Buying a Home? Location, Location & What Else Matters?

Are you buying a house? Thinking from the seller’s perspective will help you focus on the property as a long-term investment. Here are some of the most important factors to consider.

  • Don’t Just Be a Buyer but a Seller
  • Where is the Home?
  • What About the Schools?
  • What’s the House’s Relationship to its Lot?
  • Is There a Lot of Storage Room?
  • Is the Neighborhood Safe?
  • How “Walkable” is the Community?
  • Does the Home Need a Lot of Work?
  • What Kind of Character does the Neighborhood Have?
  • Finding a Perfect Home

Don’t Just Be a Buyer but a Seller

When people buy a home, ironically, they tend to think too much from the buyer’s perspective. It’s important to also think about the property from the seller’s perspective – because there is a good chance you will eventually be in that position. After all, the average person moves 11.4 times during their lives, so there’s a good chance this home won’t be your final address.

It’s especially important to consider the property as a long-term investment because homes are the largest purchases that most people ever make. Here are a few factors to consider as you go through the buying process.

Where is the Home?

We’ve all heard that real estate truism about location, location, location. The reason it’s such an obsession of agents and brokers is that it has an extraordinary impact on value. Even if a property is otherwise incredibly unattractive, many people will want to buy it down the line if it is in the right place.

What About the Schools?

Consider the fact that many people shopping for new homes will actually start their search with the school district, prioritizing it over any other characteristic. “Even though you might not have children, buying a home in a good school district is always smart,” notes Forbes. “If the schools are desirable, homes tend to hold their value.”

What’s the Home’s Relationship to its Lot?

How close is the house to the road? If you’re looking at condos, you want to think about whether it’s an interior unit or has better privacy on one of the ends. You will have more difficulty getting the price you want when you sell if a neighbor’s house is so close to you that it’s blocking your sunlight as well.

Is there a lot of storage room?

Another major aspect of a property that buyers often fail to notice is storage room, notes Massachusetts broker Marjorie Youngren. “If the current homeowners are smart and their storage is tight, they have either removed or packed away items,” she advises. “Don’t be fooled!”

Is the Neighborhood Safe?

Of course criminal activity is one of the first elements you want to consider in terms of your home. Like lighting and privacy, you may not priortize that aspect as much as others – but it still impacts a house’s value. Look up the crime statistics for the neighborhood. You should be able to find this information online, often through the local government’s website.

How “Walkable” is the Community?

Many people want to know how easy it will be for them to get around the neighborhood on foot. That’s actually become more of a concern in recent years. Again, this factor may or may not be important to you, but it drives up the home price when you sell if it’s easy to get to the school, post office, restaurants, public transit, grocery stores, and other amenities. Especially since the younger generations are less interested in purchasing cars, being within walking distance of shops and bus lines will only become more valuable in the future.

Does the Home Need a Lot of Work?

Be careful about purchasing a home because it’s in the right location while oversimplifying issues with its condition. Many people have ended up in nightmares with “money pit” properties. You really want to be prepared in advance rather than assuming that you’ll be able to get the home up to your standards once you arrive.

“If you want to build an extension or add another story to the property, make sure it is within local zoning or building codes,” notes Forbes. Plus, “[n]ot only does a renovation take money, it takes time, energy and emotional stress.”

What Kind of Character does the Neighborhood Have?

Don’t just trust the crime data. Look around and see if the character of the neighborhood makes it a place you will feel comfortable living long-term. Understanding how you feel toward the area will give you a good sense of how valuable your home might be to potential buyers when you’re on the other end of the transaction.

One of the best ways to really get a deeper understanding of the neighborhood is to visit and walk around at three different times of day. You don’t just want to get a sense of the people (such as how friendly the area is) but traffic density. Talk to neighbors. Is there a garage band practicing next door? Forget resale value for a moment and remember that you don’t want to be irritated from day one by loud noises or other factors.

Finding a Perfect Home

Are you getting ready to buy a new home? As you can see, there are many different factors to consider beyond price and location.

At, we deliver information that not only shows you the properties that fit your criteria but the neighborhood & community amenities that fit your lifestyle. Find a new home now!

Stress of Moving Can Strain Relationships

Are you thinking about moving? Be prepared for the emotional toll it will take: research shows moving is more stressful than divorce. In related news from earlier this year, a common side-effect of moving is strain on a relationship, resulting in multiple challenges.

  • Moving More Stressful than Divorce and New Work
  • How Moving Threatens Relationships
  • Lightening the Load of Stress
  • Making the Home Search Simpler

Moving More Stressful than Divorce and New Work

When researchers asked 2000 people in the UK who have moved within the last three years about stressful life events, 61% ranked moving as more stressful than anything else they’d experienced, higher even than divorce.

The stresses of beginning new employment, divorce, and the dissolution of a relationship all essentially tied for second place, with each of them averaging 42% as the most stressful experience of respondents.

The researchers dug deeper to determine the most problematic aspects of the moving process, notes Will Stone of the Daily Express. “Misplaced possessions and realizing furniture does not fit in the new house topped the list of most stressful moving day moments,” he says. “And a quarter of us admit leaving it weeks before we unpack all the boxes.”

Half of people surveyed said that it was a good idea to plan food delivery ahead of time for the night of your move. (It’s sometimes also advised to plan your food order at the new house for the same reason.)

Moving consultant Dave Hax suggests several tactics that can make moving day easier to handle:

  1. Cut holes into your boxes so that they have handles; that way dropping them is prevented.
  2. If doing a self-move, lighten your load by removing the drawers from your dressers and desks so that they can be makeshift boxes.
  3. Snap photos of your power meters at both locations. Also get pictures of all the connections for your computers and TVs.

“Applying … these tips will help to take the stress out of moving day and enable you to have a smooth and efficient move,” says Hax.

How Moving Threatens Relationships

Just during 2015 alone, 40 million people moved. When the economy is going strong in some areas, people in other parts of the country will move to those cities for opportunity. Also, some of those who went through foreclosure during the recession have now reestablished their credit and can buy a home.

Moving is good for the economy in the sense that money is being spent and the best employees are moving to the available jobs. However, take care with relationships when moving. Stresses listed in a recent US survey found that common arguments between couples include the reason for moving, destination of move, finances, and sex life.

People also often get rid of each other’s stuff, with more than 30% saying that they either misplaced or knowingly got rid of something belonging to their partner.

The pollsters spoke with 200 New Yorkers who had moved at least once since 2010.

Among the couples surveyed, more than one-third (35%) said that their relationship was damaged by moving. Top factors making life hard on movers were:

  1. Increase in arguments (51%)
  2. Slowdown in sex life (49%)
  3. Money challenges (49%)

People who have kids encounter additional struggles, especially selecting the best school and getting their children socially acclimated in new friendship circles.

The other stressor, as mentioned briefly above, is things getting either accidentally or inentionally left behind. Top items that wrongly end up in the trash are books, photo albums, themed towels, and memorabilia such as trophies and tchotchkes.

This survey was conducted by moving marketer Our Town America, as explained by its CEO Michael Plummer, Jr.. “These survey results show that moving is highly stressful on relationships,” he says. “In a move, people are overwhelmed with learning new roads, meeting people and perhaps starting a new job.”

Lightening the Load of Stress

How can you keep calm so that stress doesn’t overwhelm you, causing your relationship to suffer? Along with the ideas above for moving day, here are a few more tips from Michelle Manetti of Huffington Post:

  • Make a to-do list well ahead of time.
  • Get plenty of supplies: boxes and tape.
  • Be careful to mark all your boxes so you can easily deliver to the right room.
  • Get rid of some of your belongings so you aren’t moving old junk.
  • Bring an overnight bag so you don’t have to immediately unpack.
  • Contact movers well ahead of time, if you are hiring professionals.
  • Get a friend or two to help you.

“It’s such a shame that the momentousness of buying or renting a new place is overshadowed by such a burdensome process,” notes Manetti. “No one should lose sleep … over what should otherwise be an exciting new life stage.”

Making the Home Search Simpler

Are you getting ready to move to a new location? At, we offer the quickest way to search real estate listings online. Select a city.

10 Ideas for Strong Home Staging

Do you want to use staging to better prepare your home for sale? Here are 10 ways to do it right.

  • What Does a Home Stager Do?
  • Hiring a Home Stager
  • 10 Ideas for Better Staging
  • Finding Your New Home

What Does a Home Stager Do?

To stage means to present something for public display. Home staging, then, is the process of preparing a residence for an open house or other viewings by potential buyers. Staging is intended to improve the way a property looks and feels so that more people will submit bids.

Professional home staging, for the most part, is a relatively new phenomenon. The need for home stagers grew out of a desire for specialized expertise to rethink interior design and otherwise improve a home’s appeal.

Home stagers organize belongings, switch out furniture, and can even give you advice for better curb appeal. That way you can captivate buyers from the moment of arrival.

Home staging is essentially a makeover, allowing your home to look as good as it can to an objective eye. It doesn’t take long for someone to decide whether or not your house is right for them, so seize the moment, explains Minnesota Coldwell Banker real estate agent Jan Van Horne.

“[A] potential buyer has made up their mind ten seconds after they step in the front door,” she says. “To achieve the greatest possible outcome, a home should always be presented at its best the first time around.”

Hiring a Home Stager

You want to find a home stager from a referral, possibly through your real estate agent. Get estimates from three or four so you can compare costs alongside reviews.

In some cases, you may be able to convince your real estate agent to cover part or all of the cost of staging. Depending on the sale price of the house, Minnesota Re/Max agent Pat Cirelli says it sometimes pays off to have staging performed.

“For the most part, an agent should be able to determine if a home is in need of this type of service, and if it would be of benefit or not,” she says. “If it’s a reasonable fee, it is usually a worthwhile investment.”

10 Ideas for Better Staging

Wanting some ideas to get you started with this project? Here are 10 general tips on staging a house from professional home stager Matthew Finlason.

Focus on curb appeal. People will often drive by a home multiple times before deciding whether or not they want to take a look inside. Mow the grass; spray down your deck and sidewalk; and add flowers and plants.

Apply elbow grease to the grime. You want the place to look absolutely spotless. Do everything you can possibly imagine that falls under the heading of cleaning, and also look out for weird smells. Homebuyers are basically inspecting your place. If you are cleaning the place yourself, you can always ask a neighbor or friend to give you their first impressions.

Focus on light and color. It’s important to be careful about overwhelming homebuyers with anything bright or offbeat. Typically neutral colors are ideal – unless you are going for a certain impact following a broader design theme.

Make your home inviting. When someone walks through a house, they want to be able to picture themselves living there. Clutter and personal items disrupt that fantasy, notes Finlason. “They need to see your home, not your stuff,” he says. “Excessive personal items like photos, collections, personal awards, electronics and collectibles will make it difficult for buyers to see past your personal style and may deter a sale.”

Buy new furniture and toss unnecessary items. It’s okay to mix several different styles. Try different arrangements and possibilities. Obviously you want to control your costs, but bringing in some funky used chairs and tables could be pivotal.

Stop by the art gallery. Art can make your home look much more attractive and sophisticated. Finlason particularly recommends photography.

Fix what needs fixing. Is there anything that’s overused or damaged? Oil your door hinges, plane doors that are sticking, and replace whatever blinds or fixtures are in disrepair.

Give it a fresh coat. One of the surest ways to revitalize a home is with paint, Finlason advises. “Slap a fresh, neutral color on the space,” he says. “Choose a beige or taupe for living spaces and a neutral green or blue for bathrooms.”

Roll out the red carpet. Recarpet and refinish as needed. In a pinch, you can use an area rug over worn wood floors.

Upgrade the fixtures. A simple way to modernize your home is to get sleeker, more stylish outlets, light fixtures, light switches, and doorknobs.

Finding Your New Home

By understanding how to stage your home, you will better be able to sell it. But where are you going to go? With, you get the quickest, most customer-centric way to search home listings online. Get started now.

For Best Value, Think Small With Remodeling

Small replacements that boost curb appeal are the easiest way to get more attention from buyers.

  • Looking Sharp – The Debate over Staging
  • Comparing Cost to Value
  • Bigger Isn’t Better
  • Snap Judgments
  • Kitchens Best Large Project Return
  • Consider Your Region
  • Awash in a Sea of Factors

Looking Sharp – The Debate over Staging

Everyone wants to get really strong bids when they sell their house, and that often involves sound strategy.

The two most obvious pieces of preparation are a deep-clean and staging of your home.

If you haven’t thought much about staging, it’s basically preparing your home for potential buyers – such as removing clutter and rearranging furniture. It’s worth noting that the staging industry came under fire last year when a study found that the practice does not actually add value to a home. However, the same study concluded that sprucing the property up does make it likelier a buyer will become interested in the home (indirectly increasing its value).

Ohio Coldwell Banker agent Virgil Mathias firmly believes that staging is effective and well worth the cost, so much that he always has it done. “After years of doing this, I feel very strongly about it,” he says. “We wouldn’t pay for it if we didn’t think it worked.”

It seems highly unlikely that staging doesn’t increase value, but there is another option to consider that’s a bit more aggressive: remodeling.

Comparing Cost to Value

Large projects typically will not allow a home seller to recoup the full cost. However, there are some repairs and enhancements that make better sense than others. Some will almost completely be recovered in a sale, while others may not be as good from a strict investment perspective but make it likelier that you attract multiple offers (as when you can show off a new kitchen). It also just helps to know what home-improvement projects are the smartest for you to enjoy years in advance of a sale (since the payoff typically doesn’t match the price).

Here are some basic findings:

Bigger Isn’t Better

A major rule of thumb right now is that smaller, less involved projects are the best investment, according to a report from the National Association of Realtors (NAR). “The national average cost for a steel door replacement was $1,230, for example,” explains the NAR’s Stacey Moncrieff. “That’s the least expensive project on the list, and it ranks highest on the payback scale, returning 101.8 percent nationally on average.”

The report looks at 102 different markets, and the door makes back its expense completely in 43 of them. Out of the 36 different types of projects analyzed in the study, four others pay themselves off completely in most markets: minor kitchen remodel, midrange wood window replacement, luxury garage door replacement, and midrange garage door replacement. In other words, five of the six smartest remodeling projects you can buy are replacements – which also tend to be relatively inexpensive.

Specifically, here are the top five in terms of cost vs. value recovered:

  • Replacement of entry door – 102%
  • Replacement of manufactured stone veneer siding – 92%
  • Replacement of midrange garage door – 89%
  • Replacement of fiber cement siding – 84%
  • Replacement of luxury garage door – 83%

Snap Judgments

People look for homes online now, so they really do quickly judge whether or not they think your home is appealing. For that reason, you will get the best returns for replacements that are immediately apparent, such as garage doors.

“Siding replacement also provides great value at resale,” says Moncrieff, “particularly … manufactured stone veneer, which is expected to recoup 92.2 percent of its cost nationally on average.”

Kitchens Best Large Project Return

When we think about a remodel instead of a replacement, the only project in that category that is in the top ten in terms of recouping cost is the minor kitchen remodel. Across the United States, a typical bill for this project is $19,000, 79% of which is recovered in additional value at sale.

Consider Your Region

The best region in the United States for payback on remodeling is the Pacific region (California, Oregon, Washington, Alaska, and Hawaii), with six projects that offer greater than a 100% return. East South Central (Kentucky, Tennessee, Alabama, and Mississippi) is the second best place to make home improvements, with two projects that yield better than 100% in value improvement over cost.

Awash in a Sea of Factors

There are really many factors at play when we think about the value of a certain replacement or remodeling project, including geographical location, common updates in the neighborhood, how well the project is completed, and how critical that particular project might be to an individual buyer.

Selling a home can be mind-boggling, so looking for a new one should be fast and intuitive. At, we are disrupting the real estate market with a core focus on higher quality service for buyers and sellers. Find a new home now!

Homeownership in Flux: Yesterday & Today

Homeownership isn’t for life anymore, with Americans now moving much more than they did a few decades ago. As the market changed with the housing crisis, so did the amount people are spending to fix up their homes, as well as the number of people buying second properties for vacation homes or investment.

  • Moving the American Heart
  • Remodeling Still Big Business
  • Doubling the American Dream
  • First-Timers vs. Retirees
  • Finding a New Home

Moving the American Heart

Home may still be where the heart is, but it’s not necessarily where we stay put.

If you look back at previous generations, people used to stay in one home for a couple of decades. They would work away at their home loans until they truly 100% owned the house and remain in it into old age. Today, that’s the exception to the rule.

As of 2007, a homeowner will sell their house about every six years on average. Americans have become moving experts, packing everything into boxes and heading to new locations 11.7 times throughout their lives. “At age 18, a person can expect to move another 9.1 times in their remaining lifetime,” explained the US Census Bureau, “but by age 45, the expected number of moves is only 2.7.”

Longevity isn’t the only way that the typical homeowner profile is changing. Today, married couples buy houses more often than anyone else (representing three out of every five buyers), but single women have become the second-largest demographic.

Remodeling Still Big Business

Another important way that homeownership has changed is the amount that’s invested into the house once it’s purchased.

Homeowners invested $227 billion on remodeling in 2007. About 25% of that was spent on fixing and maintaining houses, while the other 75% went to refurbishing and upgrading, noted Home Insight. The capital spent specifically on improvements was approximately $2300 per property.

Part of the reason the remodeling figure was so high was that some people were spending far more than that average. Many families were overhauling their bathrooms and kitchens eight years ago, spending tens of thousands of dollars. Those spending over $20,000 on improvements represented 9% of the homeowner population.

Well, that $227 billion was actually the peak, says 2013 data highlighted by Rose Quint of the National Association of Home Builders (NAHB). Now, the improvement and repairs total has dropped to $150 billion. “That was 34% less than in 2007 ($227 billion), 19% less than in 2009 ($186 billion), and 16% less than in 2011 ($178 billion),” said Quint. “In the 10 years included in this analysis, total homeowner remodeling expenditures have only been lower once: in 2003, when they were $128 billion.”

In other words, yes, home improvement has shrunk considerably, but you could say that’s a correction after the excessive zeal of the housing bubble. The other way to look at the remodeling market is that it’s expanded 17% since 2003, growing from $128B to $150B.

Doubling the American Dream

People move around, but they also sometimes double-down. Almost 6% of homeowners had an additional home in 2004, with the two homes typically separated by no more than 150 miles.

Generally speaking, this “second home” segment is of working age. Many use it as an investment property, often renting it out. For others, though, this alternate property is a getaway located in a scenic area.

Like remodeling, this figure has understandably dropped considerably since the housing crisis as well. Here is the amount of Americans with second homes, as surveyed in the Spring of each year since 2008:

  • 2008: 12.6 million
  • 2009: 12.4 million
  • 2010: 12.4 million
  • 2011: 12.4 million
  • 2012: 11.8 million
  • 2013: 11.6 million
  • 2014: 11.0 million
  • 2015: 10.5 million

In other words, in the last seven years, there has been a gradual 17% decline in the population of Americans who own a second home.

First-Timers vs. Retirees

When people retire, it’s typical to downsize. As people age, they don’t want to have to clean or maintain such a large property. They also want to reduce their expenses.

One thing that has withstood the test of time is that smaller properties have always been attractive both to older generations and to those entering the market for the first time. When realtors show smaller properties near various amenities, attendees of open houses are often a mix of millennials and seniors. “This creates an interesting dynamic as move-down buyers find themselves in competition with first-time buyers for the same housing stock,” said Home Insight. “And when demand exceeds supply, the prices tend to rise.” In other words, the prices on smaller homes can sometimes be inflated because diverse demographics want them.

Since retirees sometimes have difficulty purchasing a smaller house due to the competition, they wisely hesitate to sell their existing homes. That understandably creates a problem, though, because the sale is often necessary to free up cash and credit for the trade-down. One option for empty-nesters who can’t afford paying on both homes is to go ahead and sell, get a storage unit for a few months, and live in a rental or extended-stay hotel for a few months.

Finding a New Home

We move much more often than our parents did. We don’t invest as much in our homes – although it’s still a huge total. The experience of homeownership is always adapting to different cultural and economic factors. The critical role of homeownership as a piece of the American Dream remains the same, though.

At, we are here to support you in your efforts with the quickest way to search real estate listings online. Find a new home now!

Homebuyer: Watch Your Back

When one man went through the homebuying process, he realized that some of the professionals he thought were his advocates actually had clandestine conflicts of interest.

  • Tip #1 – Understand real estate agency relationships.
  • Tip #2 – Be skeptical.
  • Tip #3 – Know you’re in the driver’s seat.
  • Tip #4 – Educate yourself.
  • Tip #5 – Don’t get paranoid.
  • A New Home

Duncan Hood decided that he wanted to buy a house in Toronto, so he signed on with three real estate parties: an agent, a mortgage broker, and an attorney. He was dismayed to realize as the home search progressed that some of the individuals he was paying to help him were actually also getting paid by a third party.

He offers a few pointers based on his own experiences searching for a new home in fall 2014.

Tip #1 – Understand real estate agency relationships.

What is the difference between a subagent, a disclosed dual agent, a designated agent, a transaction broker, a buyer’s representative, and a seller’s representative? You need to understand not just the roles that are played but who is paying your mortgage broker, agent, and attorney – which in turn tells you where their allegiances lie.

Hood thought that he was the exclusive client of the agent, that it was a straightforward one-on-one relationship. “[B]ut it turns out she gets paid by the seller of the house, splitting a 5% commission with the seller’s agent,” he explains. “My mortgage broker wasn’t paid by me either, but by the financial institution that provided my mortgage.”

Even his attorney recommended a service based more on lining his own pockets than dispensing real expert advice – as discussed below.

(Your first step to cram on agency relationships is the Realtor Magazine brief on agency relationships.)

Tip #2 – Be skeptical.

You don’t want to ever confuse yourself into believing someone is looking out 100% for you when they have other relationships that are also impacting the way they behave. Hood notes that he hired an agent to help him get the price on the house as low as possible, but he later realized that his agent would make more money the higher the sale price.

He also found out that his mortgage broker would collect a commission from the firm providing the home loan, which would also be greater if he got Hood to agree to a higher interest rate. “To me that’s a stunning conflict of interest,” says Hood, “and it wasn’t revealed until I signed the mortgage papers.”

Tip #3 – Know you’re in the driver’s seat.

Now keep in mind, the agent will get zero dollars if you decide against buying. If you feel like the service is problematic, you can and should end your relationship with them.

Since brokerages don’t want that to happen, they will give you a contract called a buyer representation agreement that’s required to work with them. However, you can tell them that you’ll only sign for a certain length of time. Also, agents will generally terminate their contract with you if it’s obvious you aren’t going to do business.

Tip #4 – Educate yourself.

Homeownership has certainly changed in one critical way between a couple generations ago and today. Back then, “folks lived in their homes 15 or 20 years, or more,” explains housing market data portal HomeInsight. “Many paid off their mortgages and stayed in their homes well into their retirement.” Now, on the other hand, the typical person moves almost a dozen times (11.7) throughout their lives. Ownership of a specific house is now short-term, lasting six years on average.

Since these transitions are so much more common, it’s a wise investment to pick up some of the information that is considered the specialty of agents, brokers, and attorneys so that no one can exploit you. For instance, Hood used his understanding of the title insurance market to find a better policy than what his lawyer suggested, the latter of which paid a commission.

Tip #5 –  Don’t get paranoid.

One must be careful, but don’t get paranoid. After all, agents are highly dependent on referrals, so they want you to be happy. Despite his concerns and warnings, Hood saved well over $30,000 thanks to cogent advice from his own realtor.

Plus, “after some prodding, I got a good rate on my five-year fixed mortgage from my broker too (2.79%),” he recounts, “and even my lawyer came through.”

The fact is that even if the professional relationships of realty aren’t always working in your best interests, the average person needs that expert guidance. It can obviously be valuable too, as indicated by the tens of thousands Hood kept in his pocket.

A New Home

Do you want to buy a new home? You deserve transparency. Search online listings through a source with comprehensive information that you can trust: Find a new home now.

Are You “House Poor”? So is Your Neighbor

According to a recent study, most of us can’t afford our homes – but there are a couple of silver linings.

  • Reapplying the “28/36 Rule”
  • House-Poor Nation
  • Two Silver Linings
  • Building Equity with Your Own Home

Reapplying the “28/36 Rule”

The global housing crisis officially ended six years ago, but American families are still struggling to make ends meet. Although there were various powerful forces at play in the leadup to the residential real estate crash, the economic meltdown served as a wake-up call to rethink our finances and be careful not to overextend ourselves.

One way that financial advisors have responded is by reasserting the value of the traditional 28/36 rule, a nutshell guideline that can be used to build a smarter budget.

The rule is fundamentally focused on debt. It states that a family should cap the total amount spent on basic home costs (including mortgage/rent, homeowner’s/renter’s insurance, and property tax) at 28% of gross income. Beyond the amount spent on the home, only an additional 8% of income should be spent on auto loans, hospital bills, credit cards, student loans, and other debt payments – for a grand total of 36%.

Some advisers are questioning the specific idea of applying those percentages to gross earnings (pre-taxes), arguing instead that they should be applied to net income (post-taxes). Applying the rule to take-home pay makes it much more achievable for the average household, explains Joseph R. Birkofer of Houston-based Legacy Asset Management.

The key is that it’s doable. “I want people to have more than a house, I want them to have a life, too,” says Birkofer. “The application of the 28/36 rule can be an eye opener and a ‘go slow’ or ‘reform now’ sign.”

House-Poor Nation

For many Americans, though, their immediate costs for debt are already in excess of the 28/36 rule. We may have gotten more conscientious about our housing costs, but many of us are either stuck in mortgages or living in cities in which the rental rates are skyrocketing (such as San Francisco – where the rent rose 15% between 2014 and 2015).

In fact, every other one of us (52%) has had to take a significant hit in order to pay our housing costs between 2011 and 2014, per a report funded by the MacArthur Foundation. People have adjusted by working additional hours, redirecting retirement funds toward everyday costs, reducing medical expenditures, building up credit card debt, and moving to cheaper communities.

The issue of home prices being out of reach for many people is a critical one, according to National Association of Realtors economist Lawrence Yun – who notes that the average sale price of a house went up 20% between 2012 and 2014 while wages stagnated. The only way the cost of those houses will go down is if more houses are built – and last year’s housing starts measured well below the 1.4 million average units constructed each year since 1959.

When we really get to the crux of the problem is when we look at how many Americans are living in areas where the average mortgage payment represents greater than 30% of the average salary. That’s the case in the areas where 15% of homeowners live. The most absurd examples of an imbalance between mortgage and income are seen in New York and San Francisco, where mortgage is 77% and 70% of earnings, respectively.

Young people are having particular difficulty transitioning to homeownership, according to RealtyTrac vice president Daren Blomquist. “The slow jobs recovery for young adults has made it harder for them to save and to get a mortgage,” he says. And it’s true: more than four in five young adults (84%) are putting off significant milestones, such as switching from renting to owning, due to market forces.

It may look as if people in their 20s and 30s simply want to keep renting, but that is not the case. In fact, 7 in 10 renters hope to one day become homeowners.

The issue is that many of us are still in recovery mode after the housing crash. Since 2008, 7.5 million people saw their homes evaporate in short sales or foreclosures. Even more, 9 million homeowners, still have upside-down mortgages.

Two Silver Linings

Not everything is doom and gloom, though. For one thing, equity has been on the way up. From the nadir of the housing debacle to 2014, homeowners gained $4 trillion of equity. That general trend has continued through 2015.

Furthermore, the building of additional houses mentioned above by Yun as a solution to rising home prices has actually started to materialize.

“Housing starts in the United States rose 6.5 percent to a seasonally adjusted annual rate of 1,206,000 in September of 2015,” says market resource Trading Economics, “following an upwardly revised 1,132,000 in August and beating market forecasts.”

Building Equity with Your Own Home

As you can see, many homeowners are still underwater. However, the housing market has recovered. For many of us, homeownership is the wisest next step to build a future for our families and establish equity rather than throwing our money away on rent.

Are you looking to buy? We deliver information on properties that fit your criteria along with neighborhood amenities that suit your lifestyle. Find your new home now.

5 Secrets Your Real Estate Agent May Keep From You

  1. “Heavy machinery is on its way.”
  2. “My commission is not set in stone.”
  3. “I make more money when the sale is through my brokerage.”
  4. “I might have to tell the seller everything you say.”
  5. “I am in cahoots with the home inspector.”

You want to keep in mind when you are buying a house that you must exercise the same caution as you do when buying a car. Since you often spend more time with a realtor, you can start to forget that they are a commission-based salesperson. Agents are incentivized to want you to pay as much as possible, as quickly as possible. That means they will sometimes withhold certain information that would be helpful for you to know.

Of course, there is a range of honesty levels among realtors, notes Home Buying Kit for Dummies co-author Eric Tyson. “Real estate agents provide an important service, and the top ones have your best interests at heart,” he says, “but you should be aware of the practices that go on to protect yourself.”

Here are a few secrets that your agent may be keeping from you:

  1. “Heavy machinery is on its way.”

If your agent is hungry to sell a house as quickly as possible, they will be less likely to mention anything negative about the general area. For instance, there might be a huge construction project that’s just starting in a couple weeks, or a registered sex offender may live on your block. The city could even be preparing to replace the grass in the park across the street with artificial turf, as they did when I was living in Brooklyn.

The real estate agent should tell you that information. National Association of Realtors President Moe Veissi mentions that you should ask agents about the local schools, crime figures, post offices, and whatever other neighborhood amenities might concern you. You also want to know how long they have been a realtor and if they are in any professional associations – since those groups typically promote ethical standards for their members.

  1. “My commission is not set in stone.”

How much commission typically goes to brokers and agents? Realty analyst Real Trends estimates the nationwide average is 5.4%. When the house is sold, half of the commission goes to the buyer’s agent and half to the seller’s agent. The specific rate is debatable, though.

The seller is the one who has the most control over commission. They can work with an agent who will accept a lower rate. It will be easier to negotiate a better percentage if your property is worth more.

You just want to make sure that your agent isn’t going to take all the money out of the share going to the buyer’s agent, explains Tyson. “If your broker advertises a fee less than what buyers’ agents normally get,” he says, “buyers’ agents are less likely to show your house.”

  1. “I make more money when the sale is through my brokerage.”

An agent gets a bigger check if the property is one of the brokerage’s listings. One option when you buy is to use a broker who only works with buyers so that there isn’t a conflict of interest. You can find realtors of that type via the National Association of Exclusive Buyer Agents (NAEBA).

NAEBA President Benjamin Clark argues that working with agents who don’t sell is especially critical given the way real estate started changing in the mid-90s. “Since several states discarded the common law of agency in the mid-nineties,” he says, “the real estate agent’s duties of obedience, undivided loyalty, confidentiality and reasonable care have been greatly diminished.” He points out that the housing crisis associated with the Great Recession was caused in part by unscrupulous or desperate agents guiding homebuyers and investors into mortgages that were not in their best interests.

  1. “I might have to tell the seller everything you say.”

Many people will accidentally mention something to an agent who is showing them the house that they should not – such as the amount of a mortgage preapproval or the desired speed of a move. Often there are laws in place that require the agent to pass on whatever you say to the sellers.

Remember that different agents are on different teams. Be careful not to talk openly when you are within earshot of the other side.

  1. “I am in cahoots with the home inspector.”

Generally when you are buying, your agent will give you a list of home inspectors that they recommend. Like agents, some of these inspectors will overlook problems so that the sale moves more quickly toward a close. Shady brokers will keep working with them for the favor.

Now, you won’t always run into this problem, of course, notes Tyson. “If you picked a good agent, you should get high-quality referrals,” he says.

Nonetheless, it’s a good idea to speak with several inspectors and get a sense of their credentials. You can ask for a sample inspection report. Also see if they are in the American Society of Home Inspectors (ASHI) or a similar professional group.

Checking the Neighborhood While you Search

Watching out for realtor secrets in the above categories can protect you when you buy a house.

You can actually educate yourself on the community (the #1 secret) ahead of time through All our property information is integrated with school ratings and local amenities so that your house search is optimized for your lifestyle. Find a new home now!

Why Was Your Home Offer Rejected? 4 Possibilities

  • Much at stake and much to do.
  • The power of rejection.
  • #1 – It’s “Too much house.”
  • #2 – You have strong competition.
  • #3 – You lack preapproval.
  • #4 – You want to extend escrow.
  • Conclusion

Much at stake and much to do.

There is a lot on the line when you buy a house. Most of the stress is simply a matter of scale. No one needs to check your credit when you purchase a candy bar, because you don’t have to take out a massive loan to purchase it. Beyond the sheer size of a home purchase, there are also emotions involved – strong emotions related to one’s sense of identity and the notion of achieving the American Dream.

Plus, there isn’t just much at stake but several major steps to complete – strengthening your credit, finding the right mortgage, selecting the best agent, and going out to look at houses.

At the end of the day, you just want everything to move smoothly. Sometimes, though, it doesn’t. Sometimes you work carefully through the whole process, and your home offer gets turned down.

The power of rejection.

Probably the last thing you want to hear if you just had a home offer rejected is how powerfully rejection impacts your body, but understanding what’s going on can help you take care of yourself.  Seriously, rejection hurts.

In fact, functional neuroimaging (the accepted method of tracking brain activity) has revealed that the part of the brain that’s at work following rejection is the same part of the brain that lights up in response to physical pain.

The processing of physical pain and social rejection is so similar that a common headache medication – acetaminophen, the ingredient used in Tylenol – is effective at decreasing the impact of rejection. That point is made by psychologist Guy Winch, PhD, author of the book Emotional First Aid: Healing Rejection, Guilt, Failure, and Other Everyday Hurts.

“In a study testing the hypothesis that rejection mimics physical pain, researchers gave some participants acetaminophen … before asking them to recall a painful rejection experience,” he says. “The people who received [acetaminophen] reported significantly less emotional pain than subjects who took a sugar pill.”

Solving the emotional headache is one thing. Why were you rejected, though? Here are four common reasons.

#1 – It’s “Too much house.”

Sometimes houses are simply too expensive. A realtor might want you to look at properties that are beautiful but just don’t make sense for your budget. Whatever makes sense to you in terms of a price range, stick to it firmly, advises finance writer Valencia Higuera.

“[A]fter looking at [pricier] homes, properties within your price range may lose their appeal,” she says. “In order to make a more expensive home affordable, you may submit a low-ball offer – which often doesn’t sit well with sellers.”

An offer that is excessively low (less than 75% of the asking price) can be irritating to the seller. Keep in mind that they have their own money issues. Out of the sale, there must be money for the agent, the current mortgage, and a down payment for their next property.

Be reasonable about what you can afford to protect everyone’s time, including your own.

#2 – You have strong competition.

You aren’t the only one looking for a house, remember. The seller may have a better offer currently in their hands.

You typically want to be close to the asking price, and you really don’t want to bid too far below what you are willing to pay if you are in love with the property – especially if there are likely other potential buyers.

“Never assume that other buyers will bid low,” says Higuera, “[A]nd even if they have, it only takes one person offering slightly more than your bid to knock your contract off the table.”

#3 – You lack preapproval.

Many sellers only want to look at offers from people who have been preapproved for home loans. Preapproval is a relatively simple process, and when it’s over, you actually benefit as well – because you know exactly how much money is going to be available to you through a mortgage.

#4 – You want to extend escrow.

People do not want the contract sitting in escrow for very long waiting for your down payment. Specifically, sellers generally don’t want to work with anyone who can’t close within a month, Higuera notes. “They’re undoubtedly ready to move forward with their life,” she says, “or they may need to sell quickly for other reasons, such as a divorce, an illness, job loss, or relocation.”


As you can see, there are various reasons why your home offer may have been rejected, and rejection really does hurt. However, there are plenty of other options out there.

If you want to look at different price ranges or just get back out and find new properties quickly, that’s the whole point of Select a city now.

Six Mistakes to Avoid When Lowballing a Home Seller

  • Lowballing is Seasonal
  • #1 – Lack of Knowledge
  • #2 – Poor Selection of Real Estate Agent
  • #3 – Failure to Provide Evidence
  • #4 – Unsureness About Your Price Limit
  • #5 – Obtuseness or Difficulty of Offer
  • #6 – Disregard for the Supremacy of Cash
  • Top Mistake when Searching

Lowballing is Seasonal

The Lake Tahoe community in California is heavily dependent upon skiing. In fact, the winter sport boosts the local economy there $564 million, according to Patrick Tierney, a professor at San Francisco State University.

Just like in Lake Tahoe, different elements of the economy change with the seasons. You may know that nationwide car sales tend to follow a seasonal pattern, and that’s the case with the housing market too. One of the best examples is that homebuyers are more likely to be successful with lowball offers in the fall. People often want to sell during the summer; once the fall hits and the holidays start to approach, sellers become more eager to close a deal.

Some even decided that they will wait for the market to get hot again, pausing promotion of their house until the new year. Even those people are often willing to take a lowball offer just to get the house out of their hair.

Going low with an offer will often prove successful when a home has failed to sell – so you will see many situations in which it works. However, it can also backfire. Here are a few mistakes to avoid.

#1 – Lack of Knowledge

You really want to have as much information as possible. Specifically, you want a market analysis comparing the property to sale prices of similar properties nearby to figure out a reasonable value.

Obviously, the farther you are below fair market value, the less likely that your lowball effort will work.

Also keep in mind that lowballing is highly location-specific. Anywhere that the market is skyrocketing, such as Northern Virginia or San Diego, you will have difficulty playing homebuyer limbo even in the fall.

#2 – Poor Selection of Real Estate Agent

Real estate agents will often be overly cautious about lowballing, says California real estate analyst Patrick Carlisle. Realtors who are new or otherwise desperate are more likely to move quickly toward a sale that gives them a strong commission. Some agents also just aren’t very good at negotiating.

“If it’s an appealing, well-priced property that has five or six offers on it, well, going in 10% or 20% under asking isn’t going to get you anywhere,” says Carlisle. “But on a property that has been overlooked by the market and doesn’t have multiple bidders, it often doesn’t hurt to go in low.”

#3 – Failure to Provide Evidence

It’s unwise to just throw a lowball at the seller without providing fair justification. You should be able to tell the seller exactly why your offer is what it is, advises Atlanta Re/Max agent Bill Golden.

“Sellers want to know why you’re coming in so low,” says Golden. “Include recent [nearby sale prices] or issues with the property that validate why your offer is so low.” He also notes that you should be tactful and phrase everything constructively.

#4 – Unsureness About Your Price Limit

Everyone wants to get a good price on a house. Actually, the funny thing is that the primary motivation is social. According to Arizona State University real estate professor Jay Butler, no one wants to hear that they made a poor home purchase.

Obviously a sale is essentially a compromise: sellers are only willing to go so low. Usually that low threshold is determined by the seller’s level of equity.

If you want to submit an aggressive offer, you still want to know what you are really willing to pay, notes Carlisle. “At some price point, the deal is no longer worth doing, no matter how great the property.”

You certainly want to stick to any ceilings that you set – which typically means that it’s not a good idea to express absolutes within an initial offer. You can often sour a deal by stating that something is a “final offer” and then circling back around with another $5000.

#5 – Obtuseness or Difficulty of Offer

If you are really lowballing, your offer needs to otherwise be impressive to the seller. Let them know that you are ready to close immediately.

You don’t want anything blocking your ability to buy. For instance, you don’t want to have to sell your current house to free up the down payment for the new property.

Get your paperwork together too, particularly the mortgage pre-approval letter.

#6 – Disregard for the Supremacy of Cash

Don’t think that offering cash will always get you a deal because it won’t. Certainly, though, it doesn’t hurt to let the seller know that you are an all-cash buyer. People really do want cash in hand – although that doesn’t mean they will go below their minimum limit.

Cash is especially helpful if you are buying from a bank, as with a foreclosed property. A financial institution would prefer to get cash rather than wait for a mortgage to go through.

Top Mistake When Searching

As you can see, it’s easy to make missteps when you start negotiating a house deal, especially if you are truly low-balling the seller. Hopefully being aware of those common issues will help you avoid them.

In fact, the entire process of buying a home presents opportunities for errors. For instance, when searching for a home, many buyers fail to conduct their search using the quickest way to search real estate listings online, Find a new home now!