Real Estate Tips & Resources
The Cost of Waiting: Reasons to Buy a Home in Early 2022
Since the arrival of the COVID-19 pandemic, the real estate market has proven to be a wild ride for buyers and sellers alike – from the cutthroat bidding wars to the all-time-low interest rates. A lot of would-be buyers are understandably nervous in early 2022 and are considering waiting for the market to cool down. But holding off on buying your new house might turn out not to be the best strategy. The housing marketing outlook for 2022 According to U.S. News & World Report, housing experts predict the following trends to take shape this year: “The inventory of available homes will remain tight, and rising prices will put pressure on affordability.Interest rates will rise, but wage growth may help to provide a balance for buyers.The rental market will see continued growth, but likely stabilize somewhat compared to the last two years.There’s a lot of anticipation for new home construction, but when labor and supply issues [will] ease enough for homes to be completed is unclear.” Housing prices aren’t guaranteed to drop For potential buyers wondering if they should wait to see if home prices will drop before buying, these market insights shed some valuable light on why you should consider buying now. And while we can’t predict the future, current data shows the housing market isn’t going to dramatically cool anytime soon. Although prices may stabilize a bit as material shortages and supply chain delays ease, forecasters can’t pinpoint when we’ll see those changes trickle down to the buyer level and impact housing prices. The takeaway? If you’re ready to buy a home, and you’re financially prepared to do so, it’s important to consider the risks of waiting and the potential for housing costs to continue to rise in the coming months. Responding to the question whether home buyers in tight housing markets (like Denver) should wait for prices to drop, Compass real estate agent Taylor Wilson says: “As the old proverb states, ‘The best time to buy a home was 20 years ago. The second best time is today.’ On a macro level, housing relies on what all markets rely on: supply and demand. In Denver specifically, demand is strong for a variety of reasons. Denver is a top city for millennials to move to and they are the largest buying population. We are LESS expensive than many cities that buyers are moving from, so we are relatively inexpensive. I believe Denver has a long run of strong appreciation ahead of it. That said, waiting for prices to drop will leave many buyers priced out of the market." Interests rates are rising At the end of 2020 and early 2021, mortgage interest rates hit historic lows. However, these record lows are no longer a reality, as interest rates have already begun to rise. Gay Cororation, Senior economist of the National Association of Realtors (NAR) shares, “Mortgage rates are expected to slightly move up, to an average of about 3.5 percent.” David Keyte, Team Lead and real estate broker with Bend Relo at West + Main, in Oregon, had this advice for buyers in 2022: “While there is always a risk of a price correction, if a buyer is comfortable with their monthly payment and the home meets their needs, there aren’t many strong arguments to delay. Each month people delayed in 2021, they saw their purchasing power erode by 1%-10%. We all have an embedded cost of housing, whether it’s rent or a mortgage. Speculating on trying to time a market correction has caused painful losses over the last decade. With inventory at all time lows, we are advising our clients to lock in the low rates and get into something they love." If you’ve done your research, crunched the numbers, and are financially prepared to shop the housing market, the first half of 2022 is as good of a time as any to buy a house. Any delay could lead to higher costs due to a rise in housing prices and/or interest rates. Another cost consideration is climbing rent costs. For those currently renting, waiting to buy a home could potentially mean more out-of-pocket monthly expenses and less opportunity to save. Is waiting to buy the best strategy? Timing the market is nearly impossible, as circumstances could change at any given point in time. One thing is certainly clear: it doesn’t look like housing prices will drop dramatically anytime soon. So the real question is, why risk waiting? Taylor Wilson warns, "The home a buyer loves today will be 5%-10% more expensive next year, and interest rates may be higher, putting that home out of reach. Buyers hoping to ‘time the market’ may find themselves renting for the foreseeable future." If you’re prepared to buy a house in early 2022 and are just waiting for the right time to pull the trigger, set yourself up for success by aligning yourself with a trusted mortgage lender sooner rather than later. At Accept.inc, we help everyday homebuyers who qualify for a mortgage gain the competitive edge needed to make a winning offer using the power of cash, while offering competitive rates and no extra or hidden fees. Ready to get out there and snag your dream home? Get Cash Approved today!
Kelly K. | Jan 28, 2022
How to Choose a Denver Real Estate Agent
The housing market in Denver over the past few years has been characterized by low interest rates, low inventory, and ready buyers. A city desirable for its location and job market, Denver is attracting a growing number of young professionals and young families, many of whom are looking for a place to live and need help navigating the exceptionally competitive local real estate market. How can they make sure they find the right house and put in a winning bid, instead of fighting a losing battle for months? Enter the role of the real estate agent. Challenges Facing Buyers and Denver Real Estate Agents Even with popular house listing sites and countless other digital ways to monitor the housing market, a real estate agent is an invaluable resource. But choosing a real estate agent is no small task. Especially when the housing market is as hot as it has been -- and will likely continue to be -- in Denver. In January 2022, Denver buyers looking for single-family detached homes faced an average price of over $700,000, according to the Denver Metro Association of Realtors monthly report. And homes continually sell above list price while staying on the market for less than three weeks. Neighborhoods like Capitol Hill, Highlands, LoDo, and Baker, for example, are gaining popularity for being walking distance to family-friendly food and attractions and prospective homebuyers should expect to face stiff competition when making offers. For buyers to have a chance at winning properties in these kinds of hot Denver neighborhoods, they need a real estate agent who is going to be proactive when it comes to getting showings, negotiating, and closing quickly. How to Choose a Denver Real Estate Agent Buying a home is one of the most important decisions of your life. So choosing a real estate agent that is knowledgeable and experienced is critical. Not only that, but a buyer’s agent should present you with options and financial strategies that will put you ahead of the competition. Make a list, then start to interview It can be difficult to know how to choose a real estate agent that has all of these qualifications. There are many online tools and databases for researching buyers agents. And don't forget to ask your network of friends, family, and coworkers for personal recommendations! You can start by putting together a list of agents that may be a good fit. But a face-to-face or phone interview is one of the best ways to get a feel for how they communicate and learn if they are a good fit for your needs. Ask the right questions During your interview call with potential Denver real estate agents, make sure you’re prepared with a list of questions. Some of these questions should be standard for the industry. But you should also include scenarios and questions that are personal to your situation as a buyer. Here’s a checklist of some topics you can cover when talking with a buyer's agent in an interview. These questions are designed to help you gauge how they communicate and what they'll be like to work with. Questions to help you choose a real estate agent Ask about their knowledge of the Denver marketWhat are current market conditions and what kinds of offers are sellers looking for?Which neighborhoods best meet your needs and desired lifestyle?Which areas are they most familiar with and what other places should you be considering?Their understanding of your financial options and opportunitiesHow much house can you realistically afford?What are the different types of mortgages and financing options available to you, including cash offers, delayed financing, etc?What is their experience working with Accept.inc and making all-cash offers? Their experience managing and closing transactionsWhat's an example of a difficult purchase agreement they've had to facilitate?Have they worked with a Denver mortgage lender specializing in cash offers?Their portfolio of sales Ask specific questions about working with buyers similar to you and your financial situationAsk specific questions about recent home sales in neighborhoods where you’re looking to buy How many deals have they successfully brokered in Denver in the last year? Ultimately, the three things that matter the most when choosing the best Denver real estate agent in your specific home search are as follows: One: Do they listen to you and understand your needs? Two: Are they responsive? This means that they are quick to respond to you and to other parties involved in the process. Three: Do they have a track record of being able to close a lot of deals successfully? Your initial conversations with potential buyer's agents should be used to give you a good sense of how each agent stacks up in these three areas. And then don't forget to make sure you like this person. After all, you may be spending a lot of time with them over the coming weeks or longer. You want to make sure you will feel like you're getting the level of service, attention, and respect of your needs that will make you feel good about the process. Figuring out how to choose a realtor in Denver is no small commitment, but a good buyer-agent partnership will make the process not just easier, but more successful. Your agent is your primary advocate when dealing with the seller and is a key member of your home-buying team. So choosing the right real estate agent is essential for securing your Denver dream home. Finding the perfect real estate agent and lender combo One final note: In a competitive sellers' market like Denver, you may have the best real estate agent in the greater metro area, but if you're not able to write a competitive offer, you'll still face an uphill battle. Real estate agents need to be well-versed in the various financial strategies available to buyers to give them every possible advantage. Understanding how to leverage cash offers, for example, to win your dream home could be the difference between having your offer accepted or not. Denver real estate agents who work with Accept.inc know that buyers making Accept.inc-backed offers are four times more likely to win a home and be able to negotiate better terms than buyers with traditional mortgages. With a real estate agent who is on the ball and a responsive lender like Accept.inc – a combo that can assure sellers you'll go from contract to closing fast – your offer is sure to outshine your competition. Buying Your Denver Dream Home with Cash Before you begin looking at houses in earnest with your new real estate agent, you'll need to have your financing lined up. If you haven't done so already, be sure to check out our tips for choosing the best mortgage lender. Accept.inc works with ordinary Denver homebuyers to help them buy a house with the power of cash and then pay it off like a regular mortgage over time. Apply to become Cash ApprovedTM and be ready to make your next house offer an all-cash offer in just a few days! Learn more about Accept.inc and how we work with Denver homebuyers and their real estate agents throughout the buying process!
Olivia G | Jan 21, 2022
The Hidden Discount of an All-Cash Offer On a Home
Psst...we have a home buying secret that you’ll definitely want to hear. Did you know about the hidden discount for buyers who make an all-cash offer on a home? Whether it's a buyer’s or seller’s market, leveraging the power of cash isn't only about winning a bidding war, it can also mean big savings for the everyday homebuyer. So, what type of cash purchase savings can you expect? And how can you tap into the same benefits as a cash buyer? Here’s a closer look. Is there a discount for paying cash on a home? In today’s cutthroat real estate scene, all-cash offers can give prospective buyers a real edge to win a bid. But what many buyers don’t realize is that cash purchasers have more leverage in a negotiation, providing numerous money-saving opportunities as well. Whether it’s a reduced total sale price, a lower down payment, more immediate equity, or more seller concessions, the advantages built into a cash offer means more green for your balance sheet. We're talking about tens of thousands of dollars, if not more. How much can you save when buying a house with cash? The average home price in the U.S. is currently at an all-time high, reaching over $400,000 in 2021 according to Statista. In a desirable and high cost of living (HCOL) city, home prices can be much higher. Denver's median home price soared to a record $600,000 in the summer of 2021 – a 25% increase over the last year. It's unlikely that housing prices in popular and expensive cities will drop dramatically in the foreseeable future. And for buyers, that means even a small cash discount on a house is a huge win, putting free money, or more equity, back in your proverbial wallet. According to new findings published by researchers from the University of California-San Diego, cash buyers paid approximately 12% less than those who used traditional mortgage financing over the past 40 years. Think about it: what would you do if you had the opportunity to save $72,000? The ability to negotiate better terms is considered a "hidden" cash discount because sellers aren't advertising a separate list price for cash buyers. But cash sales are the most attractive. Attractive enough to translate into savings. What kinds of concessions can you ask for when paying cash? When your superior cash offer gives you leverage, you may choose to bid lower than the list price or a competing offer. Or you can ask for concessions. You can also use findings from the home inspection as a bargaining chip, for example. Seller concessions can include anything from a credit for closing costs to certain repairs on the home. For homebuyers, closing costs can cost anywhere between 2% and 5% of the home’s purchase price, or $5,000 to $12,500 on a house valued at $256,000. However, depending on the state, that percentage can be as low as sub-1% or as high as 4+%. After forking over a pretty hefty down payment for a home, these closing fees can be a burden for buyers. As a homebuyer, you can benefit from cash purchase savings by asking the seller to cover all, or a portion of, your closing costs. Having extra cash in your pocket? That’s a win in our book. In a similar vein, you can request a closing credit to cover big-ticket repairs that the seller doesn’t want to do themselves. For instance, maybe the chimney needs repairing or the driveway is riddled with cracks and needs to be refinished. If the seller agrees to provide a credit for these items, it won’t reduce the home’s purchase price, but it will lower your out-of-pocket costs. In reality, there are other factors sellers care about beyond just the purchase price, such as net proceeds. By asking for a credit towards closing costs, it’ll decrease the amount needed to complete the sale, speeding up the closing timeline – which is just one of the benefits, to a seller, of accepting a cash offer. Cash offers are a better deal for regular buyers, too! Ok, sure. You're convinced that making a cash offer translates to cost savings on a house. But is this another case of only the ultra-wealthy being able to take advantage of hidden savings loopholes? Not at all! Anyone who qualifies for a mortgage can make a cash offer with the help of iLending pioneer Accept.inc. The process of making a cash offer with a mortgage is simple with our process. Even if you don't have the funds on hand to buy a house in cash, once you're Cash Approved, Accept.inc will provide you with the upfront funds needed to make an all-cash offer. Then you'll pay back the loan over time like a traditional mortgage. What does that mean? It means you'll get the leverage of cash to negotiate a discount AND you have the liquidity that comes with using a low-interest loan rather than sinking all your cash into property. The icing on the cake: you’re 4X more likely to win your dream home with a cash offer and it doesn’t involve any funny business or hidden fees. So, the real question is, what will you do with your cash purchase savings? Enjoy all the benefits that come with making an all-cash home purchase by becoming Cash Approved today.
Kelly K. | Jan 7, 2022
Delayed Financing for Cash Offers: Pros and Cons
It’s no mystery that an all-cash offer on a house is a huge advantage. In a highly competitive seller's market, a cash offer on a property can be the difference between getting your dream home or not. And in a buyer's market, a cash offer gives you extra leverage to negotiate on price or seller concessions. But most prospective homeowners aren't sitting on a giant stack of cash. Even if buyers do have the cash available, it may not be the best financial choice to tie it all up in a home purchase. This is where delayed financing begins to look like an attractive option. Delayed financing is a term you’ve probably heard before. So, what is it? And who can do it? We’ll unpack everything for you. What is delayed financing? Delayed financing is a way of buying a home with cash upfront and then, right after the purchase is complete, doing a cash-out refinance. In this case, you buy the house free and clear, and then take a loan out against the home afterwards in order to get back liquidity rather than keeping your cash tied up in your house. Essentially, delayed financing is a delayed mortgage. Homebuyers and investors get the advantage of being a cash buyer, then get a mortgage shortly afterward to get cash back out of the property. This avoids tying up cash in a house that could be used more productively elsewhere. Delayed financing exceptions and requirements There are certain eligibility requirements for homebuyers to take into consideration before using delayed financing. With traditional home equity financing, there is a requirement for the new homebuyers to be on the property title for at least six months. Delayed financing is an exception. The delayed financing exception allows homebuyers who pay cash upfront to apply for cash-out refinancing immediately. There are different delayed financing exceptions depending on Fannie Mae and Freddie Mac loans. And these can affect your cash-out refinancing. Researching these in advance and knowing your lender is important. When you choose a mortgage lender, ask questions about their loan processing time, documentation requirements, and their standards for a delayed financing cash-out refi loan. Some of the other qualifications you have to meet for delayed financing include: The purchase of the property has to be an arms-length transaction. The buyer must use cash to buy the property.The buyer must provide the source of the funds.If the cash used to make the initial purchase came from a HELOC on a different home, the proceeds from the delayed finance mortgage must be used to pay off that HELOC.The new loan amount cannot exceed the purchase price. Lastly, for delayed mortgages, homes also have to stay within a local loan limit based on location. For example, for single-family homes in most counties in Colorado, the loan cap was raised to $647,200 for 2022. But in Denver, the limit is $684,250 for a single-family home in 2022. Loans above these limits are considered "jumbo loans" and may not be eligible for delayed financing, depending on your lender. The Pros and Cons of Delayed Financing To recap, a delayed financing strategy requires cash upfront and has lots of special requirements. So, why would buyers want to do it? For older homebuyers looking to downsize and who have cash available, delayed financing could be a great option. Buyers who are downsizing typically have cash available from selling their more expensive house. Taking advantage of delayed financing means this homebuyer can act more quickly when buying their new, cheaper home with cash on-hand, because all-cash offers close faster and are more attractive to sellers. Then, this buyer can turn around and do a cash-out refinance immediately, under the delayed financing exception, to regain liquidity and take their time repaying the new loan. Similarly, for property investors, delayed financing keeps assets more liquid to support their real estate investment strategy. These types of buyers are in a category all of their own, usually with large sums of money allocated for buying and then flipping or renting houses. These are not your average homebuyers. That said, there are some advantages and drawbacks to consider when deciding if delayed financing is an option for you. Pros of delayed financing Gives buyers a competitive edge when buying a house with cash.Allows buyers to bundle closing costs and financing costs into the cash-out refinance.Helps buyers regain cash immediately instead of waiting 6+ months to refinance. Delayed financing may be a smart and strategic financial move if you have the money available to buy a house outright. However, not all homebuyers are sitting on this much cash. In order to take advantage of delayed financing, cash on-hand is a fundamental requirement. And one that disqualifies a lot of buyers. Cons of delayed financing Requires cash upfront to purchase a home. Requires that all qualifications (listed above) are met. These can vary by lender.Limits which lenders buyers can use depending on cash-out refinancing availability. Has loan limits for refi that cannot be exceeded. Requires leaving some equity in the home to avoid PMI.Allows only certain types of conventional and some jumbo loans. FHA and VA loans are not eligible.Comes with the risk of not closing the refi quickly or locking in the best rates, should rates rise by the time of the refi closing. . Comes with higher interest rates than a traditional mortage. If you are able to make an all-cash offer on a home but want to stay liquid, then a cash-out refinance with delayed financing could work. But there are calculated risks that come with this strategy that the average homebuyer is probably not willing to take. How to make an all-cash offer without delayed financing Delayed financing isn't the right option for most homebuyers. Whether it's the risk, the higher loan rates, or the upfront cash requirements, this type of delayed mortgage strategy attracts a small subset of buyers. Let’s say you’ve done your research and delayed financing just isn’t going to work for you. There is another option available for making cash offers on homes! At Accept.inc, we are the mortgage lender of choice for everyday Colorado homebuyers who want to make a cash offer on their next home. If you qualify for a mortgage, you can get Cash ApprovedTM. Once approved, you can make your next house offer backed by Accept.inc's proof of funds -- in other words, you're a cash buyer. But unlike with delayed financing, you'll already have the details of your Accept.inc loan, including your competitive mortgage rate, with no hidden fees. Once the closing process is completed, you begin paying back the loan just like a traditional mortgage. Accept.inc levels the playing field for any qualified homebuyer to compete with other cash buyers. All without needing upfront funds or complicated financing tricks. Now that you know the pros and cons of delayed financing, we think you'll agree that the Accept.inc alternative is superior in every way. Get Cash Approved today and start making cash offers without any uncertainty.
Olivia G | Dec 30, 2021