Cincinnati has been voted one of the best places to live in the United States, and while that may be not surprise to us lifelong residents, we want to make sure new visitors and transfers understand just how great our City is! Of course we love our sports teams, unique restaurants, and the wide array of things to do, but our personal favorite is the affordable housing market.
So, please take a quick look at all the reasons we love the Queen City and head on over to our PROPERTY SEARCH to browse our selection of homes currently on the market to purchase. You know you love Cincinnati as much as we do… is it time to set new roots in your favorite neighborhood?
The housing market is hot, and while that may be great news for those listing their homes, for buyers, the frustration is real. Week after week, house after house, they’ve grown accustomed to the phrase…”we’re now in multiple offers.” A great looking, well-cared-for and most importantly, well-priced house, is creating quite the frenzy for those out searching for their next home in this low inventory seller’s market.
When demand outweighs supply, there are a few things you can do to get ahead in this competitive market:
FIND A WELL QUALIFIED BUYER’S AGENT: Along with obtaining a strong financing pre-approval, this is the first step in getting closer to the home of your dreams. Ideally, you want an agent who has dealt with multiple offer situations before and knows several strategies to help you win. Overall, it can come down to what you’re willing to pay. As a buyer’s agent, I would never encourage a client to overpay for a home, but I can offer advice to help get you to the “right” price.
MAKE A STRONG INITIAL OFFER: Yes, we’re starting with the $$$. In most cases, this is what it comes down to. Sellers usually want the best possible price they can get for their home. Still, it doesn’t mean the highest offer will always be the winning offer. Along with the purchase price written in the contract, you can also consider asking your agent to include an escalation. This is an addendum to the contract stating that you will pay a set amount over the highest written offer up to the limit you set.
HAVE YOUR AGENT ASK ABOUT THE SELLER’S NEEDS: Is there an occupancy time that would work best for them? Do they need a quick close? Ultimately, the offer that best fits the needs of the seller is the offer that will win.
CONSIDER WAIVING CONTINGENCIES OR KEEP TIME FRAMES SHORT: While I can’t recommend skipping an inspection, some buyers are waiving the inspection as a contingency and accepting the house “as is.” The same goes for the appraisal. There is a concern when a house sells far over listing price that might not appraise. In a multiple offer situation, the buyer could offer to pay the difference between the appraisal value and the purchase price should the appraisal come in lower.If you don’t want to waive the contingencies all together, it can be a good idea to keep the inspection and settlement period as short as reasonably possible
DON’T ASK FOR EXTRAS: A multiple offer situation is not the time to throw in a lot of extras like closing costs, a home warranty or appliances or furniture. It’s best to keep the contract as clean as possible.
GET A PLUG FROM YOUR LENDER: Have your mortgage person CALL the agent to tell them how well qualified you are. Even if they just leave a message it can help.
GIVE IT YOUR BEST EFFORT: As mentioned before, having a strong pre-approval to back your offer can help the seller feel much more confident in your ability to purchase their home. You can also add to the amount of earnest money you would normally offer to show a strong interest and commitment to following through with your offer. If possible, consider a cash offer. While cash isn’t always king, it does make for a very compelling offer and a streamlined purchase process that can be hard to top.
STAY CALM: It can be easier said than done, but the best advice I can give to my clients is to present the strongest offer they can to help get the house they want at a reasonable price that falls within their budget. While it can be difficult to remaIN unemotional about these decisions, you have to keep it in perspective. Offering more than you’re comfortable with paying or forgoing important contingencies can lead to regret down the road.
Build Collective is Here to Help Home Buyers Every Step of the Process
If you’ve been living in the City of Cincinnati, chances are you’ve heard about the tax abatement for new construction and remodeled homes. But, do you really know how it works??
Paul Yankie, President & CEO of Green Building Consulting sat down with us to give us a little crash course on the tax abatement & LEED Construction and why it’s been such a driving force in the Cincinnati residential real estate market.
Paul explains it best in our chat with him, but here are the main takeaways:
The Cincinnati Community Reinvestment Area (CRA) Residential Tax Abatement, as it’s called, offers property owners the ability to minimize tax implications when you build, add-on or invest in your home. This means that any improvements will NOT significantly add to the property tax bill. You would only pay on the amount of “pre-improvement” value, up to $275,000.
LEED Certification: This is the secret topping to the tax abatement. Basically, LEED Building = Green Building = Energy Efficiency.The City of Cincinnati is one of the BEST places to build a LEED certified home because it saves you even more money. The higher the rating, the more money you save. LEED Silver allows for up to $400,000 abated, LEED Gold is up to $562,000 and LEED Platinum is UNLIMITED. Of course, LEED comes with it’s extra building costs, but that’s specific to the home you build and how much money you can spend!
Find a professional (a builder or Build Collective or Green Building Consulting) that understands the tax abatement and construction process. They can help you determine what the best plan of action is for you.
Now that you’re armed with this information, doesn’t building and remodeling in the City sound that much better? Not only can you design a home specifically for you and your family, but you can save money in the process!
See How Much Money You Can Save on A New Home with Our Tax Abatement Calculator!
Tune in to see how we’re working with our buyers and sellers during COVID-19. Mike Hines (Build Collective) joins Tim O’Brien (Zipfel Capital) and Dan Orner (First Title) on the latest procedures when it comes to home buying and selling to keep you safe and informed.
As the top real estate team in Montgomery, Ohio, we are committed to keeping you well informed so you can always make the best decisions for you and your family.
Call Us With Questions
Have more questions? Need to sell or buy a home soon but don’t know where to start during these ever changing times? Please reach out to us! Mike Hines is available to chat or email at anytime…. 513.260.0424 or [email protected]
Empty Nester. Lifestyle Living. Moving Down. Right Sizing…What best describes what you and what you’re looking for?
Like it or not, these are all just fancy marketing names for all you baby boomers looking for a new home to fit your new lifestyle. Whatever you or they call it, you’re just ready to shed the home that you raised your kids in for something more your current style
So what’s important to you in a new home? One misconception that we always hear from non empty-nesters (like their kids!) is often that this move is ONLY about one floor living so you can get around easier now or in the future. Don’t get us wrong, we know this is a big part of it, but we know that’s not the only driver! The fact is that you are looking for a location to capitalize on this new found freedom. We’ve helped dozens of empty nester buyers looking for a new home and most often, the number one drive in their search is location because they want to be surrounded by things to do. Restaurants, walking trails, shopping, etc. so they can take advantage of the time they used to spend on their kids. This might not be in every case, but we’re seeing it more often than not!
Happy smiling family relaxing in autumn park
Of course, in addition to location, we know that you’ll be thinking about things like:
Function Living Spaces – One floor potentially or maybe a future elevator
No or Low Maintenance – Lock it and Leave it!
Close to your kids: Lets face it, we might need you guys more than ever!
NOW, HOW DO YOU FIND IT?
Even though you have the exact idea of what you might want, finding it is a different story! The search can be difficult because of the lack of options and inventory. That’s often why people come to us because of our less conventional ways to go about the search!
In fact, to make it a bit easier on you, we’ve outlined a few tips on how to go about your search:
Most Buyers start off searching for Existing Homes because it’s the path of least resistance. It would be ideal to find a ranch style home with one floor living, minimal steps and that’s fixed up enough that you won’t have to do much to it. However, you’ll see that the inventory of homes like this is slim. Take Montgomery for example. Of the 51 single family home listings in Montgomery, only 7 are ranches, and of those 7, only 3 are existing homes.
TOWNHOMES & CONDOS:
Condo living is fantastic! You can lock it and leave it since there’s NO maintenance. In areas like Montgomery, Blue Ash, Oakley, Hyde Park, there are quite a few new condo developments (and existing ones) to choose from. For instance, the Allora on Madison is an excellent example of a new community that has been a magnet for empty nester buyers. With low HOA fees, elevator options and located smack dab in the heart of Oakley, this development literally checks ALL boxes!
As you look as these options though, there’s a few key items to consider:
HOA fees – These can range monthly from $100 to well over $600 so keep an eye on what they cost and what’s included!
Functionality and size of your floor plan – If you’re coming from a larger single family home think about the culture shock of going from 4000 ft to 2000 ft.
In addition to the Allora, here’s a few links to some other options that are available now:
We wouldn’t be called Build Collective if we didn’t mention at least a couple of new construction options! Take for example Orchard Trail in Montgomery. Designed for lifestyle living, this community caters to the empty nester crowd by designing ranch homes, an all inclusive HOA and maintenance fee and plenty of room for outdoor entertaining without the burden of taking care of more than you need.
Things to keep in mind:
Cost Per Square Foot – Ranches tend to be more expensive because all or most of the living is on the first floor!
Lot Width – This is the most important feature to consider if you’re looking at lots!
Timing – Make sure you have adequate time to build, which can take anywhere from 6-10 months nowadays with the tight labor market
Montgomery – 10432 Radabaugh – (This lot is tremendously wide & perfect for a ranch!)
Whichever option you choose, try to think through the transition and location. It’s also key to keeping an open mind. Sometimes the best options never cross your mind until they’re right in front of you!
And, as you search, we’re hear to help. Having a good agent on your side is pivotal as they can find ferret out options for you and make your purchase MUCH smoother.
Download Our Guide to Moving Down to help you as well!
Making the decision to buy or sell a home can be an overwhelming. The team at Build Collective, Coldwell Banker West Shell can help you understand the process and make sure you get the most for your home in the shortest amount of time. Contact us at 513.686.7676 to get your new home journey started!
On July 31st of this year, the Federal Reserve lowered the Federal Funds Rate 25 basis points in a much- anticipated move. As a mortgage broker, I’ve fielded many questions from our firm’s clients about this development. Specifically, people want to understand how this shift in policy impacts their mortgage and buying power in the future.
How does a Federal Reserve rate cut impact mortgage rates?
The short answer I give to my clients is to pay attention to the 10-year treasury bond rate. There is a common misconception that the Federal Funds Rate directly correlates to mortgage rates. Instead, the 10-year treasury bond is the main index lenders use to price mortgage rates. The reason? While most mortgages are 30-year products, those mortgages typically get paid off within 10 years, making it a great benchmark to determine where rates are going.
To provide an illustration, if you look at the 10-year treasury rate between January 2019 (around 2.75%) and August 2019 (around 1.66%), that 100 basis point drop is a direct correlation to how the conforming 30-year fixed mortgage rate has performed. In January 2019, that rate was around 4.5% and in August 2019 that rate is in the 3.5% range.
What are things to consider as a potential homebuyer?
1. Low interest rates represent higher home buying purchasing power
Let’s say you’re applying for a 30 year fixed mortgage loan for a new primary residence and have been prequalified to borrow up to $400,000. Last year, assuming a 740+ credit score, a 30 year fixed rate would have been in the ballpark of 4.75%. The principal & interest payment would be $2,075.43 per month. In today’s environment, that rate could be as low as 3.5%. on conforming loan amounts (<$484,350). The principal & interest payment would be $1,790.54 per month. That’s a difference of $285 per month. That also means, in today’s low rate environment, you could get approved up to $463,500. The principal & interest payment would be $2,075.43 per month at 3.5%. The drop in rates represents an ability to borrow up to $63,500 more.
If you don’t envision owning your home for longer than 7-10 years, you might consider refinancing into a 10-year fixed Adjustable Rate Mortgage (ARM). A 10-year ARM is amortized over 30 years but offers a lower interest rate than a traditional 30-year mortgage for the first 10 years. This can be a great way to save on interest payments. For example, if you compare a $1MM loan with a 30-year fixed rate at 4.25% to a 10-year ARM at 3.125%, there is an interest savings of nearly $107,000 over 10 years. Typically, you can refinance as much as a $3MM loan balance into this type of loan.
2. Look at a 15 or 20 year mortgage
Ideally, we all would like to pay off our debt in as short and inexpensive way as possible. In comparison to a 30 fixed mortgage, 15 & 20 year fixed options offer lower interest rates. The amount of interest you pay over the term of a 15 or 20 year fixed loan compared to a 30 year fixed mortgage is drastically lower. In fact, many financial advisors and personal finance experts recommend homebuyer’s utilize15 year fixed mortgages. So why do most buyers not finance their mortgage into a 15 year fixed loan? They can’t budget the higher monthly mortgage payment of a 15 or 20 year fixed loan into their budget. There’s too many other expenses, whether it be putting money away for retirement, school tuition, or lifestyle expenses. Assuming you can comfortably budget a 15 or 20 year mortgage payment, it’s a great financial tool to build up equity in your home quickly and eliminate interest expense.
3. Adjustable Rate Mortgage option
Consider this example. Say you don’t envision owning your home for longer than 7-10 years. You might
consider a 10-year fixed Adjustable Rate Mortgage (ARM). A 10-year ARM is amortized over 30 years but
can offer a lower interest rate than a traditional 30-year mortgage for the first 10 years. This can be a
great way to save on interest payments. For example, if you compare a jumbo $1MM 30-year fixed rate at
4.0% to a 10-year ARM at 3.125%, there is an interest savings of nearly $82,000 over 10 years when you
compare them side-by-side. That’s a massive amount of savings. If you select the 30 year fixed option and
moved in year 10, that’s $82,000 in interest you didn’t need to pay.
As you can see, the reasons to pay attention to rate changes are many and varied. However, as a
homebuyer, low interest rates represent a great way to increase your borrowing capacity and save
thousands of dollars in interest over the life of your loan.
Making the decision to buy a home can be an overwhelming. Tim O’Brien, at Zipfel Capital, can help you understand opportunities that will provide clarity in a complex situation like purchasing a home.
About the Author
Tim O’Brien is an equity partner in Zipfel Capital, a mortgage brokerage company based in Hyde Park, specializing in residential and commercial lending. Tim has been acknowledged by the Greater Cincinnati Mortgage Bankers Association (GCMBA) as a Diamond Level Producer, given to less than 1% of industry professionals. He has also been featured in the Cincinnati Business Courier’s “Ask the Expert” series. Tim holds a bachelor’s degree in Xavier University and is a graduate of The Summit Country Day School. He lives in Mt. Lookout with his wife and three children.