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10 Best States for First-Time Home Buyers

shutterstock_71599324Buying a home is a financial goal that has been delayed for many Americans, thanks to the recession. With the economy continuing to strengthen in 2015, however, many wannabe homeowners have decided it’s time to buy their first homes.

One-third (32 percent) of home purchases made in May 2015 were by first-time home buyers, according to the National Association of REALTORS®. Lawrence Yun, chief economist for NAR, called this “an encouraging sign” stemming from “strong job gains among young adults, less expensive mortgage insurance and lenders offering low down payment programs.” According to Yun, first-time buyers entering the market will continue to increase.

To see which states offer the best conditions for new homeowners, GOBankingRates ranked the 10 states with the most growth in the number of first-time homebuyers, while maintaining lower levels of foreclosure rates, over the past 10 years.


1. West Virginia

West Virginia saw some of the biggest growth in first-time home buyers in the past 10 years. From 2003 to 2013, the share of new first-time home buyers increased 57.6 percent while foreclosures in 2015 have remained low in the state at 0.01 percent.

The low costs of buying a home in this state also make this housing market accessible for first-time buyers. The median sale price in West Virginia is $115,850, with a monthly payment on a 30-year mortgage costing around $550 a month — more than 40 percent less than the $950 median rent price.

West Virginia also offers some public programs to help its residents buy their first homes. The Homeownership Program offered through the West Virginia Housing Development Fund can provide up to 100 percent financing for first-time home buyers who meet income requirements. Home buyers can also take advantage of the Down-Payment/Closing Cost Assistance program to secure a low rate on a loan of up to $15,000 to help cover down payments and closing costs.


2. New Hampshire

New Hampshire saw an even greater increase in the number of first-time home buyers than West Virginia. The portion of homebuyers in the state looking to purchase a house for the first time increased by 89.3 percent from 2003 to 2013. The state’s foreclosure rate is not quite as low, however, at 0.05 percent, which put it at No. 2 on this list.

The median sales price in New Hampshire, $224,700, is also nearly double that of West Virginia. But buying at that price is still cheaper than renting; a monthly mortgage payment is around $1,060 on a 30-year loan compared with the median rent price of $1,250 in New Hampshire.

New Hampshire state programs can be a big help to first-time homeowners, such as the Home Preferred loans that let borrowers get a mortgage with a down payment as small as 3 percent and provide low mortgage insurance coverage for smaller monthly payments. New Hampshire also offers a tax credit of up to $2,000 each year for first-time home buyers.


3. Rhode Island

Rhode Island had the largest amount of growth in first-time homebuyers; its rate of this type of borrower nearly doubled — up by 97.1 percent — from 2003 to 2013. Foreclosures are also fairly low at 0.06 percent, only slightly higher than New Hampshire’s 0.05 percent.

Rhode Island also has a wider gap between typical mortgage payments and rent prices. The median rent is reported at $1,400 while the monthly 30-year mortgage payment is just around $1,030, based on a median sale price of $217,625.

The state’s FirstHome lending program makes borrowing more accessible for first-time buyers. It offers no-money-down options and assistance with closing costs. Rhode Island’s FirstHome loans also qualify the homebuyers for a FirstHome tax credit of up to $2,000 throughout the life of the loan.

4. Vermont

Vermont is yet another Northeast state that has seen strong growth among first-time homebuyers, with a 48.2 percent rise from 2003 to 2013. The state also has one of the lowest foreclosure rates at 0.02 percent.

The MOVE mortgage credit certificates offered through the Vermont Housing Finance Agency offer low-interest mortgages, lowered monthly mortgage insurance payments and savings on the Vermont Property Transfer Tax. The agency also offers down payment grants that can cover as much as 2.5 percent of the purchase price or loan amount, whichever is lower.

Lastly, there is the local housing market. Vermont’s median home sale price is $224,900, which is slightly above the national median of $215,177. This difference doesn’t push homeownership too far out of reach, but it could mean that hopeful homeowners might need to save a little longer to afford a house.


5. Massachusetts

The ratio of first-time homebuyers in Massachusetts saw a big jump from 2003 to 2013 — 74.3 percent — showing more residents in the state are ready to take the leap. The state also has a foreclosure rate on the lower end, showing that its residents have a good chance at retaining homeownership once they’ve made the commitment.

The median home value in Massachusetts is $323,800 and the median sale price is $309,500, indicating that Massachusetts residents shopping for a home can currently get a deal and pay below market value. Monthly 30-year mortgage payments based on the median price would also be significantly cheaper than the median rent in the state, at $1,460 versus $2,300, respectively.

First-time buyers in this state can also take advantage of mortgage insurance programs like MassHousing, which offers mortgage payment protection that covers up to $2,000 a month in mortgage and interest payments for up to six months should the borrower suffer a job loss. Another option is the ONE Mortgage Program, which is offered through the Massachusetts Housing Partnership Fund and allows for down payments as low as 3 percent and publicly subsidized loans for up to 20 percent of the home’s value.

6. Hawaii

Hawaii had a 52.8 percent increase in first-time homebuyers from 2003 to 2013 and has a lower foreclosure rate at 0.03 percent. In terms of state programs to get help buying a first home, Hawaiians have limited options. But, the state does offer a mortgage credit certificate that can reduce the federal income tax homeowners owe.

Like in Massachusetts, listing prices in Hawaii fall below home values, making it more likely that a home purchase will be a good deal. But the $84,200 difference between the median sale price ($453,100) and median home value ($537,300) is more pronounced in Hawaii. On the other hand, this median sale price is still high and would result in payments around $2,140 a month with a 30-year mortgage, which is on par with the $2,300 median rent price.

7. Washington, D.C.

When it comes to housing, Washington, D.C., has the highest prices of all the places on this list, with a median sale price of more than half a million dollars — $511,885. The lower $487,600 median home value also doesn’t bode well for homebuyers, indicating they’ll be trying to purchase in a market that favors sellers. Plus, the median rent price of $2,285 actually beats mortgage payments of $2,420 based on the median sale price. Of course, D.C. is a smaller area than the states surveyed and is a major metropolitan area, so buyers should expect a competitive housing market.

In terms of first-time homebuyers, D.C. saw fair growth of 41.7 percent from 2003 to 2013. It has also maintained one of the lowest foreclosure rates at 0.01 percent. D.C. offers several local programs that can help first-time homebuyers, such as the Home Purchase Assistance Program. The program provides up to $50,000 in gap financing and up to $4,000 in assistance with closing costs.

8. Wyoming

With plenty of wide-open spaces to offer its residents, Wyoming’s real estate comes cheaper than real estate in many other states. Its median home value is estimated to be $179,000 as of May 2015, which is right on par with the national median of $179,200. Wyoming’s growth in the portion of first-time home buyers was fairly average at 48.5 percent, but the state has a lower foreclosure rate of 0.03 percent.

Wyoming also provides state-level assistance through the Home Again Program, which offers reduced mortgage rates for first-time homebuyers. The state’s Down Payment Loan Program can also be a big help to new homeowners; it provides loans up to $10,000 to help cover home down payments.

9. Maine

The median value of homes in Maine. which was estimated to be $118,000, is relatively low — not only when compared with the national median but especially next to the median home values of other Northeast states, such as Massachusetts ($323,800) and New Jersey ($273,700). Even with a reasonable median rent at $1,225, homeownership is still attractive. A 30-year mortgage for a property equal to the state’s median home value would cost around $560 a month.

The portion of first-time homebuyers in Maine has increased significantly, climbing 51.6 percent from 2003 to 2013. The state’s 0.04 percent foreclosure rate is also less than most states. Maine provides a few programs to help homebuyers, including the First Home Program. The program offers low-rate home lending, which requires little or no down payment.

10. Arizona

Arizona saw above-average growth in first-time homebuyers (63.6 percent), but this increase is also paired with a middling 0.06 percent foreclosure rate that pushed the state down to No. 10 on this list. First-time homebuyers in the state also lack many public assistance options; however, the Home Plus Home Loan Program can help first-time buyers secure down payment assistance up to 4 percent of the home loan amount.

Arizona is another state that has low home values compared with slightly inflated sale prices. The median home value is $191,300, and the median sale price is $204,500. The good news is that mortgage payments are still cheaper than renting; a 30-year mortgage on the median sale price would cost around $970 a month, whereas the state’s median rent is more than $200 higher each month at $1,195.

For more information, visit www.gobankingratescom.

Reprinted with permission from RISMedia. ©2015. All rights reserved.

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10 Tips for Handling a Hoarder’s Home

blog.rismedia.com

blog.rismedia.com

By John Egan

If you find yourself handling the buying or selling of a hoarder’s home, you might feel like you’ve landed in an episode of the reality TV show “Hoarders: Family Secrets.” Chances are, you’ll encounter many of the same issues that pop up on the program. To cope with those issues, here are 10 tips from the experts.

 

1. Recognize that hoarding is a disorder.

Hoarding isn’t a way of life. It’s a mental condition that affects anywhere from 2 to 5 percent of the U.S. population; in a recent survey commissioned by SpareFoot, seven percent of American adults identified themselves as hoarders.

Everything in a hoarder’s home carries emotional attachments, whether it’s a stack of old newspapers or a collection of hats, experts say.

“Something that looks like trash to the average eye may be a very important item—emotionally or financially—to the hoarder,” says Matt Paxton, one of the cleanup professionals on “Hoarders.”

2. Be compassionate.

Speak to hoarders as equals, Paxton says, and work with them closely to come up with a fair deal for both sides.

“Hoarders are good people who have experienced bad things. Do not treat someone with a hoarding disorder as a lesser person,” he says.

If you’re a real estate agent whose client is a hoarder, be honest while also being respectful and nonjudgmental, Paxton says. Here’s what you shouldn’t say to a hoarder who’s selling a home: “Do you see how messy this house is? I can’t list it.”

Here’s what you should say to a hoarder who’s selling a home: “My expert opinion tells me that we’ll need to clean up this space in order to maximize the sale price.”

3. Create a sense of optimism.

If you’re representing a hoarder who’s selling a home, assure the client that the home can be sold, says Paxton, the hoarding and extreme-cleaning expert for ServiceMaster Restore.

“If you don’t believe it, they won’t,” he says. “Treat them just like any other client.”

4. Team up with “extreme cleaning” professionals.

When dealing with a hoarder’s home, it’s best to clear out everything before it’s put on the market, says Dave Baxter, owner and CEO of Baxter Restoration, which provides restoration and remediation services in Orlando, Fla. Experts suggest tapping professionals who are well versed in “extreme cleaning.”

“You can’t know what you are really dealing with until you get all the crap out and have a look at the structure of the building to see what kind of damage has been done,” says Baxter.

Working with a team of professionals who are familiar with hoarders’ homes, rather than a typical cleaning crew, ensures there’s a high level of “compassion and understanding,” says Paxton.

“People with a true hoarding disorder cannot be pushed, threatened or cajoled into making decisions, so ideally, a professional organizer or therapist would be good to add to the team,” says Regina Lark, a Los Angeles-based professional organizer with expertise in hoarding disorder and chronic disorganization.

5. Consider storage.

Lark suggests renting a mobile storage unit or a nearby self-storage unit to temporarily store stuff if a hoarder is grappling with weeding out belongings.

6. Be realistic.

If you must list a hoarder’s home while all of the seller’s belongings are still inside, feature only a floor plan in the listing and include photos of what does look nice or can easily be fixed to look nicer, says Brad Chandler, co-founder and CEO of a real estate investment company in Springfield, Va.

“Encourage buyers to visualize what can be done with the ‘bones’ of the property and how it could look once it is renovated,” says Chandler.

Depending on the market and the property’s value, consider paying an architect or remodeler to draw up a plan showing renovation ideas and costs, he says. Such a plan can cost between $3,000 and $5,000.

7. Brace for extensive damage.

Hoarding often evolves over the course of many years, resulting in mold, animal infestation and other structural problems. Therefore, both visible and hidden damage may be lurking inside a hoarder’s home.

“Buyers and sellers need to fully understand that they may not be able to determine the full extent of structural damage to a house or residence until after the items are removed. This is where professional companies experienced in construction and repair work, as well as cleaning and decluttering, can be particularly helpful,” Paxton says.

If a house is being sold “as is,” you might not fully understand why the price tag was so low till after the house is empty, Paxton warns.

8. Recruit home flippers.

An investor might be willing to buy a hoarder’s home “as is,” with the owner’s possessions still inside, Chandler says. An agent can host an open house for potential investors without the hoarder needing to be there. “This shields the seller from embarrassment and eliminates the need for parading buyers through, as is necessary when listing the traditional way,” he says.

9. Establish ownership.

Make sure the person living in the home actually owns the home. A hoarder’s house actually might be tied up in a trust, or a hoarder might be living there for free. “Understand the legal landscape of ownership before getting too far into a contractual relationship,” says Paxton.

10. Be time-sensitive.

When arranging appointments with a hoarder client, set specific times and call ahead a few times before those appointments. “Understand that timing is not a hoarder’s strength,” says Paxton.

As for establishing goals for cleanup, set several reachable deadlines instead of one massive deadline, Paxton advises. In other words, don’t tell the hoarder: “This house must be clean by end of week.” Rather, approach it like this: “By Friday, I need you to clean up this hallway. Then by Monday, I need to be able to see this 2-foot-by-2-foot area.”

John Egan is editor in chief at SpareFoot, which operates a marketplace that helps people find and book self-storage.

This post was originally published on RISMedia’s blog, Housecall. Check the blog daily for real estate tips and tricks for you and your clients.

Reprinted with permission from RISMedia. ©2015. All rights reserved.

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How to Deliver Email Worth Reading

By Courtney Soinski

iStock_000000316772Medium-email copyThink about all the emails that you receive in your inbox each and every day. Now think about all the emails that you send to your prospects and clients. Do your marketing messages have what it takes to be opened and read? How do you get people to pay attention?

To prevent emails from being ignored or filtered into spam folders, learn these headache-saving strategies.

Get right to the point in the subject line

To ensure that your email gets opened and clicked on, grab the reader’s attention with a catchy subject line. Keep it short, descriptive, and give them a reason to explore your message further.

Try to avoid flashy promotional phrases, all capital letters, and exclamation points. Not all punctuation is bad, though. Subject lines framed as questions can often perform well.

Words and phrases to stay away from

To avoid being plopped in the dreaded spam folder or just plain ignored, there are certain words and phrases that you should stay away from at all costs. According to a recent study, a few of these words include: “Free”, “Help”, “Percent Off”, and “Reminder”.

Use a recognizable “From” name

“From” names that are not recognized or seem confusing to readers will be ignored, deleted, or lost in the inbox. Would YOU want to open an email from someone you don’t know?

Here’s something else to keep in mind – sending a welcome email as soon as your client subscribes will get them engaged much earlier in the relationship. After that, they’ll surely be able to recognize you, trust you, and read your emails.

Localization gets results

Providing localization in your email, such as the name of a city, neighborhood, or area-specific event can increase open rates and click-through rates. You’ll be using personalized geographic information to peak their interest while directly targeting clients on a hyper-local level.

Design for optimum compatibility

When you’re creating your email, be sure that it’s designed to display on all types of device platforms. Now more than ever, people everywhere use their cell phones and tablets in addition to a desktop computer to access their email. Don’t let your messages get left behind!

Deliver read-worthy content

You can increase and maintain engagement by delivering content that’s actually wanted. Keep it short, and provide links they can click on to read more or share with a friend via email or social media. Including a video is also a great way to effectively connect with your readers.

There are many benefits of email marketing if used in the right way. After all the hard work you put into your campaigns, the last thing you want is to be ignored or mistaken for spam. Follow these tips and you’ll be on your way to building relationships through valuable content and effective reader engagement.

Are you ready to deliver email worth reading?

 

Source: MailChimp; RealtorMag

 

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