home buyer tips Archives - Columbus Ohio Real Estate | Buyer's Resource Realty Services

Ohio Sees Drop in Home Building Permits

RealSupport — Sat, 04 Nov 2023 05:51:04 +0000

Columbus home buyers have been dealing with below-normal home inventory for several years. Homeowners have been affected by low inventory as well, having little to choose from if they were to sell their current home. More recently, rising interest rates have made homeowners reluctant to sell and give up the low-rate mortgages they currently enjoy.

This leaves new construction as the best hope for improving Central Ohio’s home inventory. Unfortunately, home builder confidence took a hit as quick-rising rates impacted buyers and raised financing costs for builders themselves.

This is evidenced in the decline of single-family home building permit activity in Ohio. Data released by the National Association of Home Builders shows a 14% drop in Columbus home building permits year-to-date as of August 2023, compared to the same period a year ago.

Most of Ohio saw a reduction in single-family home building permits. Dayton Ohio permits fell 21%. Cincinnati permits fell 18%. Canton permits fell 17%, Cleveland fell 16%, and so on. The only area to see an increase in building permits was Toledo, which lined up 143 more permits this year compared to last year. Overall, Ohio has seen a double-digit decline in building permit activity statewide for 2023.

The National Association of Home Builders has been vocal about the impact of interest rate hikes on the industry. In a joint letter issued with the Mortgage Bankers Association and the National Association of REALTORS© to Chairman Powell on October 9, there is an excellent point: increases in housing costs are a leading source of inflation. Higher interest rates make housing costs more expensive and worsen the problem. This is a very simplified summary: you can read the exact wording at this link.

While the trade associations have found some sympathy among the Federal Reserve Board of Governors, many economists expect that interest rates may rise a bit further before leveling off. There is an expectation that rates may stay elevated well through 2024, unless an economic disruption forces the Fed to pivot.

In the meantime, waiting for lower rates, more home inventory, or an “easier” real estate market may not be realistic for Columbus home buyers. You cannot predict the future. But you can find opportunities today with the help of an Exclusive Buyer’s Broker!

As Exclusive Buyer’s Brokers, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Andrew Show
Exclusive Buyer’s Broker, CEBA-M, MCNE, CSP, PSA,e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services www.BuyersHome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

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How to Avoid Fraud During Your Columbus Area Home Purchase

RealSupport — Tue, 18 Jul 2023 08:25:12 +0000

Wire fraud is actively targeting Columbus home buyers and buyers around the country. If you are buying a home anywhere, you are at risk! Through sophisticated email phishing schemes, and the impersonation of legitimate parties, criminals have stolen millions of dollars in down payment funds.

Here are tips from title companies to protect your down payment from theft!

Be suspicious about ANY email changing the instructions for your down payment. Never accept “new” wire instructions that come through email. The more urgent and high-pressure the email sounds, the more suspicious you must be!

Call the title company’s closing officer to verify wiring instructions before you send any money – but do NOT use a phone number from an email. Be sure to have a business card from the title company officer who will handle your closing. When in doubt, reach out to your mortgage lender and real estate agent.

Have your bank confirm the account number associated with your wiring instructions, along with the name on that account. Be sure this information perfectly matches. Never assume that a discrepancy is a mere typo or human error.

You can test the wiring instructions you have by sending a small amount first. Call your title agent to verify receipt of the test wire, before sending the rest of the funds.

Always feel welcome to communicate via telephone with the people involved in your home purchase!

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Cash Buyers Remain a Force in Columbus Real Estate

RealSupport — Thu, 16 Mar 2023 07:12:05 +0000

Columbus home buyers have faced competition from cash-paying investors since the Great Recession. Recent information from ATTOM Data Solutions, as reported in Columbus Business First, suggests that cash purchases may take a larger share of the market in the months ahead. Here are the highlights, along with our own research!

During 2022, all-cash buyers accounted for 36.1% of home sales. This is the second-highest percentage of cash sales since 2011-2012, when cash sales accounted for 38.5% of all home sale transactions.

This information is concerning, given that first-time buyers represented just 26% of home sales nationally during 2022, according to the National Association of REALTORS®.

Conditions for first-time home buyers are somewhat better in Central Ohio. According to Columbus REALTORS®, first-time buyers purchased about 38% of all homes sold during the first quarter of 2022. The Columbus Dispatch reported that all-cash home purchases accounted for 24.3% of home sales during roughly the same period.

2023’s higher interest rates make mortgages less affordable than they were just a year ago, and cash buyers are not going away. Fortunately, our free e-book, “How to Buy a Home like a Pro,” gives you expert tips for making compelling offers – without breaking your budget! If you are financing your home purchase, read this book first.

As Exclusive Buyer’s Brokers, we serve your best interests at all times. Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

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Rising Rents Squeeze Prospective Home Buyers in Central Ohio

RealSupport — Thu, 16 Mar 2023 06:59:46 +0000

It’s no secret that rising interest rates and low home inventory have challenged Central Ohio home buyers. Another barrier to home ownership is the rising cost of rent. Since 2016, average rents in Ohio have increased by more than 50%.

Despite this, Central Ohio remains a relatively affordable place to live, compared to other major metros in the country. During 2022, the monthly rent on a 2-bedroom apartment in Central Ohio was $1,295. Nationwide, the average monthly rent on a 2-bedroom apartment was $2,105, according to Rent.com.

Like all real estate, the rental market is highly nuanced, with rents varying widely depending on the neighborhood, apartment size, amenities and so on. Affordable rents can still be found in the Columbus Metro – but you have to look harder for them. For those who have less-than-perfect credit, it can be difficult to obtain housing, especially when there are multiple applicants for the same apartment.

Central Ohio’s population growth will keep pressure on the rental market. The Mid-Ohio Regional Planning Commission shows Columbus as the only Midwest city to add over 100,000 residents in the last decade. It is estimated that the region’s population will triple by 2050.

Central Ohio’s population growth is supported by robust economic development, something that any area would be envious to have. It has been difficult for new housing development to keep up, and these growing pains do not have a simple solution.

In the meantime, Central Ohio tenants must juggle rising rents with other increased expenses. They must also find the means to save for a down payment, and control debt levels, if they aspire to become home buyers.

There is help available through Ohio housing programs. Franklin County renters who need assistance can find resources at Rentful614.com. If you are a home buyer looking for down payment assistance and financing options, we list resources in our free e-book, “How to Buy a Home like a Pro!” You can download it right now without any cost or obligation.

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What Columbus Home Buyers Should Know About Mortgage Buydowns

RealSupport — Tue, 17 Jan 2023 13:19:47 +0000

Rising interest rates have revived some mortgage options, and Columbus home buyers could find them useful. One such option is the mortgage buydown. This is similar to paying “points” on a mortgage, but it’s a bit more complex.

First, the basics: paying points on a mortgage is pre-paid interest. One point is typically 1% of the amount borrowed. By paying a point, a home buyer can reduce the effective interest rate on their mortgage. The corresponding reduction in the monthly mortgage payment may be nominal, given a 30-year amortization.

With a mortgage buydown, the points are applied to a specific period. For example, there is a “3-2-1” buydown. This means the mortgage payments would be temporarily lower for the first three years. During the first year, the payments would be at their lowest; during the second year, the interest rate would go up by 1%; and during the third year, the interest rate would go up another 1%. At the fourth year, the full, locked-in interest rate would resume.

Another option is the 2-1 buydown. In this scenario, the interest rate is only reduced for the first two years of the mortgage, but the first year has a bigger discount in the payments. For example, the rate would be 2% lower during the first year, then just 1% lower the second year, and then resume the full rate by year three.

Here’s why buydowns are getting attention: if the lender allows it, sellers may pay for the buydown as a concession to the home buyer. Depending on the math and the situation, it can be more advantageous for a seller to contribute points to the buyer’s financing than to reduce the price of the home. For the home buyer, a buydown could reduce their mortgage payment more effectively than a reduction in the home price.

These are very individualized calculations, and Columbus home buyers should examine buydown options carefully. As your Exclusive Buyer’s Broker, we provide a fiduciary level of representation to you, which enables us to provide you with objective, honest advice about your mortgage options!

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7 Reasons Columbus Home Buying is Tough in 2021

RealSupport — Thu, 28 Jan 2021 08:56:39 +0000

Recently, we had the opportunity discuss Central Ohio home buying conditions with the Columbus Dispatch. As we said in the article, the Columbus real estate market is, bluntly speaking, insane! The current market frenzy is unlike anything we’ve seen in our nearly 3 decades in the business.

With a market this fast, buyers are making quick decisions about the largest transaction of their lives. Buyers are digging into their financial reserves to accomplish a home purchase – and then digging deeper to win a bidding war!

Here are 7 reasons why Columbus home buying is tough in 2021:

1. Pandemic-driven lifestyle changes, making homes a place to live, work, attend school, exercise and enjoy recreation, driving a need for more housing space.

2. Lowest mortgage rates in modern history, averaging below 3% for a 30-year fixed rate mortgage.

3. A mobile workforce that can work remotely while living virtually anywhere, swelling the ranks of out-of-town buyers.

4. A soaring stock market and rising home prices, which have empowered buyers who hold financial assets and/or equity in a prior home.

5. Home owners with little desire to sell because of the pandemic, or because of scant home supply to choose from, or because they recently refinanced their mortgage.

6. An improving Central Ohio economy, with one of the lowest pandemic-era unemployment rates in the country.

7. Chronically-low home inventory that cannot keep pace with demand.

The deck is stacked against buyers. This is exactly why you must not throw caution to the wind right now. Home ownership is a long-term endeavor, and the “fear of missing out” could cause short-sighted decisions!

Of course, we do have guidance for this market, and we share it with our Buyer-Clients! When you become our Buyer-Client, we will work hard to find you opportunities and help you succeed in these competitive conditions. We also “tell it like it is” so you are prepared for what you’ll be getting into.

As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

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Columbus Home Buyers, Think Twice About These Bidding War Strategies

RealSupport — Thu, 31 Dec 2020 13:23:30 +0000

Columbus home buyers who are frustrated by being out-bid may be tempted to try risky, over-the-top clauses in their purchase offers. As home buyers turn to social media for new bidding war strategies, these ideas are gaining ground around the country.

These risky strategies might work, but you would literally be winning the bidding war “at all costs” – namely yours! Please keep in mind that these tactics have been promoted by agents who represent the sellers.

As Exclusive Buyer’s Brokers who look out for the buyer’s best interests at all times, we do not recommend these.

Automatic escalation clause: when used in a purchase offer in a bidding war, this states that the buyer will automatically exceed the highest qualfied offer by a set amount. Depending on the local market, this could be an additional $2,000 to $10,000 or more. In theory, it’s impossible to be out-bid because you would automatically have the highest offer on the table.

Of course, if another buyer has an automatic escalaction clause and has a higher exceeding amount, you could still be out-bid.

Even if you “win” you have committed to a price higher than what any other buyer could support. You would also need deep pockets to cover any amount above what your mortgage financing would handle. Which brings us to the next concept:

Appraisal gap guarantee clause. This clause states that if the mortgage company appraisal comes in for less than the sales price, the buyer promises to cover the difference in cash. In other words, the seller doesn’t have to give an inch! It’s a great deal for sellers, but it literally puts buyers “underwater” in equity on day one.

No matter how “hot” a real estate market might be, home buyers should not lock themselves into clauses that place them at a serious financial disadvantage. It is never in your bests interests to overpay for a home!

Instead of tactics like these, we recommend you read our free e-book, “How to Buy a Home like a Pro,” and utilized our time-tested strategies that work in all market conditions! Better yet, become our Buyer-Client and get the best home buying representation in the business. We can help you craft a compelling offer without putting your financial interests at risk.

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4 Decisions for First-Time Columbus Home Buyers

RealSupport — Thu, 26 Nov 2020 09:21:18 +0000

Buying your first Columbus home requires planning! If you are daunted by where to start, here are four basic, but important, decisions to help you begin.

1. Choose your real estate agent. We recommend an Exclusive Buyer’s Agent or Exclusive Buyer’s Broker! We make a critical difference in the home search and purchase process, potentially saving you thousands of dollars!

We also protect you from pitfalls that traditional agents may not point out – because they represent the seller! Read our free e-book to learn what other agents aren’t telling you.

2. Choose your mortgage. Seek a mortgage pre-approval from a reputable Columbus area lender. We can personally refer you to local lenders! If you are our Buyer-Client, we can also help you compare your mortgage offers.

3. Choose your preferred home locations in the Columbus area. Your home buying power may go further in some communities than others. If you are set on a certain school district, or wish to be close to family, decide these priorities now.

4. Choose the kind of home you need for your budget and household. What are your priorities in the home itself? There may be tradeoffs in your home search. Decide your must-haves before you begin your search.

As our Buyer-Client, you’ll have the full benefit of our information, experience and guidance. This will give you the confidence to make the best possible decisions.

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Columbus Home Buyers, Prepare for Cautious Lenders

RealSupport — Mon, 02 Nov 2020 09:47:09 +0000

For the past 3 months, mortgage interest rates have been averaging below 3% for 30-year Conventional loans. But Columbus home buyers may find that lenders are feeling less generous these days, making any advertised, ultra-low rates difficult to obtain.

Even as rates have declined, lenders have been increasing their credit score requirements. The Mortgage Bankers Association reports that the Mortgage Credit Availability Index (MCAI) dropped by 6.1% in September, indicating that loan approvals are down. The median FICO score for mortgage approvals nationally is 700. In “hot” markets, the median FICO score on approved mortgages is over 750.

What’s going on? Simply put, lenders have enough applications for home purchases and refinances that they can afford to be picky. Another concern is the economy. So far, economic damage from COVID-19 has struck certain industries much harder than others; yet lenders fear the snowball effect that a prolonged pandemic could cause.

Still, you won’t necessarily be denied for a mortgage if your FICO score is below 700 and your down payment is less than 20%. But the interest rates you are offered may be higher than the “teaser rates” shown on lender websites.

To get the lowest possible mortgage rate in the Columbus area, you’ll need the best possible credit score and a strong financial picture! Being financially prepared with limited debt obligations, a considerable down payment and a solid work history helps.

It’s also a good idea to work with Columbus area lenders who know our market! We can refer you to local lenders who will work hard to get you the best options. And as our Buyer-Client, you will get our help in evaluating your mortgage offers, to compare not only rates, but also the fees and costs that are part of your overall financing.

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3 Home Search Mistakes Columbus Buyers Should Avoid

RealSupport — Wed, 23 Sep 2020 09:42:20 +0000

The lean supply of Columbus area homes for sale can make buyers anxious, and inspire them to get too creative with their home search. Some tactics can backfire and close more doors than they open. Here’s what not to do during your Columbus home search!

Do not call the listing agent for each home that interests you. You would be giving away information about yourself to a number of agents, who can use that information against you for the seller’s benefit. Listing agents typically encourage you to “act fast” and make the highest possible offer! They may also suggest that you waive essential contingencies, such as a home inspection, to make your offer more “competitive.”

As fiduciary agents to the seller, listing agents are required to get the best price and terms for them – not you!

Note: an Exclusive Buyer’s Broker can help you write a compelling offer without overpaying for the home, and without sacrificing protective contingencies!

Do not “spread the word” about your home buying plans. Eager buyers might tell several agents, as well as residents in the neighborhood that they are looking to buy a home in a certain price range. Buyers hope that by putting out multiple “feelers” they will have an advantage.

This can backfire! These agents have the same local MLS access. When a new listing comes to market, these agents will say they “have a potential buyer.” (Namely you!) The neighbors will tell the home seller that they know a buyer, too. Suddenly, the sellers think they have the hottest listing on the market – and they’ll want to stand firm on the price!

When all these agents contact you to set up a showing for the same home, it’s awkward at the least! Once the duplication of effort is discovered, they will have little motive to help you further.

As your Exclusive Buyer’s Broker, we can show you any home on the market, including FSBO and new construction. We have Broker-level access to all internal details in the Columbus Regional MLS, and an excellent network of home builders and industry professionals. In short, we give you the widest selection of listings, plus the new listing alerts via the MLS, and your own buyer portal into the listings database!

Do not look at several homes with an agent, then write an offer using someone else. Agents do not have an hourly wage. They are only compensated by commission, if the sale has a successful closing. Making a last-minute change of representation robs an agent of their compensation, and can lead to a “Procuring Cause” dispute between agents – with you stuck at the center.

The great news is, our Buyer-Clients don’t suffer these “Procuring Cause” disputes!

We promise our Buyer-Clients undivided loyalty, and we work hard to obtain the very best price and terms for them on the home they choose. Our fiduciary level of service costs nothing extra – and actually gives buyers the most choices in the market, with superior representation in the home search and purchase process! We will be happy to explain how we do this!

As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

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