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Appraisals Versus Inspection – Emerald Coast Real Estate

Appraisal Versus Inspection

When you apply for a mortgage, an unbiased appraisal (required by the lender) is the best way to confirm the home’s value based on the sale price. Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal will help make sure the bank doesn’t loan you more than what the home is worth.

Appraisal Versus Inspection

What’s the Difference between an Appraisal and a Home Inspection?

Many new buyers ask, what is the difference between an appraisal versus an inspection. If you’re planning to buy a home along the Emerald Coast, an appraisal is an essential step in the process. It is a professional evaluation of the market value of the home you’d like to buy. In most cases, the lender will order an appraisal to confirm or verify the home’s value before lending a buyer money for the purchase. It’s also a different step in the process from a home inspection, which assesses the condition of the home before you finalize the transaction. Here’s the breakdown of each one and why they’re both critical when buying a home.

Home Appraisal

The National Association of Realtors (NAR) explains:

“A home purchase is typically the largest investment someone will make. Protect yourself by getting your investment appraised! An appraiser will observe the property, analyze the data, and report their findings to their client. For the typical home purchase transaction, the lender usually orders the appraisal to assist in the lender’s decision to provide funds for a mortgage.”

When you apply for a mortgage, an unbiased appraisal (required by the lender) is the best way to confirm the home’s value based on the sale price. Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal will help make sure the bank doesn’t loan you more than what the home is worth.

This is especially critical in today’s sellers’ market, where low inventory is driving an increase in bidding wars, which can push home prices upward. When sellers are in a strong position like this, they tend to believe they can set whatever price they want for their house under the assumption that competing buyers will be willing to pay more.

However, the lender will only allow the buyer to borrow based on the value of the home. This is what helps keep home prices in check. If there’s ever any confusion or discrepancy between the appraisal and the sale price, your trusted real estate professional will help you navigate any additional negotiations in the buying process.

Home Inspection

Here’s the key difference between an appraisal and an inspection. MSN explains:

In simplest terms, a home appraisal determines the value of a home, while a home inspection determines the condition of a home.”

The home inspection is a way to determine the current condition and safety of the home before you finalize the sale. The inspection report addresses if anything is questionable the process. Some examples of issues that could arise could be the age of the roof, the state of the HVAC system, or just about anything else. You, as a buyer, have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. Your real estate agent is a key expert to help you through this part of the process.

Bottom Line

The appraisal and the inspection are critical steps when buying a home, and you don’t need to manage them by yourself.  

Do you have further questions regarding the appraisal process and the home inspection process?  To learn more, reach out to our team.  With two office locations, Life’s A Beach Real Estate located in Panama City Beach.  And Life’s A Beach Luxury Real Estate located in Destin.  We are here to answer your questions and help you find your piece of paradise.

 

 

 

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Increasing Wealth Through Homeownership – Emerald Coast RE

increasing wealth through homeownership

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are already baked into the rent payment – along with a profit margin. You don’t save money by renting.

The Importance of Home Equity in Building Wealth

Increasing Wealth Through Homeownership

Let’s talk about increasing wealth through homeownership.  Homeownership has always been the first rung on the ladder leading to household wealth. As Freddie Mac recently posted:

“Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

What is Home Equity?

Home equity is the difference between the current market value of your house and the amount you currently owe on your mortgage. To estimate your equity, subtract your mortgage balance from the market value of your home.

You can find what you owe on your mortgage by looking at your last monthly statement or by contacting your lender. If you need help determining the current market value of your home, contact a local real estate professional.

Is homeownership truly a better path to wealth than renting?

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are already baked into the rent payment – along with a profit margin. You don’t save money by renting.  You are saving money, by increasing wealth through homeownership.

As proof of this, First American broke down the net worth of homeowners and renters by income categories. Here are their findings:The Importance of Home Equity in Building Wealth | MyKCM Only one income category ($127-192K) has a higher net worth for renters over homeowners. Every other category shows that being a homeowner leads to greater accumulated wealth.

According to the latest Homeowner Equity Insights Report from CoreLogic, the average homeowner gained $17,000 in equity in just the last year. Here’s a breakdown of the year-over-year equity gain by state:The Importance of Home Equity in Building Wealth | MyKCM

When can you cash in on your housing wealth?

Your home equity is part of your total wealth as a homeowner. The two most common ways homeowners can leverage their wealth are:

  • Selling
  • Refinancing

Selling: When you decide to sell your home, the equity you’ve built over time will come back to you in the sale. For example, if you paid off your $200,000 mortgage and sold your home for $350,000, you would receive $150,000 after closing.

Refinancing: You can refinance your current mortgage and take out some of the equity you have accumulated. With today’s historically low mortgage rates, you may be able to take out substantial cash and keep your monthly payment the same. Thankfully, homeowners today are doing this responsibly and not repeating the same mistakes made in 2006-2008 when some cashed out their entire equity to purchase luxury items like new cars, lavish vacations, etc.

How can these options help homeowners?

During these difficult times, many households are struggling with their housing expenses. Homeowners, because of their equity, have better alternatives. Odeta Kushi, Deputy Chief Economist at First American, recently explained that homeowners financially impacted by the pandemic will not necessarily be faced with foreclosure:

“The foreclosure process is based on two steps. First, the homeowner suffers an adverse economic shock…leading to the homeowner becoming delinquent on their mortgage. However, delinquency by itself is not enough to send a mortgage into foreclosure. With enough equity, a homeowner has the option of selling their home, or tapping into their equity through a refinance, to help weather the economic shock.”

What might the future bring?

Most experts are calling for home prices to continue appreciating going forward. The Home Price Expectation Survey, a survey of a national panel of over one hundred economists, real estate experts, and investment & market strategists, indicates appreciation will continue for at least the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser would potentially earn by buying a $300,000 home this January:The Importance of Home Equity in Building Wealth | MyKCM

Bottom Line

Home equity, for most Americans, is the quickest way to build household wealth. That wealth gives homeowners more options during good times and in difficult situations.

Are you increasing your wealth through homeownership?  To learn more, reach out to our team.  With two office locations, Life’s A Beach Real Estate located in Panama City Beach.  And Life’s A Beach Luxury Real Estate located in Destin.  We are here to help you find your piece of paradise.

 

 

 

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Turning A House Into A Happy Home – Emerald Coast RE

Happy Home

We talk a lot about why it makes financial sense to buy a home, but more often than not, we’re drawn to the emotional reasons for homeownership.

Turning a House into a Happy Home Along The Emerald Coast

Happy homes along the Emerald Coast, without a doubt the location makes for a “happy home”, but what are other areas that make a happy home?

We talk a lot about why it makes financial sense to buy a home, but more often than not, we’re drawn to the emotional reasons for homeownership.

No matter the living space, the feeling of a home means different things to different people. Whether it’s a certain scent or a favorite chair, the feel-good connections to our own homes are typically more important to us than the financial ones. Here are some of the reasons why.

1. Owning your home is an accomplishment worth celebrating

You’ve likely worked very hard to achieve this dream, and whether it’s your first home or your fifth, congratulations are in order for this milestone. You’ve earned it.

2. There’s no place like home

Owning your own home offers not only safety and security but also a comfortable place where you can simply relax and kick-back after a long day. Sometimes, that’s just what we need to feel recharged and truly content.

3. You can find more space to meet your needs

Whether you want more room in your home for your changing lifestyle (think: working from home, virtual school, or a personal gym), or you simply prefer to have a large backyard for socially-distant entertaining, you can invest in a location that truly works for your evolving needs.

4. You have control over renovations, updates, and your style

Looking to try one of those complicated wall treatments you saw on Pinterest? Tired of paying an additional pet deposit for your apartment building? Maybe you want to finally adopt that fur-baby puppy or kitten you’ve been hoping for. You can do all of these things in your own home.

Bottom Line

Whether you’re a first-time homebuyer, investment buyer, or a move-up buyer who wants to start a new chapter in your life, now is a great time to reflect on the intangible factors that turn a house into a happy home.

To learn more, reach out to our team.  With two office locations, Life’s A Beach Real Estate located in Panama City Beach.  And Life’s A Beach Luxury Real Estate located in Destin.  We are here to help you find your piece of paradise.

 

 

 

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Real Estate in 2021, Three Reasons to be Optimistic – Emerald Coast RE

Real Estate in 2021

Experts forecast that buyers and sellers are going to be active in 2021.

Real Estate in 2021, Three  Reasons to be Optimistic

 

Real estate in 2021 looks positive along the Emerald Coast.  As we reflect on this last year, we have all been through a lot.  2020 will be remembered for many reasons, and optimism is one thing that’s been in short supply since the spring. We’re experiencing a global pandemic, social unrest, an economic downturn, and natural disasters, just to name a few. The challenges brought on by the health crisis have also forced many homeowners to reevaluate their space and what they need in a home going into 2021. So, experts are forecasting that next year is one in which we can be optimistic about real estate for three key reasons.

1. The Economy Is Expected to Continue Improving

Tim Duy from the University of Oregon puts it this way:

“There is nothing fundamentally ‘broken’ in the economy that needs to heal…there was no obvious financial bubble driving excessive activity in any one economic sector when the pandemic hit…With Covid-19 cases surging again, it is understandably hard to look optimistically to the other side of this winter…Don’t let the near-term challenges distract from the economic stage being set for next four years.”

2. Interest Rates Are Projected to Stay Low

In the latest projections from Freddie Mac, interest rates for a 30-year fixed-rate mortgage are expected to remain at or near 3% next year. These low rates will continue to make homes more affordable, driving demand for housing in 2021.3 Reasons to Be Optimistic about Real Estate in 2021 | MyKCM

3. Future Home Sales Are Forecasted to Grow while the economy improves and interest rates remain low, homes are also expected to continue appreciating as more people buy in the coming year. Danielle Hale, Chief Economist at realtor.comsays:

“We expect home sales in 2021 to come in 7.0% above 2020 levels, following a more normal seasonal trend and building momentum through the spring and sustaining the pace in the second half of the year.”

Bottom Line

Experts forecast that buyers and sellers are going to be active in 2021. If you’ve thought about buying or selling your home this year but have held off, now may be the time to take advantage of this market. Let’s connect to take the first step toward your new home today.

To learn more, reach out to our team.  With two office locations, Life’s A Beach Real Estate located in Panama City Beach.  And Life’s A Beach Luxury Real Estate located in Destin.  We are here to help you find your piece of paradise.

 

 

 

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Remote Work Driving Sales Of Vacation Homes

Vacation Homes

Buyers are taking advantage of the fact, that working from home might be someplace other than their primary residence. Many are relocating to the beaches along the Emerald Coast.

Remote Work Driving Vacation Home Sales

This year, the opportunity to work remotely has increased the demand for vacation homes. Gay Cororaton, Senior Economist and Director of Housing and Commercial Research at the National Association of Realtors (NAR) notes:

“Working from home is a positive factor in demand for vacation homes.”

What does this mean for real estate along the Emerald Coast?

Buyers are taking advantage of the fact that working from home might be someplace other than their primary residence – at the beach, along the Emerald Coast, in the mountains, or somewhere in between. NAR explains:

Sales in vacation-home counties increased 48% on average year over year in the third quarter; overall, 81% of vacation-home counties saw a year-over-year sales increase.”

Is it Time to Sell Your Vacation Home?

If you’ve been thinking about selling your vacation home, putting it on the market now while demand is high might be your best move. Here are two reasons why.

1. Vacation Homes Are Selling Quickly

Homes and condos are not staying in the market for very long. NAR also notes:

In September, 68% of vacation homes sold in less than a month. Historically, about 30% sell that quickly…It’s a pretty amazing uptick compared to past years.”

2. Home Prices Are Rising

With an increase in demand, prices go up. NAR continues:

“In the third quarter, prices in vacation-home counties rose by about 32% year over year. Seventy-nine percent of these counties experienced year-over-year price gains. NAR defines a vacation-home county as one in which seasonal housing accounts for at least 20% of stock.”

If your vacation home is sitting idle, maybe not attracting as many renters as you usually see, or if you simply want to sell it so you can trade up or take it off your worry list, now may be the time. Demand is high, so you’re in the ideal spot to get a stronger return on your investment today.

Bottom Line

Demand is on the rise, so let’s discuss your next steps when it comes to selling your vacation home.

To learn more, reach out to our team.  With two office locations, Life’s A Beach Real Estate located in Panama City Beach.  And Life’s A Beach Luxury Real Estate located in Destin.  We are here to help you find your piece of paradise.

 

 

 

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Will Mortgage Rates Remain Low Next Year?

Mortgage Rates

In 2020, buyers got a big boost in the housing market as mortgage rates dropped throughout the year, which is good news for the PCB Real Estate Market.

Will Mortgage Rates Remain Low Next Year?

In 2020, buyers got a big boost in the housing market as mortgage rates dropped throughout the year. According to Freddie Mac, rates hit all-time lows 12 times this year, dipping below 3% for the first time.  Making buying a home or condo along the Panhandle’s Emerald Coast more and more attractive as the year progressed (See graph below):

Will Mortgage Rates Remain Low Next Year? | MyKCMWhen you continually hear how rates are hitting record lows, you may be wondering: Are they going to keep falling? Should I wait until they get even lower?

The Challenge With Waiting.

The challenge with waiting is that you can easily miss this optimal window of time and then end up paying more in the long run.  Not to mention, you may miss out on the perfect Emerald Coast beach home.  Last week, mortgage rates ticked up slightly. Sam Khater, Chief Economist at Freddie Mac, explains:

Mortgage rates jumped this week as a result of positive news about a COVID-19 vaccine. Despite this rise, mortgage rates remain about a percentage point below a year ago.”

Mortgage Rates Are Still Lower Today Than They Were One Year Ago.

As the economy continues to get stronger and the pandemic is resolved, there’s an excellent chance that interest rates will rise again.  Several top institutions in the real estate industry are projecting an increase in rates over the next four quarters (See chart below):Will Mortgage Rates Remain Low Next Year? | MyKCM

If you’re planning to wait until next year or later, Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), forecasts mortgage rates will begin to rise steadily.Will Mortgage Rates Remain Low Next Year? | MyKCM As a buyer, you need to decide if waiting makes financial sense for you.

Bottom Line

If you’re planning to buy a home or condo along the Emerald Coast, don’t wait.  Take advantage of today’s low rates. Now is the time to do so. Please don’t assume they’re going to stay this low forever.

 

To learn more, reach out to the Life’s A Beach Real Estate team. We are here to help you find your piece of paradise.  We have agents in Panama City Beach and surrounding areas.  As well as the Destin San Destin 30A area.

 

 

 

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Working From Home?

Working From Home

Working from home, PCB style.  Businesses all over the country have figured out how to operate remotely and the trend may continue. What better area to work from than Panama City Beach!

Why Working from Home May Spark Your Next Move

If you’ve been working from home this year, chances are you’ve been at it a little longer than you initially expected. Businesses all over the country have figured out how to operate remotely to keep their employees healthy, safe, and productive. For many, it may be carrying into next year and possibly beyond.

While the pandemic continues, Americans re-evaluate their homes, floorplans, locations, needs, and more. Some need more space, while others need less. Whether you’re renting or own your home, if remote work is part of your future, you may be thinking about moving, especially while today’s mortgage rates are so low.

Why Move To Panama City Beach?

Now, if you live in the Panama City Beach area, odds are you do not want to move away if you have the option of working from home…However, if your work-life allows a move to PCB, now is the time!  Imagine taking that zoom call while sitting on your deck overlooking The Gulf of Mexico!  Or maybe you are sitting out by your pool…why not enjoy the beach life work life!!

A recent study from Upwork notes:

“Anywhere from 14 to 23 million Americans are planning to move as a result of remote work.”

To put this into perspective, last year, 6 million homes were sold in the U.S. This means roughly 2 – 4X as many people are considering moving now, and there’s a direct connection to their ability to work from home.

The same study also notes while 45.3% of people are planning to stay within a 2-hour drive from their current location, 41.5% of the people who are citing working from home as their primary reason for making a move are willing to look for a home more than 4 hours away from where they live now (See graph below):Why Working from Home May Spark Your Next Move | MyKCM In some cases, moving a little further away from your current location might mean you can get more home for your money. If you can work remotely, you may have more options available by expanding your search. Upwork also indicates, of those surveyed:

“People are seeking less expensive housing: Altogether, more than half (52.5%) are planning to move to a house that is significantly more affordable than their current home.”

Whether you can eliminate your daily commute to the office or you need more space to work from home, your plans may be changing. If that’s the case, it’s time to connect with a local real estate professional to assess your evolving needs and determine your path together.

Bottom Line

This has been a year of change, and what you need in a home is no exception.  This year has taught us to appreciate the little thing’s in life more.  Don’t wait…buy the beach house…in PCB!  Let’s connect today to ensure you have expert guidance on your side to help you find a home that fits your remote work needs.

To learn more, reach out to the Life’s A Beach Real Estate team. We are here to help you find your piece of paradise.  We have agents in Panama City Beach and surrounding areas.  As well as the Destin San Destin 30A area.