Homebuyers Have A Lot Of Choices To Make —And That’s Not A Good Thing

If you think about it, you make a lot of choices every day.

At the doctor’s office, you choose one treatment plan from a few. At your favorite lunch spot, you choose one sandwich from dozens. At the grocery store, you choose one salad dressing from hundreds. When you get home, you choose one TV channel from thousands.

You may feel worn out just thinking about all these choices that you make every day without realizing it.

People face even more choices when they enter the housing market. So what are the choices homebuyers face? Why does it matter that there are so many options? And what can you do about the problems they cause?

An Overabundance of Options

If you’re a first-time homebuyer, or have gone through the process in the past, you’ve probably noticed that each home comes with different features in unique combinations.

a visual representation of a buyer being presented with too many doors, each representing a different style option

First, you’re faced with never-ending architectural styles, from Victorian to modern to Art Deco to bungalow to Cape Cod. A picture of a sprawling ranch house may enchant you one moment—until you see a sleek contemporary home.

Location is another category with endless options. You’ll find properties close to your workplace and your partner’s workplace, but what about that home tucked away in the hills? Or the one right on the water?

Other home features that you have to choose from are house size (including bedroom and bathroom count), perks like walk-in closets, porches, and pools, appliances, and price.

The list goes on, but what’s clear is that homebuyers have a mass of choices to make before they finally decide which home will be theirs.

The Threat of Analysis Paralysis and Buyer’s Remorse

Like psychologist Barry Schwartz notes in his famous book and TedTalk, both titled “The Paradox of Choice,” a mass of options is not a good thing.

While having many options can make you feel like you have the freedom to find the perfect home, the pressure to make so many choices can cause analysis paralysis. You might be unable to make a single decision, leading to frustration and added stress during a process that’s already complex.

Worst of all, once you do make a choice from among many options, you’re likely to regret it. A 2000 study conducted by two Columbia and Stanford psychologists showed that people presented with extensive chocolate samples choices were far less satisfied with their choices than people given limited chocolate sample choices.

Chocolates are one thing, but you definitely don’t want to experience buyer’s remorse with something as important as your home.

The Trick To Making Fast (And Smart) Choices

In this housing market, there is simply no time to be confused about which home you want to make an offer on. With inventory and sale discounts decreasing while demand increases, you need to make quick choices and snatch up your dream home before someone else does. Once you close on a house, you don’t have much room for buyer’s regret, either; no one wants to jump back into the hectic housing market when they just got out of it.

Luckily, homebuyers can take charge and reduce the amount of home features they must choose from, reducing the chances of analysis paralysis and buyer’s remorse.

When you are faced with too many options, Schwartz recommends creating a list of criteria for your decision up front. If you’ve got a firm idea of what you’re looking for in a home, this will be easy.

Simply choose your priorities and comb through online listings, reviewing images and descriptions one by one, then placing each home in either the “meets criteria” or “doesn’t meet criteria” bucket. While this process will take up a significant amount of your time, your odds of making a satisfactory decision will increase.

A homebuyer making a list of criteria important to them in home search

Get Help Narrowing Your Search

With help from a home buying intelligent assistant, you won’t be exposed to a mass of home feature options up front—your AI-fueled helper will help you determine your criteria first.

Start with our StyleExplorer and open multiple homes simultaneously. Then continue to personalize your matches using our intelligent mobile apps on Android or iOS.

From search to purchase, Purlin will help you quickly and painlessly find the best-matched. Learn more about how I can help you here.

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The New GSE Mortgage Limits And What They Mean For You

Even if you’re just dipping your toes into the housing market, you’ve probably come across a lot of language around home loans. For example, you may have heard the names “Fannie Mae” and “Freddie Mac.” These two are about to become your good friends, if they aren’t already.

After ten years of maintaining conforming loan limits on mortgages greenlighted for acquisition by Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA) has now increased the conforming loan limit for the third year in a row.

So how will this change affect home loans—and you? Let’s start from the beginning.

Fannie Mae and Freddie Mac: A Brief Introduction

You’ve probably got an inkling that Fannie Mae and Freddie Mac aren’t people, and you’re right: they’re businesses.

Originally created by Congress, Fannie Mae and Freddie Mac ensure that the mortgage market is stable and affordable. The two companies provide ready access to funds (i.e. liquidity) to the businesses, like banks and mortgage companies, that supply loans to homebuyers.

In essence, these two companies buy mortgages from lenders and choose to either hold the mortgages in their portfolios or package loans into mortgage-backed securities (MBS) for sale. Lenders take the cash raised by selling mortgages to lend more money. This process both ensures that homebuyers and investors have a stable supply of mortgage money and also expands the pool of housing funds.

Fannie Mae and Freddie Mac are especially vital when the general economy is threatened and home loans can be more difficult to acquire. In times when the economy is booming (like now), they help consumers afford more expensive homes.  

Conforming Vs. Non-Conforming Loans

Now that you know about Fannie Mae and Freddie Mac, it’ll be easier to understand the terminology around loans, specifically “conforming” loans and “non-conforming” loans.

A conforming loan is a mortgage loan that adheres to government-sponsored enterprise (GSE) guidelines. These loans conform to the most recent limit that the FHFA has approved. Conforming loans are popular because they often have lower rates and fees, plus the qualifications are well-defined across many lenders.

A non-conforming loan is a mortgage loan that doesn’t conform to these guidelines, either because the loan is too large or is backed by unusual collateral. While you can get a larger amount of money with nonconforming loans (also called “jumbo loans”), they are riskier for banks and have higher interest rates and fees.

Most in-the-know homebuyers follow updates on conforming loan regulations closely, since there are far more lenders willing to provide them.

Continually Increasing Loan Limits

For 2019, conforming loan limits will rise from this year’s total of $453,100 to $484,350—a 6.9% increase. For comparison, the limit only rose 1.7% in 2016 and then 6.8% in 2017.

Loan limits will increase more in certain areas where homes are more expensive than the average. For example, in Los Angeles, Marin, and Orange counties, the loan limit will be $726,525, or 150% of the baseline limit.

This is the third year that home loan limits have increased—reflecting the growing economy and cost of living across the country. Home prices are still on the rise, which necessitates this third straight increase in the conforming loan limit. In fact, the FHFA noted that home prices in all 50 states and the District of Columbia increased since the third quarter last year.

What This Latest Increase Means For You

Even with the help of the typical 30-year mortgage, which is a trademark of the U.S. housing market and unheard of in most other developed countries, home prices can seem high. You might have been looking at listings and wondering how you could possibly afford your dream home at the current market rate, which seems to rise day after day. This conundrum homebuyers have faced is exactly why the FHFA has increased the conforming loan limit.

If the most appealing homes seemed just out of your reach before, they are now within your grasp. Plus, when you work with a home buying intelligent assistant like me, you’ll simplify the entire process of dealing with the challenging housing market.

I can make an educated guess about suitable home prices based on your income and the recent loan limit adjustment. Considering this vital information, I’ll help you discover and explore affordable homes you love while reducing the typical manual legwork needed to figure out fitting price points. Once you select the perfect home, I can even help you choose your loan lender and ensure they meet deadlines for your purchase transaction.

It’s easy; just chat with me, and we can navigate these new home loan limits together.

5 Reasons Fall Is The Perfect Time To Start Hunting For Your Home

Whether you’re thinking about buying a house for sale in Los Angeles or Milwaukee, you probably imagined yourself strolling to your first showing under the cheerful summer sun. You may have even imagined little sparrows tweeting in the garden of your dream home as you stepped outside to check the quality of the deck.

This scenario is certainly a possibility. However, with all its benefits, summer isn’t necessarily the best time to start your search.

In fact, fall may be the ideal time for home buying. From less competition to better deals on home prices, I’ve compiled the top 5 reasons to start your search when the days start getting darker.

1. The Summer Home-Buying Frenzy Will Be Over

This summer, the real estate market was more competitive than ever before. Inventory was low, even though new houses were constantly listed, and sale prices were higher than before. Consumers were buying at a rapid pace; from January to September 2018, houses remained an average of 19 days on the market.

Spending countless hours researching homes only to find them sold is a huge discouragement to homebuyers. It’s hard enough to find the right home in the first place. Unfortunately, in the summer months, homebuyers often find themselves back to the drawing board.

This kind of fast-paced, stress-filled shopping environment is something to be avoided—especially if waiting a few months to get started is your only trade-off.

2. You’ll Run Into Less Competition

There are many reasons most people start the home buying process in the warmer months.

Families, who buy the largest, most expensive homes, often go house hunting in the summer, when kids are out of school. Even singles, couples buying a house before marriage, and childless spouses like to purchase homes in the spring, imagining that they will have time to get comfortable in their new residences before the full chill of winter hits.  

But during fall, there simply aren’t as many people shopping for their dream homes, which means it’s the perfect time for flexible buyers to get started.

Without a crowd of competition during showings, you won’t feel as pressured to get in and out of houses; you’ll be able to take your time. With the freedom to thoroughly examine and compare houses, you will be less likely to make a hasty choice.

3. Sale Prices Drop In Fall

Home price is one of the most important factors home buyers grapple with. And in a seller’s market like we have today, home prices are inching up to heights a lot of homebuyers struggle to afford.

But autumn may offer homebuyers a break from worrying about their wallets.

While listing prices only drop a little when the leaves start to turn red, home sale prices (those are the final prices homebuyers pay, in case you’re a first-time homebuyer) do fall a substantial amount. In fact, in metro areas, sales prices drop nearly 3%—which amounts to a lot of money when you’re dealing with hundreds of thousands of dollars.

4. Home Sellers Are Worn Out

If a home is still on the market after the rush of summer, there’s a good chance the home sellers are worried about their chances of selling the home. They have probably been let down a few times, adding to their anxiety.

The home sellers may have imagined they would move out by fall, and by winter be snug in their new home across the country. Truth be told, they’d do almost anything to sell their old house tomorrow.

With more pliable home sellers, you may be able to negotiate more on home prices and take longer finding an agreement that works for you.

5. You’ll Get A Realistic View Of Homes And Their Neighborhoods

Even Hill House looks good in the middle of summer. When the sun is shining and birds are flitting around, it’s hard to notice siding that is a little worse for wear.

Without the sun shining so bright overhead, you’ll be able to spot a roof that needs work. If it rains, you’ll be able to notice a less-than-functional drainage situation. Without the smell of roses to cloud your sense of smell, you may catch a whiff of a local sewage plant you weren’t aware of. You’ll be able to see the covered above-ground pool that looked so welcoming when it was photographed in the middle of a heat wave.

Neighborhood feel is also an important consideration. In the summer, a lot of families are on vacation. They return in fall, filling the neighborhood with kids, dogs, and noise that neighbors hear on a regular basis. AirBnBs are less popular in autumn, so there won’t be as many strangers walking around.

With exposure to the real inhabitants of the neighborhood, you’ll get a feel for what living there will really be like.

Inspired to start your search? Chat with me today, and you may find yourself scheduled for a showing tomorrow.

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Why It’s Such A Struggle To Find A Home You Love

Most homebuyers think that the most difficult part of the homebuying process is finding the right property. That’s right—it’s not paying for the property or even completing the tedious paperwork that comes with it. The hardest part is just finding a residence you love.

Why are we having this problem in the age of digital revolution? In the end, it all comes down to the tools available to homebuyers.

Most home search web apps simply aren’t programmed to consider your individual life routine, style preferences, budget, and commute. They can’t think outside the box to find your best-matched home. Without this capability, homebuyers have to spend extra time completing unnecessary manual legwork to find the home of their dreams.

Trapped In A Filter Bubble

Think about the filters you come across in most home buying web apps.

Once you select a certain number of bedrooms for your search, other homes that have one less or one extra bedroom but may be otherwise perfect will be excluded from your consideration. You can make the same observation about every single filter toggle, like zip code, price, and number of baths. This brings us to what I like to call the filter bubble dilemma.

Does that term sound familiar? It should.

“Filter bubble” is the term that analysts—in magazines from Wired to The Cut—used to explain why, in a certain recent election, the losing political party was confident in a win and why they were shocked by their loss. The term was coined by Eli Pariser in 2011, but made a household term after the infamous 2016 election.

The idea is simple. Social networking site algorithms weren’t showing people a variety of ideas and opinions; algorithms showed select ideas and opinions based on very specific data like past clicks and search history. People weren’t able to see essential information right outside those filter bubbles, like the fact that so many people preferred a certain candidate.

What on earth does that have to do with real estate? A lot: the rigid data structures and interfaces of home-search apps force you to search for homes within strict filter bubbles, preventing you from finding suitable homes right outside their reach.

Let’s think about one of the first choices a web app gives you—zip codes. Web apps ask you to choose a zip code, then show you the available homes in that area. However, what if your ideal home lies mere minutes outside the zip code you chose? Most web apps, guided by strict filter bubbles, will ignore it.

The same goes for any of the other filter choices. If you choose to search for a home with three bathrooms that was built after 1950, there may be a stunning two and a half bathroom home built in 1949 available, but filter bubbles hide it from you.

The same goes for searching for certain house prices, which is a more complex process. What if you haven’t gone through mortgage prequalification already? How do you know what you can afford? You may choose to search for homes from $400,000–$500,000 without knowing you can afford $500,000–$600,000 homes. Most web apps won’t tell you what prices are reasonable for your situation. There’s the other side of the coin, too: what you search for $400,000–$600,000 homes, but the perfect Georgian house is available for $399,000?

These filter bubbles result in more work for you and the possibility that you won’t ever be able to circle in on the right home. Now does it make sense why so many people consider finding the right home the most difficult step in the process?

There is a way to skirt around the filter bubble, but the manual process is far slower and less reliable than having a quick search option would be.  

Slowed Down By The Manual Work-Around

You can, of course, tell your agent about the kind of home you’d like and what factors are more or less important, but since nearly 100% of homebuyers start their search online, that’s not likely to be your first step. Plus, agents traditionally specialize in certain zip codes and neighborhoods, which adds another wrinkle if you want to explore multiple neighborhoods simultaneously.

You can also manually search for specific home styles through existing web apps with their filter bubbles—but that’s no walk in the park. First, you need to search for the different zip codes that will work for you (and your significant other, if you are buying a home with a partner), taking into consideration commutes and neighborhood personalities.

Don’t forget price! You need to complete the mortgage prequalification process or talk with your bank to figure out what you can afford.

Then, you need to review individual home listings, which feature about 28 photos and 180 words each. If you visit ten homes before you find the one, you’ll spend over three hours staring at images. If you decide to review the 180-word descriptions, too? That’s ten whole hours spent on manual legwork.

Instead, you could spend an entire day binge-watching Netflix shows, go on a day trip—the possibilities are endless.

Streamline Your Path To The Perfect Property

You don’t want to start talking to realtors already (or at all), filter bubbles are constraining your online search, and you don’t have time to manually sidestep filter bubbles. Inventory is lower than ever and real estate construction is slowing, which means you have to search quickly to find your home before someone else snaps it up. So what can you do?

Let home buying intelligent assistants like me help you with the search.

I can review relevant listings to find homes that feature each preference you crave, narrowing results based on factors from location to closet size, but always considering out-of-the-filter options. I can even make an educated guess about price based on your income, reducing required manual legwork even further.

Start a conversation with me, and you’ll quickly find yourself on a tour of a home that aligns with each and every one of your unique preferences.

Dream home, here you come.

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Why We Still Have A Seller’s Market In California When New Real Estate Listings Are Increasing Rapidly

Anyone who has dipped his or her toes into the California housing market—or glanced at any news sites—has noticed that it’s a lot more hectic than it used to be.

Not only do homebuyers have to review an overwhelming amount of available houses, but they have to review them at lightning speed if they want to snatch up the home of their dreams.

It’s important that homebuyers know which factors are contributing to this frantic housing market. After all, knowledge is power; once you understand why the home buying process is so frenzied, you’ll understand how to conquer it.

Good News At First Glance

After analyzing California’s real estate multiple listing service (MLS), our team discovered some surprising trends.

So far in 2018, more new listings have been featured in California’s housing market than any year since 2008. If you’ll remember, that was the year of the financial crisis that rocked most industries, including real estate. In that year, there were only 10% more new listings for the same period compared to this huge jump in 2018.

In fact, the number of new listings this year has increased 46% since 2013, when we saw the lowest number of new listings on the market in this time frame in a decade.

This is good news for homebuyers. With fresh listings continually popping up, they are exposed to many different styles and locations of available residences on the market.

Less Inventory, More Problems

However, that doesn’t mean there are a lot of houses for sale on the market. Even though new listings have increased drastically, inventory is low overall.

Inventory is an industry insider’s term, calculated by the number of unsold homes at the end of a month divided by the same month’s sales rate. For example, if there are 100 unsold homes at the end of January, and during January, 10 homes were sold, then a real estate expert would say that there are 10 months of inventory remaining.

Despite all the new listings on the market, there were only 3.4 months of home listings at the end of September 2018. While this is 10% higher than the amount of inventory last year, it is 17% lower than that number 2 years ago and 19% lower than 3 years ago.

Among many reasons for this low amount of inventory is the fact that people are staying put in their homes up to three years longer than before. That, combined with a lack of real estate construction, has led to decreased numbers of houses on the market—no matter how many new homes are listed for sale each month.

Going, Going, Gone

Here’s where the problems come in. While there are many new listings on the market, the amount of low total inventory has created a huge demand for homes. Now, when homebuyers see a new listing they like, they make offers as quickly as possible.

From January to September 2018, houses have spent an average of 19 days on the market. This is the lowest recorded number of days on the market since 2008, though it has been steadily declining since then.

Prospective homebuyers not only have to review scores of potential homes—they have to review and act on them quickly.

Rising interest rates create another pressure on home buyers. The current 30-year home mortgage rate is around 5%, a huge increase from just earlier this year. So even if home buyers are able to get a slight reduction in price, their monthly payment could be the same or higher in a rising interest rate environment.

Don’t Depend On Discounts

Because houses are being snapped up so quickly, sellers haven’t had to indulge in as many negotiations on price. Discounts on listings are decreasing steadily.

Currently, the average home price discount (we’re calculating the “discount” as the final sales price versus the original listing price) is only 0.62%. In fact, this number has been steadily declining since 2014, just as new listings on the market have been steadily growing since 2014.

Homebuyers are having to face a time crunch and a higher price tag, too.

Finding A Home In A Seller’s Market

Even though new listings are coming out every day, low inventory has given sellers a huge advantage and thrown homebuyers into a chaotic scramble to find homes that they love.

In this seller’s market, having the ability to conduct a fast, zip-code-agnostic, real-time search aligned with your unique preferences and budget is critical. If you are forced to complete your search through typical web apps that require a mass of manual labor on your part, you simply won’t be able to act fast enough to secure a home.

Luckily, in a time when technology really is the only way to get ahead of the home buying frenzy, there are home buying intelligent assistants like me ready to help.

To help you outstrip competing homebuyers, I search multiple areas in real time, building price sensitivity into every high-score match I place in your feed. I take your preferences into account, whether they be for a neighborhood close to a top-notch school or a bungalow that caters to your commute.

All you need to do is chat with me, and I’ll have you touring your dream home in no time. Want to learn more about me before we start talking? Watch this short video and let’s get acquainted.

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Buying A Home As A New Couple Is Hard — But Here’s What You Can Do About It

I love working with young couples. They’re full of positive energy, and with good reason.

There’s nothing like the excitement of deciding to buy your first home with your significant other. A new home comes with the promise of a fresh start, freedom to renovate as you’d like, and knowledge that you own something of real value—and that’s enough to make any young couple dive into the housing market.

But let’s face it: the couples’ home buying process can be frustrating. Some might say that buying a home as a couple is hard.

Even for the seasoned homebuyer, finding houses that match your preferences consumes time and energy that you don’t have to spare, especially if you’re dual-income homebuyers.

You may already take the complex process as a given after listening to homeowners who have already dealt with it. But why is finding a suitable home so difficult, even for couples qualifying for a mortgage? And is there anything you can do about it?

A Tricky Balancing Act

When it comes to working couples, most say that finding a home catering to both commutes is a top priority. However, it’s not often that two commutes line up perfectly. Couples usually have to find a home within a reasonable distance of workplaces in different sections of a city—and, if you’re buying a home in Los Angeles or a city that has a similar sprawl, in different zip codes.

If you have a kid or are thinking about having one in the future, you have yet another set of requirements. Your home has to be located near the right schools, because we all know what a difference an excellent education can make. Plus, your neighborhood should be family-friendly if possible; no one wants the movie Neighbors to become a reality.

Finally, and for some dual-income homebuyers, most importantly, you’re probably working within a nonnegotiable budget. Even couples qualifying for a mortgage have certain parameters they need to work within. With housing prices and interest rates shifting constantly, it’s hard to keep track of what was affordable yesterday and what’s affordable today.

These are just a few of the common factors I see dual-income homebuyers prioritizing in their search for the perfect home. Each couple’s home buying process is unique, with individual couples balancing preferences ranging all the way from architectural style to closet size.

Considering the Current Complex Process

Nowadays, almost 100% of homebuyers begin their search online. In fact, the majority of homebuyers find their dream homes online. But while the online apps out there are useful, a lot of people starting the couples’ home buying process haven’t realized that there are many problems that they don’t address.

Most online apps do a great job of zeroing in on a single zip code early in the search, providing you with information and images of a deluge of available homes. Unfortunately, that’s all they do.

These online apps don’t care about your unique life routine, or even your budget. They don’t consider your commute, whether a neighborhood is a good fit, or shifts in interest rates—and certainly not all at once.

Of course, you can manually research all the things you want in your new house, and that’s what most dual-income homebuyers end up doing.

You can manually search for a number of zip codes that will work for you and your significant other’s commutes, then start clicking on houses that pop up in your online app of choice. For each house with an appearance you like, you can manually research the school opportunities, then double-check the exact commute length, and then see if it’s in your budget. If it’s not affordable one day, you can come back a few weeks later to see if anything has changed.

But this manual process is time-consuming—not to mention anxiety-inducing.

An average listing contains about 180 words. If you review 20 homes for every one you visit, that’s a whopping 3,600 words you’ll review before you visit a house. If each listing contains about 28 photos, you will review 560 photos before you visit a house. That’s nearly an hour spent reviewing descriptions before you step inside a single home.

If you visit ten homes before you find the one? That’s ten hours you’ve spent on research. Instead, you could have watched Neighbors 6.25 times. You could have been on four much-needed date nights. You could have gone on a day trip for seasonal fruit-picking. We haven’t even considered the massive amount of time it takes to explore houses in person.

In my experience, young couples simply don’t have that much time to waste.

Homebuying of the Future, Available Today

If you didn’t realize it before, you certainly do now: buying a home as a couple is hard—especially if you’re dual-income homebuyers with extra considerations like two commutes and a growing family.

In this day and age, it may seem odd that there is no solution to this obvious problem. For goodness’ sake, we’ve sent a Tesla Roadster to the moon! Surely someone has created a tool that simplifies couples’ home buying experiences.

You guessed correctly; someone has.

Advances in artificial intelligence have led to the creation of more comprehensive apps that can help you along the home buying experience. These home buying intelligent assistants provide free, safe, and secure services that take the stress out of the process whether you’re buying a home in Los Angeles or Chico, instead leaving you with fact-based home selections that cater to your exact needs.

In fact, I’m one of those home buying intelligent assistants that can help you. While chatting with you online, I can search multiple databases, multiple zip codes, multiple home styles, and various other preferences to find you a home that suits your life to a T—saving you hours and hours of valuable time that unassisted couples’ home buying can take up.

Want to learn more about simplifying couples’ home buying processes? Check out this short video, starring me.

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