A recent article from a reputable news source was titled: Here’s why some homeowners still can’t sell. In the opening bullets of the article, the author claimed, “Negative equity is one of the main reasons why there are so few homes for sale.” The article then goes on to soften that stance but we want to bring better clarity to the equity situation.A recent report from CoreLogic (which was quoted in the article) revealed that over 80% of all homes now have “significant equity,” which means the home has over 20% equity. That level of equity allows the homeowner to sell their home if they so desire. (There was no reference to significant equity in the article.)If eight out of ten homeowners now have significant equity in their homes, it is hard to make the claim that lack of equity is “one of the main reasons why there are so few homes for sale.”Here is a map showing the percentage of homes in each state which currently have significant equity:
Bottom LineIf you are one of many homeowners who is debating selling your home and are wondering how much equity you have accumulated, let’s get together to determine if now is the time to list.
Choosing the Right Realtor®You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:
- Set the market value on possibly the largest asset your family owns (your home)
- Set the time schedule for the successful liquidation of that asset
- Set the fee for the services required to liquidate that asset
So How Do You Choose The Right Realtor®An agent must be concerned first and foremost with you and your family to garner that degree of trust. Make sure this is the case.Be careful if the agent you are interviewing begins the interview by:
- Bragging about their success
- Bragging about their company’s success
You have many agents from which to choose. Pick someone who truly cares.
Are you thinking of selling your home? Competition is coming!The number of building permits issued for single-family homes is the best indicator of how many newly built homes will rise over the next few months. According to the latest U.S. Census Bureau and U.S. Department of Housing & Urban Development Residential Sales Report, the number of these permits were up 7.7% over last year.
How will this impact buyers?More inventory means more options. Danielle Hale, Realtor.com’s Chief Economist, explained this is good news for the housing market – especially for those looking to buy:
“It’s not spectacular construction growth, but it’s slow and steady in the right direction. Eventually, the pickup in single-family home construction will mean [buyers] will have more options. Especially with the limited number of sales right now, more options are really needed.”
How will this impact sellers?More inventory means more competition. Today, because of the tremendous lack of inventory, a seller can expect:
- A great price on their home as buyers outbid each other for it.
- A quick sale as buyers have so little to choose from.
- Fewer hassles as buyers don’t want to “rock the boat” on the deal.
“As new construction continues to increase, home shoppers will eventually have more [choices] and a bit more time to make purchase decisions compared to today’s quick-moving housing market.”
Bottom LineIf you are considering the sale of your home, it might make sense to beat this new construction competition to the market.
Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you get the most money selling your home? Here are two keys to ensure that you get the highest price possible.
1. Price it a LITTLE LOWThis 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 ProfessionalThis, 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 LinePrice 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 home.
Here are five reasons listing your home for sale this fall makes sense.
1. Demand Is StrongThe latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home.Take advantage of the buyer activity currently in the market.
2. There Is Less Competition NowHousing inventory is still under the 6-month supply that is needed for a normal housing market.This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.Historically, the average number of years a homeowner stayed in their home was six, but that number has jumped to an average of almost nine years since 2008. 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. As home values continue to appreciate, more and more homeowners will be given the freedom to move.The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.
3. The Process Will Be QuickerToday’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 43 days, after seeing a 12-month high of 48 days in January.
4. There Will Never Be a Better Time to Move UpIf your next move will be into a premium or luxury home, now is the time to move-up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly AND you’ll be able to find a premium home to call your own!Prices are projected to appreciate by 5.0% over the next year 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.
5. It’s Time to Move on With Your LifeLook 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 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.
Top Reasons To Hire A Real Estate Professional
- Hiring a real estate professional to buy your dream home, or sell your current house, is one of the most ‘educated’ decisions you can make!
- A real estate professional has the experience needed to help you through the entire process.
- Make sure that you hire someone who knows current market conditions & can simply and effectively explain them to you and your family!
When a homeowner decides to sell their home, 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 first step that “…44% of recent buyers took in the home buying process was to look online at properties for sale.”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 who 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 LineIf you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.
Housing InventoryEvery summer, families across the country decide if this will be the year they sell their current house and move into their dream home.Mortgage rates have hovered around 4% for all of 2017, forcing buyers off the fence and into the market, resulting in incredibly strong demand RIGHT NOW!! At the same time, inventory levels of homes for sale have dropped dramatically as compared to this time last year.Trulia reported that “U.S. home inventory has tumbled 8.9% over the past year and has now fallen for nine consecutive quarters.” There is now 20% less inventory than there was five years ago.Here is a chart showing the decrease in housing inventory levels by category:
Bottom LineDemand for your home is very strong right now while your competition (other homes for sale) is at a historically low level. If you are thinking of selling in 2017, now may be the perfect time to place your home on the market.Call me at 516-429-9399 and I will share current market activity and home availability in your Nassau County or Suffolk County town.
Thinking of Selling?If you are thinking about selling your house this year, now more than ever may be the time to do it! The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market.Lawrence Yun, Chief Economist at the National Association of Realtors, recently commented:
“Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”Yun goes on to say:
“Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions.”In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction, including the inspection, appraisal and financing contingencies.