selling

Thinking Of Selling? Now May Be 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 putting their home 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 compared to the rest of the year? The National Association of Realtors (NAR) revealed a couple of years ago which months and days of the year most people list their home. Here is a graphic showing the results:

The circles represent the ten most popular listing dates. We can see that all ten days are in the second quarter of the year. The months in red represent which months most people put their home on the market. Again, the three months in the second quarter are most active for listings – the time of year when sellers have the most competition.

What does this mean to you?

With a strong local job market 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 are putting your house on the market at a time you will have the greatest competition for your buyer. It may make sense to beat that rush of housing inventory to the market and list your home today. Call us at 775-432-6300 to beat the rush.

Mortgage Rate Projections – Buy Sooner Rather than Later

In a recent video update on the housing market, Frank Nothaft, Freddie Mac’s chief economist, stated that with both mortgage interest rates and home prices projected to increase in 2015 buying now makes sense.

If you are planning to buy a home in the next year, it’s better to do it sooner rather than later.

Here are the latest mortgage interest rate projections from four major housing entities:Fannie Mae, Freddie Mac, the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR):

Thinking of Selling & Moving Up?

This advice isn’t limited to just the first-time buyer. If you are considering moving up to the home your family has always wanted, waiting also makes no sense.

4 Reasons to Sell Now

As we discussed recently one reason to sell now is demand is still strong. With inventory levels also still below historic numbers, you could be missing out on a great opportunity for your family.

1. There Is Less Competition Now

Housing supply is around 1 month, which is way under the 6 months’ supply that is needed for a normal housing market. This means that 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 will come to market in early 2015. 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 two years. Many of these homes will be coming to the market in the near future. 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 continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.

2. The Process Will Be Quicker

One of the biggest challenges of the 2014 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. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.

3. 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 over 23.5% from now to 2019. 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 in the low 4’s right now. Rates are projected to be over 5% by this time next year.

4. It’s Time to Move On with Your Life

Look at the reason you are considering to move 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. Perhaps, the time has come for you and your family to move on and start living the life you desire?

Top Ten Home Showing Tips

Showing your home is essential in the real estate business. After all, who would purchase a property sight unseen? When a potential buyer stops in, here are ten recommended tips to follow when showing your home:

Tip # 1: Welcome Your Buyers

If you are still living in the home while it’s being shown, graciously greet your potential home buyers and invite them to look around. Make sure that you instruct them to take their time and to ask any questions that they may have. It may be a good idea if you leave the home for a short time to allow the buyer to look without feeling restricted by your presence. A potential buyer is less likely to voice any concerns in front of the current owner, which is why it’s better to leave your buyers with the REALTOR® and announce that you will be returning in 30 minutes. This should allow plenty of time for your potential buyer to speak candidly with the REALTOR®.

Tip # 2: Be Flexible

Many home buyers are on a tight schedule, whether it be work, school or other commitments. Time is tough to come by, so try to be flexible about allowing potential buyers to tour your home. If you are still living on the premises, it’s especially important that you be ready for last-minute visits.

Tip # 3: Climate Control

When a buyer comes into your home, they do not want to feel cold in the winter or overly stuffy in the summer. If you know that your REALTOR® is bringing a potential buyer to tour the home, make sure that the temperature is comfortable. Otherwise, your buyer may not spend as much time in the home as necessary in order to form an accurate opinion. The last thing you want is a buyer who’s in a hurry to leave.

Tip # 4: Quick Cleaning

If you have enough time before the buyer shows up, run the vacuum over the floors and make sure that any clutter is cleaned up. A clean home appears larger, while a cluttered one gives the appearance of being too small. If you really want to impress your potential buyers, place a plate of freshly baked cookies on the dining room table. When they walk into your home, they will be greeted by the wonderful smell.

Tip # 5: Animal Control

If you have pets, remove them from the home temporarily or place them in a contained space, such as a kennel, exercise pen or carrier. This will allow buyers to tour the home without being distracted by a nervous animal which could result in a nervous buyer.

Tip # 6: Light The Way

Your home should appear open and bright, even if it’s a winter day, so open the curtains and turn on the lights throughout the home. Buyers will not likely be drawn to a dark, dimly-lit house.

Tip # 7: Educate Your Buyers

When someone is looking for a home, they are looking for more than the perfect floor plan. If you have recently had the home appraised or inspected, place copies of each report on the dining room table. Purchasing a home is a big step, and buyers will be drawn to a home that has everything out on the table, so to speak.

Tip # 8: Communicate With Your REALTOR®

If you want certain aspects to be pointed out during the home tour, tell your REALTOR® what they are. For instance, good neighbors are a big plus to any home, but it’s not something that potential home buyers will see simply by looking at the rooms in your house. If you have wonderful neighbors, ask your REALTOR® to point this out. If you live in a family-oriented neighborhood, let it be known.

Tip # 9: Curb Appeal

An important part of showing your home is making sure that the outside looks just as appealing as the inside. When a potential buyer drives up, you want them to be eager to see what else is in store for them. You can do this by paying close attention to your curb appeal. In addition to having a freshly cut lawn and properly maintained flower beds (if applicable), the outside of your home should be free of any clutter and any shrubs should be groomed.

Tip # 10: Ask For Feedback

Once the potential buyer has completed their tour, invite their feedback by placing comment cards in the home. The information provided could be potentially helpful during your next home showing, and it will make the potential buyer feel as though you value their opinion.

Do I as the seller have to consider contingencies made by the buyer?

Yes. When you receive an offer on your property, you can reject, accept, or counter any offer that is presented. Most offers include contingencies, which protect the buyer in case something goes wrong.

The two most common contingencies deal with financing, which makes the sale dependent on the buyer’s ability to obtain a loan commitment from a lender within a stated time period. And secondly, inspections, which allows the buyer to have a professional(s) inspect the property to help identify any surprises.

There really is no reason not to consider these contingencies because they are quite reasonable and standard.

However, think twice about a contingency that is predicated on you making expensive home repairs. Now, if the roof is caving in, that is probably a different story. You may need to spend money to replace it or lower the asking price of the home.

Also give serious consideration to a offer that contains a contingency on the buyer first selling their home, especially if your sale is time sensitive or if that market is changing.

DON’T Throw Out Your Home Improvement Receipts

Keeping your home improvement receipts might really pay off when it comes time to sell, especially if you plan on holding on to your home for some time.

I just got off the phone with a client who wants to sell his home. Unfortunately he didn’t keep all the receipts for the many improvements he has done to his home over the last twenty years. Dual pane windows, hardwood floors, an addition, remodeled kitchen and much more. At a guess, probably easily over $100,000 in improvements.

The home was purchased in the early 80s for $150,000 and will sell today for around $630,000. The owner is single so he will be exempted from paying taxes on the first $250,000 of profit as a single filer ($500,000 exemption for joint filers).

So with a sales price of $630,000, less the original purchase price of $150,000, there is a taxable profit of $480,000 (before any selling costs). From this amount the owner will get the $250,000 exemption, reducing the taxable profit to $230,000. Had receipts been kept, this taxable gain could have been further reduced by over $100,000, a significant tax savings.

If you don’t plan on living in your home for very long, then it may not be worth the effort to track improvement expenses. However, if you plan to live in your house a long time or make lots of upgrades, saving receipts could save you considerable money down the road.

You might want to think twice before throwing out those Home Depot / Lowes receipts or that invoice from the contractor.