurt to ask if they’re offering any specials, try not to push the issue if there are more potential tenants vying for the same apartment. Doing so may put you out of the running.

4. Proof of income is still important, but some landlords are being lenient.

While having good credit is great, if you don’t have the income to back it up, it can be difficult to get a landlord to rent to you. Some landlords are more understanding than others, though, so it doesn’t hurt to apply if you’re unemployed and see what happens.

The good news is that although the renting process is a bit different, there are still plenty of properties available for rent. Just bring your patience along.