Americans say real estate is best long-term investment

by Tracey Boyd

When it comes to long-term investments, Americans love real estate, and, in recent years, that belief in real estate as the best long-term investment option only has strengthened.

According to the article “More Americans Say Real Estate is Best Long-Term Investment” by Jim Norman on Gallup.com, the percentage of those surveyed in a Gallup poll who chose real estate as the best long-term investment option rose to 35% in 2016, with stocks and mutual funds coming in second with 22%.

In the poll, those surveyed were given five options to choose from. Gold (17%) ranked third, followed by savings/CDs (15%) and bonds (7%). In 2011, gold was favored by 34 % of Americans, compared with 19% for real estate, Norman noted in the article. However, since 2014, real estate has been the clear preference.

Stocks and mutual funds have made major gains since the 2008 stock market crash, yet Americans still have not embraced them, Norman wrote. He also noted that 17% of Americans chose stocks and bonds as the preferred long-term investment in 2011, when the Dow Jones industrial average still was below pre-crash levels, and although the Dow was about 4,000 points above its pre-crash high of 14,164 when the 2016 poll was taken, the percentage of those choosing stocks and bonds as the best long-term strategy had risen to only 22%.

In contrast, Norman noted, as the average sale price of new homes in the U.S. rose from $259,300 in 2011 to $348,900 in February 2016, the percentage of Americans choosing real estate as the best long-term investment option almost doubled.

Norman theorized in the article that the widening margin between those choosing real estate over stocks and bonds might simply be a return to the norm. He pointed to a 2002 Gallup poll (which did not include gold as a choice) that showed 50% of Americans named real estate as the best long-term option, compared with only 18% for stocks, 16% for savings accounts and 13% for bonds.

A recent Bankrate national survey showed many of the same results as the Gallup poll, according to the article “Real estate is top investing choice, with stocks only tied for third, survey finds” by Claes Bell published on Bankrate.com.

In the survey, people were asked to pick the best way to invest money they wouldn’t need for more than 10 years, and the most popular answer was real estate, followed by cash investments, such as CDs and saving accounts, according to the article. The stock market was a distant third, tied with gold and other precious metals.

Sterling White, co-founder of Holdfolio, a real estate investment firm, said in the Bankrate.com article there is a simple reason a quarter of those surveyed picked real estate as the best long-term investing option: “Houses are tangible. You can physically see and feel the product. So you know where your money is going: It’s going into that house," he said in the article. "With stocks, you have no clue where your money is going.”

USDA loan: An option for rural home buyers

by Tracey Boyd

The United States Department of Agriculture Rural Development agency was established to help improve the economy and quality of life in rural America. One of the ways it is doing that is through the Single Family Housing Direct Home Loan Program.

These USDA loans are available to assist very low- and low-income households purchase a home in rural areas, such as in Barry County, Missouri.

“No down payment is usually required," Madeline Watson, area technician with the USDA, said in "USDA offers home loans with no down payment," by Julia Kilmer on monett-times.com.

"The maximum loan amount is dependent on the applicant's repayment ability based on income and monthly debt obligations, but cannot exceed $216,840," Watson continued. "With interest rates currently at 3%, the principal and interest payment would be only $598.50 on a $150,000 home, and some households might even qualify for payment assistance, reducing their monthly payment even further.”

The property must be located on a modest site in a rural area, typically in towns with a population of 35,000 or less, and the living area of the home typically may not exceed 2,000 square feet, according to the article. A USDA Rural Development employee will inspect the home to make sure it qualifies for the program, but the applicant is required to obtain an inspection from a qualified home inspector, the article reported.

"If the seller is willing, they can make any required repairs, or, if not, we will order an appraisal as repaired, giving the appraiser the list of repairs that will be completed," Watson said in the article.

"The buyer will obtain bids for the repairs, which can be completed after the sale closes, so long as the house appraises at a sufficient value to loan the purchase price plus the amount needed for the repairs," she said.

To qualify for a Single Family Housing Direct Home Loan, an applicant cannot already own a home and must be able to repay the loan, according to an article by Gabe Franklin on nevadadailymail.com. Furthermore, documentation from the USDA limits ratios to 29% principal, interest, tax, and insurance; or 41% total debt, and first-time buyers must take a home buyer education class before closing, the article reported.

In addition, Franklin's article, "USDA aims to increase home ownership through loan program," reported the USDA also offers home repair loans and grants to fix leaky roofs or bad heating systems, for problems with the house’s structure, for the installation of handicap access, and for other approved home improvement projects.

5 reasons sellers need real estate agents

It’s been well-established real estate agents are crucial players in any real estate transaction. A recent post by Maureen Hughes, lead listing specialist of The Wayne Megill Real Estate Team of Keller Williams Brandywine Valley, in West Chester, Pa., explains why a broker’s expertise is particularly important to sellers.

"In my experience, there are several reasons you should consider before you take on the challenge of selling you[r] home without the help of a realtor,” Hughes wrote in “Agents improve results in real estate sales,” published May 6 on Pennsylvania’s Daily Local News. “For the vast majority, it could severely hamper the sale of their home.”

Here are Hughes’s five reasons why real estate agents are vital to a home sale :

They are masters at negotiating — Sellers will need to negotiate with several people when selling their home, including the buyer, the residential appraiser, the buyer’s agent, the home inspector and, in some instances, the buyer’s attorney. Without an agent, it will be up to the seller to handle any potential questions these entities may have.

“Typically, a realtor would field all of these negotiations, but in FSBO, you will be the one to answer them,” Hughes wrote.

They are experts on getting exposure for your listing — Real agents know how to market themselves and their listings and will put together a plan that ensures your listing reaches the potential buyers. According to Hughes, recent studies show more than 89% of buyers use the internet to search for home, while less than 20% use newspaper ads.

“Most agents have an internet strategy to promote the sale of your home,” she wrote.

They get results — Homeowners report that among the four ways they found a home, buying directly from the seller wasn’t in the top two, Hughes wrote. According to her article, 44% of homeowners reported the internet as the top method used, with using a real estate agent coming in second at 33%. Contact information from a yard sign and newspaper listings came in third and fourth, at 9% and 1% respectively.

They keep abreast of changes in a constantly changing industry — “The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations  have become mandatory,” Hughes wrote. For this reason, she noted, the number of FSBOs has decreased from 19% to 8% during the last 20-plus years.

They make more money for the seller — Homeowners believe they will make (or keep) more money if they list the home themselves. However, according to Hughes, studies show that homes sold by brokers typically yield more money than those sold by owner. Real estate agents will set the appropriate price for a home to get close to if not full asking price.

“Although an agent receives a commission check, you may still benefit from higher home sales and therefore higher profits when all is said and done,” Hughes wrote.

Help buyers and sellers navigate the market

by Tracey Boyd

Real estate experts are saying it's a seller's market, so homeowners will need as much help as possible from their real estate agents when faced with multiple offers on their property. Buyers will need assistance trying to navigate the market as well, according to Mary Chao of the Rochester, N.Y. Democrat & Chronicle.

"Both sellers and buyers can gain the upper hand by knowing how to navigate through the current market," Chao wrote in "5 tips for handling multiple offers on a home."

In the April 28 article, Chao included these five tips from Realtors Sheila Varnado and Bob Malone that agents can pass along to their clients.

1. Seller's advantage. Current market conditions favor those who are selling their homes. As such, sellers may benefit from multiple offers by being able to get the highest price; the best closing and financing terms; and fewer contingencies, according to Varnado.

"Sellers are also able to retain backup offers for the property, in case any problems may arise with a mortgage or buyer's remorse," she said in the article.

2. Price it right. Even though the market favors sellers, pricing and condition are still important. "If a home is priced right and in good shape, it is often only hours before an offer comes in," Malone said in the article.

3. Having financial ducks in row. Buyers should seek pre-qualification to show that they are in a good financial position to make the purchase. According to Varnado, "Being pre-qualified or pre-approved is insurance to the seller and makes your offer look stronger."

4. Dollars and cents. Price is the deciding factor for most sellers, Malone said, and if a buyer really wants a home it may be in their best interest to make an offer higher than asking price. Also, according to Varnado, the type of financing the buyer has may impact multiple offers.

5. Assess the situation. Determine the seller's motivation and then make the terms flexible to their needs. Varnado's goal in representing a buyer is to make a strong offer for the property without overpaying.

"I will usually work up a couple of scenarios for my buyer to look at," Varnado said in the article. "My buyer is also aware that a seller could counter-offer, especially if other terms meet their criteria."

Teaming Up with United Way

April 28th-May 25th

OMT Mortgage is teaming up with United Way of Lane County for their "GIVE A BOOK, SHARE AND ADVENTURE' summer book drive.

We will have this at our location of 2644 Suzanne Way, Eugene OR 97401 until May 25th.

This program helps get books into the hands of kids that may not have access to reading material, and helps keep their reading level up to par over the summer months.

Also can you please say call us at 541-242-8080 or you can call Amy Klein for more information at 541-242-8079!