The one-stop shop real estate agent has gained in popularity over the past 5 years, and for good reason. Working with a real estate agent who can also be your partner through the home loan origination process is convenient, and also provides an added layer of trust and security. A recent survey by the National Association of Realtors shows that “.95% of homebuyers would consider a one-stop shopping model.”

With any real estate transaction, there are two main parties with whom a client typically works: a real estate agent and a mortgage loan originator. It takes time and energy to do a sufficient amount of research to find suitable parties to fulfill each function. Even if you were lucky enough to find the best of the best in each department, you still run the risk of having individuals who are not used to working with one another. These professionals need to communicate about one of your most important financial decisions, and alignment is very important.

This is one of the reasons why more and more people are gravitating to partnering with professionals who can do both; real estate agents who are also mortgage loan originators and can therefore seamlessly support them through the entire process. This one-stop shop real estate model has seen great success. 

“Almost 50 percent of recent homebuyers used one source to procure home-buying services in 2019.”

In addition, “Home-buying satisfaction levels are higher among those who used OSS, and the majority of homebuyers say that OSS makes buying a home easier.”

 

3 Benefits of Working with A One-Stop Shop Real Estate Agency

1.One-Stop Shop Real Estate Partners are Convenient

When you are buying a home, you have enough stress to deal with. You want the process to be as easy as possible. One-stop shop real estate agencies are convenient for both the client and the agent. An NAR study shows that three-quarters of consumers believe a one-stop shop makes the buying or selling process more efficient and manageable.

Real estate agents and mortgage loan originators need to be in communication and closely aligned during a home buying process. A lack of alignment can cause delays, inconvenience and some real worst-case scenarios. However, when your real estate agent is a one-stop shop, the entire process becomes more convenient. 

According to a Forbes.com article on one-stop shopping, “When a brokerage has direct access to the mortgage and title companies, it can also take care of issues more quickly than if it had to coordinate with a third-party mortgage or title firm. This saves time for everyone involved in a home transaction.” 

2. One-Stop Shop Real Estate Partners Add Trust & Reliability

Most people put a good bit of time into finding a real estate agent that they think they can trust. In fact, they end up trusting this person so much that they often look to them for a recommendation on who to work with for their mortgage “Over half of homebuyers say they would be more likely to consider a firm affiliated with their real estate agent, with nearly one in five saying they would be much more likely—suggesting that the real estate agent can have a significant impact on a homebuyer’s choice of additional services. This consideration has close to doubled over the past 10 years.”

When a trusted real estate professional can also double as the mortgage loan originator, everyone benefits! Your real estate agent is the closest person to your transaction. They know the timeline you are working on. They understand industry norms. And most importantly, they know the things that could benefit you when it comes to your home loan. 

According to Forbes.com, “Integrating real estate mortgage and title services can even help decrease the chance of something slipping through the cracks as it’s all under one roof.” “Access to an in-house title insurance service helps increase communication and awareness of details between the broker and title firm. The one-stop shop process can help a brokerage avoid any potential last-minute surprises and, ultimately, delays.”

3. One-Stop Shopping is Financially Responsible

In a one-stop shop real estate environment, transactions can proceed smoothly and efficiently, resulting in reduced costs. There are a wide variety of fees that are an inevitable part of closing costs. However, the amount of these fees can vary, and that can be difficult to research and compare. 

When you work with a one-stop shop real estate agent, they can use their industry knowledge to make sure everything is fair. By maintaining more oversight over the entire experience, as well as the pricing of the home or mortgage or title fees to ensure they’re fair, the transaction is made as smooth as possible for the client and agent (forbes.com).

 

Miami Properties and Paradise is a one-stop shop. Our Broker is also a licensed mortgage loan originator, currently with NEXA Mortgage. We are ready to support your real estate dreams! Reach out today to start a conversation with a one-stop real estate agent today.

Demand for second homes is on the rise, even as some Americans face financial hardships due to the pandemic. For many affluent American’s, the prospect of a second home is now more tempting than ever due to low interest rates, high amounts of time spent at home, and the increased relocation flexibility due to remote work possibilities. This phenomenon is an interesting example of a k-shaped recovery the US economy has been experiencing.

According to a report from Redfin, demand for second homes skyrocketed in October 100% from last year, marking the fourth triple-digit increase in the past five months. 

The second-home demand outpaced the 50% increase in demand for primary homes, signaling particular interest in a second home investment.



Why are we seeing an increase in demand for second homes amidst a pandemic?

The answer is threefold. 

1. The Lifestyle Aspect 

   People are spending more time at home than ever before, and as a result, they want to love where they live! With decreased opportunities to travel and increased remote work opportunities, second homes and vacation homes are extremely compelling.

   The inability to travel coupled with mandates to stay home incites us to create our own residential paradises. Purchasing a second home allows for a safe, consistent vacation alternative that can provide a much-needed change of scenery.

2. An Advantageous Real Estate Market

   Second homes don’t only provide lifestyle benefits, they can also be really great financial investments. A lot of second home buyers are just regular folks, looking to think outside of the box. They want to purchase an asset that essentially pays for itself every year. Second homes can go up in value and eventually net a return, all while the owners get to use them as personal paradises. Some second homes can even be used as vacation rentals to produce their own revenue streams.

   The current real estate market is making this all the more possible for many. Interest rates on home loans are at historic lows, being readily available below 3%. In fact, interest rates have hit a historic low more than 8 times in 2020.

   This is a tempting factor driving home sales from both existing and prospective homeowners. “With mortgage rates at all-time lows and offices shut down across the country, the dream of having a second home outside of the city is becoming a reality for many wealthy Americans,” says lead economist Taylor Marr.

   

3. The K-shaped Recovery

   The pandemic is not affecting all industries or individuals equally. According to Bloomberg, “While nearly 11 million people were unemployed as of November, many other Americans had grown wealthier thanks to surging stock and house prices, spurring the term the “K-shaped recovery.”

   While some continue to struggle, others are riding a wave of recovery. The diverging strokes of the letter k represent the different fortunes. 

Real estate has been a large facilitating factor in the upper stroke as affluent buyers and sellers take advantage of low rates and healthy margins to relocate to more spacious accommodations, or even purchase a second home.

 

Will Second Home Demand Continue To Increase?

The increase in second home purchases is a trend that is likely to continue, even as physical offices reopen. Consumer preferences are changing in major ways when it comes to housing, employment, and social activity. Those changes won’t simply dissipate when the pandemic is over. 

Marr explains, “Even when offices reopen, folks will be able to spend more time than ever before in their second homes because many employers will continue to offer flexible remote-work policies.”

If you are considering investing in a second home, now may be the perfect time to get started. Reach out today to talk through your options with a real estate expert.

 

Enjoying time in a place that you love, surrounded by your loved ones – that’s truly what life is all about. It’s all too easy to get bogged down in the details of finding a suitable vacation home or to be overwhelmed by the high rental costs and end up skipping it for years altogether. One of the benefits of buying a vacation rental property is that it makes your dream vacation easy and free.

Many people don’t realize how accessible owning a vacation rental property can be. You don’t necessarily have to take on dual mortgages to own a vacation rental property. Why? Because it can essentially pay for itself while also generating you additional income.

 

1. Generate Rental Income

One of the top benefits of buying a vacation rental property is that renting it out when you are not using it will allow you to generate rental income. In this way, the house actually provides you with its own steady source of income. Depending on where you are buying your vacation home, short term rentals during the peak season can cover the mortgage expenses and leave homeowners with a nice financial boost.

Renting out your vacation property generates income that you can use to pay your mortgage payments and any other expenses. This essentially means that you are having others pay off your loan while you still get to capitalize on the equity your asset gains over time.

 

2. Build Equity Through Appreciation

In addition to making you money in the short-term through rental income, another one of the benefits of buying a vacation rental property is that it can potentially make you a lot of money in the long run. While the housing market can fluctuate, real estate tends to appreciate in value over time. Even modest appreciation can add a lot of equity to your investment.

Combine appreciation with the fact that you may be able to pay your loan down entirely with the income you make from short term rentals, and you have a recipe for not just a free vacation home, but a money-making investment. If and when you are ready, you can usually sell your vacation property at a higher price than you paid for it, allowing you to cash in on the profit.

And, what is neat about increasing the income through short term rentals is often times investors will buy an asset based on it’s ability to generate income. In essence, the more income you are able to generate for yourself, the more appreciation you would enjoy as you added that value yourself. How liberating!

 

3. Take Advantage of Tax Benefits

A rental property is considered a business, which makes it eligible for a variety of tax benefits. You may be able to write off things such as mortgage interest, maintenance and repair costs, property management expense related fees, money spent on marketing and licensing, etc.

The tax laws around vacation rental properties are different in each state, so make sure to consult a tax professional to make sure you are taking maximum advantage of your tax benefits.

 

4. Prepare for a Happy Retirement

Who doesn’t dream of retiring where they like to spend their vacations? Maybe by the beach, or on the lake? Or in the mountains, everyone has what they consider “Paradise”.

Another one of the benefits of buying a vacation rental property is that it can help you prepare for a happy retirement in your dream home in a financially responsible way.

If you have considered a plan where, upon retirement, you sell your current home and move full time into your vacation rental property, then you’re probably pretty financially savvy. This plan could save you a lot of money in the long-haul. You will begin reducing your mortgage debt on your vacation rental property long before you move in full-time. Plus, when you sell your current home, you can use the profits to pay down your mortgage debt even further. This can reduce either the longevity of your loan, your monthly payments, or both!

 

5. Anytime Access to a Free Vacation Home

When talking about buying a vacation rental property, anytime access to a free vacation home can’t be overlooked as a benefit. Putting time aside to take consistent vacations with your friends or family is so important. When you’re the owner of a vacation home, planning a vacation could not be easier. You will have your choice of dates, and you won’t have to pay the hefty rental fees. Best of all, you will get to enjoy your vacation in a home that you love and that is familiar to you! Think Pride of Vacation Home Ownership!

 

Buying a vacation rental property is a big decision that extends beyond your finances. You are not just investing in a rental property. You are investing in a place where memories can grow over the years as you vacation with your loved ones. The income that this investment can produce makes it much more accessible than you might immediately think. If you are considering purchasing a vacation rental property, reach out to our team so we can help you make an informed decision.

When you are buying a home for the first time, finding your best mortgage option can seem like a daunting task. How can you be sure that you are taking advantage of the best first time home buyer program? Knowing the basic loan options for first time home buyers will allow you to make sure that you are exploring all avenues with your mortgage lender and making an informed decision.

After you have looked into your loan options, research mortgage lenders. Your lender will be able to offer you many of the below first time home buyer programs, and they will walk you through the ones that you qualify for in more detail when the time comes.

First Time Home Buyer Programs:

1.Conventional Home Loans

Conventional home loans are simply mortgages that are not insured or guaranteed by the federal government. There are two types of conventional loans, conforming and non-conforming. Conforming loans abide by guidelines set by the government-sponsored entities Fannie Mae or Freddie Mac.Non-conforming loans abide only by the guidelines set by the lending institution. This is an important distinction because with the backing of Fannie Mae and Freddie Mac, lenders can offer conventional loans with more competitive interest rates and down payments as low as 3%.

2. Federal Housing Administration

In a Federal Housing Administration mortgage, the FHA insures the home loan. This offers the lender some protection since they cannot lose money if you were to default on your mortgage. Because of this, these loans often require lower down payments and closing costs than conventional loans and thus can be a great option for first time homebuyers. You will need a decent credit score to qualify for an FHA loan with a good interest rate.

3. U.S. Department of Veteran Affairs

If you are an active-duty military member, a veteran, or a surviving spouse, The U.S. Department of Veteran Affairs (VA)  will guarantee part of your mortgage. This makes it possible for the lenders to offer special mortgage features. Most namely, there is no minimum credit score required to qualify, there is no down payment, private mortgage interest is not required, and interest rates are competitive.

4. U.S. Department of Agriculture

U.S. Department of Agriculture (USDA) also has a homebuyer assistance program. This program focuses on homes in certain rural areas. If you are considering buying a home in a rural area, you should look into this option. The property does not have to be a farm to qualify. The USDA guarantees the loan, which helps allow for no down payment. These loan payments are also fixed, which means that your rate can not increase if mortgage rates increase in the future.

5. Local Grants and Programs

In addition to all of the federal loan programs, many cities and states also offer their own first time home buyer programs that often have below-market mortgage rates, as well as down payment or closing cost assistance programs.

Florida First Time Home Buyer Programs:

• There is a Florida First-Time Homebuyer Program with 30-year fixed rate loans through participating lenders.
• Florida First Time Home Buyers can also take advantage of the Local SHIP Program, which enables low to moderate income home buyers to access funds from their local country for down payments and closing costs.
• Florida home buyers should also be aware that there is a Mortgage Credit Certificate Program which allows buyers to claim up to 50% of their first mortgage interest (up to $2,000) each year as a tax credit. 
• Miami/Dade offers their own mortgage assistance program with below-market mortgage rates. So does Broward county.

 

When you apply for a loan, your approval, as well as your loan rate will depend on a variety of factors. Your credit score and your income level have an impact in these decisions. To determine your interest rate, the two calculations are taken heavily into consideration:

• Loan-To-Value Ratio = Mortgage Amount / Appraised Value of the Property. This is basically a risk assessment of the loan based on the asset value and the purchase price. The higher the LTV, the higher the risk.
• Debt-Service Coverage Ratio = Net Operating Income / Total Debt Service. This is basically the measure of cash flow available to pay debt obligations.

 

If you just starting to look into first time home buyer programs, feel free to reach out to our experienced agents for advice, and so that we can keep an eye out for your dream home.

Buying a home for the first time can, at first, seem like a daunting task. If you do your research and make sure you are financially ready, it can be a great investment and even a fun process. We have compiled 6 tips for first time home buyers to help you make a sound investment.

6 Tips for First Time Home Buyers:

1. Check Your Credit Score

Before you consider applying for a home loan, you need to be certain that your credit score is in the viable range for a decent mortgage rate. If you don’t know where you currently stand, check your credit score to see. It would also be wise to avoid opening any new lines of credit, (for a credit card, a new vehicle, etc.), during or directly before the home buying process.

 

If you need to work on raising your credit score, you can sometimes work with a credit expert through your mortgage lender to help you get your score where you need it to be. The best thing to do in many situations to raise a credit score quickly is to pay off as much debt as you can. This will lower the percentage of available credit that you utilize, which is a factor in determining your credit score. Start with credit card debt.

2. Research Your Mortgage Options

There are a lot of great mortgage options out there for first time homebuyers. The VHDA offers loans with as low as 3% down for qualifying participants, and depending on your income level, you may even be eligible to get money towards your down payment as a grant. Check out all of your options so that you know when a mortgage lender is offering you a good loan.

 

When you are ready to look for a mortgage lender, look for someone you can trust. Your real estate agent will likely have a connection with a dependable mortgage lender that they can recommend. You can also ask your homeowner friends for recommendations. Your mortgage lender can help walk you through all of your options. Don’t be afraid to get quotes from multiple mortgage providers, but be aware that the final closing disclosure could be different from those provided estimates.

3. Research The Process

Another tip for first time homebuyers is to make sure that you have researched the home buying process prior to starting your house search. Knowing what’s involved, from the home search and the mortgage application, to the inspection, all the way up to the closing, you need to be familiar with everything that is to come so that there are no surprises.

 

Understand that the home buying process is called a process for a reason. It doesn’t have to be a chore, in fact it can be quite enjoyable. But in order for you to stay positive and confident, you have to be aligned with a solid team of professionals. The process can seem daunting at first, but once you get serious in your house search, it really does tend to take on a life of its own. Lean on the expertise of your agent, and use your knowledge to anticipate the timeline, as well as other details of your purchase.

4. Know Your Market

The decision to buy a home is obviously a very large one. It has the potential to be a great investment, but it is certain to be a great financial responsibility. One of the best tips for first time home buyers is to get a good feel for the real estate market that you are shopping in. The more you know, the more informed this important decision will be.

 

Location is very important in real estate, but it is not so much the physical address as everything that comes with it. This means that location has the potential to change in value. Is the neighborhood that you are looking in on the rise? Is it already a great area with access to all of the things that you value? Get to know the area around any home that you are looking at and make sure you take into consideration how it should affect the current price tag, as well as the home value in the future.

5. Get An Agent That You Trust

No matter how well you think you know your real estate market, there are some things only years of experience can tell you. That’s where your real estate agent comes in. One of our tips for first time home buyers is to find a real estate agent that you feel like you can trust and have an open dialogue with. They can help you determine if a property makes sense for you financially, and they have an eye for all sorts of red flags you may encounter in the process.

 

A lot of times, people don’t really know exactly what they want and need in a home until they look around. It is often by seeing examples of what you don’t want that you are able to narrow down the search. Your real estate agent will help you find the home that fits your needs based on the conversations you have at the beginning of your search.

6. Be Involved In Everything

You have probably noticed a common theme among many of these tips for first time home buyers; knowledge is power in the homebuying process. When you are buying a home, you need to stay as involved as possible to make sure that you are always making informed decisions.

 

Read everything, and always double check your numbers. Banks, credit unions, and mortgage lenders can make mistakes, so pay close attention to the itemized details of your fees within your disclosure. If something is being paid for before closing, make sure it is not included in the total due at closing – stuff like that. Also, be prepared to provide a LOT of financial documents to your lender. The more responsive you can be here, the quicker the whole process will move.

7. Put More Money Aside Than You Think You Are Going To Need

I am sure you have thought about the down payment, but what about the closing costs, the home inspection fees, the good faith deposit? Work with your lender to get a FULL estimate of your costs out of pocket at the beginning of the process, and then buffer that number just to be safe.

First time home buyers can purchase homes with relatively low investments, but you will still have a decent financial obligation to close. The more you can put down on your home at the beginning, the less you will pay in interest over the years.

 

Buying a home for the first time is exciting, and it can be a wonderful investment. Our agents at RE/MAX Paradise are dedicated to helping you find the home that is right for you. Contact us today to get started on your home search!