Tag Archives: buying a home

Technology Has Made It Easier Than Ever For Millennials To Find Their Dream Home

 Technology has Made Buying a Home Easier for Millennials | Money Savvy Living

 

The advent of technology is predominantly responsible for the current shape of the real estate landscape, or at least how it operates.  That said, I am convinced that those who are fully committed to adopting the latest technological trends are in the best position to capitalize on opportunities that arise in the real estate industry.

 

There isn’t a generation more prepared to harness the power of technological advancements than millennials.  Having been exposed to more technology at a younger age, it is only natural that younger homebuyers are more inclined to lean on it in their respective home searches than older generations.

 

Let’s take a closer look at how technology has shaped the way millennials research, shop and close on their first homes:

 

It has never been easier to research a respective property than it is today, and one thing in particular has more to do with making research accessible to everyone than everything else combined: the Internet.  Not surprisingly, online platforms and real estate valuation tools have left millennials more informed in their own home searches than the generations that have come before them.  With just a few clicks of a mouse and a little ingenuity, it is entirely possible for prospective homebuyers to compile a list of viable homes that meet their criteria.

 

According to the National Association of Realtor’s latest Profile of Home Buyers and Sellers, 94 percent of millennials used online portals in their home search last year.  Today, those home searches have transcended desktop searches, and now take place on mobile devices.  In fact, more than half of younger buyers preferred to search for their first home on a mobile phone or tablet.  Of those surveyed by the NAR, 31 percent of millennials and 26 percent of Gen Xers ended up purchasing the home they found on their mobile device.

 

Of particular importance, however, is the difference in volume and time spent searching for a home between those that used the Internet and those that didn’t.  According data released by the NAR, buyers who used the Internet last year spent twice as long searching for a home and saw twice as many houses than those that neglected to use online tools.

 

If for nothing else, new technology within the real estate sector has awarded millennials the opportunity to make more informed decisions.  All the information they need on a property is just one click away.  Moreover, they no longer have to settle for the houses brought to them by a single real estate agent.  They essentially have a much wider pool of properties to choose from, and can therefore be more selective in their search process.

 

First-time buyers will have a better chance finding a home they can afford today than they have in the past.  With access to the MLS, online valuation tools, and even mobile applications, millennials have every reason to shop within their means.

 

Speaking of a wider pool, more refined search results will also benefit those in search of a loan.  Outside of finding the right home, the Internet has made the mortgage process itself more accessible to those who may not understand it entirely.  It’s much more likely that millennials will turn to the Internet to help them find the right mortgage for their current situation.

 

No longer are first-time homebuyers expected to walk into a bank and accept the lending terms of the closest traditional institution.  Not unlike their home search, they can shop around for the mortgage that best suits their needs.

 

First-time homebuyers have the added benefit of being able to reference pages like the Consumer Financial Protection Bureau, which exists specifically to help those who may have questions about the home buying process.  Subsequently, the U.S. Department of Housing and Urban Development offers first-time homebuyers a step-by-step blueprint and even determines how much home they can afford.

 

Armed with a better knowledge of how mortgages work, millennials are less likely to take on monthly premiums they can’t afford, which, I am sure I don’t need to remind you, contributed to the Great Recession nearly a decade ago.

 

Above all else, new technology within the real estate sector has awarded first-time homebuyers the opportunity to make more informed decisions.  There may have never been another generation more prepared to actively participate in the housing sector than millennials, which bodes well for real estate and the economy as a whole.

 

I want to make it abundantly clear; just because millennials are more inclined to use technology in the search for their first home, it doesn’t mean real estate agents will be relegated to the wayside.  In fact, real estate agents are more relevant than ever.  According to the NAR’s Profile of Home Buyers and Sellers, 87 percent of buyers in 2015 purchased their home through a real estate agent or broker, and millennials are no exception.  While today’s first-time homebuyers may not need an agent to begin their search, there is a good chance they will need help interpreting the information they are presented with; someone to confirm what they read online.

 

Consequently, technology has also changed the way first-time homebuyers interact with real estate agents.  Instead of your typical phone call, it isn’t uncommon for most conversations to take place via text or email.  First-time homebuyers, for that matter, tend to place a priority on those agents who can answer their questions fast and reliably.

As millennials quietly start to represent the largest pool of buyers in America, their preferences will start to shape the way real estate business is done.  Those who become early adopters of the technology they use should be able to capitalize on what has already been deemed the easiest time to find the home of your dreams.

 

*This guest post was contributed by Than Merrill, CEO of FortuneBuilders, former NFL player, author, and businessman.

Than MerrillBio: Than Merrill, CEO of FortuneBuilders, is one of the most successful real estate investors in the nation. As a graduate of Yale University and a former NFL player, Than attributes his success in sports, business, and investing to coaching and education. Than exhibited his real estate prowess as he starred on A&E’s Flip This House, is a highly sought after speaker, and bestselling Amazon author of “The Real Estate Wholesaling Bible.”  Merrill is also active in philanthropic efforts and started a non-profit charity, with his wife Cindy, called Equal Footing Foundation. In addition to his own charity, Merrill spearheaded the creation of FortuneBuilders Gives; the company’s philanthropic initiative to provide opportunities for employees and students to give back to their communities.

Connect will Than on social media:  Website \\  Twitter  \\  Google+  \\ LinkedIn

Renting vs. Buying: How to Know When Renting is the Best Option

Renting VS Buying | Money Savvy Living

If you are getting ready to graduate from high school or college and are thinking about moving out on your own, it can seem a bit overwhelming—and confusing. There is so much to consider: where you want to live, how much of a payment you can afford, will you have roommates, and what does all of the paperwork actually mean…

 

Let’s start at the beginning. The first thing that you need to look at when you are deciding to get your first place, is whether you should rent or buy. Surprisingly, the answer for most young adults, just leaving their parents’ home, is to rent. Why? Isn’t that just throwing money away, when it could be building equity in your own asset? Not necessarily. Here are 3 reasons, that renting may be your best option.

 

SAVE UP FOR A DOWN PAYMENT

In order to get a conventional mortgage, you can only finance 80% of the loan to value of the home you want to buy. If you are above that amount, you have to pay PMI (private mortgage insurance) or find a lender that will do a 2nd mortgage. Taking a few years to stash some cash away for a down payment on your home—and to cover closing costs—will be a huge benefit to your finances down the road.

 

BUILD YOUR CREDIT

If you are just moving out on your own, you may not have much of a credit history built up, even if you do have a credit card or two. Without much of a credit history, which lenders use to determine your ability to repay the mortgage loan, you may be considered a higher risk consumer, and end up with a higher rate. You can take steps, during the few years that you are saving up for a down payment, to build your credit history and increase your credit score.

  • Get a credit card—having a credit card that you use monthly and make a payment on monthly will start building your credit history in a positive way. While racking up a bunch of credit card debt is not good, utilizing a credit card to pay monthly expenses, then turning around and making a payment to the credit card company (on-time) every month, gives you a credit history because your credit card company, most likely, reports to at least one of the three major credit bureaus.
  • Pay your rent on-time every month—even though most rental owners or apartment complexes don’t report to the credit bureau, you actually can build a rental payment history by paying your rent each month by personal check from your bank. This will give you a paper trail of a rental payment history; and often, lenders will accept bank statements to prove this.
  • Finance a larger purchase, such as furniture or a car—even if you have the cash to buy a car or furnish your new apartment, taking out financing on a major purchase like this is a great way to show your ability to repay a loan and can build your credit.

 

DECIDE ON THE PERFECT LOCATION

If you are just graduating and moving out on your own, chances are you haven’t found your dream job. So unless you know for sure that you plan on living in the same area for at least five years, purchasing a home may not make financial sense anyways. When you purchase a home, there are closing costs involved, and typically, it takes at least a couple of years to recoup those transaction costs. The first few years of any mortgage that you take out is also the time during a loan that most of your payment is going toward the interest. So if you move within the first five years of taking out a mortgage loan, you may actually lose money if you sell your home.  In most short-term living situations you are probably better off to just rent, and then buy when you have settled on a location.