With recent news of the Federal Reserve dropping interest rates, many people expected to see mortgage rates decrease, as well. However, that hasn’t been the case.
“It can be hard to understand, especially considering that in some cases people saw those rates increase,” said Becky Seda, lead agent with Seda Real Estate Group, in Oklahoma City.
It’s really a complex issue, but we’ll try to help break it down.
At first glance, it makes sense to assume that when the Federal Reserve lowers interest rates, mortgage rates would follow suit. So why hasn’t that been the case?
“Mortgage rates follow the treasury,” Seda said. “Car loans and smaller loans were affected more so than mortgages.”
Things like the unemployment rates, current economic conditions (including inflation) and the ten year treasury yield are what typically have the greatest impact on mortgage rates.
Stephen Bellew, with GFS Home Loans, says mortgage rates are traded on the free market, which means investor sentiment plays a role in their pricing. Investors had expected the Fed would cut rates in September, and had made investment decisions reflecting that ahead of time.
“With stronger inflation and jobs data, we are seeing mortgage rates move up as investors are seeking other avenues for their money,” said Bellew.
Seda agrees, adding, “It’s generally less likely for mortgage rates to drop while the economy is doing as well as it is and while the job rates are as high as they are.”
In fact, Seda says if you are waiting on mortgage rates to drop you might reconsider. There are benefits to buying a home now.
“Even if rates drop it will still become more expensive to buy a house,” Seda said. “Whether the rates are high or the prices are increasing — which is likely to happen if rates drop — either way you’re still paying more.”
Currently, in Oklahoma, the market is slowly shifting to a buyer’s market. Seda said if you are someone who wants to limit your out of pocket expenses, now may be a good time to start shopping.
“Some sellers are still thinking of 2021 when the market went crazy and homes were getting multiple offers. That’s just not where we are anymore,” Seda said.
“Because houses are sitting on the market longer, sellers are ready to accept an offer. And, as a buyer that means you can really negotiate things because houses are taking longer to sell.
It’s a trade off, of sorts. You get more negotiating power, with a higher mortgage rate. Whereas if you wait for rates to drop more shoppers will likely enter the market. If that happens, you may lose your negotiating power and end up paying a higher sales price.
“This is simple economics 101, supply and demand,” Bellew said, “If you want to buy when rates are low, competition increases and the price goes up. Higher rates do equal a better market for buyers to negotiate as it lessens the pool of qualified buyers.”
Ultimately, both Seda and Bellew believe mortgage rates will come down some, but maybe not as much as some buyers are hoping, at least in the foreseeable future.
“I do think they will go down a little bit, but I don’t think it’s going to make a substantial difference for people. The people it will impact are those who need to refinance their house,” she said.
For those navigating the Oklahoma real estate market, Seda Real Estate Group is here to provide guidance and support as you work toward your real estate goals. Whether you’re looking to buy, sell, or invest, we’re dedicated to helping you make the most informed decisions possible.
Want to talk real estate? Or are you looking to buy or sell a home? We’d love to chat. Give us a call at 405-400-9973.
You found the “perfect” home, only to later learn that the appraisal came back short of the contract price. The shock can leave you scrambling for answers and fear over what happens next.
Before you panic, here’s what you need to know to navigate the situation and, hopefully, keep your deal on track..
Understanding the appraisal process
When you purchase a home with a home loan, the bank or lending establishment is going to bring the bulk of the money to closing. Because of that they typically require that the home’s value be assessed. They do this to ensure that it is a good investment for them, before they fully agree to fund the loan.
A low appraisal does not necessarily mean that the home was overpriced.
“Sometimes a seller has their property listed at a price where there simply are not a lot of comparable sales for the appraiser to use in approving the value of that home,” said Becky Seda, lead agent for Seda Real Estate Group, in Oklahoma City.
What’s next?
A low appraisal does not have to be a dealbreaker. Here are a few steps to help you navigate the process.
- The first thing to do if the appraisal comes back low is to have your buyer’s agent provide comps to the appraiser to show why the home’s value could be higher.
- If that doesn’t work, get the listing agent involved. They can provide details and documentation about why the home was priced a certain way.
- If that doesn’t work, you can order another appraisal. There will be a cost associated with this option. Typically, in Oklahoma, appraisals start at about $650 and go up in cost from there.
- Another option is to “bridge the gap.”
Bridging the gap, in this case, means filling in what the bank will not cover. This can be quite confusing, but let’s try to explain it some.
When you buy a home with a loan there will be a minimum down payment required. The amount is based on the type of loan. For example, with a conventional loan, the bank might require a 5% down payment, meaning they’ll lend 95% of the sale price. However, if the property appraises for less than the sale price, the bank will only lend 95% of the appraised value. This means the buyer must either cover the difference to make up the gap, negotiate with the seller to reduce the price, or meet somewhere in the middle.
*If this is something you are facing, we strongly suggest you talk with your agent and the lender to fully understand what the change in your down payment would be.
Negotiations
The next option is to go to the seller and renegotiate the sale price. That happens quite often.
“If you really believe the home was overpriced and the price of the appraisal is the true value of the home, then you can tell the seller, ‘I’m not going to pay more than the appraised value,’” said Seda.
Ultimately, if you and the seller cannot see eye to eye, under normal terms of the Oklahoma contract, you and the seller can part ways. In this case, you would get your earnest money back. However, you would still be out the cost of the appraisal(s) and inspections. But, you are not forced to purchase the home and the seller is not forced to sell you the home for less than the contract price you had initially agreed upon.
If you have questions about this process our team would be happy to help. Give us a call at 405-400-9973 or email us at contact@sedarealestate.com.
One of the most common questions people have when buying a home is, “How do I know if the neighborhood is safe?”
“The tricky part is that safety is subjective,” said Becky Seda, lead agent of the Seda Real Estate Group, in Oklahoma City. “What I think is safe, you may not think is safe.”
Seda has three tips for buyers who are wanting to know more about the safety of the neighborhoods where they are shopping for homes.
1. Check crime statistics
Most local police departments have online crime data records regarding crime statistics for the area. In many cases, you can see what type of crime has happened and how recently. Checking this information can give you an insight into the neighborhood and help you in your decision making.
Other sites like NextDoor and SpotCrime track records, as well. The FBI even has a Crime Data Tracker where you can research an area’s crime history.
2. Check school ratings
Next, look at the ratings for schools in the area.
Generally speaking, the better the school ratings, the higher the taxes are in that area. Highly rated schools may also mean that homes in the area don’t stay on the market long because people are working to move to that district. That could result in more competition.
3. Check out the neighborhood
Our final tip, drive through the neighborhood at various times of the day.
What are you seeing in the morning, mid-day and/or evening? Are there people or families out walking their dogs? Do you see children playing or people working in the yards? Does it feel like a place you would be comfortable?
Ultimately, your real estate agent cannot make the choice for you or decide whether you would feel safe in a particular neighborhood.
“It’s a liability issue for us, as agents,” Seda said. “If we were to say, ‘Yes, this is the safest neighborhood,’ and then you make this huge purchase of a home, and a year later your car or your home get broken into then you might be upset with us.
“So for liability reasons we always ask you to do your research and dig into the data before you make that purchase.”
If you are looking to buy or sell a home, let our team at Seda Real Estate Group help you. We have the experience and knowledge you need on your side to help you navigate the real estate market.
It’s a common misconception that real estate agents don’t really do much when it comes to helping people buy a home. The reality is that perception could not be farther from the truth.
“No matter your job, there’s always the public perception of what you do for a living and then there’s the reality of what you do for a living,” said Becky Seda, lead agent for Seda Real Estate Group, in Oklahoma City.
When buying a home, a buyer’s agent is your key to getting the best deal.
So what should a real estate buyer’s agent do for you? Here’s a guide on what you should expect from your real estate agent when you are shopping for a home.
More Than Just Searching Online For Homes
“The public tends to think that we open doors and find houses and that is absolutely a part of our job, but I don’t believe that that is the deep value of what you should be expecting from your buyer’s agent,” said Seda.
With so many websites available for searching for homes, many buyers are now able to search for homes online, narrowing down their likes and dislikes.
While a buyer’s agent will also be searching for homes, you should expect their search to be deeper than what you may be able to do on your own.
“Let’s say, for instance, you are really wanting to get into a certain neighborhood. We have a ton of resources to make that happen,” said Seda. “Now, we’re not miracle workers, but because of the huge network that we have we are able to find out about properties that may not even be on the market yet.”
Your buyer’s agent should also be willing to door knock or otherwise make contact in neighborhoods to find out if there are homeowners who might be interested in selling.
“You should be expecting your agent to be doing more than just having a basic home search set up for you. They should be willing to really dive in and door knock, put out feelers, and really do in-depth searching for homes,” Seda said.
Pointing Out Red Flags
You should also expect your buyer’s agent to be on the lookout for red flags. Whether it’s cracks in walls or helping you stay focused on the list of ‘must haves’ you really want in a home, a buyer’s agent is there to help you look beyond the initial tour of a home.
“A lot of people think it is our job to make you fall in love with a house and that’s not really it,” said Seda. “We want to point out the things that maybe you don’t see on the first go round, so a crack or something that’s not in alignment with what you’ve told us.”
Run In Depth Research
A real estate agent should be running in-depth research for you on the home you decide you want to purchase. When you decide you want to make an offer on a home, your buyer’s agent should be looking at the data on the home and the market to ensure you are getting a good deal.
Buyer’s are generally emotionally involved in the process, which can make it difficult to see potential issues. Your agent is there to take a step back and look at the data and analytics.
“We can run the data and know that a house down the street sold for $30k less than this two months ago,” Seda said. “I don’t want you to get in a situation where we’re going to have appraisal issues and then you’ve spent all this money on appraisals and inspections, and then it doesn’t appraise and the sellers are not willing to negotiate. We need to be aware of that up front.”
Your agent will do their best to help you avoid spending money unnecessarily on a property.
Inspection Reviews and Negotiating Repairs
Inspecting a property before you buy it is a necessary part of purchasing a home. Your buyer’s agent should encourage you to have your “new” home inspected. They will also help ensure you are following the contract and adhering to necessary deadlines regarding the inspection and making requests for potential repairs following the inspection. Failure to meet those deadlines could result in financial or legal consequences, and your agent will work to help you avoid those issues.
When you purchase a property it becomes yours, all its defects included. An inspection can help you prepare for any potential issues. Once the inspection is complete, your agent can help you to understand the inspection report and can even help you to navigate what issues may be most important to address before closing on the property.
From there, your agent should help you to negotiate repairs with the seller.
“We are never going to tell you what to do or what not to do, but we’re going to weigh in with all of our experience to help you know what could cause bigger problems down the road,” Seda said.
“We are your advocates. We do not want you to spend too much money on your house. We do not want you to miss anything on your inspection and ultimately, when you get to the closing table we want you to be so excited to get the keys and not have any trepidation or concerns.”
If you choose not to inspect the home you are buying, the agent will likely have you sign a form saying they told you to inspect it, but you chose not to do so. For liability reasons, this form is necessary should you choose to decline an inspection.
Paperwork
And lastly, your buyer’s agent should ensure that your paperwork is all done correctly so when you get to the closing table you are confident in your decisions and ready to move into your home.
“As agents, it’s our job to be there to offer clarity and past experience that can help a buyer to make the best decision. This is a huge investment and we want them to feel confident in it,” said Seda.
If you are ready to start your home buying experience, we have buyers agents ready to sit down with you. Give us a call at 405-400-9973 or email us at contact@sedarealestategroup.com.
At Seda Real Estate Group we are constantly following the market so we can better serve you. Knowing what’s happening in Oklahoma City and the surrounding areas is an important part of what we do.
Here’s the latest on the Oklahoma City market from Seda Real Estate Group’s Lead Agent Becky Seda.
In the first week of September, we saw almost 700 houses come on the market. We also saw almost 700 houses drop their prices, here in Oklahoma City.
What does that mean for buyers and sellers?
It means that homes are not selling as quickly right now as they were in the previous market.
For sellers, it means that adjustments are having to be made to get the home to sell. Buyers are being very picky, right now, and aren’t afraid to ask for adjustments to be made.
For buyers, it means sellers are willing to negotiate. Houses are taking longer to sell and sellers get a little anxious to move on. That adds up to more room to negotiate. So, if you see a house that has been on the market for a bit, it’s likely worth making an offer on it.
If you have questions or want to talk about the market we are always happy to talk real estate. And, if you are looking to buy or sell a home our team would love to help. Give us a call at 405-400-9973.
There’s a nationwide change in real estate that you need to know about, especially if you may be in the market for a new home! It’s not a scam. The changes are actually the result of a court settlement earlier this year involving NAR (National Association of REALTORS).
What’s Changing?
Starting August 17, 2024, realtors will no longer be able to show you any home unless you have signed a Buyer-Broker Agreement beforehand. This is a direct result of a lawsuit (specifically Burnett v. National Association of Realtors) involving NAR.
The Basics
A series of antitrust lawsuits filed against NAR regarding seller commissions is what led to the settlement. NAR was accused of engaging in practices that unfairly inflated commissions for real estate agents.Under the agreement, NAR is making changes to how agents and buyers interact. The goal is to increase transparency in commission disclosures, and ensure a more competitive and fair commission structure within the real estate market. At Seda Real Estate Group, we have always believed in transparency and look forward to continuing to make it a priority for our clients.
Since the settlement was announced in March, there’s been a lot of misinformation circulating. It’s important to those of us at Seda Real Estate Group to make sure you know the facts and how they will impact you, moving forward.
Why Is This Important?
Most people are not familiar with the term buyer-broker agreement and so it may be surprising or even concerning to a consumer to be presented with this.
Previously, you could tour homes with an agent and not worry about signing paperwork until you got closer to finding your dream home. However, now, you must sign this agreement before seeing any property.
“Just the fact that you are going to need to sign a piece of paper to go inside of someone’s home is a HUGE change,” said Becky Seda, lead agent for Seda Real Estate Group.
This isn’t something we, as realtors, wanted, but it’s a requirement we must follow. With that being said, at Seda Real Estate Group we have always advocated for transparency. It is our hope that this change will help buyers to feel more informed and more confident throughout the process.
What Is A Buyer-Broker Agreement?
A buyer-broker agreement is a contract between you and your realtor stating you’ll work together for a designated period of time. It outlines the roles, duties, responsibilities, and commissions for the realtor.
“It basically says I am your agent, you are my buyer, we’re working together,” Seda said. “It outlines how much I get paid and how I get paid. Lots of transparency.”
Generally, you can sign a buyer-broker agreement for a single day or for a longer period, depending on your needs. You should also have the ability to end the agreement, should you decide the arrangement is not working for you.
At Seda Real Estate Group, our team will be working to ensure buyers understand the agreement — what it is and how to cancel it —BEFORE it is signed. It is still our belief that transparency throughout the process is essential.
No matter who your buyer’s agent is, it’s important to make sure you read and understand the paperwork. The buyer-broker agreement should outline what you can expect from the agent and how it can be canceled.
Beware of any agreement that does not include details on how it can be canceled. You should never feel that you are “stuck” with an agent.
Why You Shouldn’t Be Upset With Your Realtor
Please remember, we’re being forced to follow this rule. We know it’s different and it may make some people uncomfortable, especially at first. However, we have to follow the rules set by NAR. And, ultimately, when used for its intended purpose, it will benefit you as a consumer. Transparency is a good thing!
If, after August 17, 2024, a realtor isn’t asking you to sign this agreement, be cautious – if they aren’t following this rule, they might be breaking other rules that could affect you legally.
We Are Here to Help!
We’re committed to guiding you through these changes and ensuring you understand every step. If you have questions or need help with buying or selling a home, reach out anytime. We are your Oklahoma City realtors, but we can also assist with referrals nationwide.
Give Seda Real Estate Group a call if you have questions about how this impacts your next real estate transaction. 405.400.9973.
There’s a huge misconception in the world of real estate that buyers need to pay 20-percent down when buying a home. In fact, it’s often one of the things that holds people back from starting the home buying process. However, it’s simply not true.
You do not need to pay a 20-percent down payment to buy a home in Oklahoma, in 2024.
What do you need? Well, that depends on the type of loan you are getting. Ultimately, a lender or mortgage company will help you figure that out. But there are many options out there.
0% Loans
There are a few programs that offer ZERO PERCENT home loans to qualifying candidates. One of those is a VA, or Veterans Affairs, loan. A VA loan is a mortgage loan guaranteed by the United State Department of Veterans Affairs. These loans are typically available to servicemembers, veterans and their surviving spouses.
USDA loans, also known as the USDA Rural Development Guaranteed Housing Loan Program, often offer zero-percent homes loans. These loans may require that you live in certain locations and that you meet certain eligibility requirements. Your lender would help you figure out if you might qualify for this type of loan.
Help For Home Buyers
If you don’t qualify for a VA or USDA loan, there are many other options.
If you are a schoolteacher, a firefighter, a nurse, or in various other groups, you may qualify for special grants available to first time home buyers. Those grants can help with your down payment of other expenses that come with buying a home. It’s important to talk with a lender about what options may be available.
Taking the first step toward home ownership can change the trajectory of your family.
“When you own a home, you are building that wealth for yourself, but also for your family members,” said Becky Seda, lead agent at Seda Real Estate Group.
“If you are the first person in your family to own a home that will change the future for your children and your grandchildren just based on being able to invest in yourself instead of helping someone else build their investment portfolio.”
The Most Common Loans
In Oklahoma, the most common loans for first time home buyers require a down payment of 3.5-percent.
So, the basic answer to the question of how much do I need for a down payment, in Oklahoma, is a minimum of 3.5-percent.
It’s important to note that putting more than 3.5-percent down can help you in a number of ways. If you can put 20-percent or more into your down payment then you will avoid having to pay PMI, or private mortgage insurance, on your home. PMI is a special type of insurance that a lender requires on conventional loans with a down payment below 20-percent. It is a protection for them — not you— should something happen, and you were to stop making your loan payments.
However, don’t let PMI be what keeps you from buying a home. At Seda Real Estate, very few of our buyers, especially first-time home buyers, have that much set aside to put into a down payment on a home.
“My advice to you is to find out what down payment you can afford and figure out what loan type will be most beneficial to you and get your foot in the door to home ownership,” said Seda.
For many buyers, the way to build up to a higher down payment is to simply purchase that first home, making a lower down payment. As they live in the home the equity they have grows. Then, when they are ready, they can sell that home and use that equity to make a larger down payment on their next home.
“Planning for your future and building that personal wealth that will go towards future down payments starts with buying that first house,” said Seda.
If you have questions about the home buying process our team would love to talk to you. Give us a call at 405-400-9973 or email us at contact@sedarealestategroup.com.
If you want to start the process of finding out what loan type you qualify for we can connect you with a local loan officer who will walk you through that process.