The Time For a Starter Home is Now
With more than half of the home sales in 2017 expected to be to first-time buyers, now is the time to make your move. Research from the National Association of Realtors shows this demographic of people aged 19-34 are moving from urban rentals. That means competition and bidding wars could become fierce in the spring for such “starters” in desirable areas. While there’ll be less inventory this winter, there’ll also be less competition per unit and a higher percent of motivated sellers.
Find The Right Agent
One of the best decisions a seller can make is in finding a good Realtor®. A bad hire can cost sellers tens of thousands of dollars and months of worried waiting.
Take a good look at an agent’s marketing materials and their listings. Are there good photos of the properties? Are descriptions accurate without seeming exaggerated? Then, look at profiles of the agents on LinkedIn, Facebook and other social media; and be sure to read web reviews. What kind of impression is the agent making? You can narrow your search to a few agents and interview each, ideally in person. Ask for sales-activity reports, existing listings and time-on-the-market averages, plus the requisite local comps.
An experienced listing agent will know the best times for open houses and how to initiate a price war if the market allows.
Find The Loan For You
Those who couldn’t get mortgages during the downturn because they didn’t have 20 percent to put down can find affordable financing again. Borrowers with FICO scores as low as 690 are now getting conforming mortgage loans (those under $417,000). Borrowers without a 20 percent down payment will still likely pay private mortgage insurance until they hit the 20 percent to 25 percent equity mark.
The best rates go to those with 800-plus credit scores, though 750-plussers are getting virtually the same terms.
A Seller’s Market
Home sellers can do several simple things to enhance appearance, increase buyer interest and boost their home’s profile. Instead of wholesale renovations from which sellers recoup maybe 60 percent on investment, do light makeovers everywhere, with an eye on the kitchen and bathrooms. Show the space, not the contents. Put away family photos, excess art, and store bulky and worn furniture. Think bright and cheery. Open drapes and add brighter light bulbs in dark areas. Repaint where needed and use neutral colors.
Time To Buy
In many cases, rents are rising faster than home values, yet mortgage rates remain low. Renters now account for 37 percent of households (the highest level in 50 years), indicating an imminent surge of renters-turned-buyers. While there are many rent vs own calculators out there, they can’t account for human behavior, such as reluctance of renters to re-invest what they’ve saved from not paying property tax, insurance, upkeep, etc.
Don’t bank on a done deal or other verbal promises from listing agents until you sign a contract. In many heated markets across the country, buyers are being misinformed and using their offers to bid up the price for preferred buyers who they think can pay more and close faster. Strategies such as preapproval (versus prequalification), proof of funding, closing flexibility and the risky practice of waiving inspection and repairs can help sway buyers.
It can sometimes be helpful to write letters to existing owners telling them how much the home will mean to you in order to give you preference over other buyers.
The Grass Is Always Greener
Surveys show that strong curb appeal can increase prices by 10 percent or more. In addition to a green lawn, shrubs, plantings and flowers also project a welcoming feel. Sellers typically enjoy a 100 percent return on the money they put into curb appeal.
Sustainable landscaping has become a value-add for buyers such as: native plants grasses and perennials that require less water and attention fill that bill.
Know Your Market
A balanced housing market is defined as one with an average inventory of 6.5 months. When inventory remains below equilibrium, sellers enjoy more control over prices and the area becomes a seller’s market.
When inventory lingers well above stasis, you have a buyer’s market where sellers must get more serious about price reductions, credits and throw-ins. These averages don’t necessarily reflect demand in certain desirable and undesirable submarkets.
If you have any questions or are ready to sell or buy your home, I would be more than happy to talk about your financing options. No question is too big or small! Contact me today!