Posts Tagged ‘home selling’

Sellers: Don’t Wait Until Spring To Make Your Move

Wednesday, January 26th, 2022

Courtesy: At Keeping Current Matters

As you plan out your goals for the year, moving up to your dream home may top the list. But, how do you know when to make your move? You want to time it just right so you can get the most out of the sale of your current house. You also want to know you’re making a good investment when you buy your new home. What you may not realize is, that opportunity to get the best of both worlds is already here.

You don’t want to wait until spring to spring into action. The current market conditions make this winter an ideal time to move. Here’s why.

1. The Number of Homes on the Market Is Still Low

Today’s limited supply of houses for sale is putting sellers in the driver’s seat. There are far more buyers in the market than there are homes available, and that means buyers are eagerly waiting for your house. Listing your house now makes it the center of attention. As a seller, that means when it’s priced correctly, you can expect it to sell quickly and get multiple strong offers this season. Just remember, experts project more inventory will come to market as we move through the winter months. The realtor.com 2022 forecast says this:

“After years of declining, the inventory of homes for sale is finally expected to rebound from all-time lows.”

Selling now may help you maximize the return on your investment before your house has to face more competition from other sellers.

2. Your Equity Is Growing in Record Amounts

Current homeowners are sitting on record amounts of equity thanks to today’s home price appreciation. According to the latest report from CoreLogic, the average homeowner gained $56,700 in equity over the past 12 months.

That much equity can open doors for you to make a move. If you’ve been holding off on selling because you’re worried about how rising prices will impact your own home search, rest assured your equity can help fuel your next move. It may be just what you need to cover a large portion – if not all – of the down payment on your next purchase.

3. While Rising, Mortgage Rates Are Still Historically Low

In January of last year, mortgage rates hit the lowest point ever recorded. Today, rates are starting to rise, but that doesn’t mean you’ve missed out on locking in a low rate. Current mortgage rates are still far below what they’ve been in recent decades:

  • In the 2000s, the average mortgage rate was 6.27%
  • In the 1990s, the average rate was 8.12%

Even with mortgage rates rising above 3%, they’re still worth taking advantage of. You just want to do so sooner rather than later. Experts are projecting rates will continue to rise throughout this year, and when they do, it’ll cost you more to purchase your next home.

4. Home Prices Are Going To Keep Rising with Time

According to industry leaders, home prices will also continue appreciating this year. While experts are forecasting more moderate home price growth than last year, it’s important to note prices will still be moving in an upward direction throughout 2022.

What does that mean for you? If you’re selling so you can move into a bigger home or downsize to the home of your dreams, you want to consider moving now before rates and prices rise further. If you’re ready, you have an opportunity to get ahead of the curve by purchasing your next home before rates and prices climb higher.

Bottom Line

If you’re considering selling to move up or downsize, this may be your moment, especially with today’s low mortgage rates and limited inventory. Reach out to a local real estate professional today to get set up for homebuying success this year.

 

What Buyers and Sellers Need To Know About the Appraisal Gap

Thursday, September 9th, 2021

Courtesy: Keeping Current Matters

It’s economy 101 – when supply is low and demand is high, prices naturally rise. That’s what’s happening in today’s housing market. Home prices are appreciating at near-historic rates, and that’s creating some challenges when it comes to home appraisals.

In recent months, it’s become increasingly common for an appraisal to come in below the contract price on the house. Shawn Telford, Chief Appraiser for CoreLogic, explains it like this:

“Recently, we observed buyers paying prices above listing price and higher than the market data available to appraisers can support. This difference is known as ‘the appraisal gap . . . .’”

Why does an appraisal gap happen?

Basically, with the heightened buyer demand, purchasers are often willing to pay over asking to secure the home of their dreams. If you’ve ever toured a house you’ve fallen in love with, you understand. Once you start to picture yourself and your furniture in the rooms, you want to do everything you can to land the property, including putting in a high offer to try to beat out other would-be buyers.

When the appraiser comes in, they look at things a bit more objectively. Their job is to assess the inherent value of the home, so they’re going to study the facts. Dustin Harris, Appraiser Coach, drives this point home:

“It’s important for everyone to understand that the appraiser’s job in the end is to remain that unbiased third party, to truly tell the client what that home is worth in the current market, regardless of what decisions have been made on the price side of things.”

In simple terms, while homebuyers may be willing to pay more, appraisers are there to assess the market value of the home. Their goal is to make sure the lender isn’t loaning more money than the home is worth. It’s objective, rather than emotional.

In a highly competitive market like today’s, having a discrepancy between the two numbers isn’t unusual. Here’s a look at the increasing rate of appraisal gaps, according to data from  CoreLogic (see graph below):What Buyers and Sellers Need To Know About the Appraisal Gap | Keeping Current Matters

What does this mean for you?

Ultimately, knowledge is power. The best thing you can do is understand an appraisal gap may impact your transaction if you’re buying or selling. If you do encounter an appraisal below your contract price, know that in today’s sellers’ market, the most common approach is for the seller to ask the buyer to make up the difference in price. Buyers, be prepared to bring extra money to the table if you really want the home.

Above all else, lean on your real estate agent. Whether you’re a buyer or seller, your trusted advisor is your ally if you come up against an appraisal gap. We’ll help you understand your options and handle any additional negotiations that need to happen.

Bottom Line

In today’s real estate market, it’s important to stay informed on the latest trends. Work with a real estate professional to help you navigate an appraisal gap to get the best possible outcome.

A Big Change in Real Estate

Monday, September 21st, 2015

You Can Always Count on Change

There are so many examples of how things have changed. If you were born in the 50’s you have seen so

many changes. If you are part of the Greatest Generation…WOW have you seen changes. Things that the

Millennials take for granted, Baby Boomers struggle to grasp. How many upgrades to my computer or

cell phone can I ignore before my system is totally obsolete or the computer gurus will refuse to work

on? The home I grew up in had two bedrooms and one bath, a small formal living and dining room and a

small eat in kitchen. There is no such thing as a typical home today. Anything from 2 bedrooms and one

bath; three bedrooms with 2 ½ baths; five bedrooms with 4 ½ baths. A great room or den, a media

room, a FROG (finished room over the garage which can be just an open space finished nicely with

carpet, or it can also have a large closet and a full bath of its own.) You can own the large yard that

surrounds your home, own no land because your property is defined as a condominium, townhome or

patio home. A carport, detached or attached garage which can be one, two, three or even four bays.

As you start to work with your REALTORÂŽ and you want them to have a good understanding of what you

want in a home, defining it might not be as easy as you think. But work together and get started looking.

The best way to define what you want is to let your REALTOR® know what you don’t want. Things seem

to work out when we understand the picture you have in your mind of that perfect place to call home.

One big change that is occurring has nothing to do with style of home, how long it takes to find it, or

what the preferred color pallet is. It has to do with getting your financing lined up and the transactions

successfully closed and recorded. If you have bought a home before and you think you understand the

steps to this part of buying your home… Think again. As of August 1 ( this date may change in order to

allow lenders and lawyers to update the required software) of this year things are changing. If you are

familiar with the term HUD-1, it will now be called the Closing Disclosure Form. This form will contain

the final disclosure that was given to the borrower along with the HUD-1. The final rule has two options

pertaining to who prepares this form. The lender can prepare the form, or the lender and the settlement

agent can prepare it together. There will also be a 3 day rule…A WHAT? This new rule says that the

closing disclosure must be given to the borrower 3 days before closing. There might also be a 3 day

delay if certain changes have to be made, sending the documents back to the underwriter. Those

changes fall into the following categories;

  • Changes to the APR (annual percentage rate) above 1/8 of a percent of the loan;
  • Changing the loan product;
  • Adding of a prepayment penalty to the loan.

 

Why all these changes? The reasons were established in the Truth and Lending Act and the Real Estate

Settlement Procedures Act; To improve consumer understanding of risk factors, overall costs and

monthly payments; To help the consumer realize that they should compare the different loan products

that are available to them and to avoid costly surprises at the closing table. These new rules apply to

most mortgages EXCEPT Home Equity lines of credit, Reverse Mortgages and Mortgages secured by a

mobile home.

 

As the consumer, you would be well advised to start the conversation early on with your real estate

team. Your REALTORÂŽ will be educated on these changes as will the lender and the closing attorney.

The lender and the closing attorney are on the front lines of these changes. My personal advice to you if you

are purchasing a home after August 1st is to stay calm if faced with a delays. It is no one’s fault. We are

all facing a learning curve and we are doing our best to understand any impact these new rules will have

on our clients. Your REALTORÂŽ, Lender and Attorney are working hard to best represent your needs.

Buying and selling real property, especially your primary residence, can be an emotional roller coaster

ride at times. Make sure that you are comfortable with the members of your team. Ask questions. And

remember that delays are normal. Prepare for plan B, if a short delay should occur. Your team members

can help you understand the delay and then help you to manage the situation.

By: Patrice Willetts

 

4 Tips for Setting the Right Sales Price

Tuesday, September 21st, 2010

Home with For Sale sign out front.

One of the most common issues that Sellers will face with their REALTORÂŽ is the right sales price for the home that they have taken such pride in over the years.

Sellers think their homes are worth more than their real estate professional recommends, and buyers think these same homes are worth less.

It’s a difficult disconnect that makes selling properties a challenge. Successfully marketing a home requires that the price be set carefully — or it will languish on the market. Among the considerations:

  • How many homes are for sale in the neighborhood? The more homes on the market, the more important it is to list at the lower end of the scale. “I want buyers to ask why is this house priced so competitively,” said NAR President-elect Ron Phipps of Phipps Realty in Warwick, R.I. “I want the answer to be an offer.”
  • Take short sales and foreclosures into consideration when pricing. If the competing properties are in lousy condition, they are less of an issue, but if they are well taken care of, yet priced 25 percent below market, they can be a serious factor.
  • Negotiate decisively. “Buyers are not interested in back-and-forth negotiations these days,” Phipps said. “They are less emotional and more disciplined. They will walk away.” (more…)