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The Importance of Using a Professional to Sell Your Home

The Importance of Using a Professional to Sell Your Home

When a homeowner decides to sell their house, they obviously want the best possible price for it with the least amount of hassles along the way. However, for the vast majority of sellers, the most important result is actually getting their homes sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. According to the National Association of Realtors’ 2016 Profile of Home Buyers & Sellers, the percentage of buyers who used the internet in their home search increased to 94%.

However, the report also revealed that 96% of buyers who used the internet when searching for homes purchased their homes through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their homes directly from a seller whom the buyer didn’t know.

Buyers search for a home online but then depend on an agent to find the home they will buy (50%), to negotiate the terms of the sale (47%) & price (36%), or to help understand the process (61%).

The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots.” This is obvious, as the percentage of overall buyers who have used agents to buy their homes has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

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    Renting or Buying? Either Way You're Paying a Mortgage

    Renting or Buying… Either Way You’re Paying a Mortgage

    There are some people who have not purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage - either yours or your landlord’s.

    As Entrepreneur Magazine, a premier source for small business, explained this month in their article, “12 Practical Steps to Getting Rich”:

    While renting on a temporary basis isn't terrible, you should most certainly own the roof over your head if you're serious about your finances. It won't make you rich overnight, but by renting, you're paying someone else's mortgage. In effect, you're making someone else rich.”

    Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

    “With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

    As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.

    Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. https://www.FreddieMac.com latest report shows that rates across the country were at 4.23% last week.

    Bottom Line

    Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.

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      How to Get the Most Money When Selling Your Home

      Every homeowner wants to make sure they get the best price when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to ensuring 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 reality, this just dramatically lessens the demand for their 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, as the seller likely believes that he or she will net more money if they don’t have to pay a real estate commission. With that being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

      Research posted by the National Association of Realtors revealed that:

      “The median selling price for all FSBO homes was $185,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $163,800. However, homes that were sold with the assistance of an agent had a median selling price of $245,000 – nearly $60,000 more for the typical home sale.”

      Bottom Line

      Price your house at or slightly below the current market value a

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        Forget What You Know: This Year, Sellers May Benefit From Listing Early

        According to Realtor.com conventional wisdom in real estate holds that sellers should time the market to maximize their price. Why? Because home sales are extremely seasonal: They peak in spring and summer, when prices peak as well. That’s why in most markets, most years, the optimal time to list is in the spring, so that the maximum number of potential buyers view the home.

        But we’re in an era in which conventional wisdom is becoming an ever-sketchier concept. So why should real estate be immune from all this topsy-turviness? This year, the conventional wisdom of buying and selling may need to change.

        Inventory levels at the beginning of 2017 are at multiyear lows. Sellers now face very little competition.

        Likewise, buyer demand is abnormally strong for the off-season. The climb in mortgage rates that started in October and accelerated in November and December has created a sense of urgency among buyers.

        The new year is expected to bring more economic growth and even higher interest rates. And with consumer confidence at a 15-year high, buying competition is likely to get fierce.

        Not everyone can move up their plans for the spring and summer; but even so, the months of winter and early spring will likely be much busier than usual. Therefore, sellers could benefit less from timing a spring listing for a summer sale this year.

        But the most important reason to consider selling early this year is the same reason most people want to sell in the first place: so they can buy again. We estimate that more than 85% of sellers are planning to buy another home. The endgame is not necessarily getting the maximum price on the house being sold, but rather taking the best path to the next home.

        When interest rates are moving up, waiting to sell could end up costing more than selling sooner and locking in today’s rates. Waiting to sell could also mean having to wait to buy when there are even fewer homes available.

        The biggest challenge to growth in sales this winter and spring will most likely be inventory. That means that the market overall continues to favor sellers. But that won’t last forever. As rates continue to rise, higher financing costs will eventually dampen demand.

        If you are thinking of selling and buying in 2017, the early bird may get the worm. And the best new nest.

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          Listing in the Winter Attracts More Serious Buyers

          Listing in the Winter Attracts More Serious Buyers

          A recent study of more than 7 million home sales over the past four years revealed that the season in which a home is listed may be able to shed some light on the likelihood that the home will sell for more than asking price, as well as how quickly the sale will close.

          It’s no surprise that listing a home for sale during the spring saw the largest return, as the spring is traditionally the busiest season for real estate. What is surprising, though, is that listing during the winter came in second!

          “Among spring listings, 18.7 percent of homes fetched above asking, with winter listings not far behind at 17.5 percent. While 48.0 percent of homes listed in spring sold within 30 days, 46.2 percent of homes in winter did the same.”

          The study goes on to say that:

          “Buyers [in the winter] often need to move, so they’re much less likely to make a lowball offer and they’ll often want to close quickly — two things that can make the sale much smoother.” 

          Bottom Line

          If you are debating listing your home for sale in 2017, keep in mind that the spring is when most other homeowners will decide to list their homes as well. Listing your home this winter will ensure that you have the best exposure to the serious buyers who are out looking now!

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            Buyers Are Searching For Your House

            Buyers Are Searching For Your House

            The most recent Pending Homes Sales Index from the National Association of Realtors revealed a slight bump in contracts with an increase of 1.6% in December. This news comes as existing home sales are also forecasted to be on pace for 5.54 million in 2017, a 1.7% increase over 2016, which was the best year for sales in a decade.

            The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed.

            According to NAR’s Chief Economist, Lawrence Yun,

            Pending sales bounded last month as enough buyers fended off rising mortgage rates and alarmingly low inventory levels to sign a contract.

            So, what’s the problem?

            Buyers are searching for existing homes, but supply is not keeping up with their demand!

            Yun went on to explain,

            The main storyline in the early months of 2017 will be if supply can meaningfully increase to keep price growth at a moderate enough level for households to absorb higher borrowing cost. Sales will struggle to build on last year’s strong pace if inventory conditions don’t improve.” (emphasis added)

            Bottom Line

            Buyers are out in force right now! If you are considering selling your home this year, the early months of 2017 will be your best option. Let’s get together to discuss how you can capitalize on current market conditions.

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              No Matter What the Groundhog Says, Here are 5 Reasons to Sell Before Spring!

              No Matter What the Groundhog Says, Here are 5 Reasons to Sell Before Spring!

              s spring closer than we think? Depending on which groundhog you listen to today, you may have less time than you think to get your home on the market before the busy spring season.

              Many sellers feel that the spring is the best time to place their homes on the market as buyer demand traditionally increases at that time of year. However, the next six weeks before spring hits also have their own advantages.

              Here are five reasons to sell now.

              1. Demand is Strong 

              Foot traffic refers to the number of people who are out, physically looking at homes right now. The latest foot traffic numbers from the National Association of Realtors (NAR) show that the number of buyers out looking for their dream homes in December reached the highest mark since February 2016.

              These buyers are ready, willing and able to buy…and are in the market right now! Take advantage of the strong buyer activity currently in the market.

              2. There Is Less Competition Now 

              Housing inventory just dropped to a 3.6-month supply, which is well under the 6-month supply needed for a normal housing market. This means, in many areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices; however, additional inventory is about to come to market.

              There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last four years. Many of these homes will be coming to market soon.

              Also, new construction of single-family homes is again beginning to increase. A study by Harris Poll revealed that 41% of buyers would prefer to buy a new home, while only 21% prefer an existing home (38% had no preference).

              The choices buyers have will increase in the spring. Don’t wait for this other inventory to come to market before you sell.

              3. The Process Will Be Quicker

              One of the biggest challenges of the housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. There is less overall business done in the winter. Therefore, the process will be less onerous than it will be in the spring. Getting your house sold and closed before the spring delays begin will lend to a smoother transaction.

              4. There Will Never Be a Better Time to Move-Up

              If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by 4.7% over the next 12 months according to CoreLogic. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate around 4% right now. Rates are projected to rise by half a percentage point by the end of 2017.

              5. It’s Time to Move on with Your Life

              Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

              Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

              That is what is truly important.

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                Thinking of Selling? Why Now is the Time

                Thinking of Selling? Why Now is the Time

                It is common knowledge that a large number of homes sell during the spring-buying season. For that reason, many homeowners hold off on putting their homes on the market until then. The question is whether or not that will be a good strategy this year.

                The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring, as compared to the rest of the year? The National Association of Realtors (NAR) recently revealed the months in which most people listed their homes for sale in 2016. Here is a graphic showing the results:

                The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,820,000.

                That number spiked to 2,140,000 by May!

                What does this mean to you?

                With the national job situation improving, and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring; they are out looking for a home right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition for a buyer.

                Bottom Line

                It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home today.

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                  Why Pre-Approval Should Be Your First Step

                  Why Pre-Approval Should Be Your First Step

                  In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

                  Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach. 

                  Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

                  “It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

                  One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” 

                  Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

                  1. Capacity: Your current and future ability to make your payments
                  2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
                  3. Collateral: The home, or type of home, that you would like to purchase
                  4. Credit: Your history of paying bills and other debts on time

                  Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

                  Bottom Line

                  Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

                   

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                    You Need a Professional on Your Team When Buying a Home

                    You Need a Professional on Your Team When Buying a Home

                    Many people wonder whether they should hire a real estate professional to assist them in buying their dream home or if they should first try to do it on their own. In today’s market: you need an experienced professional!

                    You Need an Expert Guide if You Are Traveling a Dangerous Path

                    The field of real estate is loaded with land mines; you need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and is ready for you to move into can be tricky. An agent listens to your wants and needs, and can sift through the homes that do not fit within the parameters of your “dream home.”

                    A great agent will also have relationships with mortgage professionals and other experts that you will need in securing your dream home. 

                    You Need a Skilled Negotiator

                    In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

                    Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family?

                    If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal. 

                    Bottom Line

                    Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

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