Sept. 26, 2017

How to Get the Most Money from the Sale of Your Home

Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to ensure that you get the highest price possible.

1. Price it a LITTLE LOW 

This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price, but will instead have multiple buyers fighting with each other over the house.

Realtor.com gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

A new study by Collateral Analytics, reveals that FSBOs don’t actually save any money, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”

The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.

Posted in For Sellers
Sept. 15, 2017

Empty Nesters: Best to Remodel or Time to Sell?

55+ Couple holding hands

Your children have finally moved out and you and your spouse now live alone in a four-bedroom colonial (or a similar type of house). You have two choices to make:

  1. Remodel your house to fit your current lifestyle and needs
  2. Sell your house and purchase the perfect home

Based on the record of dollars spent on remodeling and renovations, it appears that many homeowners are deciding on number one. But, is that the best long-term solution?

If you currently live in a 3-4-bedroom home, you probably bought it at a time when your children were the major consideration in determining family housing needs. Along with a large home, you more than likely also considered school district, the size of the property and the makeup of other families living in the neighborhood (example: you wanted a block with other kids your children could play with and a backyard large enough to accommodate that).

Remodeling your home to meet your current needs might mean combining two bedrooms to make one beautiful master suite and changing another bedroom into the massive walk-in closet you always wanted. However, if you live in a neighborhood that historically attracts young families, you may be dramatically undermining the value of your house by cutting down the number of bedrooms and making it less desirable to the typical family moving onto your block.

And, according to a recent study you will recoup only 64.4% of a remodeling project’s investment dollars if you sell in the future.

Your home is probably at its highest value as it stands right now. Instead of remodeling your house, it may make better financial sense to sell your current home and purchase a home that was built specifically to meet your current lifestyle and desires.

In many cases, this well-designed home will give you exactly what you want in less square footage (read less real estate taxes!) than your current home.

Bottom Line

If you are living in a house that no longer fits your needs, at least consider checking out other homes in your area that would meet your lifestyle needs before taking on the cost and hassle of remodeling your current house.

 

Posted in For Sellers
Sept. 8, 2017

What to do after a disaster hits your home

What to do after a disaster hits your home, mortgage

 NEW YORK – Sept. 6, 2017 – Hurricane Harvey has damaged or destroyed hundreds of thousands of homes and put countless families into a financial tailspin. And now, Hurricane Irma has its sites set on Florida. If you're affected by a natural disaster, what does it mean for your mortgage? Here are frequently asked questions and answers.

What should I do first?

Get in touch with the following entities:

·         The Federal Emergency Management Agency. You can register with FEMA online, in person at a disaster recovery center or by calling 800-621-3362.

·         Your homeowners insurance company, plus your flood or earthquake insurance company, if either applies to your situation.

·         Your mortgage servicer. That's the company that you send your monthly payments to; it might not be your original mortgage lender.

I can't pay my mortgage. What are my options?

If the disaster makes it impossible to make your monthly house payments, ask your servicer for mortgage forbearance. A forbearance 'allows you to stop making your payments for an agreed-upon time,' says Lisa Tibbitts, director of public relations for Freddie Mac.

In a forbearance agreement, you might make partial payments or stop making payments for a specific time. Generally, a forbearance lasts up to six months and can be extended up to another six months. Interest still accrues during the time you aren't making full monthly payments. But under a forbearance agreement, the lender won't charge late fees or report you to credit bureaus.

The lender will want you to catch up on your missed payments after the forbearance period is over. That might involve paying extra every month for a few years, modifying the loan or reaching some other negotiated agreement.

To talk with a Department of Housing and Urban Development-approved housing counselor before agreeing to forbearance, call 800-569-4287.

What aid is available?

Direct federal aid consists mostly of loans from the Small Business Administration. As odd as that may seem, the SBA is in charge of delivering disaster-related loans to individuals and families.

The SBA extends loans at favorable interest rates to replace or repair primary residences. You can borrow up to $200,000 to cover renovation or construction costs. Whether you're a renter or a homeowner, the SBA will lend you up to $40,000 to replace personal property such as clothing, furniture, appliances and vehicles.

FEMA offers grants to fill in gaps between insurance payouts and SBA loans. The maximum grant is $33,300 per household for disasters that happen in the fiscal year that ends Sept. 30, 2017. Grants can be used for expenses such as basic home repairs that aren't covered by insurance, temporary rent and disaster-caused medical and child care.

The Federal Housing Administration has a program that's designed to help disaster survivors rebuild or buy replacement homes. Under the Section 203(h) program, the FHA insures mortgages for people whose homes were destroyed or damaged in disasters. Borrowers don't have to make a downpayment.

My house was destroyed. Should I keep paying the mortgage?

You should do your best to maintain your credit score. That means paying the home loan if you can afford it until you have talked with the servicer and have reached a settlement with the insurance company.

The way lenders look at it: You promised to repay your loan when you signed your mortgage documents at closing. "The borrower is liable for the loan debt, and making their payment is part of the borrower's contractual obligation," Alicia Jones, Fannie Mae spokeswoman, said in an email.

Note: If you apply for a loan from the SBA, it runs a credit check before inspecting your property. That's one reason to preserve your credit score by paying your bills on time as best you can.

What happens if I stop mortgage payments without telling my servicer?

If you stop making payments without permission from your mortgage servicer, you could be charged late fees and your credit score could fall.

Homeowners "should call their lender," says Brian Sullivan, supervisory public affairs specialist for HUD. "Don't stop answering the phone. Don't stop opening your mail."

Talk with your mortgage servicer before you miss a payment. The servicer might offer forbearance.

What if I can't contact my mortgage servicer?

Whether your loan is guaranteed by Fannie Mae or Freddie Mac, insured by the FHA or guaranteed by the Department of Veterans Affairs, the servicer is expected to reach out to you.

In response to Hurricane Harvey, Freddie Mac is allowing servicers to "verbally grant" 90-day forbearances, and Fannie Mae is letting servicers grant 90-day forbearances 'even if they cannot contact the impacted homeowner immediately.'

Even so, you should call the servicer or answer the mortgage company's calls.

What happens if I'm in foreclosure?

Mortgage servicers receive foreclosure guidance from federal agencies, and the recommendations vary depending on the disaster.

Fannie Mae, Freddie Mac, the VA and the FHA have suspended foreclosures for 90 days in the Hurricane Harvey disaster area.

The house I was buying was destroyed or damaged. What happens now?

If a disaster happens between appraisal and closing, "the lender is expected to take prudent and reasonable actions to determine whether the condition of the property may have materially changed since the effective date of the appraisal report," according to Fannie Mae's guide to lenders.

If the damage is relatively minor and covered by insurance, the mortgage can be closed. But if the damage is uninsured, or if it's major, then the house must be repaired before the mortgage can go through.

Copyright © 2017 The Steuben Courier Advocate, Holden Lewis. All rights reserved. The article "What to Do After a Disaster Hits Your Home, Mortgage," originally appeared on NerdWallet.

 

 

Posted in Real Estate News
Aug. 31, 2017

Want To Keep Up With The Joneses? Now's The Time!

Upscale Living Room photo

Does your current house fit your needs? Does it seem like everyone else is moving up and moving on to more luxurious surroundings? Are you wondering what it would take to start living your dream life?

Market conditions around the country have presented an opportunity like no other for those who are looking to make the jump to a premium or luxury home.

The National Association of Realtors reports that national inventory levels are now at a 4.3-month supply. A normal market, where prices appreciate with inflation, has 6-7-months inventory. The national market has echoed the conditions felt in the starter and trade-up markets as inventory has declined year-over-year for 25 consecutive months.

The chart below shows the relationship between the inventory of homes for sale and prices.

Monthly Housing Inventory GraphAccording to Trulia's latest Inventory Report, the inventory of homes for sale in the two lower priced markets has dropped by double digit percentages over the last 12 months (16% for starter and 13% for trade-up homes). While the inventory of homes in the premium home category has dropped by only 4%.

This has created a Seller's Market in the lower priced markets, as 54% of homes were on the market for less than a month in the last Realtors Confidence Index, and a buyer's market in the luxury market, where homes were on the market for an average of 160 days according to the Institute for Luxury Home Marketing .

Bottom Line:

If you are even thinking of listing your home and moving up to a luxury home, let’s get together to evaluate your ability to do so. Homeowners across the country are upgrading their homes, why can’t you? Your dream home is waiting! 

 

Posted in For Buyers
April 21, 2017

Tampa Bay Home Values Increase

Tampa Bay had the second largest increase in home values over the past year of the country's 35 largest metro areas. Zillow data released Thursday indicated that bay area home values jumped 11.4 percent from March last year to a median value of $183,300, a pace second only to Seattle.

Nationally, the median home value is $196,500, a 6.8 percent increase from last year.

The report also gave hope to renters that a reprieve may finally be in sight.

According to Zillow, median rents across the country are rising at the slowest pace since 2012. 

Tampa Bay came out near the middle of the pack for rental prices with the 12th-highest increase to reach 

a median of $1,351. Tampa's increase surpassed the national appreciation rate of 0.7 percent, but still 

comes in lower than the national median of $1,408.

Posted in Real Estate News
March 17, 2017

Tackle these projects in a single day!

It's easy to get stressed out just hearing the word “renovation." You're instantly thinking of having your home life disrupted by construction debris, cluttered rooms, and loud noises.


But you don't have to spend a ton of money and brace yourself for months of inconvenience to upgrade your home. Here are a few projects that you can knock out in a single day, and they'll greatly improve the look and enjoyment of your home.


Paint or replace an exterior door:
 If you know the correct dimensions and specifications for a replacement door, replacing an exterior door is a quick and easy job. That's even more true if you're repainting it. Preparation and a few coats of paint will only take a few hours.


Plant some low-maintenance trees:
 Young evergreen trees are relatively simple to plant, and after some heavy watering in the first few weeks, they're very easy to maintain. They'll add some color and texture to your landscaping, instantly improving curb appeal.


New light fixtures:
 Whether they're on the interior or exterior of your home, something as subtle as light textures can have a dramatic effect. Swapping out traditional fixtures for something modern or industrial can completely transform a room.


New hardware:
 Drawer pulls and door knobs are easy to change out, and like light fixtures, they have a big impact. You'd be amazed how your kitchen or bathroom could look with new hardware.

 


Posted in Real Estate News
March 14, 2017

Mortgage Rates Went Up Again. Should I Wait To Buy?

Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeksFreddie Mac, along with Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors, is calling for mortgage rates to continue to rise over the next four quarters.

This has caused some purchasers to lament the fact they may no longer be able to get a rate below 4%. However, we must realize that current rates are still at historic lows.

Here is a chart showing the average mortgage interest rate over the last several decades.

Posted in For Buyers
March 3, 2017

5 Reasons to Sell Before the Selling Season Picks Up

5 Reasons to Sell Before the Selling Season Picks Up

A common thought in real estate is never list your home in the winter off season. Perpetuated by industry experts, agents and repeat sellers alike, this saying encourages many would-be sellers to wait until the spring peak to list their homes. However, studies show that homes listed in the winter off season not only sell faster than those in the spring, but sellers also net more above asking price at this time.1 Don’t wait until spring to sell. If you’ve been thinking of selling your home, here are five reasons to list now.

 

1. TAKE ADVANTAGE OF LOW INVENTORY.

Since most sellers are waiting until spring to list, local inventory falls during the off season. However, there are still motivated buyers who are ready to move now and don’t want to wait that long to purchase a home. According to the National Association of Realtors, 55 percent of all buyers purchased their home at the time.

 

they did because “it was just the right time.”2 While you’ll likely have fewer showings in the off season, buyers who do visit will be more serious about writing an offer. As a result, your home will likely sell faster than it would have during the peak season.

2. SET A HIGHER LISTING PRICE.

Homes sold during the off season sell at a higher price, on average, than those sold during the spring and summer peak. There are many reasons for this. First, motivated buyers are willing to pay closer to the asking price for a home. Second, homes are more likely to be priced right and reflect the economics of not only the local market, but the neighborhood as well.

3. YOU'LL RECEIVE MORE ATTENTION.

If you’d like to hire a tradesperson to handle routine maintenance or undertake a minor home renovation before you list, you may be able to take advantage of flexible scheduling and cheaper rates. Many of these professionals experience a winter off season, and will be able to focus their time and attention on you and your project.

4. EASIER TO MAINTAIN CURB APPEAL.

Curb appeal sets the stage for what interested buyers can expect when they step foot in the home during a showing or open house.

Some grass, shrubs and plants go dormant at this time of year, so you may have less to maintain. You may not have to mow as often.  It's still important to ensure your exterior appears well-tended.

5. TAP INTO THE LIFE CHANGES OF BUYERS.

Many buyers receive employee pay raises and bonuses at the end of the year.  If they've been saving to buy a home, this extra money may allow them to reach their goal for a down payment and put them on the path to becoming a homeowner, or upgrading to larger property.  Additionally, companies often hire new employees and relocate current ones during the 1st quarter of the year, creating a strong demand for housing.

IF YOU'RE THINKING OF SELLING, GIVE US A CALL! WE'D LOVE TO HELP YOU POSITION YOUR HOME TO SELL IN OUR MARKET.

Posted in For Sellers
Jan. 13, 2017

Cost of Home Improvement Scams

Posted in Real Estate News
Dec. 2, 2016

Why Are Mortgage Interest Rates Increasing?

According to Freddie Mac’s latest Primary Mortgage Market Survey, the 30-year fixed rate mortgage interest rate jumped up to 3.94% last week. Interest rates had been hovering around 3.5% since June, and many are wondering why there has been such a significant increase so quickly.

 

Why did rates go up?

Whenever there is a presidential election, there is uncertainty in the markets as to who will win. One way that this is noticeable is through the actions of investors. As we get closer to the first Tuesday of November, many investors pull their funds from the more volatile and less predictive stock market and instead, choose to invest in Treasury Bonds.

When this happens, the interest rate on Treasury Bonds does not have to be as high to entice investors to buy them, so interest rates go down.  Once the elections are over and a President has been elected, investors return to the stock market and other investments, leaving the Treasury to raise rates to make bonds more attractive again.

 

Simply put, the better the economy, the higher interest rates will go.

The Good News

Even though rates are closer to 4% than they have been in nearly 6 months, they are still slightly below where we started 2016, at 3.97%.

 

The great news is that even at 4%, rates are still significantly lower than they have been over the last 4 decades, as you can see in the chart below.

 

Any increase in interest rate will impact your monthly housing costs when you secure a mortgage to buy your home. A recent Wall Street Journal article points out that, “While still only roughly half the average over the past 45 years, according to Freddie Mac, the quick rise has lenders worried that home loans could become more expensive far sooner than anticipated.”

Tom Simons, a Senior Economist at Jefferies LLC, touched on another possible outcome for higher rates:

“First-time buyers look at the monthly total, at what they can afford, so if the mortgage is eaten up by a higher interest expense then there’s less left over for price, for the principal. Buyers will be shopping in a lower price bracket; thus demand could shift a bit.”

Bottom Line

Interest rates are impacted by many factors, and even though they have increased recently, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

 

 

 

Posted in Real Estate News