More Americans Say Now is a Good Time to Sell!

Recently released data from Fannie Mae’s National Housing Survey revealed that rising home prices were the catalyst behind an eight-point jump in the net percentage of respondents who say now is a good time to sell. The index is now 21 points higher than it was this time last year.

Overall, 62% of Americans surveyed said that now is a good time to sell (up from 58%), while 26% of respondents said that now is not a good time to sell (down from 30%). The net score is the difference between the two percentages, or 36%.

According to CoreLogic, home prices are now up 6.7% over last year and 78.8% of homeowners with a mortgage in the US now have significant equity (defined as 20% or more).

As home prices have increased, more and more homeowners have realized that now is a good time to sell their homes in order to take advantage of the extra equity they now have.

At the same time, however, rising prices have had the exact opposite impact on the good-time-to-buy scale as many buyers are nervous that they will not be able to afford a home; the net score dropped 5 points to 18%.

Doug Duncan, Vice President & Chief Economist at Fannie Mae, had this to say,

“In the early stages of the economic expansion, home selling sentiment trailed home buying sentiment by a significant margin. The reverse is true today.

The net good time to sell share is now double the net good time to buy share, with record high percentages of consumers citing home prices as the primary reason for both perceptions. Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.”

Buyer demand continues to outpace the supply of homes for sale, which has driven prices up across the country. Until the supply starts to better match demand, there will be a gap between the sentiments surrounding buying and selling.

Bottom Line

If you are considering listing your home for sale this year, now is the time!

Posted by The KCM Crew

Click HERE to talk with one of our agents today!

Advertisements

5 Reasons to Sell This Fall

Here are five reasons listing your home for sale this fall makes sense.

1. Demand Is Strong

The 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 Now

Housing 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 Quicker

Today’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 Up

If 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 Life

Look 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.

Posted by The KCM Crew

7 Pricing Myths to Stop Believing If You Ever Hope to Sell Your House

BsWei/iStock

Pricing your own home is hard, what with all the history and hopes this magic number entails. Of course, you want to make a profit. Of course, all that money you spent installing a swimming pool or a half-bath will be recouped, because you’re leaving your digs in better shape than when you bought it, right? Right?

Well, not necessarily. Too many home sellers fall prey to myths about home pricing that seem to make sense at first, but don’t jibe with the reality of real estate markets today. To make sure you haven’t bought into any of this malarkey—since the buyers you’re trying to woo sure haven’t—here are some common pricing myths you’ll want to rinse from your brain so you kick off your home-selling venture with realistic expectations. It’s time to get real, folks!

1. You always make money when you sell a home

Sure, real estate tends to appreciate over time: The National Association of Realtors® estimates that home prices will jump 5% by the end of 2017 and continue rising 3.5% in 2018. But selling your home for more than you paid is by no means a given, and your return on investment can vary greatly based on where you live.

The NAR also found, for instance, that the cost of single-family homes increased in about 87% of the metros it studied, but prices actually dropped in 23 markets. So don’t assume you’ll walk away with a profit until you’ve examined what’s up in your area first.

2. Price your house high to make big bucks

We know what you’re thinking: “Hey, it’s worth a shot!” But if you start with some sky-high asking price, you’ll soon come back to Earth when you realize that an overpriced home just won’t sell.

“While the payday might sound appealing, you’re actually sacrificing your best marketing time in exchange for the remote possibility that someone will overpay for your home,” says Kathleen Marks, a Realtor® with United Real Estate in Asheville, NC.

While certain buyers might be suckered in, this becomes far less likely if they’re working with a buyer’s agent who will know all too well when a home is overpriced, and advise their client to steer clear. And this can lead to problems down the road (as our next myth indicates).

3. If your home’s overpriced, it’s no big deal to lower it later

Sorry, but overpricing your home isn’t easily fixed just by lowering it later on. The reason: Homes that have lingered on the market for months—or that have undergone one or more price reductions—make buyers presume that something must be wrong with it. As such, they might still steer clear, or offer even less than the price you’re now asking.

Bottom line: “Price your home appropriately from the beginning for your best shot at having a quick and easy sale,” Marks recommends.

4. Pricing your home low means you won’t make as much money

Similarly, sellers are often leery of pricing their home on the low end. But as counterintuitive as this seems, this strategy can often pay off big-time. Here’s why: Low-priced homes drum up tons of interest, which could result in a bidding war that could drive your home’s price past your wildest dreams.

5. You can add the cost of any renovations you’ve made

Let’s say you overhauled your kitchen or added a deck. It stands to reason that whatever money you paid for these improvements will be recouped in full once you sell—after all, your home’s new owners are inheriting all your hard work.

The reality: While your renovations might see some return on investment, you’ll rarely recoup the whole amount. On average, you can expect to get back 64% of every dollar you spend on home improvements. Plus that profit can vary greatly based on which renovation you do.

Check out this list of common renovations and their return on investmentto know what you can actually expect.

6. A past appraisal will help you pinpoint the right price

If you have an appraisal in hand, from when you bought or refinanced your house, you might think that’s a logical place to start to price your home. It’s not!

An appraisal assigns your home a value based on market conditions at a specific date, so it becomes old news very quickly. In fact, lenders typically won’t accept appraisals that are more than 60 days old.

“Since lenders know markets can change in six months’ time, it’s important for sellers to understand that a previous appraisal is never a reliable source for the current value of a home,” Marks says.

7. Your agent might overprice the house to make a bigger commission

Don’t even go there, says Realtor Raena Janes of RJHomes in Tucson, AZ.

“While it’s true that an agent’s commission is based on the selling price of a house, the disparity will end up being negligible,” she says. For example, the difference in commission between a $300,000 house and one that’s $310,000 is about $150.

“No real estate agent is going to lose a sale for the sake of a couple hundred dollars,” she explains.

Posted by Cathie Ericson on realtor.com

 

Want to know how much your home is worth? Click HERE!

Empty Nesters: Best To Remodel Or Time To Sell?

Your children have finally moved out and you and your spouse now live alone in a four-bedroom colonial (or a similar type of house). You have two choices to make:

  1. Remodel your house to fit your current lifestyle and needs
  2. Sell your house and purchase the perfect home

Based on the record of dollars spent on remodeling and renovations, it appears that many homeowners are deciding on number one. But, is that the best long-term solution?

If you currently live in a 3-4-bedroom home, you probably bought it at a time when your children were the major consideration in determining family housing needs. Along with a large home, you more than likely also considered school district, the size of the property and the makeup of other families living in the neighborhood (example: you wanted a block with other kids your children could play with and a backyard large enough to accommodate that).

Remodeling your home to meet your current needs might mean combining two bedrooms to make one beautiful master suite and changing another bedroom into the massive walk-in closet you always wanted. However, if you live in a neighborhood that historically attracts young families, you may be dramatically undermining the value of your house by cutting down the number of bedrooms and making it less desirable to the typical family moving onto your block.

And, according to a recent study, you will recoup only 64.4% of a remodeling project’s investment dollars if you sell in the future.

Your home is probably at its highest value as it stands right now. Instead of remodeling your house, it may make better financial sense to sell your current home and purchase a home that was built specifically to meet your current lifestyle and desires.

In many cases, this well-designed home will give you exactly what you want in less square footage (read less real estate taxes!) than your current home.

Bottom Line

If you are living in a house that no longer fits your needs, at least consider checking out other homes in your area that would meet your lifestyle needs before taking on the cost and hassle of remodeling your current house.

Posted by the KCM Crew

 

Ready to sell? Click HERE to find out how much your home is worth!

Study: FSBOs Don’t Save Real Estate Commission

One of the main reasons why For Sale By Owners (FSBOs) don’t use a real estate agent is because they believe they will save the commission an agent charges for getting their house on the market and selling it. A new study by Collateral Analytics, however, reveals that FSBOs don’t actually save anything, 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 casesbelow the average differential represented by the prevailing commission rate.”(emphasis added)

Why would FSBOs net less money than if they used an agent?

The study makes several suggestions:

  • “There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids on with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
  • “Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
  • “Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.

Three conclusions from the study:

  1. FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
  2. The differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%.
  3. The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

If you are thinking of selling, FSBOing may end up costing you money instead of saving you money.

Posted by The KCM Crew

FSBO Risks: 4 Scary Scenarios ‘For Sale by Owner’ Home Sellers Face

jhorrocks/iStock

Going the “For Sale by Owner” route is a tempting alternative to hiring a real estate agent to sell your home. After all, listing agents charge a commission for their work that can eat into your own profits. So why not try to save money by selling your home yourself?

Here’s why: There are some major risks with going FSBO, from a lower sales price to landing in legal hot water. So before you pursue this DIY route, here’s a warning of some of the bad things you might encounter when you attempt a FSBO arrangement.

1. Your listing won’t be seen by many buyers

One key thing a real estate agent will do for you is create an eye-catching ad for your home, with attractive photos and a winning description that will reel in buyers (by, say, playing up those hardwood floors and granite countertops). Sure, you can probably cobble together your own ad, but there’s one thing you absolutely can’t do if you go FSBO: Post that ad on the multiple listing service.

Real estate agents pay to put their listings on the MLS, which is then distributed far and wide, including to sites such as realtor.com®. Which is great, since that way you know your home can be seen by thousands of potential buyers and their agents. With FSBO, however, your home won’t go on the MLS; instead, it’ll go on sites that cater to FSBO listings, which get far less traffic.

“There are thousands of agents trying to sell your house when it’s on the MLS, but when you do it alone, only one person is trying to sell your house—you,” notes Realtor® Denise Briez with Pro100 in Neosho, MO.

2. Your home could sell for a much lower price

Pricing a home can be far more challenging than most newbies assume. The majority of sellers price their home based on emotions, or what they hope it should sell for in some dreamy best-case scenario.

“Often the seller is too personally invested in the situation and too close to be objective,” says John Powell, chief development officer at Help-U-Sell Real Estate in Tucson, AZ.

But buyers want a bargain, and they know when a place is overpriced. As such, listings with bloated prices tend to sit—and sit—on the market. Even if you eventually lower the price, buyers are likely to wonder at that point if there’s something wrong with your house since it’s languished on the market so long.

A real estate agent, by contrast, will provide an accurate home value based on a solid market analysis, plus serve as a buffer between you and buyers to facilitate successful negotiations and a resolution both parties can live with. This, in turn, means you can earn top dollar for your home—which means your agent will likely earn every penny he’s paid.

3. You could run into legal trouble

Selling a home is fraught with legal pitfalls that only a real estate agent will know. As such, when you choose the FSBO route, you could do something that skirts the law but not even know it.

“There are a lot of potential legal problems that can arise during home selling,” says David Welch, a Realtor with Re/Max 200 Realty in Winter Park, FL. “I would say disclosure requirements may be your most likely issue. Most states, maybe all of them, have requirements involving seller’s disclosure of defects in the property.”

Disclosure requirements vary by state, but might include information on lead-based paint, nearby environmental hazards or sex offenders, and even whether someone died in the house. If you know of such info but keep mum, you could be committing a prosecutable offense and have one highly irate buyer on your hands to boot.

4. You might end up with a buyer who doesn’t pan out

Even if your FSBO listing gets an offer that you accept, you’re not out of the woods quite yet. For one, buyers fall through or back out for all sorts of reasons. For instance, you might inadvertently choose a buyer who can’t get a loan, which means you’ll have to start back at square one.

A real estate agent will be your ally in confirming a buyer is pre-approved for the correct loan amount, and then will ensure there is an airtight contract in place so the entire process will proceed smoothly.

Due to the risks of FSBO homes, many sellers eventually realize they can’t afford to not hire a real estate agent. So make sure to weigh the FSBO trade-offs against your money, time, and peace of mind.

 

Posted by Cathie Ericson on realtor.com

Housing Inventory Hits 30-Year Low

Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home. Homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.

New data from CoreLogic shows that even though buyers came out in force, as predicted, homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,

“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.”

CoreLogic’s President & CEO, Frank Martell added,

“Home prices are marching ever higher, up almost 50 percent since the trough in March 2011.

While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.”

Overall inventory across the United States is down for the 25th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.

Real estate is local.

Market conditions in the starter and trade-up home markets are in line with the median US figures, but conditions in the luxury and premium markets are following an opposite path. Premium homes are staying on the market longer with ample inventory to suggest a buyer’s market.

Bottom Line

Buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your starter or trade-up home and moving up this year, let’s get together to discuss the exact conditions in our area.

 

Posted by The KCM Crew