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Market Outlook

There’s been some concern lately about another housing market crash.
Maybe you’ve read articles linking today’s environment with the Market
Meltdown of 2008. Even with the talk of recession, this real estate market is
very different and that means that most experts do not expect a crash, just
a normal ebb-and-flow slowdown. There are some significant differences in
today’s situation:

Loan Qualifying
Heading into the 2008 crash, loans were very easy to find. Almost anyone
could qualify for a loan with zero down payment and lower FICO scores.
The lending industry was taking huge risks, and this pushed home prices
higher, artificially. With stricter lending policies in place, not only do
borrowers need to qualify properly, but appraisals are based on true value,
avoiding over-inflated prices.

Housing Supply
Another difference is the housing supply. As home prices soared, so did the
number of homes for sale. Currently, there is still a shortage of available
inventory for the buyers still looking for a new home.

Equity Levels
Another huge difference is near record equity for most homeowners. The
strong housing market during the pandemic pushed home values higher
than ever before. Contrast this to the Market Meltdown era of short sales
and foreclosures, and it’s clear that most sellers can still afford to negotiate
and reap a healthy gain in the process.

What this means to you
The bottom line is that if you are a buyer looking to purchase or a seller
ready to move, there is no reason to wait or worry that there is a crash on
the horizon. The frantic pace of the market has slowed, interest rates have
risen, but opportunities are still available in this market.

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Tips for Buying a Home Unseen

It may come as a shock that many people purchase a home before ever setting foot inside. These buyers may be moving to a new country or city far away, or they may not have the time or resources to visit for a home search before the big move. Not everyone has the option (or the desire) to rent for a few months while they find a permanent home in their new location. Most homebuyers would prefer to purchase a house before they arrive, so they can move their belongings and quickly get settled into their home.

There are a few things you can do to make the process more manageable if you’ve considered buying a house unseen. The first step is to find a realtor in the area that you can trust. Let them know your circumstances and that you’ll need them to help vet potential properties for you. They’ll be able to provide you with a link to a virtual tour if it’s offered, or schedule a meeting where they can walk you through the house via FaceTime or another video-based app. This will help you feel like you’re there in person and give you the chance to ask your realtor about any potential issues that may pose a problem in the future. You’ll also be able to see any features that you love, which will help you make your final decision.

Another great option is to have a family member or friend who lives in the area stop by a few open houses or take a tour with your realtor of any homes that you’re interested in. It’s a great idea to involve someone that you know and trust, to help spot any red flags or deal-breakers you should be made aware of before signing on the dotted line.

When the time comes for you to move in, be prepared for the unexpected. There will always be a few things that you didn’t expect when you’ve purchased a home unseen. However, make the best out of the situation and stay positive. It really is possible to find your dream home, even if you can’t see it before closing.

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Rising Interest Rates – Should I Lock in the Mortgage Rate?

One of the most important financial considerations of buying a new home is
the interest rate paid on the mortgage. Over time, a higher interest rate can
add thousands of dollars to the true cost of buying the home. When interest
rates are low or steady buyers have greater confidence that they will get a
favorable rate when they go to secure the loan, but in our current
environment of rising interest rates, many lenders are suggesting a rate
lock at the time of pre-approval.

What is a Mortgage Rate Lock?

A rate lock freezes the interest rate on a mortgage for a period of time
before the close of the loan. Typically lasting for 30-60 days, the lender
guarantees the rate will not change during this period for a fee that is paid
when you agree to the loan terms.
A mortgage lock protects the borrower from rising interest rates while the
loan is processed and approved.

When should you lock in a Mortgage Rate?

Lenders will offer to lock in the rate at the time of loan approval. With
escrow periods of 30-60 days, the lock assures the buyer that their rate will
not increase during the time it takes to complete the loan process.
In a period of rising interest rates, as we see today, locking the rate may be
a smart idea. The borrower will pay a higher fee for the lock, as the lender
is also taking a risk, but it could be worth thousands of saved dollars over
the life of the loan. Even a small increase in the interest rate can have a
huge financial impact.

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Great Time to Sell

Sellers all over the country are confused and worried they may have
missed the best time to sell their home. Prices are dropping, mortgage
rates are rising, and the pace has slowed but the impact on any individual
seller is unclear.

While the days of any home selling for any price are behind us, the current
housing market is still strong. The biggest hurdle for sellers is to avoid the
feeling that they missed their chance to get top dollar. Yet, many times the
seller intends to buy again also; so while they may sell their home a little
lower, they will also buy the new home a little lower as well.

ABCs of Success

The ABCs to a successful sale are not complicated. They are the basics of
home selling, but if followed, it will ensure a timely and profitable home
sale.

A) Appreciation

When sellers hear this term, they normally think of the value of the home.

During a challenging market, this kind of appreciation is to appreciate every buyer who wants to come by.
Appreciate  every offer you receive; take them seriously.

B) Give in, Don’t Dig in

Along with appreciation for offers, view all the terms in the light of where you can give in or compromise.

Be easy to work with and be reasonable.

C) Stop Comparing the House Next Door

Try not to be discouraged or angry if other homes are selling faster. You don’t really know the reason;
try to stay patient.

Buyers are excited about the slower market. This means that buyers are
still buying. Sellers who get back to the basic ABCs can be successful and
achieve their selling goals

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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.