Monthly Archives: July 2016

Homebuying Tips: Advice For First-time Home Buyers

Best Advice For First-time Home Buyers

If you are a first-time homebuyer, you’ll have a much easier time finding and financing your next home if you follow these tried and true tips:

  1. Hire an experienced real estate professional:  Buying a first home is a complex process. Your Berkshire Hathaway HomeServices professional will assist you through the hurdles of neighborhood searches, comparing homes, making an offer, inspections and appraisals, as well as help you identify the best values.
  2. Check and repair your credit: Banks use your credit scores to make lending decisions, so make sure your credit is accurate and deficiency-free. Order your credit reports and scores by visiting http://www.annualcreditreport.com so you can make repairs, if needed.
  3. Get pre-approved: To get pre-approval, you have to apply for a loan and share your income, work history, debts and other information. Your lender will confirm your down payment source, interest rate, type of loan and loan term. Only then will you know exactly how much home you can buy.
  4. Check out federal, state and local government incentives: To learn about first-time home buyer programs, see: http://www.grants.gov or http://www.hud.gov. Click on Housing Authorities to find out what’s being offered in your community.
  5. Prepare to compromise: There’s no perfect home, so you’ll have to prioritize your wish list. Older homes often need cosmetic work so expect to pay more for a home in pristine move-in condition.
  6. Make a long-term investment: Equity is built over time, so plan to occupy your home for several years or more. Your home is also an investment in happiness and that can be the best deal you ever make.
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Berkshire Hathaway HomeServices PenFed Realty Continues to Outperform the Industry

Hot off the press… Berkshire Hathaway HomeServices PenFed Realty continues to break records!

Mid-Year Review

According to Berkshire Hathaway HomeServices PenFed Realty Mid-Atlantic President Kevin Wiles, “The Mid-Atlantic team delivered a company sales record in June and a record-breaking first half of 2016. Thanks to all of our amazing agents and employees, the Mid-Atlantic region had the best 6-months in the history of the company.”

Highlights:

  • In June, closed a record 746 units for $283 million in sales volume, surpassing our previous high sales mark by $30 million.
  • YTD growth in average sales price (ASP) through June was more than 8% as opposed to  MRIS, which grew by less than 1% at .05%.
  • BHHS PFR sales volume grew YOY by 21.3% (YTD through June), which exceeds MRISgrowth for the same period by more than 11%.
  • YOY unit sales increased by 12.7% (YTD through June), which exceeds MRIS growth for the same period by more than 5%.

“This is a phenomenal success story,” Wiles said. “For two years in a row, we have outperformed the industry average. I want to sincerely thank the Berkshire Hathaway HomeServices PenFed Realty Mid-Atlantic team for delivering on our commitment to perform with excellence. You continue to do this with the unparalleled customer service that is the hallmark of our strong brand,” Wiles said.

FINANCIAL TIPS: Four Ways to Build Equity

Four Ways to Build Home Equity

Equity is the percentage amount of your home that you actually own. You have three ways to build your ownership stake: through the purchase, through the reducing principal and through the passage of time.

  1. Down payment: You gain instant equity when you put down a down payment. If you put 20 percent down, your equity ownership is 20 percent.
  2. Purchase price: You can also gain instant equity by buying your home below the market. That’s difficult to do because homes don’t typically sell below market unless there is some sort of problem, such as poor condition, lack of updates or foreclosure. To build equity, invest in updates and repairs to bring your home up to neighborhood standards.
  3. Paying down principal: As you pay your mortgage, little goes toward reducing the principal while a lot goes to paying interest. The longer the term of your loan, the less quickly you’ll build equity. Work with your lender to choose an adjustable rate or fixed rate for the length of time you think you’ll be in your home.
  4. Time: Historically, home values tend to beat inflation by one or two percentage points, which means you can estimate a rise in your home’s value to average about three to five percent annually in a normal market.

It takes time to build equity this way, but when you combine principal reduction with buying wisely and caring for your home so that it retains its desirability, you’ll find that you build equity quickly and steadily.

National Association of REALTORS 2nd Quarter HOME Survey Results

Yesterday, the National Association of REALTORS® (NAR) released the  July Housing Opportunities and Market Experience (HOME) Survey Results.july HOME

According to NAR, the HOME report was created to monitor consumer sentiment about the housing market. It covers core topics that will be tracked on a monthly basis such as views on housing as a good financial investment, whether homeownership is part of the American Dream, if now is a good time to buy or sell a home and perception of home price changes.

Highlights include:

  • In the second quarter of 2016, 74 percent of people believe that now is a good time to buy a home.
  • Only 26 percent of people believe that now is not a good time to buy a home.
  • Sixty-one percent of people believe that now is a good time to sell a home, up from 56 percent in Q1 2016. Thirty-two percent believe that strongly, up from 28 percent in Q1 2016.
  • Forty-seven percent of those 34 years or younger have student loan debt.

Click here to download the full report.

HOME IMPROVEMENT TIPS: The 60/30/10 Color Rule

To paint and decorate your home without worrying whether you’re going overboard with color, try the classic interior design rule known as the 60/30/10 rule. It’s a foolproof way to divide your color scheme into primary, secondary and accent colors by assigning them percentage values.

The primary color is the largest block of color and will act as your neutral. You can use a true neutral like beige, grey, or white, or try a soft tint of your favorite color. The secondary color is the anchor and works well on upholstery and bedspreads. The accent color should have the most color intensity and is used sparingly in pillows, chair seats or oil paintings. Outside, the primary color is the brick, stucco or siding, the trim is the secondary color and the front door, porch chairs, or planter pots are the accent.

If you choose a deep shade for walls, give the paint a satin finish for sophistication. A dark color can easily look chalky. And the opposite is true—a light color can become blinding in a shiny finish. If you have lots of fine wood trim, paint baseboards, crown moldings and door and window trims in a complementary hue like white or cream.

To test a paint chip for accuracy, hold it parallel to the wall under natural light. Buy sample jars and test the colors on large poster boards you can tape to the walls. Watch how the colors change throughout the day and evening under artificial light.

Remember, interior colors always tend to go darker, while exterior colors appear lighter.

Complex Consumers: Why Your Old Marketing Won’t Work In Today’s Luxury Market

In decades past, luxury consumers were a primarily homogenous group with ostentatious style and a taste for status-setting items with luxury labels. Today, however, these values are all but obsolete. Luxury consumers are more varied, diverse, numerous, and complex than ever before, and thus less receptive to old marketing and branding tactics such as regionally- and demographically-targeted messaging. Market research shows that the “new” luxury consumer—in all of her instantiations—demands a fresh approach from luxury brands and service providers.

Out With The “Old” Luxury Consumer & In With The New

Although the new luxury consumer does not fit into one box, there are a few sentiments and traits that are growing across the board.

  • Global. The luxury consumer exists everywhere, and the Internet makes most products and services available to people from all corners of the world.
  • Sophisticated. Compared to past generations, today’s luxury consumer has more refined tastes and thinks more about the impact of their consumerism. These sophisticated shoppers are more educated about their options when making a buying decision.
  • Demanding. They expect their high-end vendors and service providers to be ever-accessible, as well as near-superhuman in their ability to predict the consumer’s needs and concerns.
  • Concerned with sustainability. The luxury market is not immune to eco-conscious consumers and business practices.
  • Shopping across all channels. Although today’s luxury consumer tends to communicate online, don’t assume that they’re doing all of their buying on the Internet. The in-person, in-office experience still matters.
  • Diverse. In age, race, socioeconomic background, taste, and expectations.

Luxury Experiences

 

One of the most important changes in the luxury consumer is the shift in interest from luxury “things” to luxury experiences. “Shock of the New Chic,” a recent research article by BCG Perspectives, reports that “newly affluent buyers tend to amass tangible goods that show off their wealth. Those who have acquired the ‘things’ they want tend to move on to one-of-a-kind experiences that they can share with others.”

 

Across all levels of affluence, the interest in luxury experiences is growing, from free-diving with hammerhead sharks to attending art auctions with other community members. American Millennials, for example, generally place much more stock in shared experiences than the elder and wealthier Baby Boomers. BCG’s 2013 Global Consumer Sentiment Survey showed that 29% of Chinese consumers prefer enriching experiences to products, while 51% of American consumers said the same. Today, experiential luxury constitutes 55% of luxury spending worldwide, and sales of luxury experiences now outstrip sales of high-end products.

How to Adapt & Improve

 

Here are 3 ways that luxury service providers can change their “business as usual” to embrace the changing trends and demographics within their market.

 

  • Offer luxury experiences. Real estate professionals should expand their services and offer luxury experiences to clients and prospects. This might mean organizing exclusive events, hosting community meet-ups for high-net-worth individuals, or throwing soirées featuring local luxury brands and products. Think of creative, on-brand ways to enhance your clients’ experience and enable them to “live” luxury, rather than just live in it.
  • Enrich your sales process. Research shows that, to excel with today’s consumer, all aspects and stages of your service should be top-tier. “Turning sales activities into deluxe experiences in their own right is nothing new,” according to BCG’s research. “But the practice is reaching new levels of excellence across a widening range of luxury segments . . . and across all channels.” Ask yourself how you can enhance your sales experience in the office, online, and everywhere in between. One digital option in real estate is to provide an easy method for clients to track the selling or buying process via a sleek smartphone app with push notifications. With a customer service interface that is branded and personalized, clients feel cared for and informed.
  • Test out new “experiential” business models. Over the past decade, the luxury market has seen a proliferation of businesses based on “sampling” luxury items or experiences, sometimes through rental or subscription models like those of Bag Borrow Or Steal and Birchbox. BCG noted that, “Although some see such businesses as democratizing luxury—perhaps even diluting the participating brands—the new model clearly resonates with consumers, especially Millennials.” In other words, it’s time to second guess the old assumption that exclusivity begets luxury.

 

Market research and statistics shed light on the luxury consumer’s ongoing transformation, and there is mounting evidence that it’s time for big changes in the luxury industry. BCG Perspectives stressed that, although luxury brands historically put less stock into research than their mainstream counterparts, “the formulas for success have become much more complicated.”

A special article from the Institute for Luxury Home Marketing