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

If you’re planning to buy a home, an inspection is an important step in the process.

It assesses the condition of the home before you finalize the transaction. It’s also a different step in the process from an appraisal, which is a professional evaluation of the market value of the home you’d like to buy. In most cases, an appraisal is ordered by the lender to confirm or verify the value of the home prior to lending a buyer money for the purchase. Here’s the breakdown of each one and why they’re both important when buying a home.

Home Inspection

Here’s the key difference between an inspection and an appraisal. Bankrate says:

“In short, while an appraisal helps you understand a home’s value, inspections help you understand a home’s condition.”

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

Home Appraisal

The National Association of Realtors (NAR) explains:

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

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

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

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

Bottom Line

The inspection and the appraisal are critical steps when buying a home, and you don’t need to manage them by yourself. Work with a real estate professional today so you have the expert guidance you need to navigate the entire homebuying process.

Keep reading.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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The Three Factors Affecting Home Affordability Today

There’s been a lot of focus on higher mortgage rates and how they’re creating affordability challenges for today’s homebuyers.

It’s true that rates climbed dramatically since the record-low we saw during the pandemic. But home affordability is based on more than just mortgage rates – it’s determined by a combination of mortgage rates, home prices, and wages.

Considering how each one of these factors is changing gives you the full picture of home affordability today. Here’s the latest.

1. Mortgage Rates

While mortgage rates are higher than they were a year ago, they’ve hovered primarily between 6% and 7% for nearly eight months now (see graph below):

As the graph shows, mortgage rates have experienced some volatility during that time. And even a small change in mortgage rates impacts your purchasing power. That’s why it’s so important to lean on your team of real estate professionals for expert advice to stay up to date on what’s happening in the market. While it’s hard to project where mortgage rates will go from here, many experts agree they’ll likely continue to remain around 6%-7% in the immediate future. 

2. Home Prices

Over the past few years, home prices appreciated rapidly as the record-low mortgage rates we saw during the pandemic led to a surge in buyer demand. The heightened buyer demand happened while the supply of homes for sale was at record lows, and that imbalance put upward pressure on home prices. However, today’s higher mortgage rates have slowed down price appreciation.

And, the truth is, home price appreciation varies by market. Some areas are seeing slight declines while others have prices that are climbing. As Selma Hepp, Chief Economist at CoreLogic, explains:

“The divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.”

To find out what’s happening with prices in your local market, reach out to a trusted real estate agent.

3. Wages

The most positive factor in affordability right now is rising income. The graph below uses data from the Bureau of Labor Statistics (BLS) to show how wages have grown over time: 

Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage since you don’t have to put as much of your paycheck toward your monthly housing cost.

Home affordability comes down to a combination of rates, prices, and wages. If you have questions or want to learn more, reach out to a real estate professional who can explain what’s happening locally and how these factors work together.

Bottom Line

If you’re planning to buy a home, knowing the key factors that impact affordability is important so you can make an informed decision. To stay up to date on the latest on each, connect with a trusted real estate professional today.

Get more on Keeping Current Matters.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Got a tax refund? 6 Home Improvements Will Level Up Your Living (and Help Sell Your House)

Let’s all put down the calculators, file the receipts, and celebrate the fact that tax season is over!

For many of us, that means a nice refund check has already landed or is on its way. (Fun fact: The IRS issued 237.8 million refunds in 2022.)

If you’re in the refund crowd, you might wonder what to do with that shiny sum. While you could blow it on a bunch of stuff that ends up in next year’s spring-cleaning piles, we’re proposing something a bit more lasting.

We asked designers and real estate agents for advice on the best home improvement projects to tackle with your tax return money. Here are their Top 6 picks for ways to reinvest those funds into your home for a more functional, comfortable, and ready-to-sell space.

1. Upgrade old appliances

Appliances from a few decades ago are unattractive and can actually be the secret energy vampires elevating your monthly bills. (And worn appliances are a massive turnoff for future buyers.)

“Upgrading old appliances is usually something that has to be done with borrowed money, which means that any time you can pay cash, you’re going to be saving,” says Martin Orefice, the CEO of Rent To Own Labs.

Additionally, new appliances are way more efficient at cooking, refrigerating, and cleaning, so you’re looking at a truly valuable improvement project.

2. Update your kitchen

Much like upgrading appliances, updating your out-of-date kitchen can be a surprisingly lucrative investment to make with your tax-return dollars.

And while you could spend thousands changing every part of your kitchen, Megan Nelson, of Nest with the Nelsons, reminds us that you don’t have to go full monty to make a big difference.

“Manageable kitchen updates are a wonderful way to use your tax refund,” says Nelson. “Think smaller improvements like new paint, an updated pantry door, new large-scale lighting over the island, or a dramatic light fixture over your table.”

. Splurge on a new mattress

A brand new, comfy mattress might not add much monetary value to your home, but the personal value of a great rest is priceless.

“A good night’s sleep is essential for overall wellbeing,” says designer and real estate agent Cam Dowski, of We Buy Houses Chicago. “Investing in a high-quality mattress can improve sleep quality, leading to better health and productivity.”

4. Invest in your outdoor space

Whether you need a new grill or want to revamp those worn-down garden beds, investing in your home’s outdoor living space will bring you lots of joy as we head into the warmer months. And it might even boost your home’s overall curb appeal when you’re ready to sell.

“Some outdoor decisions can really customize your space and make it more inviting,” says real estate agent Lauren Byington, of WarrenandLauren. “Adding landscaping, new furniture, and outdoor toys, like hot tubs, can make your space perfect for you and set a relaxing tone.”

Another pro tip? Extend the use of your outdoor area by investing in a fire pit to use in the spring and fall.

5. Make your home smarter

No, we aren’t proposing you send your house to college. But you can make your home smarter by adding in some of the latest gadgets with control capabilities for your abode’s security, heating and cooling, and electric systems.

“Making your home smarter with modernized security and smart devices can help bolster your home’s modernity,” says Byington.

Plus, who doesn’t love shouting grocery-list items to their kitchen smart device while cooking?

6. Modernize the details

If you recently purchased an older home, you might have noticed some of its characteristics haven’t aged well with the times.

A few outdated biggies are texturized, popcorn ceilings and spindly stair rails.

“Old ceilings and dated stair rails are a major turnoff,” says Byington. “Consider having them updated to a more contemporary look. Go for nontextured or wood-clad ceilings and a modern-looking stairway with simple lines.”

Updating small details in your home will not only increase the personal enjoyment and aesthetic of your home, but these upgrades could also entice future, potential buyers.

Get more like this on Realtor.com

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Ultimate Guide To Choosing the Right Hardwood Flooring for Your Home

When it comes to adding value and creating a warm, inviting atmosphere in your home, hardwood flooring is the way to go.

However, with so many different types of hardwood flooring available on the market today, finding the right one for your home can seem like an overwhelming task. To help make it easier, we’ve put together this guide to choosing the right hardwood flooring for your home. 

Types of Hardwood Flooring
There are three main types of hardwood flooring that you will encounter while shopping around – solid wood, engineered wood, and laminate wood. Solid wood is usually 3/4-inch thick and is made from one solid piece of wood all the way through; this type of flooring is best suited for homes on or above ground level. Engineered wood has a top layer made from real hardwood, but underneath, it consists of several layers of plywood that are glued together; this type of flooring works well in any room in the house because it is much more dimensionally stable than solid wood. Laminate wood is made from a high-density fiberboard core topped with a photographic image layer that looks like real wood; this type of flooring is best suited for rooms that don’t require regular cleaning. 

Installation Method & Price Range
Once you've decided which type of hardwood flooring you want in your home, you'll need to decide how much money you're willing to spend on installation and materials. Solid and engineered woods typically cost between $3-$15 per square foot, while laminate floorings cost between $1-$7 per square foot (including installation). As far as installation goes, some types need to be nailed down, while others can be floated on top of a subfloor - so make sure to check with your installer before making any decisions about which method you'd prefer.  

Maintenance Level & Durability
When selecting a hardwood floor for your home, it's important to consider both the maintenance level and durability factors associated with each type. For example, solid woods require regular waxing or sealing to keep them looking their best, whereas engineered woods need less maintenance due to their pre-finished layers. Laminate floors are known for their scratch resistance and easy maintenance since they don't need wax or sealant applied regularly. Lastly, all types of floors should be swept regularly and wiped up quickly if liquid spills occur in order to maintain their beauty over time. 

With so many different styles and types available on the market today, finding the right hardwood flooring option for your home can seem like an overwhelming task at first glance. However, by taking into consideration factors such as price range, installation method, maintenance level, and durability – you’ll be able to identify what type suits your needs best! Doing this research ahead of time will ensure that you get exactly what you want out of your new floors without having any regrets later down the road!

Get more llike this on RISMedia.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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5 Reasons Millennials Are Buying Homes

In the United States, there are over 72 million millennials. If you’re part of that generation and have thought about buying a home, you aren’t alone.

According to Zonda, 98% of millennials want to become a homeowner at some point if they aren’t already. But why? There are plenty of reasons you may choose to become a homeowner. Here’s why other millennials have made that decision (see graph below):

This graph shows why millennials are buying homes according to Zonda’s 6th annual millennial survey. The top reasons include building equity, a change in life stage, wanting stability, rising home values, and wanting to make somewhere truly their own. Here’s a look at each in more detail.

Building equity – Homeownership is a long-term investment that allows you to build wealth, increase your net worth, and become more financially stable. Beyond that, the alternative to owning a home is typically renting. With the way rents have risen so dramatically over time, it may make sense to build your own equity instead of the equity of the person you’re renting from.

A change in life stage – As a millennial, you’re reaching your prime homebuying years. That means you may be at the point where you need more space or a different location.

Stability or settling down – This could mean establishing your career or just generally deciding more concretely what you want your life to look and feel like. As that idea becomes clearer, you may want to establish that lifestyle in a particular place and put down roots.

Rising home values – By purchasing a home, you own an asset that traditionally increases in value over time. That can mean your home will have a higher resale value if you decide to move again.

Wanting to make somewhere “mine” – Owning a home gives a sense of freedom because you can customize it however you want, make updates as you see fit, and be yourself in a place that’s solely your own.

Bottom Line

There are plenty of great reasons why millennials are buying homes today. If you’ve thought about becoming a homeowner and any of these reasons resonate with you too, partner with a trusted real estate agent to explore your options.

Keep reading.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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