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2023 Market Predictions

The real estate industry is in for a wild ride over the next year, according to the
Realtor.com’s 2023 Housing Market Predictions Report. This forecast predicts an
overall positive outlook with ongoing growth, but it also acknowledges that several
regional markets are more volatile than others and may not experience consistent
gains.

The report notes that there are some headwinds to sustained growth, particularly in
regions affected by the pandemic and its economic fallout. Tightening credit conditions,
an already low inventory of homes for sale, and historically high lumber costs may all
put pressure on affordability and slow the housing market’s progress.

Good News

The good news is that many markets have been resilient and there are signs of
optimism as the economy recovers. Realtor.com expects that home prices and sales
activity will continue to rise in most markets, albeit at a slower pace. Affordability is
projected to remain a challenge for some buyers, however, as potential buyers may
have difficulty securing financing.

The report also predicts an increase in rental activity over the next year as renters take
advantage of more affordable housing options and the flexibility that comes with not
having to commit to a longer-term mortgage agreement. This could spell good news for
investors looking to capitalize on these shifting trends.

Overall, the 2023 National Housing Forecast predicts a continued rise in housing prices,
though certain regional markets may be more volatile than others. It also forecasts an
increase in rental activity as renters take advantage of the flexibility that comes with
renting. All of this suggests a vibrant and dynamic real estate market going into 2023,
so it’s important to stay informed and up-to-date with the latest trends.

Decision Making

No matter where you are in your real estate journey, it’s important to stay abreast of the
fluctuating market conditions. By doing so, you can ensure that you’re making informed
decisions and leveraging the best opportunities available to you. With a comprehensive
understanding of the current market conditions and the changing trends, you can be
sure that you’re making the most of your investments and positioning yourself for
success.

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Considering a Distressed Property?

Homebuyers are always looking for that special bargain. The old saying, “buy the worst home on the best street,” insinuates that buying a “fixer-upper” home can be a great investment. While it’s always important to get the most for your money, what about distressed properties? Are they really the best value?

Before you decide to buy, it’s important to understand what is considered a distressed property. While a distressed home might need significant repairs, the term “distressed” is actually referring to the financial situation of the seller (foreclosures and short sales) rather than the condition of the home.

The home itself might also have material issues. Everything from deferred maintenance to major system problems may be present, and a distressed homeowner will not be in a position to make repairs. Selling a home “as is” does not, however, eliminate their responsibility for disclosures and these must be carefully reviewed.

There are advantages to buying a distressed property. Often these homes are listed lower than market value to encourage a quick sale. If the home is considered a fixer-upper, the homebuyer might save thousands of dollars compared to other homes in the area. If you are handy or willing to tackle this kind of project, then buying a distressed property might be a great solution for you; just ensure you get a comprehensive home inspection so you are fully aware of the condition of the home.

If you find that the projects are beyond your skills, or the cost of the repairs would outweigh the savings, consider buying a more expensive home that is move-in ready instead. You’ll want to make sure you’re not getting in over your head…or your budget. In this way, the property will be the bargain you hoped it would be.

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Motivated Seller – Make Me an Offer!

Even in a strong seller’s market, a homebuyer might hear the words, “Make me an offer.” For a nicely appointed home that is well priced, this can be a surprise. Being invited to write an offer can often give the buyer pause. Most buyers will immediately wonder if something is wrong with the home. Did they miss something that is causing the home to take longer to sell?

While it could be that something is wrong with the home, it most likely just demonstrates the seller’s readiness to move. It could be that they have found another home or are motivated by a relocation, but it might also be that they are tired of keeping the home show-ready and are just anxious to be done with it.

In this situation, it’s important for the homebuyer to listen to their agent. A buyer who hears, “Make me an offer,” often assumes this is an invitation to write a low-ball offer. The assumption is that the seller will take any offer just to get the home sold. The buyer thinks they’ve probably got this one in the bag!

The buyer’s agent will be able to add context to the situation and provide reasonable suggestions for price and terms. Even when invited to write an offer, home sellers will not discount their home if there is no need to do so, and sending an offer below market value might insult the seller and prevent a counter-offer or acceptance—causing the buyer to miss out on a desirable home.

Buying and selling real estate is emotional on both sides. Serious buyers and sellers are both eager to find the right deal, but foolish bargains are rare. When hearing, “Make me an offer,” the best move is to consider the home and then rely on the advice of the buyer’s agent about the next steps.

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Your Listing Expired – Now What?

Listing agreements all have an expiration date. No one wants to think about what happens when the listing expires; both the seller and agent hope the home will sell long before that time. But it does happen. An expired listing means two things; first, the home is now off the market, and second, you as the seller are no longer under contract with your agent.

Now you have some decisions to make. The most important question is to decide if you still want to sell the home. Let’s face it, it’s a challenge to have your home on the market; the home must always be kept show-ready and the last-minute scramble to accommodate a potential buyer is tiring. You should also consider the real estate market and whether current conditions will still allow you to sell in your expected price range.

If you decide to continue with the plan to sell, it’s time to consider whether you want to change agents or stick with the current one. There are many reasons why a home doesn’t sell that have nothing to do with your representation, but if you sense that the agent is not the right fit, this is the time to make a change. If the agent isn’t the problem, then the next step is looking at the home itself and the price. Are you overpriced for the home and its competition?

No one wants to think about an expired listing nor a home that didn’t sell—but this is the time to take stock of the situation, adjust if necessary, and try again; hopefully with the right combination of condition, price, and agent.

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Property Liens That Can Stop The Sale

One of the most common reasons for a home sale to fall through is the
presence of property liens. Often the sellers are not even aware they have
a lien on their home and the delay caused by having them removed can
cause a qualified buyer to look elsewhere.

Along with other pre-listing tasks, such as repairs and curb appeal projects,
sellers should order a title search to determine if any liens are on the
property. Some liens are expected, such as the mortgage lien which
ensures any home loan is paid off at the time of close, but others might
come as a surprise. Here are a few liens which can derail your closing.

· Mechanics Lien – A contractor may place a mechanics lien on your
home to make sure they are paid after a home project.
· Divorce Lien – Even if you and your spouse have agreed on the sale
of the home, the court may need to approve the sale before the lien can be
removed.
· Homeowner’s Association – Past due HOA payments and
assessments can lead to a lien on the home.
· IRS and Property Taxes – A government legal claim against your
property when you neglect or fail to pay a tax debt.
· Judgment Liens – Is a court ruling that gives a creditor the right to
take possession of a debtor’s real or personal property if the debtor fails to
fulfill his or her contractual obligations.
· Credit Card Liens – If you default on a credit card and the issuers
get a judgment, they can attach a lien to your property.

Liens must be dealt with before a home can change title. Often the
lienholder will negotiate the payment, but others will want full payment
before releasing the hold. Either way, dealing with liens can take time and
money. It’s always best to remove liens before listing your home for sale.

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How to Use Comps to Price Your Home Correctly

The most important aspect of listing your home for sales is the asking price.
Unlike many other items we purchase, home prices are based on what a
willing and able buyer would pay for the property.

Sounds complicated, right? This is why real estate agents bring comps ( short for comparable
properties) information with them to the discussion. Yet are you using the
right comps to successfully sell your home?

The idea is to gather information about comparable properties that have
sold recently that are similar to your own. The goal is to compare apples to
apples. In other words, the properties should be as close to the subject
home as possible. This includes things like:

· Location – how far is the property from yours.
· Size – square footage is an important aspect of value.
· Number of bedrooms/bathrooms – even if the square footage is
close, the number of bedrooms and bathrooms can have a large effect on
price.
· Style, view, street, yard – even the exact same floorplan can have
vastly different value based on the street it’s on or the view. Size of the yard
and privacy are also critical components of value.
· Amenities – private or community pools and other amenities can
affect value as well.

Your agent will bring recent sales for homes that compare to yours. As you
look through these listings, you can add or subtract values based on the
differences.

This is the same process an appraiser will use to approve the
loan.

While this is more of an art than a science, the right comps can help
you properly price your home for a smooth sale.

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4 Things Sellers Need to Know about Backup Offers

It’s no secret that most of the country is currently experiencing a strong seller’s market. Yet even in this competitive environment, almost 25% of all escrows fall through before closing. Home inspections, appraisal surprises, and loan approvals are just a few of the issues which can arise, causing the buyer to pull out of the deal.

An essential component of any listing strategy should be a good backup offer, meaning that another buyer is willing to step in and close if escrow falls through. As you consider a backup offer, here are 4 things you need to know:

1. A Backup Offer Is Legally Binding – A backup offer is a fully executed offer, just like the original, so make sure the terms are acceptable. Typically, the buyer will include a contingency in the event they find another home.
2. Multiple Backup Offers – In a strong seller’s market, it is not unusual to accept multiple backup offers. Always clarify the position of each backup offer and whether you will continue to accept backup offers.
3. Leverage – Backup offers provide leverage during the escrow period as well as security for the seller. Use backup offers to discourage unreasonable requests for repairs or concessions during escrow.
4. Earnest Money – Backup offers do require the buyer to submit earnest money, just like the primary offer. This stays in an escrow account. Often this is smaller than a typical deposit with the condition to increase the amount if the offer becomes the primary one.

Backup offers should be an important consideration in any home sale. Not only do they protect the seller if an escrow fails to close, but the buyer can also have another opportunity to close on a home they love.

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Essential Components of the Home Tool Kit

A well-equipped home tool kit is not just for weekend warriors and do-it-yourself types. Hanging a picture, tightening a cabinet door, or assembling a Swedish-built cabinet are all moments when one might reach for a tool kit. If your toolbox consists of duct tape and a hammer, a quick, inexpensive trip to the local hardware store can save you lots of time and headache later when you need your tool kit.

Essential Components of the Home Tool Kit

• Hammer – The hammer is the most used tool in any home. Choose one that feels comfortable in your hand and is light enough that you can use easily.
• Screwdrivers – While fancy ratcheting screwdrivers are comfortable, the plain old inexpensive ones work just fine. Make sure you have at least one flat head and one Philips head on hand.
• Nails and Screws – Of course, you’ll need these to go with the first two items on the list. Since these are inexpensive, choose a few sizes to have on hand for various projects.
• Measuring Tape – Alongside the hammer, you’d be surprised how often you’ll use this tool.
• Drill – Drills are versatile tools and useful to hang pictures or tighten screws. Decide whether your preference is cordless or corded.
• Duct Tape – Yes, duct tape does have a role in a well-stocked tool kit.
• Utility Knife – This will not substitute for a saw but small cuts and simple adjustments can be performed easily with this small tool. A box cutter would also work well here.
• Protection – Safety goggles and work gloves offer essential protection from flying debris and hand or eye injuries.

Feel free to add other fun items you find during your stroll through the hardware store. You may never be ready to remodel your entire kitchen, but the right tools will provide you what you need to keep your home in great condition.

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Homeownership Is A Great Hedge Against Inflation

Over the past couple of months, the news of rising inflation is fueling
concern across the country. Currently, inflation is at a 40-year high. This is
impacting household budgets the most as families try to make ends meet
with less buying power. For potential home buyers, rising interest rates may
cause worry that you will not be able to afford the home you want.

While these are all valid concerns, for those who are still able to finance a
home, homeownership is one of the best hedges against inflation and may
be worth stretching your budget to do.

The biggest advantage of owning a home in an inflationary period is a
fixed-rate mortgage stabilizes your largest household expense. Most
people budget 25-45% of their monthly income for housing. As costs
continue to rise, rental rates will rise right along with them. These costs can
far outpace salaries and increase the burden on families.

The second advantage is that home values historically outperform other
assets in appreciation. Owning a home builds equity for the future that is
based on a tangible asset. Even if the home loses value short-term, some
studies show that over 7-years, homeowners should gain more equity than
other investments.

The bottom line is that if you’ve been thinking about buying a home this
year, it makes sense to act, even if interest rates are rising. This allows you
to stabilize your monthly housing expense while potentially building equity
for the future.

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Do You Need a Backup Generator for Your Home?

Many people live where power outages occur quite often. Some neighborhoods have more problems than others. This can be caused by storms or simply an unreliable power grid. If you experience regular power outages, you may be wondering if you need a backup generator. Here are some considerations for you to think about before you buy.

You May Need a Back-up Generator if……

· You store large amounts of frozen/refrigerated food – Do you have a storage freezer or regularly keep large amounts of food on hand?

· You have life-saving medical equipment on-site – Are you or a loved one reliant on medical devices that require power?

· You need electricity to stay warm in winter – Do you  rely on power to generate heat?

· You have essential equipment on site – Do you have systems that must run constantly to prevent damage? A good example is a sump pump that prevents flooding.

If you do need a generator, there are still options you must investigate.

How much power do you need and for how long? Generators need fuel and regular maintenance. They also are loud and emit fumes, so placement is
very important. You can also choose from a permanent whole house backup generator or a portable version.

Power outages can cause serious issues and a home backup generator is a great way to safeguard from loss.

Do you need a backup generator? Consider why you want one and then do some homework. Generators are an expensive investment but may be important for your family.