Navy Fellas Realty Group

Real Estate, Residential sales and purchase

How Do Real Estate Agents Make Their Money?

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How Do Real Estate Agents Make Their Money?If you are planning to buy or sell a home, you will want to enlist the services of a real estate agent. But sometimes homebuyers and homeowners worry about paying for the services of a real estate agent.

After all real estate agents put an enormous amount of time and energy working for clients. They deserve to be compensated, but where does the money come from?

When You Buy A Home

When you contract with a real estate agent to buy a home, you do not pay the agent anything at all. In fact, they do not make a dime unless you actually end up buying a home. The buyer’s real estate agent makes money from the seller’s agent.

The idea behind this setup is that the buyer’s agent is bringing a deal to the seller. For that service, the buyer’s agent receives a percentage of the money that is paid to the selling agent. 

When You Sell A Home

When you hire a real estate agent to sell your home, the agent gets paid by commission on the selling price. No money actually comes out of your pocket ahead of time. When they do get paid, it is all through the paperwork at closing. Your final check from the sale will be less their commission.

Real estate agents charge varying commissions that range from 2% all the way to 6%, depending on the brokerage firm, the region and other factors. You should ask your real estate agent when you interview them what their rate is. 

Where The Money Goes

When your real estate agent does get paid, they do not get to keep all of it. Their brokerage firm gets a percentage and the seller agent gets a percentage. On top of that, many agents around the country choose to donate a small percentage of all their commissions to a favorite charity.

What Real Estate Agents Do not Charge For

Real estate agents do a lot to earn their pay, plus extras that they do not charge extra for, like:

  • hosting open houses
  • providing food and drinks during open houses
  • driving you around in your car to view homes
  • marketing your home online and in print advertisements

When it comes to hiring a real estate agent, you do not need to worry about paying for services. It is a system that works well for everyone involved in the home buying and selling process.

 

 

What’s Ahead For Mortgage Rates This Week – June 15, 2020

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What's Ahead For Mortgage Rates This Week - June 15, 2020Last week’s economic reporting included readings on inflation, the post-meeting statement from the Fed’s Federal Open Market Committee, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released.

Inflation Ticks Up in May

May’s Consumer Price Index moved from April’s reading of -0.80 percent to -0.10 percent. The Core Consumer Price Index, which excludes volatile food and energy sectors, rose to -0.40 percent in May as compared to April’s reading of -0.40 percent. The Consumer Price Indices are used to calculate overall and core inflation rates. The Federal Reserve uses an annual inflation rate of 2.00 percent as an indicator for achieving price stabilization.

The Federal Open Market Committee of the Federal Reserve said in its post-meeting statement that the Fed would do all it can to ease the economic downturn caused by the Coronavirus and left the current federal funds rate of 0.00 to 0.25 percent unchanged. Fed Chair Jerome Powell indirectly encouraged legislators to approve funding for additional coronavirus relief.

Mortgage Rates Remain Stable as Jobless Claims Fall

Freddie Mac reported little change in average mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose by three basis points to 3.21 percent. Rates for 15-year fixed-rate mortgages averaged 2.62 percent and were unchanged from the previous week. The average rate for 5/1 adjustable rate mortgages was also unchanged at 3.10 percent. Average discount points rose to 0.90 percent and 0.80 percent for 30-year fixed-rate mortgages and 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.40 percent.

Jobless claims remained far higher than pre-coronavirus levels but were lower last week than for the prior week. 1.54 million first-time jobless claims were filed as compared to 1.90 million claims filed the previous week. 29.50 million continuing jobless claims were filed last week as compared to the prior week’s reading of 30.20 million continuing unemployment claims.

The University of Michigan reported a higher index reading for consumer sentiment in May with a reading of 87.8 as compared to April’s index reading of 82.3.

What’s Ahead

This week’s scheduled economic reports include the National Association of Home Builders Housing Market Index and Commerce Department readings on housing starts and building permits issued. Weekly readings on mortgage rates and unemployment claims will also be released.

Fed’s Open Market Committee Holds Key Rate Steady

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Fed’s Open Market Committee Holds Key Rate SteadyThe Federal Reserve’s monetary policy committee decided against changing the Fed’s benchmark interest rate range of 0.00 to 0.25 percent. The Federal Open Market Committee said in its post-meeting statement that it is not considering raising rates until 2023. Two of 17 FOMC members felt that the Fed’s key rate may rise in 2022.

Fed Approves Quantitative Easing Measures

Committee members also stabilized the Federal Reserve’s ongoing purchases of Treasury bills and mortgage-backed securities and said that the Fed would purchase Treasury bills and mortgage-backed securities “at least at the current pace.” The Fed was tapering its purchases before the Coronavirus pandemic.

FOMC members moved to stimulate the economy through quantitative easing. The Fed purchased $20 billion in Treasurys and agreed to purchase up to $22.5 billion in mortgage-backed securities this week. The Fed’s balance sheet was higher than $7 trillion as of June’s FOMC meeting, but former New York Federal Reserve President William Dudley expected the Fed’s balance sheet to reach $10 trillion.

Fed Chair Jerome Powell remained cautious about a quick economic recovery in response to last week’s report of 2.5 million jobs added in May. Mr. Powell noted that it was only one month’s data and that 20 million people remain out of work. Some analysts interpreted Mr. Powell’s comments as pressure on Congress to approve another stimulus package. FOMC members also discussed capping certain Treasury yields, but no decision was made.

Federal Reserve Chair Favors a Cautious Approach to Economic Recovery

Fed Chair Jerome Powell emphasized the Fed’s position of supporting the economy to the extent it is permitted. In his post FOMC meeting press conference, Mr. Powell said the Fed’s goals during the pandemic were to “provide some relief and stability, ensure that the recovery will be as strong as possible and to limit lasting damage to the economy.”

Mr. Powell predicted that the decline in real Gross Domestic Product (GDP) in the current quarter would likely be the most severe to date. He also said that the Coronavirus has not impacted Americans equally as “those least able to shoulder the burden have been the most affected.”

After saying that the extent of the economic downturn and the pace of economic recovery remains extremely uncertain, Mr. Powell indirectly called upon Congress to pass needed funding and provisions to provide additional relief until economic conditions return to normal. He said that the Fed would do “whatever we can, for as long as it takes” to assist in economic recovery.

Routine Maintenance Of Various Systems In Your Home

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Routine Maintenance Of Various Systems In Your HomeWhen you are a new homeowner, learning about your property can feel overwhelming. There are a number of systems in your home that require routine maintenance.

Knowing when to have system serviced will help keep your home running smoothly. From the plumbing in your home, to the heating and cooling, understand that each system may need routine maintenance from time to time. 

Your Heating And Cooling System

To maintain comfortable air temperatures in your home, it’s important to keep your heating and cooling system up-to-date. If you have a whole home system, it should be serviced once before the heating season and once before the cooling season.

When you get filters changed, and your system serviced, you are less likely to have to deal with emergency repairs. In addition, your HVAC system will run more efficiently.

When You Have A Septic System

Waste water leaves your home either through the town sewer system or through a septic tank. If you have a septic system on your property, you need to have the system serviced every other year. Check the records of your septic system to see when it was serviced previously.

Address Plumbing Issues

A leaky faucet is a localized problem, while discovering that all of the drains in your home are draining slowly is systemic. You need to repair small leaks to avoid wasting water in your home, while systemic problems must be addressed by a professional.

If your drains aren’t working correctly, you may have a block in your main sewer line. Know where the main shut off valve is for the water coming in to your home in case of an emergency.

Electrical Needs In Your Home

Your home has an intricate electrical system that is controlled by an electrical panel usually located in your basement. When a circuit trips, you will need to reset the circuit breaker. If your home consistently has problems with a specific circuit, you’ll want to have the circuit checked by an electrician to see if it is overloaded.

It’s exciting to own a home for the first time. Once you understand the various systems in your home, it becomes easier to take care of your property. With good maintenance, you can help avoid emergency repairs to your home.

Your heating and cooling will be more efficient, and you won’t run in to problems with your septic system if you have one. If there is something you don’t understand in your home, call a professional to get the problem looked at.

Should You Buy A Home Warranty?

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Should You Buy A Home Warranty?When you buy a new house, the first thing you want to do is protect your investment. You already have property insurance. Should you also buy a home warranty?

What Is A Home Warranty?

A home warranty is not the same thing as insurance. Home warranties are service contracts. If a covered item breaks down and it is covered in the terms of the warranty, the home warranty company will pay to fix or replace that item.

What is Covered Under A Home Warranty?

Every home warranty contract is different but generally, a home warranty may cover items like major kitchen appliances, HVAC components, sump pump, in-home sauna or spa tub, and/or ceiling and exhaust fans.

Often, a homeowner can get an extended warranty contract that covers items like the washer and dryer, garage door opener, septic system and swimming pool components.

Understand The Costs

A basic home warranty costs between $350 and $500 annually, depending on what coverage you get. However, if something does break, you will also be on the hook for incidentals like service call fees or a deductible.

Know The Benefits

There are considerable benefits to having a home warranty contract in place, especially when something expensive breaks down, like a furnace. There is a lot of peace of mind knowing that you will be able to quickly get something fixed in your home.

You Might Already Be Covered

Your homeowner’s insurance policy might cover some of the same things that are covered with a home warranty. So you could be paying for duplicate coverage on some items. However, your homeowner’s insurance likely will not cover a dishwasher that needs to be replaced or a fridge that suddenly goes out.

There Are Alternatives

Finally, before you pay for a home warranty, remember that there are alternatives. For example, most HVAC companies offer financing options to buy a new furnace. Most appliance stores also offer financing on major purchases like refrigerators and dishwashers. You could save your $500 or so a year and put it in a savings account for a rainy day instead of gambling that you might have a major repair or purchase that year.

There are pros and cons to home warranty plans. Just be sure you fully understand both sides of the issue before you sign on the dotted line.

 

The Most And Least Expensive Cities In America

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The Most And Least Expensive Cities In AmericaThe cost of living in America varies widely in different parts of the country. In general, it is less expensive to live in the country than in the cities.

However, there are many cities where the cost of living is modest compared to others where the money needed to live there is outrageous in comparison.

These rankings came from comparing the monthly cost of renting a one-bedroom apartment, utilities, the price for gasoline, and the cost of groceries.

The Ten Lowest-Cost Cities For Renters

From Texas and Ohio to New Mexico and Arizona, there are some nice cities in this low-cost group.

The top ten lowest-cost cities are:

  1. El Paso, Texas
  2. Lincoln, Nebraska
  3. Toledo, Ohio
  4. Wichita, Kansas
  5. Louisville, Kentucky
  6. Tulsa, Oklahoma
  7. Memphis, Tennessee
  8. Lexington, Kentucky
  9. Albuquerque, New Mexico
  10. Mesa, Arizona

For the top ten lowest-cost cities, the total monthly expenses for two adults ranges from just under $1,200 per month in El Paso to just over $1,500 per month in Mesa. These cities are a great deal when compared to other cities.

In America, the median rent of $1,566 per month is more than the total amount needed to live in these low-cost cities.

The Ten Highest-Cost Cities For Renters

It is not surprising that the biggest metropolitan areas are on the high-cost list.

The top ten highest-cost cities are:

  1. San Francisco, California
  2. New York, New York
  3. San Jose, California
  4. Oakland, California
  5. Boston, Massachusetts
  6. Jersey City, New Jersey
  7. Washington, D. C.
  8. Los Angeles, California
  9. Seattle, Washington
  10. Irvine, California

For the top ten highest-cost cities the total monthly expense for two adults ranges from just over $2,000 per month in Irvine to over $4,200 per month in San Francisco. For those wanting to live in the “City by the Bay” of San Francisco, both of the people in a couple better have an incredibly well-paying executive position to be able to afford to live there.

What About Home Buying?

The national median home price in America is $229,000. The city with the highest median home price is San Francisco at $1,352,000. New York is only $672,000 in comparison. The median home price in El Paso is $129,800; however, El Paso does not have the lowest-priced homes in the country.

The Top Ten Cities With The Lowest-Priced Homes

There are many cities where the homes sell at bargain prices for under $100,000, these include:

  1. Detroit, Michigan — Median home value: $42,800
  2. Dayton, Ohio — Median home value: $66,500
  3. Cleveland, Ohio — Median home value: $67,600
  4. Lansing, Michigan — Median home value: $77,100
  5. Buffalo, New York — Median home value: $77,800
  6. Toledo, Ohio — Median home value: $78,600
  7. Rochester, New York — Median home value: $79,400
  8. Akron, Ohio — Median home value: $80,100
  9. South Bend, Indiana — Median home value: $81,100
  10. Brownsville, Texas — Median home value: $85,900

Conclusion

There are bargains to be found in many parts of America for those that do not have to live in the big cities.

Many younger people are now part of the “gig” economy. They do all of their work online and can work from anywhere that has a decent Internet connection. For these young people, finding a lost-cost city in America to live in and finding a modestly-priced home to buy is not limited to any particular area.