6 Common Boise Real Estate Myths

There are many common myths about the Boise real estate market.

Here are 6 common Boise real estate myths I hear frequently.

1) Buyers Need 20% Down

That’s simply not true in the Boise real estate market.

There are loan programs with zero down payment, 3.5% down payment, 5% down payment, 10% down payment (and others) available to qualified borrowers.

2) Interest Rates Are High

While interest rates are higher than they were during “the bottom”, they are not historically-high.

In fact, they are dead cheap when compared to what I’ve experienced throughout most of my 42 years in real estate!

Current rates for a 30-year fixed rate mortgage are around 4.25% in the Boise real estate market.

One of my first-time buyers locked his loan at 3.75% last week with a 30-year IHFA-FHA loan.

15-year rates are even lower.

3) Buyers Need Perfect Credit

It’s true that borrowers need decent credit to get a mortgage these days.

But, you don’t have to have a 800 FICO score to get a loan.

Don’t assume that your credit is inadequate (unless it’s really, really bad!) and talk with a lender to see if you can qualify for a loan.

If you need a good lender, call me at (208)938-5533 for my recommended local lender who can pre-approve you on the phone.

4) Renting Is Cheaper Than Buying

This is a very dubious statement, given today’s low interest rates and strong rental market.

Most home payments are less than renting an equivalent home.

When you rent, your monthly rent is paying your landlord’s mortgage payment.

If you rent for 30 years, you bought a home for your landlord(s).

5) Buying A FSBO Is Better

There are many reasons some sellers avoid using a Realtor® to sell their home.

The most obvious one is that they don’t want to pay a commission.

Another reason is that they think their home is worth more than the value recommended by a Realtor®.

Yet another one is that they don’t think they need the professional guidance of a Realtor® for their complex real estate transaction.

Combine those three reasons and you have a recipe for a very interesting transaction if you’re the buyer.

Other issues include both buyer and seller thinking they’re saving the commission, and neither buyer nor seller knowing how to get through the transaction while complying with legal requirements.

6) You Don’t Need A Home Inspection

This is yet another real estate myth.

Trust me, you do need a home inspection!

I have seen brand-new homes with issues revealed by a home inspection.

And, I have seen common issues discovered in home after home throughout the Boise real estate market.

A home inspection, completed by a competent home inspector, is one of the biggest bargains in real estate.

 

Eagle Idaho Homes: LED Lighting

I’ve recently noticed a number of Eagle Idaho homes with LED lighting that aroused my curiosity.

After one of my clients spoke of converting to LED lighting last week, I decided to look into it.

My client mentioned that Costco had specially-priced LED bulbs, thanks to their partnership with Idaho Power.

So, with another excuse to go to Costco, I made the trip and bought a few to get started.

I should have known that this was just the beginning, given that I don’t like to do much of anything halfway.

By the end of last week, I had returned to Costco several times and converted to LED lighting throughout my home.

My new LED bulbs are interesting because they provide very “true” lighting and they’re definitely brighter than regular bulbs.

For example, my new 40W equivalent bulbs are easily as bright (maybe even brighter) than the 60W bulbs they replaced.

And, they’re dimmable, which is a nice feature.

I’ll be very interested to see how these bulbs affect my electric bill because I have five exterior 65-watt floods and three regular bulbs that remain on all night every night of the year.

I also have five 65-watt can light floods in my kitchen that are often on.

The cost to convert my home to LED lighting was around $200.

Time will tell, but I suspect my new LED lighting may pay for itself within a year, thanks to its miserly power consumption.

The new LED bulbs also claim to have a far greater life.

After nearly dropping two of those 65W floods in my kitchen while swapping bulbs last week, it would be just fine with me if I never have to replace those bulbs again using my suction-cup pole.

Stay tuned for future updates on this!

 

Boise Homes: First Time Buyer Tips

I thoroughly enjoy helping first-time buyers achieve their dream of home ownership.

The home-buying process is often bewildering for those buyers, but I’ve learned many ways to guide my clients to a smooth closing.

Here are a few tips for first-time buyers.

Check Your Current Rental Agreement

If you’re renting, you need to be certain that you can terminate your present rental agreement with a 30-day notice.

If you have a lease, you’re obligated for the payments until the end of the lease.

You don’t want to buy a home with a closing date that falls before your lease termination date unless you’re willing to continue paying rent along with your new house payment.

And, you shouldn’t give your landlord 30 days’ notice until you’re certain you have a closable deal on the home you’re purchasing.

That means having fully-approved financing, inspection issues resolved, and a satisfactory appraisal of the home you’re buying.

Get Pre-Approved

There’s absolutely no point in seriously shopping for a home until you have pre-approved financing.

Every buyer I meet assures me they can get a loan, but you’d be amazed how many learn there’s more to getting their loan approved than they realize.

You need to understand the details of your financing, including the down payment, closing costs, interest rate, and numerous other financial considerations before you start looking at homes.

Failing to do so will likely set you up for some disappointments later.

There are many types of lenders who will all tell you how great they are, but there are often significant differences in costs and service.

I can help you find the best lender for your specific situation, so call me at (208)938-5533 for guidance on getting pre-approved before you start shopping for a lender.

Don’t Change Your Financial Position

Lenders are really, really sensitive about borrowers who change their financial position during escrow.

That means you shouldn’t go out and buy new furniture for your new home and finance it.

If you do, it will alter your debt:income ratio and possibly cause you to not qualify for your financing.

The same thing applies to other major purchases.

I have experienced more than one failed sale because my buyer just had to have a new Dodge Ram pickup (with an $800/month payment) to move into their new home.

I have also had a couple of people change jobs right before closing and almost lose their financing, even though their new job was a better job with higher pay (their loans had to be re-underwritten at the last minute).

You should also be prepared to document the source of any extra money you receive during escrow.

That’s because lenders want to know that your down payment is coming from you; not some other unknown source.

Work With A Realtor® To Find The Right Home

Yeah, I know ~ this sounds self-serving, but it’s good advice.

You don’t have to work with me, but you do need to find a competent, experienced Realtor® to guide you through the home-buying process.

Contrary to popular belief, most buyers can’t find the right home online.

The internet is a great starting point, but there are countless details that you won’t find on the major real estate portals.

Details like neighborhood quality, builder reputation, details of comparable sales (not just the prices), market trends, etc.

In fact, most of the most popular real estate sites are loaded with inaccurate, misleading information that the public thinks is accurate.

Those sites can’t tell you the value of a given home because they determine estimated values with a computer algorithm.

Their computers haven’t seen the neighborhood or the inside of the home you think you like on their site.

I’m not going to give those sites the link love they would like by naming names, but their names start with “Z”, “T”, and “R”.  :roll:

Need some help with buying your first home?

I love helping first-time buyers navigate the home-buying process!

Call me at (208)938-5533 or e-mail me and let’s talk about how I can help you become a homeowner!

 

Boise Homes: How Referral Fees Work

Have you ever worked with a real estate agent who was eager to refer you to another agent in another real estate market?

Well, there’s a reason for that eagerness.

That reason is a “referral fee”.

One of the inside secrets of real estate is the practice of referring clients to other agents in return for receiving a portion of the receiving agent’s commission when a sale occurs.

In real estate speak, that’s called a referral fee.

Referral fees aren’t illegal, but I believe they should be fully-disclosed to all parties to avoid the appearance of a conflict of interest.

When I have a client who’s relocating, I ask them if they’d like my help finding an agent in their new location.

If they want my help, I discuss the details of their move with them in detail so I understand their needs, wants, likes, and dislikes.

Then, I research the market where they will be relocating to identify competent agents who might be a good fit for my client.

Then, I “test” one or more of those agents by calling and e-mailing.

I actually hope they don’t answer their phone so I can leave a brief message to see how long it takes them to respond.

If they don’t respond promptly, I eliminate them from consideration.

Those agents who answer their phone on the first or second ring go to the top of the list!

I also evaluate their internet presence as an indicator of competence.

Agents with no internet presence, only a business card webpage, or a sub-page buried deep in their broker’s website, are automatically eliminated.

If they don’t understand the role of the internet in today’s real estate market, they’re probably lacking in other areas of real estate too.

Finally, I interview them on the phone to determine how active they are, how long they’ve been in real estate, if they’re full-time, if they know the area where my client will be relocating, and assess their business practices to determine if they’re a good fit for my relocating client.

If they pass those tests, I refer my client in return for a portion of their commission.

I also follow up on the transaction afterward.

In other words, I “earn” my referral fee vs. just passing along my client’s name, hoping to receive a referral fee.

Typical referral fees range between 20% to 25% of the receiving agent’s commission and cost the client nothing.

Corporate relocation companies also require referral fees from receiving agents and their fees are almost always considerably higher.

Agents willing to accept relocation company referrals are often required to pay a referral fee of 30% or more (I was offered one for 37% earlier this year and renegotiated it).

Referral fee agreements should be documented in writing before the transaction occurs.

In Idaho, it’s illegal to pay a real estate commission to anyone who’s not a real estate licensee.

 

Boise New Homes For Sale

At a glance, many buyers consider new homes as simply a part of the overall pool of available homes for sale.

But, in reality, new homes are very different from resale homes.

When you consider buying a resale home, it’s “there” and you can see exactly what the seller is offering for sale.

New homes are different because there are relatively few completed new homes for sale at any given time.

That’s because few builders can afford (or obtain financing) to build a large number of unsold homes.

That means buyers must base their buying decision upon viewing a model home or reviewing building plans.

Buyers who are “visual” often struggle to understand a set of blueprints as they try to make one of the biggest financial decisions of their life.

Buyers who choose to build a new home must also make numerous decisions, including lot selection, plan development/changes, and dozens of selections for everything that will go into their new home.

Building a new home requires a tremendous amount of communication between builder and buyer that doesn’t exist in a resale home transaction.

Another consideration is the time that’s required to build a new home.

Production homes (non-custom homes) can often be completed in about 75-90 days following issuance of the building permit.

Custom homes usually take 120 days or more after permit issuance, depending upon a variety of factors, including developing plans, getting construction bids, and other considerations.

Buying or building a new home can be exciting, but it’s a very different proposition than buying an existing home that can be seen, touched, and be yours after a short escrow period.

If you’re interested in buying or building a new home, give me a call at (208)938-5533 or e-mail me.

I’ve helped many of my clients buy/build new homes over the years and would be happy to answer any questions you may have about the new home market.