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What to Expect From the Housing Market in the Second Half of 2023

What to Expect From the Housing Market in the Second Half of 2023

The outlook of the U.S. housing market in the second half of the year comes down to two familiar words: mortgage rates.

In the first half, high rates have kept housing in a state of suspended animation, as borrowing costs priced out prospective buyers, while homeowners with mortgage rates of 3% or less are unwilling to sell and face having to borrow for their next home at something closer to 7%.

KEY TAKEAWAYS

  • Experts expect mortgage rates to even out around 6% by the end of the year.
  • A new trend of domestic migration into Sun Belt cities is expected to continue.
  • New single family home building will make a dent in the need for housing inventory.

Despite high demand and home prices that are now starting to fall, the market is still relatively sluggish at a point in the year where it’s historically at a peak. While new construction is rising to meet some of the demand for single-family homes, it won’t be enough to meet the current market needs.

So what can homebuyers expect for the latter half of 2023? While the Federal Reserve is expected to continue raising rates through the end of the year, industry leaders foresee mortgage rates dropping and homebuying subsequently picking up as home prices fall and affordability improves.

Still, few expect a recovery that would allow the market to catch up with the pace of activity the U.S. saw in 2022.

Rates Will Determine Trajectory of Market

The Federal Reserve has signaled that more rate hikes may be in store before the end of the year. Once the rate hikes slow or stop, affordability concerns will slowly start to ease, according to Realtor Chief Economist Danielle Hale.

“It means affordability will start to improve, but not drastically,” Hale said.

Experts see mortgage rates headed on a more stable path. As inflation is expected to continue cooling, mortgage rates are expected to decline.  Another peak is anticipated for June, but Hale predicts it could be the final uptick before conditions begin to even out.

“We think that June will have been another temporary peak in mortgage rates and we’ll see them gradually ease from the 6.7% range they’ve been in recently, down to near 6% at the end of the year, likely hovering just above 6%,” Hale said in an email.

That evening out around 6% will help homebuyers who have been waiting on the sidelines to re-enter the market, according to National Association of Realtors Chief Economist Lawrence Yun, but it may not be enough to ease the lack of inventory just yet.

“That will help boost both housing demand and supply. For homeowners who are mishoused (i.e., new child in the family, new job in the other part of town, etc.) but have been unwilling to sell due to locked-in low rates, the cost of a move becomes less costly with falling mortgage rates,” Yun said in a statement provided to Investopedia.

Inventory Boost Expected to Help Meet High Demand

As mortgage rates cool, inventory is expected to tick up again throughout the latter half the year. Chronically low inventory of existing homes is dampening market conditions.  Analysts at Fannie Mae anticipate low inventory when it comes to existing homes through the end of the year.

“We continue to expect that existing home sales will decline modestly through the rest of the year amid a broader economic slowdown, ongoing affordability constraints, and limited inventories of homes available for sale,” Fannie Mae’s economic and strategic research group wrote online.1 “The ongoing lack of existing home inventory continues to provide a boost to the new home market, though, as May represented the largest single-month jump in single-family starts in percentage terms since June 2020.”

Compass CEO Robert Reffkin told CNBC he thinks when rates drop back down to around 5.5%, that’s when the inventory logjam should begin to clear.

“The issue we are seeing is that we need to have an unlock of inventory. It’s probably going to happen when mortgage rates get to 5%, 5.5% at a sustainable level. At that point, I would expect there to be a flood of inventory in the market, and it’ll feel like the pandemic craze all over again,” Reffkin said.2

Meanwhile, homebuilding is picking up to help fill inventory gaps across the country. May brought a significant uptick in the sale of new single-family homes, which rose 20% year-over-year and 12.2% from April.3

Home Prices Likely To Decline

Weak home prices are expected over the summer months, when they are typically at their peak, according to Realtor’s Hale.

“Specifically, while June is expected to be the seasonal peak for home prices in 2023, like it is most years, we won’t see as big of a month to month climb as we did in 2022, which will mean ongoing mild declines when we’re comparing home sale prices to one year ago,” Hale said.

The declines are expected to run through the early fall, depending on the Federal Reserve.

“By the time we get to the fourth quarter, mortgage rate and seasonal home price relief could be enough to stanch the declines” Hale added. “On net, we expect average home prices in 2023 to fall 0.6% compared to 2022.”

As supply boosts and mortgage rates and home prices fall, sales are expected to rise through the end of the year, according to NAR’s Yun.

“We’re likely approaching the bottom in home sales with steady improving home sales in the second half of the year and into 2024,” Yun said.

Source: investopedia.com ~ By: MEG CUNNINGHAM ~ Image: Canva Pro

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What Is a Home Appraisal and Who Pays for It?

What Is a Home Appraisal and Who Pays for It?

Get to know the basics on what a home appraisal is, when it takes place and how it factors into your ability to buy a home.

For homebuyers financing their purchase with a mortgage, a home appraisal is often a required step of the process in order to get an approved loan and close on the deal.

A home appraisal can be a valuable step outside of a pending real estate deal as well, either for a homeowner looking to determine the right asking price to put it on the market, or when looking to estimate the monetary value of a deceased loved one’s estate.

The best way to use an appraisal to your advantage is to understand what it is and how it’s used by others in the homebuying or selling process. Here’s what you need to know:

    • What is a home appraisal?
    • What does a home appraiser look for?
    • How much does a home appraisal cost?
    • Who pays for a home appraisal?
    • Who pays for a home appraisal if a deal falls through?
    • How to find an appraiser.

A home appraisal is an estimate of the market value of a residential property at a specific point in time, completed by a professional.

Once a home is under contract between the buyer and seller, a lender will typically require an appraisal during the underwriting process to determine whether the agreed-upon sale price of the home reflects the market value of the property.

“The appraisal is really used for the lender to determine the value of the collateral,” says Brian Smith, regional manager, mortgage adviser and executive coach for Union Home Mortgage in Sandusky, Ohio. A lender won’t want to approve a mortgage for $350,000 if the home is only appraised for $300,000, for example.

What Happens if a House Doesn’t Appraise for its Sales Price?

If an appraiser reports the valuation as lower than the agreed-upon sale price, the lender will likely be unwilling to approve a mortgage above the appraised price. If a home does not appraise for its sales price, you have what is known as an appraisal gap. An appraisal gap is the difference between the sticker price and the appraisal – in Smith’s example, that gap between $300,000 and $350,000 would be $50,000.

To fix the appraisal gap, the buyer can come up with the cash to make the difference, or ask the seller to agree to the lower price – if the seller won’t budge on the price and the buyer doesn’t have enough cash, the deal falls apart.

Who Hires the Appraiser?

While there are many situations when an individual can hire a home appraiser for a private appraisal, unrelated to a loan application, lenders often have a list or network of approved local appraisers they will accept valuations from, depending on the location of the property in question.

“What you want when you get a home appraisal is you want a very unbiased opinion,” says Rodman Schley, a licensed appraiser in Denver and former national president of the Appraisal Institute, an international association for professional appraisers. Schley explains that lenders will often have an employee to liaise between the appraiser and loan underwriter to avoid any possible influence on the valuation.

A home appraisal can involve a few factors, including sales comparisons of similar properties in the area, how condition or improvements can add to or detract from value as it compares to those other properties and the potential income for a piece of real estate, if it’s intended to be used as a rental or other type of income-producing property.

An appraiser will take the details of the home, including “the age of the house, size of the entire property, number of bedrooms, number of bathrooms, how big the yard is,” Smith says. “They’re looking for homes that are recently sold that are closest in proximity to that house.”

Schley notes an appraiser is typically looking for three to four deals to compare. The closer in location and more recent the comparable sales are, the better. But when a property is unique for the area or few homes have sold recently, “you might have to expand your location parameters to find a similar home throughout a wider area,” Schley says.

When possible, an appraiser will also visit the property to examine the home’s condition and see any features that would affect the appraised value. “The preference is always to go in and see the improvements,” Schley says.

Appraisal Requirements for Government-Backed Mortgages

If you’re not getting a conventional mortgage and are instead opting for something like a VA or FHA loan, for example, the appraisal has additional steps the government agencies require.

The VA, for example, has minimum property requirements, including working electricity, functional heat and air, an adequate roof and no lead paint or evidence of mold, termites or dry rot, among others. While a VA appraisal may involve more in-depth information about the condition of the property than an appraisal for a conventional loan, “it’s not as granular as a home inspection,” says Chris Birk, vice president of mortgage insight and director of education for lender Veterans United and author of “The Book on VA Loans.”

The average single-family home appraisal costs $353, according to HomeAdvisor. Costs can vary depending on the individual appraisal company, location of the property, size and condition of the home and required details either by you or the lender. Home services information company Fixr calculates a similar national average price range for a home appraisal, $375-$450, though it notes larger houses with lots of updates can drive the total price up as high as $1,200.

Traditionally, the buyer pays for a home appraisal because it is required by a lender. When a private appraisal is ordered by a homeowner or executor of an estate, the individual who orders the appraisal will pay for it.

While an appraisal fee may be included in a list of closing costs, or one-time fees due at closing, it’s likely the appraisal fee will be due ahead of closing. “(The lender) might include the appraisal fee upfront, because that is a cost incurred prior to closing,” Schley says.

If your real estate deal falls through after an appraisal has taken place, consider it a sunk cost. “The appraiser completed a service, he got paid for it – unfortunately the money is spent,” Smith says.

In the case of a VA appraisal where the minimum property requirements reveal issues like an HVAC system that needs repair or a crawl space that needs venting, the VA requires the issue be dealt with in order for the loan to be approved. Often, that means the seller is responsible for covering the repairs, “but the veteran themselves can look at paying for repairs if that’s what it takes to keep the deal going,” Birk says.

When your lender requires an appraisal, the appraiser will be contacted by the lender directly, and in the case of specialty appraisal like that for the VA, the government agency handles initiating the appraisal. But if you’re looking to get a private appraisal done for another reason, you’ll want to find one local to you.

A simple online search for home appraisers in your area may help you find local companies. The Appraisal Institute also has a search feature to help you find licensed appraisers local to you that are a part of the organization. Regardless of where you’re searching, Schley recommends looking for an appraiser with an SRA designation, which means he or she is trained in appraising residential properties.

Source: realestate.usnews.com ~ By: Devon Thorsby ~ Image: Canva Pro

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SOLD – 716 W Greenway Ave. Turlock

SOLD GREENWAY
Small Ranchette with Irrigated Pasture. Over 1400sf home with 3 Bedrooms and 2 Full Baths. Good Space Between Living Area and Formal Dining Area. Cute with Hardwood Floors and Lots of Character. Country Living Kitchen that oversees the Nook area. Small Deck Area overlooking the Backyard. Fenced for animals with TID irrigation water. Private backyard to entertain and enjoy.

 

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13 Hunter Road Acres, Livingston

13 Hunter Road Acres, Livingston

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$1,820,000 – Hunter Rd, Livingston, 13ac. Very High Visibility!! Over 1000 feet of 13 Acres Along Highway 99 Frontage Road… Between Two Major Off Ramps of Sultana and Hammatt. Down the street from the New Commercial Developments Gas Stations and Truck Stops. Roughly 12 Acres net Farmable of Almonds with Varieties of Nonpariel (50%), Carmel (25%) , and Sonora (25%). Ag Well of 300ft pumping 350-380gpm. Furthermore, it’s in the MID district with water available. Located on the Corner Of Hunter and Campbell Roads. A Must See!!

Property Features

Land Info

  • Lot Description: Corner, Shape Irregular, Shape Regular
  • Lot Size Acres: 13.0
  • Lot Size Dimensions: Approx. 13 Acres
  • Topography: Agricultural Leveled
  • Vegetation: Orchard
  • Lot Size Square Feet: 566280

Exterior and Lot Features

  • Road Frontage Type: County Road, Highway
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How to Decide Between Multiple Offers on Your Home

Multiple Offers on Your Home

You’ve worked hard to get your home to market, and you’re finally reaping the reward of all that effort. But instead of just a single, great offer, you’ve got several to choose between. This is a common situation in seller’s markets across the country, and one you, too, may be facing. How do you pick the right offer out of a stack of contenders?

  • What Situations Prompt Multiple Offers?

With only 2.1 months of existing housing supply available nationwide, according to the U.S. News Housing Market Index, there simply aren’t enough good homes for buyers to not have to compete with one another. A balanced market, where there is considered to be an equal number of buyers and sellers, has around six months of supply. Such low inventory creates the ideal conditions for sellers to receive multiple offers. Of course, some areas are going to be much more competitive than others, but the circumstances that generate multiple offer situations are pretty consistent across the country.

Still, high mortgage rates are keeping some potential buyers on the sidelines. In May 2023, on average, the number of homes sold was down 16.8% year over year, according to Redfin, with 493,5123 homes sold in May this year, down from the 592,347 homes sold in May last year.

Mortgage rates ticked up slightly as of June 15, with the average 30-year fixed rate increasing to 7.14% from 7.11% the week before. Most fixed and adjustable rates crept higher or stayed about the same as a week ago. Mortgage interest rates are widely expected to fall through 2023 but have remained elevated during the spring homebuying season.

“There are various circumstances that are more likely to generate this situation,” says Adie Kriegstein, real estate agent at Compass Real Estate in New York City. “High demand and low inventory is the number one way this occurs. When there are more buyers than homes available, competition increases. Homes that are priced competitively, in desirable locations and in good condition are more likely to attract multiple offers. Also, a unique or rare home can also cause more interest.”

Should You Consider a Letter From the Potential Buyer?

It’s become a bit of a trend that buyers submit letters to the sellers of homes they believe will have multiple offers to try to sway the seller to their side. Although the idea is sweet on the surface, it’s not a great way to help you eliminate offers because you can easily run afoul of housing discrimination laws when selecting a buyer.

“I strongly discourage these, and if a buyer insists, I explain that they really can’t tell (the seller) anything about themselves that reveals traits that violate fair housing laws, which means there is not much to them at that point,” says Christa Ross, real estate agent at RE/MAX Select Realty in Pittsburgh. “On my listings, I specifically ask that (letters) not be included with an offer. Letters seem like something that the internet recommends to buyers, which is a terrible idea in practice.”

What Do Sellers Do With Multiple Offers?

If you’re facing down a multiple offer situation, don’t panic. Your agent will have the experience to help you through the process. Depending on your state, you may have the options to accept the best offer, make a counteroffer on the offer you believe is the closest to the terms you prefer, or make a counteroffer on multiple offers you’ve received (this is not possible in all states, ask your agent if this is something you’re considering).

If you’re in a state where multiple counteroffers are possible, you may receive multiple offers back again, or even have multiple acceptances. You’ll have to decide at that point which offer is right for you. Once you’ve committed to a buyer, that’s it, you’re ready to start your real estate transaction and sell your home.

Does the Highest Offer Always Win?

Real estate contracts have a lot of moving parts, and much of the time, you’ll face juggling the merits of different offers with varying additional conditions from your potential buyers. These can include anything from financing contingencies to the date when the buyer might want to close the deal.

“Conditions in a housing contract can be all over the map sometimes, but ones that you can usually expect to see are: inspection periods, timeline of the withdrawal to get the earnest deposit, who is paying for a home warranty, who is paying for the appraisal, and close of escrow date,” says Bryson Taggart, Opendoor agent in Phoenix. “While conditions aren’t always the same, they all do have to be figured out and agreed upon to make the contract valid.”

Everyone has heard the saying “cash is king,” but it’s not always true in a real estate transaction. Even though a cash transaction might cut out a lot of potential contingencies, it isn’t automatically better than a contract with some basic, reasonable conditions from the buyer.

“A cash offer may not always be the best, as occasionally a cash offer will come in lower than the homeowners want,” says Maureen McDermut, real estate agent with Sotheby’s International in Montecito, California. “Also, the seller’s schedule may dictate which offers they consider. If they are on a tight timetable, then a cash offer might be the best option, but if they have time, they may end up with a better offer that is financed via conventional mortgage or FHA or VA loans.”

Elements of a Great Offer

Real estate professionals agree that the best offer is the one that’s best for you, but it’s difficult to apply advice if you don’t have much experience selling homes. So, before you even put your house on the market, imagine what an ideal contract might look like for you. For example, do you need extra time to pack and move? A later closing date might be important in that case. Or, if you’re selling a home you’ve inherited and don’t know much about, you might not want to be on the hook for repairs.

“Priority should always be given to the offer that meets the seller’s needs and wants, and also those that aren’t going to fall apart through the process,” says McDermut. “If (you have) a need to move quickly, cash offers will be those that are prioritized. However, there may be stronger offers, so if you are seeking the best offer in terms of the amount offered, then a conventional mortgage offer might be considered above a cash offer that is at or below asking price.”

If you’re not in a hurry to sell, or don’t need someone who will take your property as it sits, meaning you can accept a financed offer, your ultimate decision comes down to how much money a contract will bring to you and whether or not the transaction is likely to close at all. Remember, in a multiple offer situation, you generally choose the contract that’s in front of you, there’s rarely negotiation that happens like with a solitary offer.

“A key factor in determining between multiple offers is net cash: If net cash is similar, which offer brings the least amount of risk to the transaction?” says Taggart.

Should You Consider a Contingency Contract?

The likelihood a contract closes is a huge consideration, and the bigger the contingencies, the greater the risk to the contract. You may find yourself faced with a contract that’s great on the surface, but with a buyer who needs to sell their home before they can buy yours. While this can work out, you’re shouldering an increased risk.

“Accepting a contingent contract comes with risks,” says Kriegstein. “This means that the sale of one’s home becomes dependent on the sale of another property, which may take longer than expected or fall through entirely.”

This can delay the sale and potentially cause the seller to miss out on other potential buyers who are not contingent on the sale of another property. “Keep in mind once you have a signed contract, you have to change the status of your home online so buyers would be unlikely to see your home as an option for them, since it won’t be listed as active,” Kriegstein says.

If your market is active and houses are moving fast, it might be worth it to accept a contract that is contingent on another home selling, but you’ll want to make sure the buyer is sweetening the pot to make your risk worthwhile.

“A home sale contingency tends to get rejected pretty quickly unless there is something else about the offer that makes it more attractive,” says Ross.  “The price will matter. If the seller is making more money on the house, they may be more willing to take on the risk with the contingencies.”

Having multiple offers on your home can be a dream come true, if most of them are pretty good. Choosing the right offer means you’ll be able to move on to the next story in your life with fewer headaches and more cash in your pocket.

Source: realestate.usnews.com ~ By Kristi Waterworth ~ Image: Canva Pro

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3718 W Tuolumne Rd. Turlock, Land – 39.39ac

3718 W Tuolumne Rd. Turlock

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$5,000,000 – West Turlock. From this Property, You can SEE Amazon, Costco, Highway 99, and the Growth of Turlock. Furthermore, it is Located in the City of Turlock’s Urban Reserve Mapping. Currently being Farmed in Almonds. House, Garage, and Outbuildings. TID Power, TID Irrigation District, and Ag well of 25hp. Ag is pumping approx. 400gpm, 2 sets into orchard, and TID Flood water available. Approx. 24 Acres of Almonds, Nonpareil and Aldrich, Planted in 2011, 20×15 Spacing. Approx. 13 acres of Butte and Padre, 22×12 Spacing, Planted in 2001. Perfect Location for a Ag Business, Planned Development, and/or Investment. A Must See!!

Exterior and Lot Features

  • Road Frontage Type: County Road

Land Info

  • Lot Size Acres: 39.39
  • Lot Size Dimensions: Approx. 39.39
  • Topography: Trees
  • Vegetation: Orchard
  • Lot Size Square Feet: 1715828
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10880 E Monte Vista Ave. Denair, 4bd | 5ba | 3,136sf | 39.62ac

10880 E Monte Vista Ave, Denair

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Price Change $2,375,000 – Big Custom Home of 3136sf with Almost 40 Acres, On a Hilltop with Views!! One Owner, Custom Built for their Family with Multiple Features, Upgrades, and Design. Magnificent Floor Plan with 4 Bedrooms with 5 full Baths (One Bedroom and Full Bath Downstairs). Tile Roof, Stucco Eaves, Hardwood Floors, Water Softener, Central Vacuum, Stainless Steel Appliances, Setup for Two Refrigerators in Kitchen, and More. Upstairs has a Large Loft/Game Room with Appliances, Balcony, and Suitable for the 5th Bedroom. Master Bedroom has Two Walk-in Closets. Furthermore, there are 2 Junior Suites Upstairs with their own Full Bathrooms, for all of the Family Conveniences. Backyard is like a Park-Like Setting, Fenced, Patios, Pool, Grass, and Ready to Party!! Orchards-Approx, 26 acres of Independence Almond Trees on Drip and Micro-Sprinklers, Planted in 2022 on 22×13 Spacing, Viking Root Stock. Also, Another 12 Acres of Butte (50%), Padre (16.7%), and Livingston (33.3%) Almond Trees planted in 2001, 18×18 Spacing, Nemaguard Root Stock, on Micro-Sprinklers and Drip. A Must See! Irrigation Ag Wells and TID Class 2.

Property features
Bedrooms
Bedrooms: 4
Bedrooms Possible: 5
Primary Bedroom Features: Walk-In Closet, Outside Access
Appliances
Equipment: Built-In Electric Oven, Built-In Electric Range, Dishwasher, Disposal, Free Standing Electric Range
Laundry Facilities: Cabinets, Sink, Inside Room
Other Rooms
Loft, Bonus Room, Family Room, Great Room, Kitchen, Laundry, Living Room
Living Room Features: Cathedral/Vaulted, Great Room
Heating and Cooling
Cooling Features: Ceiling Fan(s), Central, MultiUnits
Heating Features: Central, MultiUnits
Bathrooms
Full Bathrooms: 5
Primary Bathroom Features: Shower Stall(s), Double Sinks, Tub, Walk-In Closet, Walk-In Closet 2+
Bathroom 1 Features: Double Sinks, Tile, Tub w/Shower Over
Interior Features
Interior Amenities: Lower Level : Bedroom(s), Living Room, Dining Room, Family Room, Full Bath(s), Garage, Kitchen, Main Level : Bedroom(s), Living Room, Dining Room, Family Room, Master Bedroom, Full Bath(s), Garage, Kitchen, Upper Level : Bedroom(s), Loft, Master Bedroom
Flooring: Carpet, Laminate, Wood
Kitchen and Dining
Dining Room Description: Breakfast Nook, Dining Bar, Dining/Family Combo, Formal Area
Kitchen Features: Butlers Pantry, Island, Island w/Sink, Kitchen/Family Combo, Tile Counter
Pool and Spa
Pool Features: Pool Type: Built-In, Fenced
Land Info
Lot Description: Auto Sprinkler F&R, Shape Irregular
Lot Size Acres: 39.62
Lot Size Dimensions: Approx. 39.62 acres
Topography: Trees Many
Lot Size Square Feet: 1725847
Garage and Parking
Garage Spaces: 3
Garage Description: Garage Door Opener, Garage Facing Front
Home Features
View: Orchard, Panoramic, Valley, Hills
Security Features: Carbon Mon Detector, Double Strapped Water Heater
Homeowners Association
Association: No
Calculated Total Monthly Association Fees: 0
School Information
School District: Stanislaus
Other Property Info
Source Listing Status: Active
County: Stanislaus
Cross Street: Hall Road
Directions: Highway 99 to Monte Vista-East into Denair. Take Monte Vista (east) passed Hall Road, on the right side 1/4 of Mile.
Source Property Type: Residential
Area: Turlock Rural E of Hwy 99 So of
Source Neighborhood: 20306
Parcel Number: 024-005-013-000
Postal Code Plus 4: 9644
Zoning: RES/AG
Property Subtype: Single Family Residence
Source System Name: C2C
Farm Info
Irrigation Source: Irrigation Connected
Utilities
Electric: 220 Volts
Sewer: Sewer Connected, In & Connected, Septic System
Cable Connected
Propane Tank Leased
Electric
Water Source: Well, Public, Shared Well
Building and Construction
Year Built: 1998
Construction Materials: Stucco, Frame, Wood
Direction Faces: North
Foundation Details: Concrete
Living Area Source: Assessor Auto-Fill
Property Age: 25
Roof: Roof Description:Composition, Tile
Levels or Stories: 2
Structure Type: Custom, Ranchette/Country
House Style: Ranch

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Making an Offer On a New Home: Real Tips From Real Estate Agents

Offer accepted, sale pending

Think of making an offer on a home as setting the roller coaster in motion: You might have sharp drops in emotion and slow, trudging climbs to success, but the ride won’t end until the car slows down and the safety bar is lifted. (OK, this metaphor is now officially over.)

But to begin the process, you need to know how to make the right offer, an offer that will end with your receiving the keys to your new house. So check out some of these agent-approved negotiation tactics to make the offer process a whole lot less bumpy.

Pick the right price

Just because a home is listed for $400,000, it doesn’t mean the home is actually worth that much.

It all depends on the current conditions of the local market. If you’re buying in a hot market—especially places with low inventories—offering substantially below asking price is “probably wasting your time,” says Mindy Jensen, a Realtor® with Equity Colorado. But if a home has been sitting unsold for a few months, the sellers may not expect full price. Your best bet at measuring prices in your target area are comps, or what similarly sized homes nearby have sold for recently.

Work with your real estate agent to determine a fair offer. They will have the best read on pricing and marketplace dynamics, and can walk through the local comps with you. Your agent can also help you determine what a fair discount might be without offending the seller. While specific numbers will depend on your market, a rule of thumb is that it is unrealistic to go below 5% of a home’s list price unless it’s been sitting on the market for months. Which leads us to…

Lowball with care

Sometimes a home is priced just too high—no ifs, ands, or buts—or perhaps it’s been sitting unsold for half a year. In those situations, a lowball offer well under asking price might be the right strategy to get the home you love for a bargain price. However, this is a tool to be deployed rarely and with great care—especially if the current owners have lived there for many years.

“Longtime owners usually have tons of pride in their home, and want the new owners to love it like they do,” says Jodie Burns, a Realtor with McEnearney Associates. “Buyers who lowball run a risk of angering the seller and losing the house. Ideally, you’re looking for a closing where both sides feel like they got a fair deal.”

So don’t lowball unless both you and your agent agree that it’s the best tactic to sway a seller. It can be perilous, so it’s best to keep this strategy on the sidelines unless you’re fairly certain it won’t cause a seller to walk away entirely.

Also, think about the big picture. Don’t let a (relatively) small amount come between you and a house you adore. “If a couple of thousand dollars is going to keep them out of a home they love, I remind buyers how little that amount translates into a monthly payment,” Burns says.

Consider contingencies

Along with the price, you’ll also want to factor contingencies into your contract. The more hurdles in the way of the sale, the more likely one of them will trip you up.

For example, do you need to sell your own home first, which requires a selling contingency? Work with your agent to decide what you’ll ask for off the bat—and consider dropping some requests if the market is hot.

As Jensen explains, “Your chances are best if you ask for the fewest things.”

That said, don’t put yourself at risk to get the home you love. Some aggressive buyers might advocate dropping the home inspection clause to sweeten an offer, but that can be dangerous, especially in older homes.

Keep your emotions in check

Yes, the search seems to have dragged on forever; yes, this home has everything you need. But keep your wits about you.

“Don’t fall in love,” Jensen says. “Falling in head over heels with a home can make you do ridiculous things, like overpay.”

Plus sometimes, even an “excellent offer may not be accepted,” says Vici Boguess, a Realtor with the Burke Boguess Zimmerman Group in Alexandria, VA. Don’t assume a rejection is an insult—the sellers might just dislike some of your contingencies or are holding out for a better offer. So, don’t assume it’s over until it’s over.

Source: realtor.com  ~ By Jamie Wiebe ~ Image: Canva Pro

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12 Mistakes to Avoid When Selling Your Home

Mistakes to Avoid When Selling Your Home

The right professional help, asking price and coat of paint can make selling your house easier.

You may be one of the many homeowners considering a home sale to potentially benefit from the seller’s market that exists throughout much of the U.S., where buyers outnumber available properties, leading to higher prices and plenty of bidding wars.

But selling a house can become more difficult if you ignore the tried-and-true practices that have helped home sellers in the past. “It’s a hot market, but it’s a hot market for things that are priced correctly and prepared to come to the market,” says Molly Gallagher, real estate agent and partner of the Falk Ruvin Gallagher Team, part of real estate brokerage Keller Williams Milwaukee North Shore in Wisconsin.

Here are 12 mistakes to avoid when selling your home:

    • Working alone.
    • Waiting for the home selling season.
    • Pricing too high.
    • Refusing to make changes.
    • Keeping clutter.
    • Opting not to neutralize.
    • Skipping major repairs.
    • Cutting costs on photography.
    • Hiding problems.
    • Being unavailable.
    • Being unwilling to negotiate.
    • Letting your emotions get the best of you.

Working Alone

Not hiring a real estate agent to represent you may seem like an easy way to avoid paying commission, but you’ll miss out on a real estate agent’s market knowledge, contacts and help with the process. Unless you have a real estate license or are planning to find an iBuyer, a real estate agent is key to a successful – and less stressful – home sale.

For-sale-by-owner properties tend to sell for a lower price overall. In the National Association of Realtors’ 2020 Profile of Home Buyers and Sellers released in November 2020, FSBO homes sold at a median of $217,900, compared to a median sale price of $242,300 for properties that sold with the assistance of an agent. If you’re looking to sell your home for its full market value, professional insight is more likely to get you there.

Waiting to Sell

Spring and early fall are often hailed as the best times to sell a house, but that doesn’t mean you should wait months to put your home on the market. While December and August see the fewest sales homes still sell every month of the year, says Anne DuBray, a real estate broker with Coldwell Banker Realty in Deerfield, Illinois.

In fact, February is the best month to put your property on the market, DuBray says – even in places that see long, cold winters like Chicago and Milwaukee. “People are less distracted in that month than every other month of the year,” DuBray says.

Pricing Too High

You want to sell your house for top dollar, but be realistic about the value of the property and how buyers will see it. If you’ve overpriced your home, chances are you’ll eventually need to lower the number, but the peak period of activity that a new listing experiences is already gone.

“Time will kill you,” DuBray says. “You still think you’re going to get showings and showings (as time goes on) and you just don’t.” For that reason, it’s important that your real estate agent is honest with you about what your home will sell for, based on the recent sales of similar homes in the area.

Refusing to Make Changes

Unless you’re planning to sell your house to an investor who will flip the property, selling your house “as is” won’t yield the highest possible sale price.

Homebuyers today expect move-in ready conditions and want to see a blank slate that allows them to picture themselves living in the home. That means you’ll need to update appliances, paint walls neutral colors such as gray or khaki and remove old carpeting.

Keeping Clutter

It’s tough to remove belongings while you’re still living in your house, but presenting each room and space in its best light means you’ll need to declutter in more ways than one. Get rid of items you don’t need anymore, but also remove oversized couches and other large furniture that dwarfs the room, clear out closets so they don’t look overcrowded and put away decor that displays too much personal detail.

“Just because you see any empty surface doesn’t mean you have to have something there. Give the eyes a moment to rest,” wrote Jessica Harris, an interior designer and manager of production design at furniture retailer Living Spaces, based in Southern California, in an email.

Opting Not to Neutralize

While removing personal decor choices is a part of decluttering, it’s also an important part of neutralizing your house so the buyer doesn’t immediately think of the people who currently live in the home.

“Remember to remove personal photos, memorable items and more from the home,” Harris says. “You want the potential buyers to envision it’s their home, not yours. If it’s something you question, go with your gut. Think simple, clean and refresh.”

That goes for your personal design tastes as well. Busy wallpaper, bright colors and trendy furniture can look amazing in your home, but buyers won’t be able to look past them and consider the space first.

Skipping Major Repairs

Pulling up carpeting and painting the walls are relatively easy tasks to tackle, but you’ll want to fix major issues as well. Cracks in the foundation or a new roof are expensive fixes that you may be wary of taking on, especially when you won’t likely recoup the entire cost in the sale. But you’re better off fixing these issues now rather than having the buyer ask for a credit to cover the cost of the repair later. This way, you have more say over who does the job and the total cost of the repair.

Plus, newly replaced features become a selling point once the property is listed. Gallagher says replacing the roof before listing your home can be cheaper than the cost a buyer would subtract from an offer. “You’re likely to get that (cost back) in the sale price if you do the new roof,” Gallagher says.

Cutting Costs on Photography

The first way many buyers see your property is by viewing photos of the house online, so don’t make them cross your house off their list before they’ve even visited.

Most real estate agents include professional photography in their marketing budget. Even if you can’t get a professional, make sure all photos give the buyer an idea of the size of the rooms. Also make sure photos are well-lit and keep you out of the frame in any reflections.

Hiding Problems

If there are problems with the property you can’t afford to repair before putting it on the market, you have to be honest about them – even if they’re not visible to the naked eye. Sellers are required to note recent repairs, problems and updates in the seller’s disclosure.

“All those things are going to come up in the inspection,” Gallagher says, adding that it’s best for everyone to know in advance rather than let the buyer have second thoughts after reading the inspection report. Even if the inspection doesn’t catch a leak or structural issue, but the buyer can prove your knowledge of it later, you could be facing a lawsuit.

Being Unavailable

When your house is on the market, showing the house should be your priority. That means if you get a call that a buyer would like to tour the house, you need to be able to leave the house in pristine condition quickly.

Even on holidays, an interested buyer is likely serious about making an offer and you shouldn’t refuse a showing. So while you’re trying to sell your house, aim to hold Thanksgiving or other holiday celebrations elsewhere.

Being Unwilling to Negotiate

If you’ve received an offer for your house that isn’t quite what you’d hoped it would be, expect to negotiate. While you’ll naturally feel your asking price is more than fair, the only way to come to a successful deal is to make sure the buyer also feels like he or she benefits.

If you would like to see the sale price come up, consider offering to cover some of the buyer’s closing costs or agree to a credit for a minor repair the inspector found.

Letting Your Emotions Get the Best of You

It’s natural to have some emotional attachment to your house after living in it for years and celebrating milestones, holidays and accomplishments with your family and friends there. But you have to view selling your house as a business deal. A low offer is not a personal affront, but a start that can either be negotiated up or declined. Plans to renovate part of you house are not an insult to your taste, but a difference in preferences.

The more you can approach the sale of your house as a business deal, the better off you’ll be to make the transaction as smooth as possible.

Source: realestate.usnews.com ~ By Devon Thorsby ~ Image: Canva Pro

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