Home for the Holidays: How To Stretch Your Budget in a Season of Inflation
You don't have to break the bank to celebrate the holidays in style—even in this season of inflation. Prices may be higher on everything from food to gifts to decorations, but there are still plenty of opportunities to eke out extra savings. For example, according to the U.S. Environmental Protection Agency (EPA), you can save a couple of hundred dollars a year just by sealing your home and boosting its insulation.1 Other small fixes—such as swapping old light bulbs for LEDs and plugging electronics into a powerstrip—can boost your yearly savings enough to pay off some of your holiday budget. And thanks to a pandemic-era boom in online shopping, it is easier than ever to find deals on new and pre-owned furniture, thrifted gifts, DIY decor, and more. Even secondhand stalwarts like Goodwill have joined the digital fray, making it a cinch to score gently-used treasures at extra-low prices.2 You won't be the only one bargain-hunting your way to a more financially-stable New Year. Multiple surveys have found that inflation is not only chilling people's spending, it's also prompting shoppers to search for better deals and creative ways to reduce their bills.3 Here are some strategies you can use to boost your holiday budget by trimming household expenses: Hunt for Deals on Groceries If you're finding it harder than it used to be to serve your family dinner on a budget, you're not alone. With the U.S. food-at-home index (a measure of grocery price inflation) at a 43-year high, many families are struggling to control costs on food staples, such as meat, dairy, produce, and grains.4 That's made pulling off holiday gatherings especially stressful lately. But don't despair: Even with inflation, retailers are still giving motivated shoppers plenty of opportunities to whittle down their bills. The key is to pay attention to the cost of each item on your shopping list—not just the most expensive—and look for easy swaps and discounts. For example, try buying non-perishable items in bulk, especially when they’re on sale, and only in-season produce. Or trade name-brand goods for less expensive options from a store's private label. As you tap into your inner bargain hunter, you could be surprised by what you save when you’re more mindful of your selections. And unlike in the old days, you no longer have to clip your way through paper flyers to snag a bargain. Instead, you can save both time and money by scouting for deals online, digitally clipping coupons, and earning cash back through special apps and browsers. For example, coupon aggregation sites, like Coupons.com, and shopping apps—such as Checkout 51 and Ibotta—make it easy to score discounts and cash back on a variety of purchases, including groceries. Also, check to see if your neighborhood grocer posts their weekly flyers online. If you're hosting a holiday party, the markdowns you find can help you narrow your food and recipe choices, based on what's currently on sale. Prep Your Home for Holiday Guests With Pre-Owned Finds You don't have to sacrifice style for the sake of preserving your holiday budget either. If you're expecting company this year and would like to add some festive flair to your home, you can do so inexpensively—especially if you're willing to decorate with items that are secondhand. Thrifting is back in vogue, with an increasing number of shoppers preferring pre-owned furniture and home goods. A recent study found that the “recommerce” market grew almost 15% last year, which was twice the pace of general retail.5 Plus, buying used isn’t just a great way to save money, it also helps the environment by keeping reusable items out of landfills. Fortunately, it’s become easier to score secondhand deals online. For example, you can scout consumer marketplaces on Facebook, Craigslist, and OfferUp. Or you can take advantage of neighborhood freecycles and “Buy Nothing” groups. And a number of thrift shops now have e-commerce sites, including major chains, like Goodwill. If you're handy with a paintbrush or have some basic carpentry skills, you can also modernize some of your existing furniture by upcycling it yourself. Or, if you enjoy crafting, search through your own recycling or sewing bin for raw material to make one-of-a-kind decorations. Don't stress yourself out, though, if you don't have the time or money to dress your home the way you hoped. “A house doesn’t have to be perfect or completely done for it to feel festive or inviting,” designer Justina Blakeney noted in an interview with the Washington Post. “These are family and friends, and they are not judging you.”6 Forgo Major Renovations in Favor of DIY Home Improvements Holidays are always a tricky time to undergo big renovations. But with ongoing worker and material shortages, now is an especially bad time to commit. Inflated costs can add thousands to your reno budget –—and unnecessary stress to your holiday. Instead of suffering through an ill-timed remodel, you're better off saving this time of year for simpler, less expensive projects you can do yourself. One winter-perfect upgrade to consider: Build a DIY fire pit so that you and your guests can roast marshmallows and relax in the cozy comfort of your backyard. You can also add some extra ambiance by hanging energy-efficient LED outdoor string lights that change from white to colorful. These are festive enough for the holidays, but also versatile enough to use year-round. Or, if you'd rather curl up by an indoor fire, channel your DIY energy into a fireplace upgrade. Adding a wooden beam to the top of your mantel can add an extra layer of coziness. Alternatively, re-tiling or painting your fireplace surround can lend contemporary flair. Just be sure to stick to DIY projects that you know you can do a quality job on—especially if your changes will be difficult to reverse. Feel free to reach out for a free assessment to find out how your planned renovations could impact your home’s resale value. Invest in Home Maintenance Projects That Cut Your Utility Bills You can save money by completing basic home maintenance tasks , such as swapping your furnace filter and updating your lightbulbs. But if you really want to lower your bills this winter, consider projects that make your home more energy efficient. According to the EPA, 9 out of 10 homes in the U.S. are under-insulated, which wastes energy and money.7 Luckily, there are plenty of DIY insulation projects that you can complete in just a few days. For example, the EPA offers guides on how to: Insulate your attic or basement crawl space Weatherstrip doors and windows Seal areas around the house that may be leaking air, including electrical outlets and fireplaces The savings you get from these projects can really add up. The EPA estimates that sealing and insulating your ducts can make your HVAC system up to 20% more efficient.8 And thanks to new provisions from the Inflation Reduction Act, you can also save a bundle this year by investing in certain energy-efficient upgrades and claiming a tax credit.9 Be sure to check with us about any local rebates and incentives that may be available, too, before getting started on a project. Use Expense Tracking to Boost Your Holiday Budget To avoid overextending yourself during the holidays, one of the best things you can do is track your income and expenses. If your monthly budget is usually tight, you may need to make some adjustments to free up cash for holiday expenditures. For example, here's a sample budget worksheet that we created. Start by adding in your expenses: Under the “Typical” column, you can list your standard expenses, and under the “Adjusted” column, list any areas where you could cut back on spending. Then consider how your standard wages may be adjusted this month by extra shifts, additional tips, or an end-of-year bonus. By decreasing your spending and/or increasing your income, you can build room in your budget for holiday gifts and gatherings. HOUSEHOLD BUDGET WORKSHEET Typical Adjusted Difference (+/-) HOUSING Mortgage/taxes/insurance or Rent Utilities (electricity, water, gas, trash) Phone, internet, cable Home maintenance and repairs FOOD Groceries Restaurants TRANSPORTATION Car payment/insurance Gas, maintenance, repairs OTHER Health insurance Clothing and personal care Childcare Entertainment Charitable contributions Savings, retirement, college fund INCOME Salary/wages Bonus, tips, other MONTHLY TOTALS Total Adjusted Income Total Adjusted Expenses - EXTRA SAVINGS FOR YOUR HOLIDAY BUDGET Feel free to utilize this worksheet as a template that you can personalize to your needs, or ask us for a PDF copy that you can print out and use right away. WE’RE HERE TO HELP We would love to help you meet your financial goals now and in the year ahead. Whether you want to find lower-cost alternatives for home renovations, maintenance, or services, we are happy to provide our insights and referrals. And if you’re saving up to buy a new home, we can help with that, too. This is the perfect time to score a great deal because only the most motivated homebuyers and sellers are active in the market right now. So reach out to schedule a free consultation. We can fill you in on some of the exciting programs and incentives we’re seeing that help make homeownership more affordable. The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. Sources: S. Environmental Protection Agency (EPA) - https://www.energystar.gov/campaign/waysToSave#!card0-GW91 USA Today - https://www.usatoday.com/story/money/retail/2022/10/05/goodwill-launches-online-store-goodwillfinds-website/8185084001/ Retail Dive - https://www.retaildive.com/news/inflation-drives-shopping-changes-consumers-survey/629973/ NBC News - https://www.nbcnews.com/select/shopping/how-save-groceries-ncna1299053 CNBC - https://www.cnbc.com/2022/09/14/secondhand-shopping-is-booming-heres-how-much-you-can-save.html Washington Post - https://www.washingtonpost.com/home/2021/11/09/holiday-entertaining-tips/ S. Environmental Protection Agency - https://www.energystar.gov/campaign/seal_insulate/why_seal_and_insulate Energy Star -https://www.energystar.gov/campaign/waysToSave The White House - https://www.whitehouse.gov/cleanenergy/?utm_source=cleanenergy.gov Extra blog graphic quote: Save money by completing home maintenance tasks and projects
7 Tips to Maximize Your Home’s Sale Price
Over the past few years, a real estate buying frenzy bid up home prices to eye-popping amounts. However, as mortgage rates have risen, buyer demand has cooled. 1 Consequently, home sellers who enter the market today may need to reset their expectations. The reality is, it’s no longer enough to stick a “for sale” sign in the yard and wait for buyers to bang down the door. If you want to net the most money possible for your property in today’s market, you’ll need an effective game plan and a skilled team of professionals to implement it. Fortunately, we’ve developed a listing strategy that combines our proven approach to preparation, pricing, and promotion—all designed to help you get top dollar for your home. But you will play an important role in the selling process, as well. Here are some crucial steps you can take to set yourself up for success as a home seller in this market: Make Strategic Repairs and Improvements When you sell something, it’s important to consider what your customer wants to buy. And according to the National Association of Realtors, only 6% of today’s buyers report that they are looking for a DIY fixer-upper.2 The vast majority want a move-in-ready home, which means that any outstanding repairs or dated features can be a major turn-off. Before your home goes on the market, we’ll conduct a thorough walk-through to identify any problems that could prevent it from selling. In some cases, we may recommend a professional pre-listing inspection. Finding and addressing issues like leaks, rot, and foundation problems up front can pay off in the final sale price. Plus, it prevents sales from falling through because of a red flag on the home inspection, a scenario no seller wants to face. Beyond repairs, we’ll also help you identify the simple upgrades that offer the highest return on your investment. For example, new paint can give your home a fresh look at a reasonable cost. However, it’s important to choose the right colors. One study found that painting your bathroom light blue could lead to a 1.6% increase in the offer price!3 Similarly, minor landscaping improvements can pay off in a major way. A healthy lawn offers an estimated 256% return on investment.4 Declutter and Depersonalize When buyers look at a home for sale, they’re trying to envision themselves living there. That’s hard to do if it’s chock-full of the current owner’s family photos, children’s artwork, and souvenir collections. Plus, cluttered homes look smaller, and older items can make them feel dated. Decluttering before you put your home up for sale will help you in the long run—after all, you’ll need to move all your things to your new home eventually. Now is the time to shred, digitize, or organize old documents, donate old clothes, or move bulky furniture into storage. At a minimum, you’ll want to pack away excess items neatly before potential buyers view the home. Remove personal photos and other trinkets to create a blank slate that viewers can imagine decorating with their own prized possessions. If you feel overwhelmed by this process, we’d be happy to make recommendations or refer you to a local service provider who can help. Stage Your Home for Success Just as you take care to dress professionally for a job interview, you should always ensure your home looks its best for potential buyers. Home shoppers today are used to scrolling through Instagram and Pinterest, and they want to see the same wow factor when touring a home. The process of making your home look its best and appeal to potential buyers is called staging, and it can be a game changer. According to the International Association of Home Staging Professionals, an average priced staged home sells 5 to 11 times faster than its unstaged counterpart. Even better, the majority of staged homes sell for 4% to 20% over list price!5 Some sellers hire a professional stager, who may bring in furniture and decor to increase the home’s appeal. Others choose to stage their homes themselves. We can help advise you on which route to choose and how much to invest in the process. It’s also important to consider what buyers in your neighborhood are likely to be looking for in a home. We can help guide your staging choices with our local market insights. For example, in neighborhoods where a large share of residents work from home, it may be effective to stage one room as an office space so potential buyers can envision their day-to-day routine. Prep for Each Showing Most of us don’t live picture-perfect lives, and our homes reflect that (sometimes messy) reality. But when your home is on the market, it’s important to ensure that it is always ready for viewers, even on short notice. A missed showing is a missed opportunity to sell your home! Before your home hits the market, it may be worth hiring professional cleaners to get in all the nooks and crannies. After, try your best to keep things spic and span. Just a few minutes a day wiping down counters, sweeping the floors, and vacuuming can make a big difference. It’s also worth noting that most buyers will open cabinets, drawers, and closets—so try to make sure everything is as neat and organized as possible. Keep toiletries and small appliances off countertops, and secure valuables and sensitive documents in a safe or off-site. Want help finding a cleaning service to make your home shine for buyers? Reach out for a referral! Price Your Home Correctly From the Start In the past few years, you may have seen homes in your neighborhood sell for shocking amounts and wondered if you could get a similar price for your property. The temptation to list your home on the high side can be strong, but it’s best to be realistic from the start. Even in a hot market, some homes will sit for months. And the longer a property is listed, the more buyers worry that something is wrong with it.6 Of course, you also don’t want to set your price too low and lose out on potential profit. That’s why it’s essential to work with real estate agents (like us!) who know the ins and outs of our local market and what buyers are willing to pay today. In a quickly-evolving market, comparable sales from a few months ago can lag the current market reality. Fortunately, if you’ve owned your home for several years, chances are good that it’s worth much more today than you paid for it. That means you stand to walk away with a handsome profit. In fact, recent reports show that homeowner equity is at an all-time high.7 Avoid Acting on Emotion The past few years of over-asking-price offers with few contingencies have set certain expectations for many sellers. It’s only natural to feel hurt or even offended if an offer comes in lower than what you think your home is worth. However, it’s important to keep in mind that those market conditions were unprecedented, and we are now returning to a more typical market. Home sellers who act rationally, rather than emotionally, are going to get the best results. Remember: You can always counter a low offer. The same goes for repair requests and contingencies—everything is negotiable. However, it’s important to accept that the market is adjusting and flexibility is key. Keep your expectations reasonable, and remain open-minded. And you can rest assured knowing that we’ll be by your side every step of the way to help you navigate the process and negotiate a great deal. Work With a Local Market Expert The economics impacting mortgage rates may be national, but real estate markets are hyperlocal. That’s why working with a professional agent who understands your neighborhood’s dynamics is essential. Through our experience, we’ve gathered insights that can help us position your home for success in this market. Plus, we have the resources to connect with qualified buyers searching for a home like yours. Working with a knowledgeable agent is also the secret to getting as much money as possible for your home. We have access to extensive data on recent sales in your neighborhood, which we will use to price and promote your property. That’s one reason why homes sold by agents draw much higher prices than those sold by their owners alone. While for-sale-by-owner homes went for a median price of $260,000 in 2020, the median for homes sold by agents was $318,000.8 That’s a difference of $58,000—and money you don’t want to leave on the table. YOUR AGENT AND ADVOCATE Selling a home in a fast-changing market can be stressful. You’re likely to hear conflicting advice and opinions from people in your life, and decisions like what color to paint your front door or how much to list your home for can be overwhelming. That’s where we come in. The market may be adjusting, but it’s still highly advantageous for sellers—and we’re here to help you make the most of it. We’re listing experts in our area, and we know what steps you need to take for a smooth, profitable transaction. If you’re considering buying or selling a home, we invite you to reach out to schedule a free consultation. We’re happy to talk through your specific situation and goals and help you identify your next steps. The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. Sources: Yahoo! Finance - https://finance.yahoo.com/news/bidding-war-rate-drops-lowest-120000537.html National Association of Realtors - https://cdn.nar.realtor/sites/default/files/documents/2022-home-buyers-and-sellers-generational-trends-03-23-2022.pdf Zillow - https://www.zillowgroup.com/news/paint-colors-that-could-lead-to-higher-offers/ Angi - https://www.angi.com/articles/smart-landscaping-tips-can-increase-home-value.htm International Association of Home Staging Professionals - https://pages.iahsp.com/home-staging-statistics/ Washington Post - https://www.washingtonpost.com/business/2019/07/22/just-because-its-sellers-market-doesnt-mean-you-should-overprice-your-home/ com - https://www.realtor.com/research/changes-in-value-of-household-real-estate-q2-2022/ National Association of Realtors - https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers#purchased
Buy Now or Rent Longer? 5 Questions to Answer Before Purchasing Your First Home
Deciding whether to jump into the housing market or rent instead is rarely an easy decision – especially if you’re a first-time homebuyer. But in today’s whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership. A real estate boom during the pandemic pushed home prices to an all-time high.1 Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down. But is renting a better alternative? Rents have also soared along with inflation – and are likely to continue climbing due to a persistent housing shortage.2 And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future. So, what's the better choice for you? There’s a lot to consider when it comes to buying versus renting. Luckily, you don’t have to do it alone. Reach out to schedule a free consultation and we'll help walk you through your options. You may also find it helpful to ask yourself the following questions: How long do I plan to stay in the home? You'll get the most financial benefit from a home purchase if you own the property for at least five years.3 If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you. There are costs associated with buying and selling a home, and it may take time for the property’s value to rise enough to offset those expenditures. Even though housing markets can shift from one year to the next, you’ll typically find that a home’s value will ride out a market’s ups and downs and appreciate with time.4 The longer you own a property, the more you are likely to benefit from its appreciation. Once you’ve found a community that you’d like to stay in for several years, then buying over renting can really pay off. You’ll not only benefit from appreciation, but you’ll also build equity as you pay down your mortgage – and you’ll have more security and stability overall. Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow. Is it a better value to buy or rent in my area? If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area. One helpful tool for evaluating your options is a neighborhood’s price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent.5 Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term. According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing home 10 years ago would have gained roughly $225,000 in equity — all while maintaining a steady mortgage payment.6 In contrast, someone who chose to rent for the past 10 years would have not only missed out on those equity gains, but they would have also seen U.S. rental prices increase by around 66%.7 So even if renting seems like a better bargain today, buying could be the better long-term financial play. Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is the better value in your particular neighborhood. Can I afford to be a homeowner? If you determine that buying a home is the better value, you’ll want to evaluate your financial readiness. Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that’s a sign you may be better off waiting until you’ve built a larger rainy-day fund. Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won’t be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs. Still, you could find that the monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it’s not always the cheaper option. Plus, even though you’ll be in charge of financing your home’s upkeep if you buy, you’ll also be the one who stands to benefit from the fruits of your investment. Every major upgrade, for example, not only makes your home a nicer place to live; it also helps boost your home's market value. If you want to buy a home but aren’t sure you can afford it, give us a call to discuss your goals and budget. We can give you a realistic assessment of your options and help you determine if your homeownership dreams are within reach. Can I qualify for a mortgage? If you’re prepared to handle the costs of homeownership, you’ll next want to look into how likely you are to get approved for a mortgage. Every lender will have its own criteria. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment. For example, lenders like to see evidence that your income is stable and predictable. So if you’re self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren’t at risk of becoming financially overextended. In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate. Whatever your circumstances, it’s always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you’re interested, and we’ll give you a referral to a loan officer or mortgage broker who can help. Want to learn more about applying for a mortgage? Reach out to request a copy of our report: “8 Strategies to Secure a Lower Mortgage Rate” How would owning a home change my life? Before you begin the preapproval process, however, it’s important to consider how homeownership would affect your life, aside from the long-term financial gains. In general, you should be prepared to invest more time and energy in owning a home than you do renting one. There can be a fair amount of upkeep involved, especially if you buy a fixer-upper or overcommit yourself to a lot of DIY projects. If you’ve only lived in an apartment, for example, you could be surprised by the amount of time you spend maintaining a lawn. On the other hand, you might relish the chance to tinker in your very own garden, make HGTV-inspired improvements, or play with your dog in a big backyard. Or, if you’re more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners. The great thing about owning a home is that you can generally do what you want with it – even if that means painting your walls fiesta red one month and eggplant purple the next. The choice – like the home – is all yours. HAVE MORE QUESTIONS? WE’VE GOT ANSWERS The decision to buy or rent a home is among the most consequential you will make in your lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don't hesitate to reach out for a personalized consultation, regardless of where you are in your deliberations. We'd be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals. The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. Sources: CNN - https://www.cnn.com/2022/08/11/homes/home-prices-second-quarter/index.html NPR - https://www.npr.org/2022/07/14/1109345201/theres-a-massive-housing-shortage-across-the-u-s-heres-how-bad-it-is-where-you-l Bankrate - https://www.bankrate.com/mortgages/5-year-real-estate-rule/ Federal Reserve Bank of St. Louis -https://fred.stlouisfed.org/series/MSPUS National Association of REALTORS - https://www.nar.realtor/blogs/economists-outlook/price-to-rent-ratios-by-state-from-2014-2019 National Association of REALTORS -https://www.nar.realtor/blogs/economists-outlook/single-family-homeowners-typically-accumulated-225K-in-housing-wealth-over-10-years Statista - https://www.statista.com/statistics/200223/median-apartment-rent-in-the-us-since-1980/
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