Top 10 Home Design Trends for 2014

This is a look at the 10 hottest home design trends anticipated for the new year.

Home design trends come and go — sometimes slowly and sometimes lickety-split. But some trends become classics and remain strong, while others go out the window.

The best advice we can give recent buyers or soon-to-be sellers is not to copy any trend blindly, especially if it doesn’t work with your budget, decor, personal preference, or lifestyle. It’s smart for your clients to be more cautious with expensive, permanent parts of their home environment, but more daring with easy-to-switch dishes, wall paint, and pillows.

Here are 10 trends that are coming on big in 2014:

1. Wider, reclaimed wood and wood-like porcelain floors. Wood floorboards are getting wider—often up to 5 and 6 inches, stained warm gray, and cut from several tree species. We are also seeing less of the hand-scraped look, which was costly to produce. Yet, boards can be personalized in other ways. Bole Floor uses a technique that gives floorboards a natural-looking curve, which also allows for more boards from each tree. Other companies like Maine Heritage Timber recycle logs from older trees, which adds warm patina. These reclaimed boards can look amazing whether in traditional or contemporary settings. Porcelain flooring has become more popular, too, because it’s indestructible and available in unlimited styles, sizes, and colors.

2. Simpler cabinets, bigger drawers. A major shift is occurring in kitchen cabinets: Warmer gray tones are replacing oranges and browns for a more authentic look. Styles also have shifted from traditional and detailed to more transitional and mid-century modern, since cleaner designs tend to give a kitchen a more timeless look. To fit these styles, hardware is less visible, more modern, and sometimes integrated into the doors. Instead of lower cabinets, big drawers are favored because they’re easier to access and can be fitted with removable storage receptacles.

3. Paint palettes. After years of beiges and whites  many home owners are now opting for more varied colors. Color forecasters agree that gray, especially a warmer hue, is the “it” gal in home design for 2014. Overall the look is lighter, fresher soft corals, shell colors, sea greens, lavenders, and misty blues — sometimes mixed with more potent purples and metallics and a decrease in Tuscan palettes. Jackie Jordan, director of color marketing for Sherwin-Williams, says four color palettes are emerging: black, white, and gray layered with textures and warm woods; soft flesh tones, beiges, grays, and off-whites; deeper romantic hues, like purple, teal, red, and some oxided golds and coppers; and globally inspired, ethnic brights balanced by neutrals.

4. Indoor-outdoor living. The trend for indoor and outdoor spaces to blend seamlessly continues with more rooms having multiple sets of French doors that open to the outside, as well as big windows that bring in the outdoors visually. Solariums with screens for fresh air in summer, and screened or covered porches that link a house with patio and pool are also coveted home features. Even freestanding outdoor structures are being spiffed up. Pool houses may feature more than changing rooms and bathrooms; some owners are adding cooking equipment, fireplaces, and terraces with living room-style seating, wireless sound systems, and weather-protected TVs. Also expect more pizza ovens, fireplaces, fire pits, and propane heaters to extend use.

5. Kitchen color, energy efficiency, and new materials. Several trends are changing up the look of the kitchen, the room where everyone still wants to hang out:

• After years of playing it safe in color in appliances, some home owners are willing to go bold. Bertazzoni is manufacturing its professional-style ranges in “vitamin” colors of red, yellow, and an orange it calls Arancio.
• Bertazzoni, Thermador, and other companies are making their ranges eco-friendly, energy efficient, and more about healthy cooking with new steam oven models.
• Smaller is in when home owners downsize. Bertazzoni’s range is available in a 30-inch version.
• Instead of giving up valuable space for a desk, home owners are shifting more toward smaller work areas that allow them to recharge phones, tablets, and other portable devices, as well as a place to leave their mail and keys, says designer Jennifer Gilmer.
• New materials are replacing standard-bearers. One example: After years of seeing granite top so many counters, metals are coming on strong, such as hot rolled steel, says Gilmer.
• The mismatched, unfitted look is disappearing, replaced by cabinets that fit together more like a jigsaw puzzle and reflect a cleaner, tidier look, says Morgante.
   

6. Bathroom kudos. Bathrooms continue to become more luxurious and we see several trends coming on stronger in 2014:

• TVs integrated into medicine cabinets to avoid having a separate TV visible all the time, such as a sleek one from Robern.
• Bigger steam showers—sometimes 7 feet by 4 feet—equipped with built-in speakers, an iPad docking station, Bluetooth connectivity, and aromatherapy. Gone are the panoply of jets and sprays that made some showers resemble a human car wash, Dumel says. In their place may be dual controls for two to shower at once with different temperatures. Also popular are rain heads that provide a softer, but still drenching, spray rather than the sharp needle effect. Infinity drains that run the length of a shower floor eliminate curb designs.
• For men who don’t want to worry about fogging up a mirror when shaving, there are more antifogging devices available.
• Washlets can now introduce greater comfort and cleanliness with an integrated, self-cleaning nozzle that releases a warm, soothing stream of aerated water; many also have a heating device and deodorizer.
• Though many do without a tub or a whirlpool, others want the option if there’s room and funds in the budget. Freestanding models are favored.

7. Technology wow. As you can see with all aspects of home design, technology systems are being integrated more and more, at all price ranges and complexities. From heat to lighting, security to sound and entertainment, and windows and window treatments to doors, technology is a home owner’s friend whether they are home or away. Spurring this trend is less costly wireless technology, sometimes one-and-a-half times less than hard wiring. At the high end, he sees home owners adding digital backsplashes with displays to watch TV or cycle through digital files of kids’ artwork or family photos. Many home owners are beefing up their networks to business-grade levels.

8. Global style. The shrinking world means more ethnic fabrics and handcrafted artworks mixed into traditional, transitional, and modern spaces. African and Asian pieces will be particularly popular, along with more embroidered fabrics. Rugs overdyed with bright and subdued tones are popular. These rugs bring great color and warmth. They’re more contemporary and edgier than their traditional counterparts.

9. Personalized quality. After years of tight budgets, there’s a return to quality as consumers spend more on choice pieces. Designer Claudia Juestel of Adeeni Design Group in San Francisco searches for artisans who fashion bespoke pieces to create one-of-a-kind interiors. The designs she and others favor incorporate craftsmanship and time-honored materials while utilizing modern technology, too. Some examples of her favorite artisans: Paul Benson for metal furnishings and accessories; Kyle Bunting for decorative hide rugs; Michael Coffey for sculptural furnishings; and The Alpha Workshops for a wide variety of unique products.

10. Accent chairs. While big comfortable sofas are always the go-to seating in most rooms, accent chairs for an extra perch and pop of color are coming on strong, says Kristen Pawlak, with Decorating Den in Louisville, Ky. “They’re small, affordable, and a way to add an accent for little cost. They also can introduce a new style to a room. Just be sure to keep it in the same scale as other furnishings,” Pawlak says.

If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohioplease contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!

The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in;Bexley Columbus Delaware Downtown Dublin Gahanna Grandview Heights Granville Grove City Groveport Hilliard Lewis Center New Albany Pickerington Polaris Powell Upper ArlingtonWesterville Worthington

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Tips for Those Preparing to Sell a Home in the Spring

Homeowners considering putting their home on the market next spring should start planning and prepping their home now.

While this level of advanced planning isn't always possible, if you know you are going to sell your home within the next year, you should start thinking about what you need to do to prepare now.

While real estate market sales activity tends to be at it's lowest levels from November through March, with the exception of December this time period is when we make the most visits to clients looking to put their homes up for sale in the coming spring / summer season.

Homeowners will contact us to discuss what they need to start doing to prepare their home for market and to maximize the home's value and marketability, staging advice, and when they should be ready to list the home. This advanced planning allows homeowners sufficient time work on indoor projects—decluttering, packing things up for storage and just overall planning.

From experience, Realtors know that a “well-polished” house appeals to more buyers and will sell faster and for a higher price. Buyers simply feel more comfortable purchasing a home that’s been well-cared for assuming that if what they can see has been well maintained, what they can’t see has probably also been well maintained. In preparing your house for sale, consider:

No. 1: Determining how much you should spend. In preparing your home for the market, spend as little money as possible. Buyers will be impressed by a brand new deck, but they aren’t likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive improvements and touch-ups to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen.

Your Realtor will be familiar with buyers’ expectations in your neighborhood and can advise you specifically on what improvements need to be made and which improvements are most effective and will provide the best return on investment.

No. 2. Consider a maintenance schedule. If the house has areas that show wear, get that work done before offering the home. If there are numerous repairs and issues that need to be tended to in the home, you may need to create a maintenance schedule to meet your spring deadline. While you may be able to attend to some of these repairs on your own, such as patching and touching up walls, replacing light bulbs, cleaning out gutters, etc, others may require the assistance of a professional. As your agent we can assist you by referring you to reputable contractors and service providers offering competitive rates.

No. 3: Declutter and deep clean. The winter season is the perfect time to work on preparing your home's interior and to decide what stays and what needs to go. Decluttering makes every room look larger and feel neater in person, as well as the photos your realtor will take of the home as part of their marketing efforts. If a house is cluttered, it not only distracts buyers, but it can also make it difficult for them to imagine themselves in it. Buyer buy more than just a home, they buy a lifestyle and by removing or storing things you don't need, you create a roomy, comfortable feeling that will be inviting to prospective buyers. For example, if the home offers a two-car garage, make room for two cars. For a lot of men, if the garage looks small because of the clutter, there's an issue. Remove seasonal clothes from the closets to make them appear larger and better organized.

And while you're decluttering, you're depersonalizing. You really need the buyer to be able to picture your house as their home and while a picture of your kids on the nightstand isn't a big deal, you don't want the family portrait gallery lining the hallway.

Cleaning makes your house easy for buyers to explore and gives the impression that it has been well cared for. Be sure every room smells as good as it looks, paying special attention to the kitchen and bathrooms. In particular having these rooms clean and sparkling can make a huge difference in the perception of whether a house is kept up or not. The carpets should be professionally steam cleaned if they're in good shape, however, if they are old and stained your realtor can assist in referring you to a wholesale carpet provider and the selection of a neutral color with broad appeal that will help freshen up your home. Some fresh paint and a one-time professional cleaning service can make your house look like new! And remember when the home goes active, you're no longer living in it; you are showing it.

No. 4: Evaluate your yard. Selling in the spring means your yard has to be in good shape. If you live in a warmer climate, you can get to work sprucing up your lawn in the winter, but those in Columbus, Ohio and other colder parts of the country will have to wait out the chill.
Depending on where you live, you may have to do more advance planning, but when you are putting your house on the market, you definitely have to focus on the yard. If the exterior of the home and it's landscaping are attractive and the home has good “curb appeal”, the primary list photo is going to attract significantly more attention, and buyers will be more inclined to want to see what’s on the inside! The importance of real estate listing photos has never been greater as over 90% of home buyers now utilize the internet as part of their home search efforts. Suggestion for preparing your home's exterior:

- Check the front entry, repaint the front door if needed, clean light fixtures, repaint any chipped or missing paint where required including mailbox and post
- Fertilize the lawn as soon as the snow melts and reseed any bare spots
- Trim bushes, hedges, and trees
- Power wash the exterior of the home, driveway if required (if an asphalt drive is present consider resealing)
- Repair and replace loose or damaged roof shingles
- Repair and repaint loose siding and caulking
- Weed lawn and mulch beds
- Plant flowers for color
- Lay fresh mulch

No. 5: Compare to other homes in your area. Check out other local real estate listings and homes for sale, to see for yourself how your home compares with others currently up for sale. This will also give you an opportunity to see what is popular in your area—hardwood floors, granite counter tops, stainless steel appliances as this will help you to understand buyer's expectations in your price point. This will also give you an opportunity to see what's for sale and what is common near your home before you start changing things in your house.”

If you want to be the seller who goes to market instead of the one who stays home? The difference might be a few of the things you do before you plant that "for sale" sign.

If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!

The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley Columbus Delaware Downtown Dublin Gahanna Grandview Heights Granville Grove City Groveport Hilliard Lewis Center New Albany Pickerington Polaris Powell Upper Arlington Westerville Worthington

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5 Claims Not Covered by Your Homeowner's Insurance Policy

In the United States, most home buyers borrow money in the form of a mortgage loan, and mortgage lenders always requires that the buyer purchase homeowner’s insurance as a condition of the loan, in order to protect the bank if the home were to be destroyed.

A signature on your insurance policy does not indicate fluency, or even familiarity, with the ins-and-outs of your coverage. Far too often, homeowners feel left in the dark about the inclusions of their homeowner’s policy, and find themselves in a tight spot when accidents occur. Simply put: having a homeowner's insurance policy doesn't provide complete protection, however, it is a step in the right direction. Together, we’ll review five common homeowner’s insurance loopholes as defined by standard insurance policies, however, to get the most out of your coverage, reach out to your insurance agent to discuss the inclusions and exclusions of your policy.

Aggressive DogsInsurance companies pay out over $300 million every year to cover the cost of dog-related injuries? Keep that in mind the next time you pet a stray on the street! With that being said, it is no surprise that insurance carriers have become a bit more cautious when outlining the specific inclusions of policy coverage.

If you have a dog, whether aggressive or not, make sure your insurance agent is aware, and get some clarity on the amount of pet protection your policy provides. If you are particularly worried about your dog’s aggression, hang a “Beware of Dog” sign on your fence, and keep the dog away from known aggression triggers (unfamiliar house guests, other animals, etc.).

TrampolinesWhile trampolines can provide hours of backyard fun, when it comes to safety, they pose a significant risk; in fact, every year, trampolines are the cause of more than 80,000 trips to hospital emergency rooms. Homeowners take a safety risk when choosing to set up a trampoline on their property, and are held liable in the unfortunate event that an accident or personal injury may occur.

Based on several factors, such as individual insurance policies and carriers, trampoline coverage may vary from zero to complete coverage. If you currently have a trampoline on your property, contact your insurance agent to determine if you have ample coverage. On the contrary, if you’re considering adding a trampoline to your property, take a few moments to review your coverage and insurance policy before jumping into a decision.

Simultaneous EventsWhen bad weather strikes, everyone’s home is at risk for flood, fire, and storm damage. What happens if your home is swept by treacherous storm damage, but also floods in the process? Are you covered? In some cases, you may not be.

In the event of simultaneous events, insurance coverage can get a little tricky. In the insurance industry, professionals use the term “anti-concurrent causation” to describe a combination of losses that may declare your policy as void or invalid. To know exactly where you stand, closely scan the fine print on your insurance policy. If you find a clause indicating that dual catastrophes will jeopardize your coverage, contact your insurance agent immediately to work through this issue.

FloodingIn the event of a flood, most homeowners automatically assume their insurance policy covers their home, assets, and valuables; unfortunately, that is not the case. When defined by insurance carriers, flooding is not deemed an “act of nature.” To keep your home, and everything in it, protected against floods and flood damage, you must purchase separate flood insurance coverage through the National Flood Insurance Program.

Considering 20% of flood claims occur in low-to-moderate risk zones, flood insurance is a must-have for every homeowner, in every geographical location. Contact your insurance agent today, or check out FloodSmart.gov, to get an estimated cost for flood insurance in your region.

Jewelry, Collectibles & High-Value ItemsContrary to popular belief, everything under your roof is NOT protected by your homeowner's insurance coverage; providers set limits on payout amounts for personal items. Since coverage from the basic home insurance policy rarely covers the cost of high-dollar or personally valuable items, we strongly suggest insuring irreplaceable items (wedding rings, valuable collectibles, family heirlooms, etc.) separately.

For more information on homeowner’s insurance or to request a free, no obligation quote, please call Christopher Connacher with Liberty Mutual at 440.590.3159 or by clicking here and completing the online form.

You can also use Liberty Mutual’s Coverage Calculator to get an estimate of what your policy might cost!

Reasons to Try to Avoid Private Mortgage Insurance

If you're thinking of buying a home, remember you're going to need to save up enough money for a 20% down payment. If you can't, your lender will require your loan include private mortgage insurance (PMI). The purpose of the insurance is to protect the mortgage company if you fail to make the payments and default on the note.

Private mortgage insurance sounds like a great way to buy a house with a low down payment and without having to save up the cash for a down payment. Sometimes it is the only, or even the best, option for new homebuyers, however, there are several reasons would-be homeowners should try to avoid paying this insurance. Below you will find five common problems with PMI and a possible solution that allows homebuyers to avoid it altogether.

Six Good Reasons to Avoid PMI

1. Cost - Private mortgage insurance typically costs between 0.5 to 1% of the entire loan amount on an annual basis. On a $100,000 loan this means the homeowner could be paying as much as $1,000 a year, or $83.33 per month - assuming a 1% PMI fee. (Calculated as: $100,000 x 1% = $1,000 / 12 = $83.33) By itself that's a pretty hefty sum. However, the average home price, according to the National Association of Realtors is about $230,000 (the average in Columbus, OH is approximately $175,000), which means families could be spending nearly $200 a month on the insurance. That's as much as a car payment!
2. May Not Be Deductible - Private mortgage insurance contracts are tax deductible - that is, if the married taxpayer earns less than $110,000 per year (in adjusted gross income). For married couples filing separately, that threshold is $55,000. This means many dual-income families with a combined income just above the threshold will be left out in the cold. While there are rumors this "income cap" could be raised in the future, there is no guarantee it will happen. Many homeowners (particularly those just above the threshold) may be better off making a larger down payment where at least they'll have the peace of mind that the interest on the loan is be deductible.
3. Your Heirs Get Nothing - Most homeowners hear the word "insurance" and assume that their spouse or their kids will receive some sort of monetary compensation if they die. This is simply not true. The lending institution is the sole beneficiary of any such policy, and the proceeds are paid directly to lender (not indirectly to the heirs first). If you want to protect your heirs and provide them with money for living expenses upon your death, you'll need to obtain a separate insurance policy. Don't be fooled into thinking PMI will help anyone but your mortgage lender.
4. Giving Money Away - Homebuyers who put down less than 20% of the sale price will have to pay mortgage insurance until the total equity of the home reaches 20%. This could take years, and it amounts to a lot of money the homeowner is literally giving away. To put the cost into better perspective, if a couple who own a $250,000 home were to instead take the $208 per month they were spending on PMI and invest it in a mutual fund that earned an 8% annual compounded rate of return, that money would grow to $37,707 (assuming no taxes were taken out) within 10 years.
   
       
5. Hard To Cancel - As mentioned above, usually when a homeowner's equity tops 20%, he or she no longer has to pay PMI. However, eliminating the monthly burden isn't as easy as just not sending in the payment. Many lenders require the homeowner to draft a letter requesting that the PMI be canceled, as well as receive a formal appraisal of the home prior to its cancellation. All in all, this could take several months depending upon the lender. How to Cancel Private Mortgage insurance.

It's Not All BadFor many Americans PMI is deductible.Those families who itemize their deductions and earn less than $110,000 per year, will find that their PMI is deductible. For a couple with a $250,000 loan and a $2,500 annual PMI payment (1% of the outstanding loan), this deduction could translate into savings of $300 to $400 dollars or more.

Also private mortgage insurance often can be paid up front. For those people that don't want to work the cost of PMI into their monthly budgets, some lenders will allow for the payment to be made up front, in cash, at the time of mortgage origination. In some cases the lender will even offer the homeowner a discount for paying up front. Another option that many lenders offer is to add the one-time upfront fee to the outstanding loan balance. The advantage to this strategy is that amortized over a period of 25 or 30 years, the monthly cost is fairly low.

A final "benefit" of PMI is that once you have finished paying off your insurance policy, the mortgage itself may seem easier to pay down. Of course, this is more of a psychological benefit than a financial one, but it can be a nice feeling to suddenly have a couple of hundred extra dollars coming in each month. Savvy homeowners would be wise to reinvest the money they are accustomed to budgeting for PMI, or apply the funds toward the principal balance on the loan. Remember the compounding mutual fund example from earlier.

How to Avoid PMIIn some circumstances PMI can be avoided by using something called a piggy-back mortgage. It works like this: Assume that a prospective homeowner wants to purchase a house for $200,000, but he or she only has enough money saved for a 10% down payment (not enough to avoid PMI). By entering into an "80/10/10" agreement, the individual will take out a loan totaling 80% of the total value of the property, or $160,000. A second loan, referred to as a piggyback, will also be taken out totaling $20,000 (or 10% of the value). Finally, as part of the transaction, the buyer puts down the final 10%, or $20,000.

By splitting up the loans, the homeowner may be able to deduct the interest on both loans, and avoid PMI altogether. Of course, there is a catch. Very often the terms of the piggyback loan are risky. Many are adjustable-rate loans, may contain balloon provisions, and are due in 15 or 20 years (as opposed to more conventional loans which are due in 30 years).

Incidentally, many lenders also offer a similar loan arrangement for buyers only able to put down 5% toward a down payment. It's called an "80/15/5" arrangement. It works exactly the same way.

The Bottom Line Private mortgage insurance is expensive. Unless you think you'll be able to attain 20% equity in the home within a couple of years, it probably makes sense to either make a larger down payment, or consider a piggyback loan. While often more risky than a conventional mortgage, piggyback loans are deductible, and are a terrific alternative for those unable to afford a larger down payment. However, renting is the most costly alternative and for those who plan to stay put for more than 3-4 years, buying a home is still the superior option even if a loan with a low down payment and private mortgage insurance policy is required.

If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!

The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley Columbus Delaware Downtown Dublin Gahanna Grandview Heights Granville Grove City Groveport Hilliard Lewis Center New Albany Pickerington Polaris Powell Upper Arlington Westerville Worthington

Planning to Buy a New Home in 2014? How Will New Mortgage Rules Affect You?

Big changes are coming to the mortgage industry in 2014, and lenders will soon have to adapt to new mortgage rules that will offer borrowers further protection against abuses and reckless lending standards. But the changes may not please all borrowers.

Regulations drafted by the Consumer Financial Protection Bureau will change the definition of a qualified mortgage for any loan applications received on and after Jan. 10, and many consumers may find themselves unable to meet the new requirements.

Qualified mortgages are loans that meet standards designed to ensure that borrowers have the ability to repay the amount in question. In return, lenders will be protected from borrower lawsuits so long as they issue "safe" mortgages that follow guidelines.

Facing this challenge, it's up to the hopeful homeowner to improve their chances of mortgage approval by doing the necessary research, improving their credit profiles and meeting the qualified mortgage standards well in advance of filling out loan applications.

It's important to meet qualified mortgage standards because government-sponsored enterprises, known as GSEs, like Fannie Mae and Freddie Mac have said they won't buy non-qualified mortgages starting next year. Fannie and Freddie don't lend to homeowners directly, rather they purchase mortgages from banks and then bundle them into securities and sell those securities to investors.

For lenders that originate mortgages with the intention of selling them to the GSEs, as many do, originating non-qualified mortgages won't be feasible. Other lenders own the mortgages they originate, meaning they don't have to worry about selling them to GSEs, and such larger portfolio lenders should continue to take on non-qualified mortgages.

What's Changing? Mortgages must pass tests of sorts to meet the standards of a qualified mortgage: The APR must be within 150 basis points (1.5% points) of the annual prime offer rate, the loan term cannot exceed 30 years, points and fees cannot exceed 3% of the loan balance and there can be no negative amortization or interest-only payments. Under these conditions, the mortgage qualifies for safe harbor, meaning the lender is not at risk of being sued by a borrower who is unable to repay the loan.

There's a class of loans called higher-priced qualified mortgages, in which the APR exceeds the 150 basis-point limit, and in those cases, the loan falls under rebuttable presumption, meaning the lender is assumed to have complied with ability-to-pay requirements, unless a borrower or attorney argues otherwise. Loans with rebuttable presumption will likely come at an additional premium, though the price of that premium is unclear at this point.

The ability to repay comprises a series of requirements that must be met by the borrower and verified by the lender, including income and debt levels. All of these CFPB regulations are aimed at protecting consumers from mortgages they can't reasonably expect to repay, because such faulty loans triggered the recent financial crisis and downturn in the housing market. Given these limitations, and some new restrictions on lenders that also go into effect in January, some have suggested that some consumers may find themselves struggling to acquire a mortgage.

 Originating a mortgage has been a process that blends science and art. The science includes the regulations that give clear guidelines for what does and does not meet qualified mortgage standards. The art comes in when an originator decides to approve or deny a mortgage application, even if a borrower doesn't meet every requirement in the book, because his or her experiences can give important context to a case that numbers and rules cannot.

With this QM rule we're seeing an elimination of the art and a focus on the science. The way the points and fees will be calculated is now essentially a defined standard. My gut says because of the shrinking art component and the emphasis on the science, fewer people are going to qualify for loans.

While the new regulations are beyond consumer control, there are several things potential homeowners can do to prepare for buying residential property in 2014.

1. Ask Questions: If this all sounds a bit confusing, don't worry. You're not alone and there's confusion among lenders. For potential homeowners who don't understand what these changes mean for them, there's no shame in asking someone to explain them.

There are a lot of components to mortgages that first-time homebuyers may not be familiar with. Say a lender instructs you to reduce your debt-to-income ratio -- that is how much of your income is tied up in existing loan obligations, student loan payments, collections accounts, judgments, etc.

As mentioned points and fees can't exceed 3% of the loan balance, but what's a point and when should you pay them? A point, is prepaid interest on the loan, with one point equal to 1% of the loan. If a borrower would rather have a lower interest rate than the one they're offered then they can pay points to lower that rate.

Buying a home is a complex transaction and you're bound to have questions. No one should enter into such a large financial decision with uncertainty. Ask a lender to explain it to you, but understand that the lenders are nailing down the new processes, as well.

It's important to shop around for mortgages, and consumers should know that they should concentrate their mortgage search into a few weeks in order to minimize the impact on their credit scores. Inquiries are a major factor in your credit scores, and too many inquiries can hurt your credit. Every time a lender pulls your credit this is considered an inquiry. Mortgage inquiries made within that short period (which varies by credit scoring model) will count as a single inquiry on their credit reports, and because multiple inquiries would normally ding credit scores, this allows consumers to find the best offer without harming their credit profiles.

2. Tackle Debt: If you have debt, you should try to reduce it, and this is true for all consumers, not just those looking to buy a home. Would be homeowners, should be extra motivated to conquer their debt: Under new ability-to-repay requirements necessary to attain a qualified mortgage, a borrower's debt-to-income ratio must be 43% or less, including the potential mortgage payment.

 Not only do lenders consider the debts that show up on your credit report, but also have to look at debts you may expect to pay in the future, such as child support and student loans in deferment.

Whether you're looking to buy a home next year or in two years, make a plan to manage debts now. It can only help.

3. Start the Paperwork: Though these new requirements impact consumers, they also affect lenders, and no one wants to be the first to screw up. The ability-to-repay measures require a lot of documentation, which will need to come from you, the applicant.

Lenders are going to need to get a very holistic perspective on the borrower in order to complete the analysis necessary to meet compliance. Borrowers should ask a lender exactly what documents they'll need to provide to complete the loan application. In order to answer lenders' questions, would be buyers should also take stock of their credit profile.

Consumers are entitled to a free annual copy of their credit report from each of the three major credit bureaus -- Experian, Equifax and TransUnion. That's three credit reports, so it's smart to review at least one before starting the homebuying process.

No one is sugar-coating these changes -- they're a lot to handle. Changes are common in this post-crisis climate, so the best consumers can do is ask questions and do their part to prepare and educate themselves. In the end, if lenders are making better loans, and the consumers are better protected, it's better for everyone.

If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!

The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley Columbus Delaware Downtown Dublin Gahanna Grandview Heights Granville Grove City Groveport Hilliard Lewis Center New Albany Pickerington Polaris Powell Upper Arlington Westerville Worthington

U.S. Negative Equity Rate Falls at Fastest Pace Ever

Fast-paced price increases have helped bring many underwater homeowners who owed more on their home's than they were worth back to positive equity. In the third quarter, 1.4 million homeowners rose to the surface as their home values once again outranked their equity, this according to Zillow's recently released Negative Equity Report.

The national negative equity rate fell at its fastest pace ever in the third quarter and was the largest on Zillow’s record, which dates back to the second quarter of 2011.

The negative equity rate now stands at 21%, down about one-third from its peak of 31.4 percent and from 23.8% in the second quarter, according to Zillow.

“Rising home prices and a greater willingness among lenders to engage in short sales have both contributed substantially to the significant decline in negative equity this quarter,” said Stan Humphries, chief economist at Zillow.

“We should feel good that we’re moving in the right direction and at a fast clip,” Humphries said.

However, with analysts—including Humphries-- predicting moderating price gains in the coming year, that “fast clip” is expected to decline in the years ahead as home appreciation begin to level off and return to more sustainable historical averages.

In fact, Humphries says negative equity will remain a persistent trait of the housing market and become “part of the new normal” for several years.

Negative Equity Down, But Not Out

While 4.9 million homeowners have risen from their negative equity positions since the bottom of the market in 2011, one in five homeowners with a mortgage remains underwater today. That’s about 10.8 million homeowners currently in a negative equity position.

The “effective” negative equity rate is even higher at 39.2% in the third quarter. The “effective” rate includes all homeowners who have less than 20% equity in their homes. This rate is significant because selling a home and purchasing a new one requires an equity stake of approximately 12% to comfortably meet related expenses.

More than half of underwater homeowners are underwater by at least 20%. Assuming Zillow’s estimated 3.8% increase for average home price growth over the next year, it will take a homeowner with 20% negative equity five years to rise to the surface.

Metropolitan Area

Q3 2013: % of Homeowners w/Mortgages in Negative Equity

Peak Negative Equity Rate

Peak Quarter

# of Homeowners Freed from Negative Equity Since Peak

Columbus

22.8%

34.4%

Q4 2011

40,940

If you’re facing foreclosure you’re facing some very important decisions. We want you know you’re not alone and we are here to help with any questions you may have to assist you in making the best decisions for your situation. There is no charge for this service and we are happy to help! We offer confidential and professional real estate advice.

The Opland Group  Specializes in  Real Estate Sales, Luxury Home Sales, Short Sales  in;    Bexley    Columbus    Delaware    Downtown    Dublin    Gahanna    Grandview Heights    Granville    Grove City    Groveport    Hilliard   Lewis Center    New Albany    Pickerington    Polaris    Powell      Upper Arlington    Westerville    Worthington

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Short Sale Approvals on the Decline as Home Prices Rise

After a surge in short sales from 2010 through much of 2012, this favored disposition method for distressed properties is shifting back toward the more traditional foreclosure auction sales and bank-owned sales, this according to the latest report from data aggregator RealtyTrac.

The national median sales price of all residential properties — including both distressed and non-distressed sales — was $170,000, unchanged from September but up 6% from October 2012, the 18th consecutive month median home prices have increased on an annualized basis.

 

The median price of a distressed residential property — in foreclosure or bank owned — was $110,000 in October, 41% below the median price of $185,000 for a non-distressed property.

“The combination of rapidly rising home prices, along with strong demand from institutional investors and other cash buyers able to buy at the public foreclosure auction or bank owned REO sale, means short sales are becoming less favorable for lenders,” said RealtyTrac Vice President Daren Blomquist in a statement.



Inventory shortages are part of the picture — last week Lender Processing Services reported that after 18 straight months of declines, U.S. foreclosure inventory is now at its lowest point since the end of 2008, falling nearly 30% from just one year ago to 1.28 million in October. RealtyTrac said short sales represented just 5.3% of all sales in October, down from 6.3% in September and 11.2% at the same time a year ago.

Foreclosure auction sales to third parties (a new category, separated out in the report for the first time) represented 2.5% of all sales, down from 2.8% in September but nearly twice the 1.3% seen at the same time a year ago. Sales of “real estate owned” (REO) homes repossessed by banks accounted for 9.6% of October sales, up from 8.9% in September and 9.4% a year ago.

Talk of institutional investors being scared away by rising prices appears to have been overstated, at least in some markets. Markets with the highest percentage of institutional investor purchases included Memphis (25.4%), Atlanta (23%), Jacksonville, Fla., (22.2%), Charlotte (14.5%), and Milwaukee (12%).

Short sales haven’t gone away altogether — states with the highest proportion of short sales in October included Nevada (14.2%), Florida (13.6%), Maryland (8.2%), Michigan (6.7%), and Illinois (6.2%).



The National Association of Realtors has reported, that tight inventories and rising home prices hampered home purchases in October. Although the U.S. is still seeing “significant supply shortages,” inventories are “stabilizing” compared to the dramatic annual declines seen earlier this year, realtor.com said in releasing October data.

This trend is one that is likely to continue as prices continue to rise and demand remains high. Distressed homeowners and those who are behind on their mortgage, or upside down owing more than their home is worth and wishing to avoid foreclosure should contact a real estate agent specializing in short sales as soon as possible as possible and before getting behind on their mortgage payments if possible. For the banks/loan servicers the determination of whether to approve a short sale is simply a mathematical calculation of which sales method will serve to limit the bank's, and/or it's investor's losses. The best way to limit the bank's losses and to enhance chance of a short sale approval, is to start the process as soon as possible and before the bank has incurred additional expenses including: back property taxes, homeowner's association or condo dues, legal expenses relating to the foreclosure process, etc.

If you’re facing foreclosure you’re facing some very important decisions. We want you know you’re not alone and we are here to help with any questions you may have to assist you in making the best decisions for your situation. There is no charge for this service and we are happy to help! We offer confidential and professional real estate advice.

The Opland Group  Specializes in  Real Estate Sales, Luxury Home Sales, Short Sales  in;    Bexley    Columbus    Delaware    Downtown    Dublin    Gahanna    Grandview Heights    Granville    Grove City    Groveport    Hilliard   Lewis Center    New Albany    Pickerington    Polaris    Powell      Upper Arlington    Westerville    Worthington

Definitions

Distressed sales: sale of a residential property that is actively in the foreclosure process or bank-owned when the sale is recorded.

Distressed discount: percentage difference between the median price of distressed sales and a non-distressed sales in a given geographic area.

Bank-Owned sales: sales of residential properties that have been foreclosed on and are owned by the foreclosing lender (bank).

Short sales: sales of residential properties where the sale price is below the combined total of outstanding mortgages secured by the property.

Foreclosure Auction sales: sale of a property at the public foreclosure auction to a third party buyer that is not the foreclosing lender.

Wondering if the Winter is a Good Time to Buy or Sell a Home?

Is the housing market still seasonal? The market has been so up and down recently that the answer can depend on whom you ask, and the market you're talking about. That said, historically residential real estate sales decline in the winter holiday season and don't pick up until the weather breaks in early spring (March or April). This is the reason that data on home prices, sales numbers, mortgage rates, etc., are "seasonally adjusted."

There are compelling signs, that as 2013 winds to a close, serious home shoppers should ignore this convention and instead turn it to their advantage. Here are key factors that prospective homebuyers might want to consider before putting their quest on winter hiatus.

Mortgage rates have fallen: Primary among the reasons to move now has been the fluctuation in mortgage rates. Rates currently stand at an average of 4.39% for a 30-year-fixed loan and while it might be true that the Federal Reserve has committed for the near term to keep interest rates low by buying bonds, no one knows with any certainty when the amend it's policy. That said, there are other reasons not to delay.

Maximum loan amounts to be reduced: If you're seeking a government-backed mortgage -- as most mortgages are -- you're already restricted to getting a loan that's based on the median home prices in your desired area ($417,000 in most housing markets). And the acting head of the Federal Housing Finance Agency, Edward DeMarco, has announced that these limits will be reduced in 2014. While DeMarco assured the public in October that the change wouldn't be sudden, and that financial markets would have at least six months to adjust, why would you want to wait until then? Home prices have continued to rise through the year, and while prices tend to drop in the winter as sellers who need to sell reduce their prices in attempt to compete for a smaller pool of buyers, inventory levels are low and aren't likely to increase significantly until spring.

Loans might be tougher to qualify for, or at least require more paperwork: Starting in January 2014, in order to get a "qualified mortgage" a loan that's insured by the Federal Housing Administration (FHA), prospective homebuyers will have to make a stronger case for their credit-worthiness. Along with documents spelling out the terms of the loan, mortgage seekers will be supplying proof of current income and assets, credit history, and other debts. And then they'll have to prove that the annual amount of debt they carry is no more than 43% of their annual income. The changes, required under the Dodd-Frank Wall Street Reform and Consumer Protection Act, also mandate that the loans carry a fixed-rate and be paid over a term not longer than 30 years.

Fewer Multiple offers: Speaking of the competition, applications for new mortgages have been declining in recent months, along with consumer confidence. That should improve the chances of those willing to continue their home search, even if it means slogging through the winter weather.

Sellers might be more motivated: Just as it can show a bit more commitment to shop for a home in November and December, the same might be said for sellers, especially those who might be seeking a tax advantage by selling before the year is out, those who have grown impatient after seeing their properties fail to sell during the market's peak season, or those who are relocating for job or other reasons and need to sell.

What better time to see a home?: Sure, it might be a little tough to judge a house's curb appeal through the gloom and slush of late autumn and early winter, not to mention under the holiday lights and tinsel. But what better time to see what a home can stand up to?

It's true that there are some key areas that probably can't be inspected or tested if it's cold or snow is on the ground, such as air conditioning units (which could be damaged if operated at temperatures below 60 degrees) and irrigation systems. On the other hand, it's a prime time to see how the furnace works, how well-insulated the home is, inadequate lighting, and if there are any roof leaks.

As for those areas that cannot be inspected: If you can't wait until the weather warms to have those checked, explore a contingency built into the contract that takes care of any possible repairs, or a good home warranty.

Prospective homebuyers hoping to buy a home in the next four months say the lack of inventory is their biggest challenge, but many believe winter is a good time to buy because sellers are motivated to sell and more willing to negotiate.

The reasons most often cited for buying a home in winter were: A quarter of the winter homebuyers revealed they are in the market now because they were unable to find a home during this last home buying season.
-- 26% said they believe that sellers are more motivated to sell and willing to negotiate.
-- 24% indicated that they think home prices will be better.
-- 24% revealed that they were unable to buy a house during spring or summer.
-- 20% shared that they think there will be less competition between buyers.

While 28% said they were planning to buy a home because they are relocating, 19% were existing homeowners downsizing to a smaller or less expensive home, and 15% were move-up buyers. Nearly 1 in 5 of those surveyed (19%) said they were first-time homebuyers.

Tight inventories and rising home prices continued to hamper home purchases, with sales falling for the second month in a row in October, the National Association of Realtors reported today. There were 2.13 million existing homes for sale at the end of October, NAR said, down 1.8% from September. But at October’s slower pace of sales, it would take five months for all those homes to sell, up from 4.9 months in September. Housing analysts generally consider a six-month supply of existing homes for sale as an even matchup of supply and demand — anything less can indicate that demand has outstripped supply. Although there continue to be “significant supply shortages,” inventories are “stabilizing” compared to the dramatic year-over-year declines seen earlier this year, realtor.com said Tuesday in releasing another report analyzing October listings data.

NAR Chief Economist Lawrence Yun recently forecast that 2014 sales of existing homes will level off and be inline with 2013 sales due to factors including declining affordability, limited inventory and tight mortgage lending standards. NAR is forecasting that when all the numbers are in, 2013 sales of existing homes will finish up 10% from last year, at 5.13 million. But similar gains aren’t expected next year — NAR predicts existing-home sales will hold steady at 5.12 million in 2014.

If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!

The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley Columbus Delaware Downtown Dublin Gahanna Grandview Heights Granville Grove City Groveport Hilliard Lewis Center New Albany Pickerington Polaris Powell Upper Arlington Westerville Worthington