While a government shutdown won’t stop people from buying and selling homes, the ripple effects across the economy could be disruptive, especially if it drags on.
Some expect to see delays around mortgage loans, particularly if the shutdown isn’t resolved quickly. Zillow estimates around 2,500 originated loans would be delayed per working day. Homebuyers applying for a government-backed mortgage from the Federal Housing Administration would face processing delays.
A government shutdown could also delay mortgage loan approval for other reasons. In areas where flood insurance is required, for example, buyers could be stalled if the National Flood Insurance Program were to pause operations.
- Delayed Loan Processing- Some federal agencies, such as the Federal Housing Administration (FHA), may operate with reduced staffing or close entirely. This can lead to delays in loan approvals and processing, affecting both homebuyers and sellers. It’s essential to inform your clients about the possibility of extended timelines.
- Verification and Documentation- Many mortgage applications require verification of income, tax returns, and other documentation from government agencies. If these agencies are affected by a shutdown, obtaining necessary documents may become more challenging, further slowing down the mortgage approval process.
- National Flood Insurance Program (NFIP)– The NFIP is vital for many homeowners in flood-prone areas, as lenders often require flood insurance for mortgage approval. A government shutdown could impact the availability of NFIP policies and affect property transactions in flood-prone regions.
IRS and Tax Transcripts–The Internal Revenue Service (IRS) provides tax transcripts required for mortgage applications. The IRS would remain funded through the Inflation Reduction Act, but obtaining these transcripts may become difficult, potentially leading to delays in loan processing and closing.
- Appraisals and Inspections- Government shutdowns may disrupt the scheduling of appraisals and inspections, as federal agencies oversee certain aspects of these processes. Delays in these areas can lead to extended closing times and may affect contract deadlines.
- Market Uncertainty- A prolonged government shutdown can create uncertainty in the real estate market, causing some buyers and sellers to delay their transactions until stability is restored. This could result in slower market activity and potential fluctuations in home prices.
- Economic Confidence- Government shutdowns can erode consumer and investor confidence in the economy. If potential buyers and investors become hesitant due to political uncertainty, it may impact the overall demand and stability of the real estate market.
- Have a residence with no smokers
- Pay your premium upfront
- Pick paperless billing
- Sign up for automatic payments
Because the builder’s agent’s job is to convince you to buy only their homes at the highest price. Your Exclusive Buyer Agent’s job is to even the odds and negotiate for the lowest price and best terms for YOU!
If you’re building what you buy, you might think, “Why would I need an agent?” However, new construction is a complicated and expensive process. The advantages are many; aside from the obvious ones. The fact that having buyer agent representation is often FREE cannot be repeated often enough. So too, should the misconception that not using a buyer’s agent will save money be constantly repeated – that simply doesn’t happen.
A seasoned agent with experience in new home construction can give you invaluable insight during the process. Whether they’ve done business with those particular builders, or are aware of other comparable communities in the area, they can provide a wider context to your transaction. They might have an existing relationship with your builder, easing any tensions that might arise.
Remember that that site agent represents the builder/developer. Most real estate agents are sub-agents of the Seller or Transactional agent. In neither case do they have a fiduciary responsibility to the Buyer.
The site agent is an employee of the builder and is obligated to represent the best interests of the builder, not the homebuyer. They are expected to work to secure the builder the best deal.
The further you get into the home shopping process, the more challenging it becomes to bring in an agent. In fact, if you’ve already registered with a community, it might be too late.
Benefits of Using an Exclusive Buyer Agent for New Home Construction:
- Compare and evaluate builders’ reputations and history of their construction quality and service.
- Help you compare and evaluate advantages and disadvantages of new construction homes vs. resale homes.
- Provide information about the community.
- Help buyer with evaluation and selection of a building lot and options. Lot location and certain options have a very real bearing on resale value.
- Help buyer evaluate which options should be done by the developer during construction and which are more affordable to be done by an outside vendor post closing.
- Truly negotiate on behalf of the buyer. Many builders are offering “free” options and upgrades, but some are also making additional price concessions.
- Review the Agreement of Sale (PA) prior to buyer signing. This is not a legal review (only an attorney can do that), but an experienced agent will be able to spot terms and conditions that are atypical and of potential concern to the buyer. The agent may then be able to negotiate terms and conditions that are more favorable to the buyer but still acceptable to the builder. Keep in mind most new construction contracts are written by attorneys that represent the builder and these contracts are therefore heavily weighted in favor of the builder.
- Recommend a real estate attorney for final contract, title commitment and to hold your escrow funds.
- A buyer’s agent serves as an extra set of ears as a witness at court or arbitration– When the builders sales representative is familiar with all rules, features and prices and it’s all new to buyer – it is good to have experienced person on buyer’s side listening with buyer and taking notes, a lot of information is verbalized in short period of time.
- Attend the signing of the Agreement of Sale
- Assist with the buyer’s financing and review financing paperwork. This is especially important if the builder is tying “free” options and upgrades to the use of a builder-affiliated lender.
- Check on the property during construction and keep a photo record at different stages.
- Assist in options selections to optimize budget and maximize resale.
- Be your leverage with the builder as problems arise during construction.
- Keep everything in writing– Sometimes even the very nicest builder makes verbal promises that later become a point of contention. An experienced buyer’s agent is conditioned and trained to “put it in writing” even though at the time it doesn’t seem necessary.
- Arrange for a final inspection with a license building inspector and generate a “punch list” to be completed before final closing.
- Document and help resolve any issues with construction, financing, title, etc. throughout the process.
- Attend a pre-settlement walkthrough with the buyer to make sure that all items are satisfactorily completed or that a proper punch list is established to assure completion after settlement.
- Obtain and review a preliminary HUD-1 settlement statement to be sure it is accurate and advise the buyer of the amount needed for settlement.
- Assist buyer with utilities, security and HOA requirements, decorators, service professionals, schools, et. al.
- Attend settlement with the buyer.
- A buyer’s agent will be there even after the home closes. It is routine for issues to arise during the first year of a new home. Site agents tend to forget a buyer’s name after the contract is signed.
- NO ADDITIONAL COST TO YOU!
Read My Reviews from New Home Construction Clients!
A jumbo loan is a type of mortgage loan that’s used to finance loans that exceed the conforming loan limit. In the United States, the Federal Housing Finance Agency (FHFA) sets loan limits for conforming loans each year.
- Water damage
- Or even flooding
- PB pipes used for interior applications are generally gray in color but may also be black. PB pipes used outside may be gray, blue or black.
- PB pipe is flexible, not rigid.
- PBpipes may be stamped with the code: PB2110.
- Near the water heater
- Connecting to sinks and toilets
- At the main shut-off valve or water meter
- Convenience. This is one of the primary reasons people start down the smart-home path. It just makes life a little easier when your home automates all the mundane tasks you used to have to do on a day-to-day basis.
- Safety. A lot of smart-home technology is centered around your home’s security system, and there’s a good reason for that. No one piece of security equipment will protect your home comprehensively, but a network of pieces of equipment all working and thinking together can.
- Sustainability. A lot of energy is wasted when you leave the lights on or keep your AC running when you’re gone for the weekend. A truly smart home will adjust itself to your habits and make sure your environmental impact is a little lighter.
- Savings. You waste a lot of money when you leave things running unnecessarily. Your smart home will improve your economic efficiency by helping you remember to turn things off or down when they’re not needed
- Detectors – Smart detectors provide peace of mind, so you aren’t left worrying that you forgot something. Smoke and carbon monoxide detectors are vital additions to any home. Gas and water leak detectors are good additions as well.
- Heating and Cooling – With the initial success of 2011’s Nest Learning Thermostat, this product category is most associated with home automation.
- Lighting – With the ability to control lights through your tablet or phone, intelligent lighting has become the initial step many take in setting up smart home technology.
- Security Systems – This area has taken home automation to the next level. A lot of the newer, more advanced smart home tech is in this category, with keyless entry, camera equipment, and more. D
- Hubs – Hubs, for the most part, are what tie your systems together. .
- Appliances – Get a text message from your washer when a load finishes. Have your fridge create your grocery list for you. Shut the coffee pot off from work. Smoke a brisket for a few hours while remotely controlling its temperature. All possibilities with smart appliances.
- Energy Management – Track your energy use and make changes in real time, from any location.
- Lawn and Landscape Care – Control your pool cleaner, mow your lawn or set the irrigation system, all via smartphone app.
- Window Coverings – Automatic shades and blinds timed to open or close with your bedtime or wake up call.
- Mortgage scams for profit: Those who attempt mortgage fraud for financial gain are typically lenders, brokers and other entities that make false claims to obtain monetary compensation or equity from lenders and homeowners.
If you’ve been house-hunting in recent years, you’ve really been through it. Maybe you were waiting out the market, hoping the rocketing prices would start to flatten. Now, of course, they have — but between 2021 and 2022, mortgage rates have more than doubled, from less than 3 percent to more than 7 percent.
If you are renting and trying to save for a down-payment, the cost of your rental has likely increased as well.
Sellers who are sitting on low mortgage rates are not listing their homes for sale and supply shortages, cost of land, and cost of lending, along with higher labor and building costs have slowed down new construction.
All these factors contribute to a continued shortage of desirable inventory and home prices are staying propped up and not decreasing as one would expect.
Buyers need to adjust their expectations…Every buyer needs to do a gut check on how much house they can afford now. That might seem daunting, but higher mortgage rates don’t have to derail your dream of buying a home. In fact, historically, today’s rates are not considered particularly high.
Review your Budget: When you review your budget, keep in mind that newly built homes typically come with builder and manufacturer warranties and new energy-efficient appliances. Those advantages of a new home can lower your monthly housing costs. That’s especially true if you currently own an older home that needs repairs and has inefficient appliances.
Raise More Cash: Another option to buy a home with a higher rate is to spend more cash up-front. You can use cash to increase your down payment as a percentage of your loan amount, pay for builder upgrades in cash, or buy down your loan’s interest rate. You should work with your lender on the best use of your cash to achieve the lowest ongoing expenses to home ownership.
Evaluate Loan Options: A third strategy is to get a hybrid loan. This type of mortgage has a fixed rate that resets at the end of a specified period and is then fixed or adjustable for the remainder of the term. An example is a 7/1 hybrid adjustable-rate mortgage (ARM). This type of loan has a lower fixed rate for the first seven years. After that, the rate is adjusted annually (that’s the “1” part) for the remainder of the 30-year term.
Hybrid loans can be more affordable since the initial rate is usually lower. But there’s a risk: If you don’t refinance or sell your home before the rate resets, your payment could rise significantly for the rest of the term. If you can’t afford the higher payment, you could lose your home.
Rethink Your Needs and Wants: Buying a less costly home is another way to cope with higher rates. Less costly doesn’t have to mean a home you don’t like or that doesn’t fit your needs.
Reconsider Your Timing: Interest rates fluctuate, sometimes dramatically, over time. If you postpone buying a home, rates might be lower in the future, making the home you want more affordable. Or they could be higher, putting the home you want further out of reach. Experts are predicting the latter. The question for homebuyers is whether waiting and hoping makes sense. The answer is never as clear as a crystal ball.
Experts recently polled project average 30-year mortgage rates to fall between 5-9.31%in 2023. No one is expecting a move downward in the next 5 years. Several factors could lead to unexpected rate movements in the coming year.
Owning a home has certain benefits that renting doesn’t offer. Renting means no control over future [home price or interest rate] increases, no accumulation of equity through price appreciation, no tax deduction for property taxes and mortgage interest if you itemize your deductions, and no benefit for improvements you make to the property. Waiting to buy while you hope rates move lower means forgoing those benefits.
The lost opportunity of not buying due to a fear of higher rates far outweighs the benefits of homeownership. It’s best to take advantage of what the rates are today and build equity sooner rather than later.
- Low or fixed rate. A loan’s interest rate might be fixed or low only for a short introductory period — sometimes as short as 30 days. Then your rate and payment could increase dramatically. Look for the APR: under federal law if the interest rate is in the ad, the APR also should be there. Although it should be clearly stated, you may instead need to look for it buried in the fine print or deep within a website.
- Very low payment. This might seem like a good deal, but it could mean you would pay only the interest on the money you borrowed (called the principal). Eventually, though, you would have to pay the principal. That means you would have higher monthly payments or a “balloon” payment — a one-time payment that is usually much larger than your usual payment.
- principal (money you borrowed)
- interest (what you pay the lender to borrow the money)
- taxes and
- homeowners’ insurance