No matter which side of the transaction you're on, you don't want to give up more than you have to.
After months of searching for the perfect home, making some offers, and maybe even competing with other buyers, you finally have a deal on your dream home. It took some negotiations, but you and the seller have come to terms.
Or have you?
Too often, getting a signed contract and putting your money into escrow is the beginning of what can become yet another round of negotiations. Here are five things every home buyer and seller should know about last-minute negotiations or credits.
Buyers may ask for credits based on property inspections.
Usually, a real estate contract either provides for a property inspection, or buyers inspect before signing. Depending on the property and the issues, a buyer might also have a particular type of inspection for the sewer line, septic, pool or roof.
These inspections can bring to light issues that the buyer couldn’t possibly have known about before making an offer. Once inspected, the buyer may still be interested in pursuing the sale. But given the needed repairs they will probably want to re-negotiate the price by asking for credits or a reduction in the purchase price.
Sellers should consider having a property inspection before listing.
The goal is to avoid negotiations once you’re under contract, because they’re not going to be in your favor. If you know the roof is near the end of its life or the furnace breaks from time to time, let it be known upfront, because rarely can you “sneak” something past the buyer.
You might even go as far as having your property inspected before listing the home. This way, you can address any issues, and make the inspection report available to buyers. They can come up with their best offer upfront, knowing what they’re getting.
If you have an inspection report or are otherwise assured your property is in great shape, you could even ask for an “as-is” clause in the contract. Although it’s not necessarily enforceable, it will send a strong message to the buyers that you aren’t open to more negotiation.
Sellers may try to avoid giving credits by having work done before escrow closes.
After inspections, the seller might agree to have work done before the closing. Or the seller may require that a payment is given directly to a contractor for the purpose of performing the specific, required work and nothing else.
These agreements help protect the seller, because buyers sometimes ask for credits just to help offset the closing costs — and never intends to do the repair work.
It also protects the seller if initial estimates for needed work turn out to have been overstated.
Buyers who ask for credits just to get the price down may be taking a chance.
Sometimes the buyer concedes on the purchase price thinking they can come back after the property inspection and ask for an additional concession.
The buyer may even feel empowered now that they’ve completed a series of inspections and are just weeks away from closing. The seller isn’t going to go back to the drawing board with a new buyer over a few more dollars, right?
Actually, they might. If it’s a strong buyer’s market, there’s a good chance the buyer can pull it off, but if it’s more of a neutral or a seller’s market, the seller may call your bluff. They’re assuming that you’re the one who, having invested all this time and money on inspections and an appraisal, isn’t going to walk away over a few dollars.
Buyers nearly always ask for credits, so sellers should give themselves some cushion.
You should also leave some additional room for negotiation when you’re in escrow. Always assume the buyer will ask for minor repair work — they nearly always do, even if there are no major issues. If you leave some cushion for yourself, you’ll feel better about the deal, and you’ll have protected yourself against the inevitable.
Conversely, the last thing you want is to be blindsided by a buyer asking for a few thousand dollars credit — just when you think the deal is finally done.
Whether you've lived in your home for a day or a decade, buckle up — homeownership can be a wild ride
You may live in your home for two years, or you may hunker down for two decades. But no matter how long you call it yours, you’ll likely experience these four key stages of homeownership — from the day you get your keys to the day you hand them off to your home’s new owner.
Read on to learn more about what to expect from each phase.
Phase 1: Starting out
The “sold” sign is posted, your belongings are packed, and the day finally arrives — you get the keys to your new home. You open the front door, and possibilities abound. How will you decorate? Where will that new couch go? Which rooms will the kids choose?
This first phase is all about unpacking, settling in, and getting to know your new home. If you’ve upsized from a smaller home, you may be tempted to jump in and start filling all that extra space.
And while you may be eager to make your mark on your new home’s interior (or exterior), Diana Bohn, a Seattle-based agent with Windermere Real Estate, warns against making extensive changes to a home right after moving in.
“It’s always good to be in your home for a year or so before knocking down any walls,” she explains. “Get your furniture in there, unpack, and see how the home lives. It’s hard to know how the space is going to feel until you’ve been there for a while. Go through all the seasons at least once.”
Phase 2: Settling in
It may take you a few months to move into the second phase — or even a few years (we won’t judge if you still have packed boxes gathering dust after a year or two). But this phase is when your house becomes a home, and you start enjoying your everyday life in the space.
You’ve figured out where all your belongings should go, you’ve done the bulk of your decorating, and you’re getting to know your neighbors and a few local hangouts. You’ve likely celebrated the holidays in your home a time or two, welcomed out-of-town guests, and gotten to know (and love?) your home’s unique quirks.
Phase 3: Fixing up
If the housing market continues its current upward trend, it’s likely that, after even a few years in your home, you’re sitting on some equity. So what should you do with it? Phase 3 is often the time when homeowners can take advantage of equity they’ve gained.
First, if you bought an older home, it may be time to update some of your home’s major systems — think furnace, roof, or windows. Portland, OR-based mortgage broker Lauren Green of Green Family Mortgage recommends researching two options for financing home improvements: home equity lines of credit (HELOC) and cash-out refinances.
“Many people have no idea they can access their home’s equity,” Green says. “They think the only way to take advantage of their home’s increased value is to sell it, but in reality, there are some great ways to access the equity in your home while still living in it.”
Second, after living in your home for a few years, you probably have a better idea of the renovations that would really make your home work for your lifestyle.
“There are lots of reasons why someone may decide to remodel instead of sell and look for a new home,” says Tyler Coke, project manager and business development manager at Marrone & Marrone, a custom home builder and remodeler in the Bay Area. “One thing that appeals to many homeowners is the custom aspect of it. You can design and create exactly the type of space that fits your lifestyle and speaks to how you use your home.”
Phase 4: Moving on
When will you know it’s time to move on? And what will prompt you to move somewhere new?
“Usually, it’s some kind of transition that causes people to sell,” says Bohn. “A new job, a growing family, or downsizing once the kids move out. In big cities, we’re also seeing people moving from more centrally located neighborhoods to farther-flung suburbs, where their money will get them more.”
Whatever your reason for putting your home on the market, the day you sign on the dotted line and close your front door for the last time is likely to be a bittersweet moment. But change can be good, and the next time you buy a home, you’ll be well-versed in all four phases and know just what you’re looking for.
Don't let anyone slip through the cracks.
When you’re preoccupied with important relocation-related tasks, it’s easy to forget about informing relevant people and institutions of your upcoming residential move and subsequent change of address.
But notifying specific organizations and individuals of your relocation is essential for ensuring a smooth moving process and preventing various hassles and troubles with your mail and accounts.
Here’s a checklist of the people and institutions you need to contact when moving.
Family and friends
Naturally, your relatives and close friends should be the first to know that you are about to move house. Informing them of your imminent relocation as early as possible will not only give you the chance to ask them help you move, but, if you’re moving far away, will also provide you with enough time to say a proper goodbye and plan for different ways to stay in touch despite the distance between you.
Unless you’re relocating to a different branch of your current company, you should inform your employer about your decision to move and leave your job as early as a month in advance.
This way, the company will have time to find a new person for your position, and you will be able to put all the relevant paperwork in order without any hassle.
Remember that your old boss will need your new address to send you tax documents and insurance information at the end of the year.
If you live in a rental home, you should carefully review your tenant rights and responsibilities contained in the lease agreement. You will probably be required to notify your landlord of your intentions to move out at least 30 days in advance.
You need to prepare a written notice that clearly states your move-out date and your future address. It is also a good idea to include a brief statement about the excellent condition of the rented property and to request your security deposit back.
Changing your address with the United States Postal Service should be among your top priorities when moving to a new house, as it will help you avoid many troubles and inconveniences.
To have your mail forwarded to your new place before you’ve updated your address with individual organizations and companies, you only need to fill out a change of address request at your local post office or at the USPS official website.
Online services such as 1StopMove can also help you complete this process.
To prevent service lapses and past-due bills you need to inform your service providers about your relocation plans. Arrange for the utilities at your old home to be disconnected on moving day, and have them reconnected at your new residence by the time you move in.
The utility companies you should contact when moving include electricity, gas, water, telephone, cable, Internet, domestic waste collection and other municipal services you may need.
When you move out of state, you’ll have to transfer your driver’s license and update your vehicle’s registration and insurance within quite a short time frame (10 to 30 days, depending on your new state).
It’s a good idea to visit the local office of the Department of Motor Vehicles at the earliest opportunity, inform them of your new address, and request all the relevant information about putting the required paperwork in order.
A number of government agencies should be notified when you’re moving to another state. Be sure to update your address with the local office of the Social Security Administration, the electoral register, and other relevant institutions.
The Internal Revenue Service will need your actual home address to mail your tax return, fiscal notes, and other documents. All you need to do is print out and mail in the IRS’ Change of Address form soon after your relocation.
To keep your finances in order, you must update your bank accounts and inform credit card companies, stockbrokers, and other relevant financial institutions of your new address either shortly prior to or immediately after your move.
The insurance agencies that provide your life, health, and homeowners insurance policies should have your current address on file, as should any other organizations and individuals (such as your family attorney) who have dealings with you and your family.
Medical and educational facilities
When moving to a new state, you will have to enroll your children in a new school, find a new family physician, and transfer all your academic records, medical records, and prescription medicines. To successfully complete these important tasks you need to tell your doctors, dentists, vets and other healthcare providers, as well as the educational facilities your kids are attending, about your relocation and your new address.
Subscription services and clubs
Last but not least, you need to update your address with any sports, professional, or social clubs you are involved with. You should also notify the subscriber services department of any magazines or newspapers you want to receive at your new home.
You may have to personally visit some companies or institutions to notify them of your relocation, but in most cases you will be able to change your mailing address online or with a simple phone call. Postcards, e-mails, text messages, and social network announcements are also viable methods to inform people of your new address.
Do you need one? Do they pocket the whole commission? Let’s set the facts straight.
Buyers and sellers often enter the market with misconceptions about real estate agents — how we work, how the process works and what the agency relationship is all about.
It’s helpful to point out, without getting too far into the weeds, that in any one real estate transaction, there are most likely two agents: one for the buyer and one for the seller.
Here are five myths (and five truths) about working with both buyer’s and seller’s agents.
1. Agents get a 6 percent commission, no matter what
Most people assume that their agent is pocketing the entire commission. That would be nice, but it’s just not accurate.
First, it’s helpful to know that the seller pays the commission, and they split it four ways: between the two brokerages and the two agents.
Finally, the brokerage commission isn’t fixed or set in stone, and sellers can sometimes negotiate it.
2. Once you start with an agent, you’re stuck with them
If you’re a seller, you sign a contract with the real estate agent and their brokerage. That contract includes a term — typically six months to a year. Once you sign the agreement, you could, in fact, be “stuck” with their agent through the term. But that’s not always the case.
If things aren’t working out, it’s possible to ask the agent or the brokerage manager to release you from the agreement early.
Buyers are rarely under a contract. In fact, buyer’s agents work for free until their clients find a home. It can be as quick as a month, or it can take up to a year or more. And sometimes a buyer never purchases a house, and the agent doesn’t get paid.
Before jumping into an agent’s car and asking them to play tour guide, consider a sit-down consultation or a call, and read their online reviews to see if they’re the right fit.
Otherwise, start slow, and if you don’t feel comfortable, let them know early on — it’s more difficult to break up with your agent if too much time passes.
3. It’s OK for buyers to use the home’s selling agent
Today’s buyers get most things on demand, from food to a ride to the airport. When it comes to real estate, buyers now assume they need only their smartphone to purchase a home, since most property listings live online.
First-time buyers or buyers new to an area don’t know what they don’t know, and they need an advocate.
The listing agent represents the seller’s interests and has a fiduciary responsibility to negotiate the best price and terms for the seller. So, working directly with the selling agent presents a conflict of interest — in favor of the seller.
An excellent buyer’s agent lives and breathes their local market. They’ve likely been inside and know the history of dozens of homes nearby. They’re connected to the community, and they know the best inspectors, lenders, architects and attorneys.
They’ve facilitated many transactions, which means they know all the red flags and can tell you when to run away from (or toward) a home.
4. One agent is just as good as the next
Many people think of “agent” as a generic term and that all agents are created equal.
A great local agent can make an incredible difference, so never settle. The right agent can save you time and money, keep you out of trouble and protect you.
Consider an agent who has lived and worked in the same town for ten years. They know the streets like the back of their hand. They have deep relationships with the other local agents. They have the inside track on upcoming deals and past transactions that can’t be explained by looking at data online.
Compare that agent to one who’s visiting an area for the first time and needs their GPS to get around. Some agents aren’t forthright and might be more interested in making a sale. Many others care more about building a long-term relationship with you, because their business is based off referrals.
5. You can’t buy a for sale by owner (FSBO) home if you have an agent
In a previous generation, sellers who wouldn’t deal with any agents tried to sell their home directly to a buyer to save the commission.
Smart sellers understand that real estate is complicated and that most buyers have separate representation. And many FSBO sellers will offer payment to a buyer’s agent as an incentive to bring their buyer clients to the home.
If you see an FSBO, don’t be afraid to ask your agent to step in. Most of the time the seller will compensate them, and you can benefit from their knowledge and experience.
The sign just went up next door. How does your neighbor's impending sale affect you?
Most people think their real estate concerns end once they’ve closed on and moved into their new homes. But when a neighbor’s house goes on the market, there can be some important implications for you.
Here are some tips for staying real estate aware.
1. Document important disclosure items
For the most part, good fences make good neighbors. But sometimes the folks on the other side of the fence don’t cooperate, and unresolved neighbor conflicts tend to arise when one of the homes goes on the market.
Have a property line dispute? Or an issue with a broken fence and you want the new buyer to know about it? While sellers in most states have a duty to disclose issues to potential buyers, not all areas require this.
Do your new neighbor-to-be a favor and alert the seller’s agent to anything the buyer needs to know about your neighbor’s property.
2. See things differently
Open houses allow buyers to spend some time exploring a home, but these events also present you with a chance to see your home from your neighbor’s perspective.
Once at a busy open house in San Francisco’s Noe Valley neighborhood, an open house visitor made a somewhat obvious beeline for the back of the house. He immediately got on the phone and started talking with someone about where he was standing, giving orders to move left and right.
It turned out this visitor lived in the home behind, and he was checking to see the neighbor’s view into his home.
The open house is your chance to check your home’s paint job from the neighbor’s yard or simply to see your home from a different perspective.
3. Know and learn the market in real time
Typical sellers claim and save their home online, but they also keep searches going after the fact. Why? To keep tabs on the market, see the comps and have a real-time sense of what’s happening nearby.
Just like when you were a buyer, knowing about the area and types of homes in the market is a good move for any homeowner. Take a neighboring home for sale as an opportunity to see what the market bears. You can also learn about the latest trends in home design.
Speaking to a real estate agent can keep you informed of changes to property taxes or how assessments are changing in your town. A smart real estate agent, working their listing, will be an incredible resource to would-be clients down the road. Leverage their experience when your neighbor sells.
Take note when your neighbor goes to sell their home. It’s not just a time to nose around, but to document, inspect or learn from the home sale. Some homes get listed once in a lifetime — take advantage of the opportunity.
True or false: All real estate advice is good advice. (Hint: Well ... it depends.)
Everyone has advice about the real estate market, but not all of that unsolicited information is true. So when it comes time to list your home, you’ll need to separate fact from fiction.
Below we’ve identified the top five real estate myths — and debunked them so you can hop on the fast track to selling your property.
Myth #1: I need to redo my kitchen and bathroom before selling
Truth: While kitchens and bathrooms can increase the value of a home, you won’t get a large return on investment if you do a major renovation just before selling.
Minor renovations, on the other hand, may help you sell your home for a higher price. New countertops or new appliances may be just the kind of bait you need to reel in a buyer. Check out comparable listings in your neighborhood, and see what work you need to do to compete in the market.
Myth #2: My home’s exterior isn’t as important as the interior
Truth: Home buyers often make snap judgments based simply on a home’s exterior. Therefore, curb appeal is very important.
“A lot of buyers search online or drive by properties before they even enlist my services,” says Bic DeCaro, a real estate agent at Westgate Realty Group in Falls Church, VA. “If the yard is cluttered or the driveway is all broken up, there’s a chance they won’t ever enter the house — they’ll just keep driving.”
The good news is that it doesn’t cost a bundle to improve your home’s exterior. Start by cutting the grass, trimming the hedges and clearing away any clutter. Then, for less than $50, you could put up new house numbers, paint the front door, plant some flowers or install a new, more stylish porch light.
Myth #3: If my house is clean, I don’t need to stage it
Truth: Clean and tidy is a good first step, but professional home stagers have raised the bar. Tossing dirty laundry in the closet and sweeping the front steps just aren’t enough anymore.
Stagers make homes appeal to a broad range of tastes. They can skillfully identify ways to highlight your home’s best features and compensate for its shortcomings. They might, for example, recommend removing blinds from a window with a great view or replacing a double bed with a twin to make a bedroom look bigger.
Of course, you don’t have to hire a professional stager. But if you don’t, be ready to use some of their tactics to get your home ready for sale — especially if staging is a trend where you live. An unstaged house will pale when compared to others on the market.
Myth #4: Granite and stainless steel appliances are old news
Truth: The majority of home shoppers still want granite counters and stainless steel appliances. Quartz, marble and concrete counters also have wide appeal.
“Most shoppers just want to steer away from anything that looks dated,” says Dru Bloomfield, a real estate agent with RE/MAX Platinum Living in Scottsdale, AZ. “When you a design a space, you need to decide if you’re doing it for yourself or for resale potential.”
She suggests that if you’re not planning to move anytime soon, decorate any way you like. But if you’re planning to put your home on the market within the next couple of years, stick to elements that have mass appeal.
“I recently sold a house where the kitchen had been remodeled 12 years ago, and everybody thought it had just been done because the owners had chosen timeless elements: dark maple cabinets, granite counters and stainless steel appliances.”
Myth #5: Home shoppers can ignore paint colors they don’t like
Truth: Moving is a lot of work, and while many home buyers realize they could take on the task of painting walls, they simply don’t want to.
That’s why one of the most important things you can do to update your home is apply a fresh coat of neutral paint. Neutral colors also help a property stand out in online photographs, which is where most potential buyers will get their first impression of your property.
Hiring a professional to paint the interior of a 2,000-square-foot house will cost about $3,000 to $6,000, depending on labor costs in your region. You could buy the paint and do the job yourself for $300 to $500. Either way, if a fresh coat of paint helps your home stand out in a crowded market, it’s probably a worthwhile investment.
Summer is peak season for home selling—but also for barbecues, vacations, and long, lazy beach days. In other words, there are lots of things to distract even the most diligent would-be buyers. And that’s not even counting those dog days when it’s too hot to even venture out to view homes.
But for home sellers who are eager to drum up an offer before Labor Day, having their sale sidelined isn't an option. And luckily, there's plenty you can do to lure buyers through your door. Check out these five smart tips for getting buyers to brave the heat and squeeze your house into their summer schedule.
1. Embrace 'rush hour' traffic
Long weekends out of town are the stuff summer dreams are made of. But they're also the reason many Saturday and Sunday afternoon open houses end up nearly empty. Choosing an alternative time frame may turn that around.
"During the summer months, I've found holding 'rush hour' open houses to be hugely successful," says Lindsay Bacigalupo, Engel & Völkers Minneapolis. "For example, Minnesota is full of lakes and so many residents here go up north for the weekend to enjoy time at their cabin. That's why I hold open houses on Thursdays from 4 to 6 p.m.—it creates an opportunity for buyers to view it during a time that might be more convenient."
2. Turn your open house into a summer party
Let's face it: Heading to a barbecue or pool party sounds a whole lot more fun than an open house. If you can't beat 'em, why not join 'em?
"Advertise it as a party instead of simply an open house," says Brett Fischer, associate broker at Lee & Associates Residential in New York, NY.
In other words, put together a gathering that feels more like a celebration than a sales pitch. Try serving up refreshments outside like lemonade and iced tea on trays, or fire up the grill to serve summer-themed appetizers or sliders.
Timing can make a difference here, too: Rather than holding your soirée in the middle of the day, wait until the evening when the temperature's bearable and people are ready to venture out and kick back at a house party.
3. Shine a spotlight on the outdoor space
Nothing's more appealing on a scorching summer day than a backyard pool. Play up this feature and other outdoor amenities to convince buyers this is the warm weather oasis they deserve.
"The long days of summer make for the perfect opportunity to highlight the exterior living spaces of the property," says Than Merrill, a real estate investor and CEO of the real estate education company FortuneBuilders. "Make additional effort to keep patio areas, the pool, and outdoor furniture extra-clean. Incorporate tasteful props such as cushions, towels, lanterns, and string lights to help spur the imagination of your guests."
Mark Cianciullli, a real estate agent at the CREM Group, recalls how setting the stage paid off by getting potential buyers to envision themselves enjoying the amenities he's featured.
"It was a hillside home that had a beautiful view of the city below, especially at night when the city was lit up. So I decided to have a 'summer nights'–themed open house where I set up bistro lights in the backyard and floating candles in the pool and served wine and cheese," he says. "It was such a charming atmosphere that the ultimate buyer wanted the house so bad so she could re-create those kinds of settings for parties or just hanging out with her family and friends."
4. Create a community event
Sometimes getting a home sold is a matter of enlisting the help of those who already live in the neighborhood. Merrill recommends hosting a summer block party at the front of the property, rather than in the backyard, to invite more attention and foot traffic from neighbors and others passing by.
"Prepare a theme, such as a luau or a summer barbecue, with entertainment for kids," he suggests. "Make sure to design and pass out event fliers around the neighborhood days in advance. Consider renting food trucks, including a snow cone or ice cream truck, to help serve your guests. As you mingle with guests, invite them to take a tour of the property and ask them to spread the word to friends and neighbors."
This concept translates to urban areas as well.
"New York City is famous for its residents fleeing the city on weekends, so real estate professionals have to get creative," explains Mable Ivory at Engel & Völkers in New York. "So this week, I hosted a community event called 'Sunset Soiree in the South Bronx.' Attendees could preview my listing, a penthouse on the Grand Concourse, while enjoying Bronx and Manhattan skyline views at sunset. We provided live music from Bronx native Pernell Walker, custom-designed 'Bronx Bomber' cocktails and bites, and had a raffle for 'The Bronx Rox' gift basket. It was more than just an open house, but a way for the community to get together and celebrate their neighborhood."
5. Advertise early, often, and offline
Spreading the word about an open house is always key to getting people in the door, but never more so than that stretch between Memorial Day and Labor Day.
"Summer is a crazy season, and often people become unplugged from their devices," says Jennifer Brownhill, regional marketing manager of CLV Group. "So advertising online well in advance will help give people the heads-up to clear their schedule for this day."
To capture more eyeballs offline, plant signs on roadways headed toward the beach, campgrounds, and other popular summer destinations. Add extras like balloons to draw even more attention.
"Buyers know that it doesn't take long to tour the home," says Alex Hubler of Keller Williams Premier Realty Lake Minnetonka, MN. Advertise how your home's just five minutes off the highway, and "people can pop in quick if they're on their way somewhere, rather than taking the whole day to tour homes."
If you've ever gotten ready to sell a home, you know that in order to fetch top dollar, you need to get your place in good shape. But that costs money—hiring contractors, painters, and other pros—so you might be wondering: Why not save some cash by tackling a few of these fix-its myself?
That's fine and good if you know what you're doing. But unless your DIY skills are fairly advanced, experts agree that this is one of the biggest mistakes a home seller can make. If you bungle the job, you might end up making things worse, and shelling out even more money down the road.
"You have to ask yourself: Is it likely to do more harm than good?" says Dan Bawden, chairman of the National Association of Home Builders Remodelers
To help you separate the tasks you can tackle from those best left to the pros, here are some DIYs to avoid when preparing to sell your home.
If you have rooms that need a fresh coat of paint, go for it, says Bawden. But if you have cracks in the drywall from a shifting foundation or a little depression from years of doorknob slams, it's worth it to hire a pro.
"In my house, I wouldn't do the Sheetrock," says Bawden. "I'd hire someone to fix plaster or drywall. If you don't get the texture just right, when you paint the wall, the repair is going to stick out like a sore thumb."
You don't want your "fix" to look worse than the original problem. Contract out the drywall repair, then DIY the paint job afterward.
"I’ve been in the construction business for years, and I don’t mess with anything inside an HVAC," says Bawden.
The heating and cooling systems in your house are complex, and often connected to both electrical and gas. Making a mistake could mean blowing out the entire system, setting you up for a much more expensive repair in the end.
Furthermore, you'd better believe that potential buyers are going to have their inspector go over the HVAC as thoroughly as possible. Even something relatively simple such as installing a smart thermostat can fry your wiring if done incorrectly. When it comes to your heating and AC, approach with caution.
Unlike installing a refrigerator, stove, or washer and dryer (which can often be a simple DIY task), installing a new dishwasher is complicated.
"The complexities involved with setup, such as installing water and drainage lines under the kitchen sink cabinet, are best handled by a professional," says Doyle James, president of Mr. Rooter plumbing.
Doing this job wrong could mean flooding your kitchen, which will ruin your floors and more. And besides, most big-box stores offer installation for a fairly reasonable price if you're buying new units, or a plumber can handle it for $150 to $500.
"Even if it's not a really massive tree, you'd be surprised how hard it is to dig around the roots," says Bawden.
It's also dangerous, especially if you don't have the tools professionals would use to remove the upper part of the tree before taking out the stump. Do you really want to be that person who puts a tree through your own roof because you were too cheap to hire a tree removal professional? (No, you don't.)
Siding and window fixes
Bawden cautions against DIY siding or window replacement, because water can seep into the walls if you don't reseal the layers properly. It might not be noticeable at first. In fact, you may sell the house not even realizing there is a problem, but down the line, mold and water damage will start to appear.
Not only is that bad karma, it could also be what Bawden calls "lawsuit city."
While replacing a light fixture or ceiling fan could be fine to DIY, experts draws the line at any electrical work involving the breaker box. Not only could you hurt yourself, you could also create a fire hazard, especially if your home isn't brand-new.
"Older homes do not usually have safety devices like ground fault circuit interrupters, making it especially dangerous," explains Shawn McCarthy, owner of Handyman Connection of Colorado Springs.
"You reach the limit pretty quickly," agrees Bawden. "Anything that involves running new wires or repairing faulty wiring should be left to a professional."
Aside from the risk of fire or injury, serious electrical work done by an unlicensed electrician could have code problems, meaning you're likely to get a thumbs-down from the inspector later anyway.
Even if it's just a little fix that the average DIYer could easily do (e.g., hammering down a shingle or two or replacing chimney pipe roof flashing), be cautious.
"It's very easy to get disoriented," says Bawden, especially on a peaked roof. This is why even pro roofers always use a harness in case of falls, so unless you take similar safety measures, steer clear.
Some plumbing tasks are doable: Fixing a running toilet or snaking a slow drain should be in pretty much anybody's comfort zone. The problem with attempting bigger DIY plumbing tasks, though, is that you often don't quite know what you're getting into. Disassembling leaky or blocked under sink pipes, for example, seems simple enough. But according to James, "Pipes are complex and very tricky to reassemble, particularly when they're in close proximity to other plumbing components and machinery, such as dishwashers or garbage disposals."
He notes that what might appear to be a straightforward problem, like low water pressure or a fractured pipe, could actually be a symptom of a larger issue with your system. Plumbing has a way of getting out of hand—i.e., broken pipes, flooding, and worse.
TC On Point
As we enter the spring home-buying season, hordes of would-be homeowners are ready to go—but there weren't enough new-home sales in the beginning of the year to quell the already strong demand.
Only about 618,000 newly constructed homes were sold in February, according to a joint report by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. That's down 0.6% from January, but up 0.5% from February 2017.
"There is plenty of room for growth," Chief Economist Danielle Hale said in a statement. "More new-home sales are needed to restore balance in the housing market. ... Today, one in every 10 homes sold is a new home, whereas in a normal market they account for one in every seven homes sold."
Currently, there aren't enough homes to go around, particularly at more affordable prices. The median price of newly constructed homes notched up to $326,800. It's up nearly 0.6% from the previous month and almost 9.7% from the same month a year ago.
That's considerably more than existing homes, which cost a median $241,700 in February, according to a recent National Association of Realtors® report. Newly constructed homes cost more than existing ones thanks to high land, labor, and materials costs. They also typically come with the latest designs, finishes, and appliances.
Only about 13% of the newly constructed homes sold in February cost less than $199,999, according to the report. The bulk of them, about 58%, were between $200,000 and $399,999. An additional 12% cost between $400,000 and $499,999, while 17% were priced at $500,000 and up.
The most new homes were sold in the South, where buyers closed on about 338,000 new homes in February. That's a 9% jump from January and a 0.6% bump from February 2017.
The region was followed by the West, where about 164,000 new homes changed hands.
This represented a 17.6% monthly drop, but a 3.1% annual increase.
Next up was the Midwest, with 79,000 sales, down 3.7% from January and 8.1% from the same month a year earlier. The Northeast had the fewest new-home sales, at just 37,000. But that was up 19.4% from the previous month and 8.8% from February 2017.
Despite a dearth of properties on the market, sales of existing homes rebounded in February, according to a recent report.
After a dip in the number of closings in December and January, about 5.54 million existing homes (which have previously been lived in) were sold in February, according to the most recent National Association of Realtors® report. That represents a 3% rise from January and a 1.1% increase from the same month a year earlier.
"Sales are being driven in the West and the South," says Chief Economist Danielle Hale. That's an indirect result of builders putting up more new residences in those regions. "Inventory is still low in those areas, but the new construction created opportunities for existing-home owners to trade up. It’s leading to faster turnover.”
Indeed, existing-home sales were up 11.4% month over month in the West. They also rose 2.4% year over year. In the South, they jumped 6.6% from January and 3.4% from the same month a year earlier.
However, sales were down in the Midwest, sliding 2.4% from the previous month to the same level as one year ago. In the Northeast, they fell 12.3% from January and 7.2% from February 2016.
Single-family homes, those stand-alone abodes that typically come with a yard out back, saw the biggest jumps. Sales were up 4.2% monthly and 1.8% annually.
But it's still too early to tell what this means for the rest of the year.
"March is where we really start to see a pickup in closings," says Hale. "And March is really the bellwether for the year as far as how the home-selling season is going to go.”
Sale prices also edged up just a little to reach $241,700 in February, according to the report. That's a 0.37% rise from January and a 5.9% jump from February 2017.
However, they were still quite a bit cheaper, by 33.6.%, than the median cost of a newly constructed home, at $323,000 in January, according to the most recent data available from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
About 53.6% of all existing homes sold in February were closed on for $250,000 or less, according to NAR. About 33.6% were between $250,000 to $500,000 and an additional 10.3% cost between $500,000 and $1 million. Only 2.5% of all sales were for $1 million or up.
“The very healthy U.S. economy and labor market are creating a sizable interest in buying a home in early 2018," Lawrence Yun, NAR's chief economist, said in a statement. "However, even as seasonal inventory gains helped boost sales last month, home prices—especially in the West—shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar."
Your rehab is not finished the moment your contractor cleans up.
After the last trim is painted and the appliances are installed, you have one more crucial step that will ensure you a quick sale, STAGING.
For those who are not familiar with STAGING, Staging is the process of creating an emotional experience that leads sellers to make buying decisions much quicker and easier. Staging is a pivotal element in your real estate investing business that does not take much effort, but yields in immense benefits. Bottom line – Staging sells your property faster, which allows you to see your profits sooner.
Staging is simple; you want the buyer walking thru the house to envision themselves living there. You want them to visualize where they would put their furniture, where they will have dinner, and enjoy a movie. Staging does not have to be complicated. You can have a lot of fun and showcase your style. Here are few tips to help stage your rehab.
Home Staging Tip #1: Clean, clean, clean!
Make sure your rehabbed house is clean from all debris, inside and out. You want the house cleaner than if your mother-in-law was coming over for Thanksgiving dinner. Make sure you don’t forget the window sills and little nooks and crannies, dry wall dust gets everywhere. Be meticulous in the kitchen and baths. You should feel comfortable eating your next meal off the floor.
Home Staging Tip #2: Bring a friend or family member
This person needs to not have an emotional connection to the house. You want an unbiased eye to help highlight the positives and distract from any negatives.
Home Staging Tip #3: Pick a Staging Point.
Go to each major room in the house (i.e. Kitchen, Bathrooms, Living room) and select an attractive part of the room to highlight. An example in the living room would be a fireplace. Simply put a mirror or painting on the mantel with some candles and a few logs in the fireplace and you just staged! It’s simple as that. Now your buyer is able to visualize enjoying a roaring fire on a chilly winter night in their new house!
Take advantage of these staging tips before putting your flip house on the market. Your goal is to enhance the “WOW” factor a buyer gets as they preview the property. This will maximize your time. Back to TIP #1 CLEAN, Make sure your contractor cleans up after themselves every night to ensure time isn’t wasted when you are ready to clean. TIP #2 Also talk to your friend or family member that you are going to involve. Tell them what your objective is, as they will be more helpful if they know your goal. TIP #3, you can save a lot of time by picking the features in advance that you want to highlight. If you are unsure of your own style, don’t be afraid to ask a store clerk or friend for help. You can accomplish half the work of staging before your project is finished. Stick to a tight time line and don’t waste a minute. Every wasted minute is narrowing your profits.
Flipping a house is becoming incredibly popular again, but for those recently looking to get into real estate investing, it may seem complicated. Those new to the industry may wonder how it works, how it is different from other investment strategies and what its benefits are?
Industry insiders classify flipping a house as buying, renovating and reselling a home.
The extent to which homes are improved can vary widely from ‘prehabbing’ (clearing out and creating a blank slate) to modest cosmetic home improvements like painting and landscaping. Experienced investors may prefer full on remodels with new roofs, additions and kitchens.
Some of the reasons real estate investors choose to flip a house are associated with their preferred investing strategy. These may include: speed of seeing returns, avoiding the risk the of long term holding, capturing larger lump sums of cash in the short term, and because it is a lot of fun and therapeutic.
There is nothing wrong with building a portfolio of rental properties, building new homes, investing in mortgages or most other real estate investing strategies. It is important to determine, whether or not, flipping a house is right for you.
Wholesaling homes, or simply flipping real estate contracts can be profitable as well. However, those addicted to flipping houses prefer that they are able to get in and revitalize communities and create profits in any market.
Flipping a house is a great way for investors to diversify from these other real estate investing strategies while generating wealth. It can increase profits, recapitalize and boost funds for rentals and allow them to flex their creative muscles.
However, one of the best reasons to make it your initial focus as a new real estate investor is the ease of entry. Without making it sound too good to be true, flipping houses really can be done with little money out of pocket, even with poor credit and for fast profits.
Feeling insulted is normal. But don’t let it get in the way of what might be a good deal.
You’ve invested a great deal in this house. So when the time comes to put it on the market, you expect potential buyers to recognize its true value. But sometimes, you get an offer that’s so far below your asking price it feels like someone pitched a baseball straight at your stomach.
Should you simply walk away from such a number? Or does it make sense to pause and weigh your options? Here are some points to consider before you decide:
#1 Is It Really Low-Ball, or Just Lower Than You Wanted?
Some agents define a low-ball offer as 25% or more below list. In areas where there’s a shortage of available homes, that figure may drop to 20%.
“What defines low-ball varies from market to market and even submarket to submarket, but certainly from price range to price range,” says Steve McLinden of Bankrate.com.
In other words, it’s likely that an offer of $80,000 on a $100,000 home will be more quickly dismissed than a $1.6 million offer on a $2 million home, he says.
#2 Should You Immediately Reject a Low-Ball Bid?
Although your feelings may be hurt, giving in to the drama monster won’t get your house sold. “When the low-ball offer comes in it can be upsetting, but it doesn’t have to be,” says Bill Gassett of RE/MAX Executive Realty in Hopkinton, Mass. “The fact that someone wants to buy your home is a good thing and you should deal with every offer — unless it’s just completely ridiculous.”
What constitutes a “ridiculous” offer? Anything significantly less than 25% below your list price should probably trigger warning bells. However, it pays to rely on your agent’s expertise to help you decide on the right response.
Countering, rather than ignoring, a low offer is often the smartest strategy. A counter to a low-ball offer “shows buyers you’re willing to work with them,” says Eric Snyder of Douglas Elliman in Boca Raton, Fla. After all, he reasons, “it’s not about where buyers start, it’s where they end up.”
And you’ll never have a chance of getting to that final number if you allow your emotions to cloud your judgment.
#3 Is Your Price Too High?
Sometimes when a seller receives one — or more — low-ball bids, it may be because the asking price for the home is out of step with the market.
Before you set a price, your agent will provide you with comps – for-sale listings of similar properties in the area — along with a pricing recommendation. Your best bet is pricing that reflects the comps. If you decide to “test” a higher price, you might have to tweak your price to invite more reasonable offers, which is just going to delay the sale.
#4 What Do You Really Need?
There may be factors involved in selling your home that are more important to you than price. Perhaps you need to sell quickly because you’re buying another home. Maybe an all-cash deal would make your life a lot easier. There are a number of potential deal sweeteners that a potential buyer could provide that may make a low offer more appealing. These include:
#5 Will You Look Too Desperate?
Don’t worry about how your willingness to entertain a low-ball offer is perceived. What matters most is the result, says McLinden.
“Some sellers get so wrapped up in righteous indignation following an ‘insulting’ offer that they tell their agent to refuse all further communication from the offender,” he says. And while that may soothe your wounded ego, it won’t help sell your house.
4 things home sellers do when pricing their homes.
Home pricing is more of a science than an art, but many homeowners price with their heartstrings instead of cold, hard data.
Smart sellers know that crunching the numbers is always the better route to an accurate home price. Here’s how they do it.
#1 They Avoid Overpricing
Homeowners often think that it’s OK to overprice at first, because — who knows? — maybe you’ll just get what you’re asking for. Although you can certainly lower an inflated price later, you’ll sacrifice a lot in the process.
Just ask Candace Talmadge. She originally listed her Lancaster, Texas, home for $129,000, but “eventually had to accept the market reality” and chop $4,000 off the price.
The home’s location proved challenging: Buyers were either turned off by the area — a lower-income neighborhood south of Dallas — or unable to afford the home.
“Sellers have to keep in mind the location,” says Talmadge. “Who are going to be the likely buyers?”
The most obvious pitfall: A house that remains on the market for months can prevent you from moving into your dream home. Already purchased that next home? You might saddle yourself with two mortgages.
“You lose a lot of time and money if you don’t price it right,” says Norma Newgent, an agent with Area Pro Realty in Tampa, Fla.
And worse: Continually lowering the price could turn off potential buyers who might start wondering just what is wrong with your home.
“Buyers are smart and educated,” says Lisa Hjorten of Marketplace Sotheby’s International Realty in Redmond, Wash. “You’re probably going to lose them.”
#2 They Don't Expect Dollar-for-Dollar Returns
It’s easy for homeowners to stumble into two common traps:
“Many homeowners think, ‘Of course my home is worth a bazillion dollars,’” says Newgent. If they put in a few thousand dollars worth of new flooring, for example, they might overestimate the upgrade’s impact on the home’s value into the tens of thousands.
Talmadge’s Texas home came with a built-in renovation trap: It was already the nicest home in the area, making it harder to sell. Major additions had inflated the square footage — and the price, according to one appraiser — without accounting for the surrounding neighborhood. That created a disconnect for buyers: Wealthier ones who might be interested in the upgraded home disliked the neighborhood, and less affluent buyers couldn’t afford the asking price.
“Don’t buy the nicest home on the block” is common real estate advice for this reason.
That’s not to say that renovations aren’t worth it. You want to enjoy your home while you’re in it, right? Smart renovations make your home more comfortable and functional but should typically reflect the neighborhood. A REALTOR® can help you understand what certain upgrades can recoup when you sell and which appeal to buyers.
Another culprit for many a mispriced home is online tools, like Zillow’s “Zestimate,” that prescribe an estimated market value based on local data.
The estimate is often wildly inaccurate. A Virginia-area real estate company, McEnearney & Associates, has compared actual sold prices with predicted online estimates for several hundred homes in the area for the past few years and concluded the predictions failed half of the time.
#3 They Use Comparable Sales (also Known as "Comps")
The best pricing strategy? Consult a real estate agent, who will use something called comps (also known as “comparable sales”) to determine the appropriate listing price. They’re not just looking at your neighbors; they’re seeking out near-identical homes with similar floor plans, square footage, and amenities that sold in the last few months.
Once they’ve assembled a list of similar homes (and the real prices buyers paid), they can make an accurate estimate of what you can expect to receive for your home. If a three-bedroom bungalow with granite countertops and a walk-out basement down the block sold for $359,000, expecting more from your own three-bedroom bungalow with granite countertops and a walk-out basement is a pipe dream.
After crunching the data, they’ll work with you to determine a fair price that’ll entice buyers. The number might be less than you hope and expect, but listing your home correctly — not idealistically — is a sure way to avoid the aches and pains of a long, drawn-out listing that just won’t sell.
#4 They Adjust the Price When Needed
Once your home is on the market, you’ll start accumulating another set of data that will serve as the ultimate price test: how buyers react.
Agent Hjorten says there’s an easy way to tell if you’ve priced too high: “If we have no showings, it’s way too high. Lots of showings and no offer means you’ve marketed well — but it’s overpriced once people get inside.”
Talmadge didn’t struggle with showings. She says a number of people were interested in the home, but not enough at the price. In the end, Talmadge sold her home for $125,000, with a $5,000 seller’s assist, a discount on the cost of the home applied directly to closing costs.
“It all boils down to location, location, location. In [another] neighborhood, our house might well have sold for well over $130,000,” Talmadge says.
When it comes to finding a buyer, pricing your home according to data — and the right data, at that — is crucial to making the sale.
You probably only think you’ve eliminated pet odors. Here’s how to make sure.
Having pet odors inside your home can turn off potential home buyers and keep your home from selling. Ask your real estate agent for an honest opinion about whether your home has a pet smell.
If your agent holds her nose, here’s how to get rid of the smell:
#1 Air Out Your House
While you’re cleaning, throw open all the windows in your home to allow fresh air to circulate and sweep out unpleasant scents.
Once your house is free of pet odors, do what you can to keep the smells from returning. Crate your dog when you’re out or keep it outdoors. Limit the cat to one floor or room, if possible. Remove or replace pet bedding.
#2 Scrub Thoroughly
Scrub bare floors and walls soiled by pets with vinegar, wood floor cleaner, or an odor-neutralizing product, which you can purchase at a pet supply store for $10 to $25.
Try a 1:9 bleach-to-water solution on surfaces it won’t damage, like cement floors or walls.
Got a stubborn pet odors covering a large area? You may have to spend several hundred dollars to hire a service that specializes in hard-to-clean stains.
#3 Wash Your Drapes and Upholstery
Pet odors seep into fabrics. Launder, steam clean, or dry clean all your fabric window coverings. Steam clean upholstered furniture.
Either buy a steam cleaner designed to remove pet hair for around $200 and do the job yourself, or pay a pro. You’ll spend about $40 for an upholstered chair, $100 for a sofa, and $7 for each dining room chair if a pro does your cleaning.
#4 Clean Your Carpets
Shampoo your carpets and rugs, or have professionals do the job for $25 to $50 per room, depending on their size and the level of filth embedded in them. The cleaner will try to sell you deodorizing treatments. You’ll know if you need to spend the extra money on those after the carpet dries and you have a friend perform a sniff test.
If deodorizing doesn’t remove the pet odor from your home, the carpets and padding will have to go. Once you tear them out, scrub the subfloor with vinegar or an odor-removing product, and install new padding and carpeting. Unless the smell is in the subfloor, in which case that goes next.
#5 Paint, Replace, or Seal Walls
When heavy-duty cleaners haven’t eradicated smells in drywall, plaster, or woodwork, add a fresh coat of paint or stain, or replace the drywall or wood altogether.
On brick and cement, apply a sealant appropriate for the surface for $25 to $100. That may smother and seal in the odor, keeping it from reemerging.
#6 Place Potpourri or Scented Candles in Strategic Locations
Put a bow on your deep clean with potpourri and scented candles. Don’t go overboard and turn off buyers sensitive to perfumes. Simply place a bowl of mild potpourri in your foyer to create a warm first impression, and add other mild scents to the kitchen and bathrooms.
#7 Control Urine Smells
If your dog uses indoor pee pads, put down a new pad each time the dog goes. Throw them away outside in a trash can with a tight lid. Remove even clean pads from view before each showing.
Replace kitty litter daily, rather than scooping used litter clumps, and sweep up around the litter box. Hide the litter box before each showing.
#8 Relocate Pets
If your dog or cat has a best friend it can stay with while you’re selling your home (and you can stand to be separated from your pet), consider sending your pet on a temporary vacation. If pets have to stay, remove them from the house for showings and put away their dishes, towels, and toys.
At first it seems like the easy, smart, money-saving path to take. Simply add your children to the deed of your home, bypass the probate process, and minimize costs to the children. This strategy is very common. The idea is to hold real property jointly with family members who are given what is called “rights of survivorship.”
There are major disadvantages to adding your children directly to your deed, and is not recommended. One such disadvantage is due to tax implications. As an illustration: if you purchased the home for $100,000 then at some point added a name to the deed, then passed away, your child would own the home. If that child later sells the house for $500,000, a capital gain of $400,000 would be taxed. This is not the case if the home is given to the child through proper estate planning.
If you have questions or concerns about how to best hold title to a home, consult with a legally qualified estate planning attorney before making any decisions. Your attorney can guide you through the best options given your unique financial situation.
Virtual Real Estate Assistant
Can a savvy home stager be the secret to selling your home fast—and for top dollar? Many real estate experts say yes.
Home staging entails hiring an experienced professional to bring in furniture, accessories, and art that will make your house look its best and appeal to the appropriate buyer. If you’re still living in the home, a home stager will rearrange your existing furniture to wow buyers.
“The goal of a stager is to attract the largest possible number of would-be buyers and get the home sold at the highest price, all in the shortest period of time,” says Andrew Sandholm, a real estate agent at BOND in New York City.
Of course, staging requires an investment upfront. Most stagers charge $300 to $600 for an initial design consultation, and then $500 to $600 per month, per room. But staged homes sell on average 88% faster and for 20% more than non-staged homes, according to industry data.
Still, if you're going to reap those rewards, you need to find a good home stager. You can start your search by asking your real estate agent for recommendations; then meet with each. The following questions will help you determine the best home stager for the job.
1. What training have you received?
You certainly don’t need formal training to have a great eye for interior design, but being accredited by the Real Estate Staging Association (RESA) means that a practitioner is held to certain standards. To become a RESA member, stagers must pass an ethics exam, have home staging business insurance, and have at least one year of staging experience.
2. How many average days were your staged homes on the market last year?
Finding an experienced stager is important, but finding a successful one is paramount. “A stager can be great at getting contracts, but if their homes don’t sell, they’re going to be a waste of money,” says Sandholm. Try to find a stager whose homes sell within 30 days, since that's usually the point at which listing agents advise clients to make a price reduction.
3. What’s the typical price range of the homes you stage?
You want someone who specializes in staging homes that are similar to yours. For example, “If you’re selling a starter home, you wouldn’t want to hire a stager who specializes in luxury homes,” says Sandholm.
4. How do you stay on top of interior design trends?
The person you hire should be able to explain how he or she keeps up with the furnishings and decor trends that make buyers come running. Do they attend conferences? Do they actively preview new listings? Do they hobnob regularly with other stagers and decorators to learn about the latest and the greatest?
5. Can I see photos from your three most recently staged homes?
You can ask a stager to see their portfolio, but it may not be an accurate representation of their work. “They’re only going to show you their best work,” says Sandholm. But, looking at stagers’ most recently staged homes will give you a better idea of the quality of their work.
6. What are your rates?
Most stagers charge a monthly fee, but some charge a flat fee per room for the duration of the listing, says Chris Dossman, a real estate agent with Century 21 Scheetz in Indianapolis, IN. You'll want to get quotes so that you can budget appropriately. If you’re tight on cash, consider only staging a few rooms, especially the living room, kitchen, and master bedroom—which make the greatest impression on home buyers, according to a recent National Association of Realtors survey.
Know that staging costs can vary depending on where you live. If your home is vacant, and you want the entire house staged, prices can range from as little as $975 a month (Indiana) to $5,500 a month (California), according to RESA. If the home has some furniture, you’re looking at between $700 (Iowa) and $4,800 (California) a month for a two-month staging contract.
7. How much time will it take you to stage my home?
“Usually, it only takes one to two days to stage a home, but good stagers are busy,” says Dossman. Availability may wind up being a determining factor in who you hire. If a stager says it’s going to take a week or longer, find out why. “If the person plans to stage your home with furniture that’s tied up in another listing, that’s a red flag,” says Dossman.
8. Is your business covered by insurance?
There’s a chance your home could get damaged when the stager moves furniture in and out, so make sure the business has insurance to ensure you’re protected. For due diligence, ask to see proof of coverage.
9. What can I tackle myself?
A reliable stager will be honest with you about what projects you can do yourself to save money. For example, if only one room needs a fresh coat of paint, that’s something you can take on. Once hired, a good stager will also offer tips on little things that you can purchase to make your home more inviting, such as candles and fluffy towels for the bathrooms.
10. What style would you recommend for my home?
This is a bit of a trick question, but it’s worth asking. “You want a neutral stager, since you’re trying to cast the widest net possible,” says Sandholm. In other words, you don’t want to hire someone who has an overly narrow design aesthetic.
It’s not enough to just get email leads: there must be follow-up.
When prospects submit an online form for listing information, 40% expect an instant response, and 70% expect a response within 30 minutes. But only 20% of agents respond within an hour, and some do not respond at all, according to the National Association of Realtors® Profile of Homebuyers and Sellers.
That’s throwing money in the trash.
The latest upgrade to ConnectionSM for Co-Brokerage provides the most efficient online lead solution on the market. Now, ConnectionSM for Co-Brokerage offers these enhancements:
More importantly, ConnectionSM for Co-Brokerage helps agents connect to consumers. Increased engagement means higher conversion rates.
More than 43% of consumers found their homes online—up from 11 percent—according to N.A.R.
Internet leads are an irreversible trend the brokerage community must capture—or watch their business falter.
Today’s real estate agent has to work smarter, not harder. The best way to gain the highest return on time and money is to prospect more effectively— to prospect with verified email leads for faster results.
With ConnectionSM for Co-Brokerage, there are no cold calls. Each conversation is impactful and meaningful, because agents are armed with intelligence.
Successful agents know if their pipeline isn’t filled with potential buyers and sellers, they are quickly out of business. Quality leads mean everything.
It’s easy to get inundated with the day-to-day transactional business of selling real estate. There are inspections to schedule, showings to get feedback on, and appraisal issues to contend with. All of that must be juggled with cultivating new business.
Quality online lead referrals must be a spoke in your prospecting wheel.
Every agent needs multiple streams of business—referrals from past clients, family members and friends, as well as strangers actively searching for a new home or considering selling the house they own.
Buyers and sellers start their search online. If you’re not capturing those potential clients when they are without representation and searching for advice, you are not optimizing all of your resources.
At least 20% of home buyers said they found their agent on realtor.com®—compared to 13% and 12% on the two top competitor sites, respectively, according to the February Consumer Brand Tracking Study by Westerberg Consulting.
ConnectionSM for Cobrokerage Works for You
Unclaimed buyers searching active listings on realtor.com® are funneled to agents signed-up for ConnectionSM for Cobrokerage.
Because realtor.com® listings are updated every 15 minutes from more than 800 MLS systems across the country, buyers are searching current inventory. There are sites that sell leads from closed or expired listings; that does you a disservice.
“We know you have choices," says Steve Pacinelli, Vice President of Industry Events for Move, Inc., operator of realtor.com®. "Various companies offer leads. I say evaluate them on quality, time invested and ROI. Once you put that time in, you can’t get it back.”
Kimberly Grogan, a REALTOR® from Arlington, TX, won Rookie of the Year in 2012 for the national Keller Williams franchise. She credits ConnectionSM for Cobrokerage for her success as a new agent.
“There’s always that moment when you’re hesitant to call your sphere,” says Grogan.
She circumvented the fear by signing up for leads.
“When I first started, I was spending about $1,000 per month on leads,” she adds. “I was making about $8,000 a month off of those leads.”
She said she closed two deals a month as a direct result of ConnectionSM for Cobrokerage.
Realtor.com® delivers better leads, according to a June study by PAA research, an independent research firm. The study shows agents are 30% more likely to convert a realtor.com® lead versus the competition.
But it’s not just about getting the lead. Agents must also follow up on those leads quickly, as Grogan did.
“The moment a lead came in, I responded,” she says.
ConnectionSM for Cobrokerage Works Fast
For consumers thirsting for timely information, fast responses are the key to converting them into clients. A Harvard Business Review study noted 70% of buyers expect a response to an online inquiry within 30 minutes. Yet, it takes REALTORS® two hours to respond, according to the National Association of REALTORS®.
That disconnect has been addressed in the latest update to ConnectionSM for Cobrokerage.
Now, the system will automatically send a text or email response you can customize, to the client, within 15 minutes.
“It’s your words,” says Pacinelli. “Remember, the best agent is the available agent.”
ConnectionSM for Cobrokerage Just ... Works
Grogan sold $6.3 million in residential real estate in her first year using ConnectionSM for Cobrokerage. Now three years into the business, she has a team, The Grogan Group, with a buyer’s agent to handle online leads.
With ConnectionSM for Cobrokerage, leads come with an actual phone number and email address. It will even import useful demographic information about the lead such as household income, marital status, place of employment and job title, when available. It also shows the last three houses the prospect looked at online as well as the ones saved as their favorites.
The point is to move the conversation along. The first conversation is no longer an expedition into their wants and price range; it’s a revelation of how knowledgeable you are.
“We make you smarter," Pacinelli adds. "You can introduce them to new homes because you already know what they are looking for."
Fewer new homes were sold in December than the month before—but it's not something that those looking for the home of their dreams should be too worried about.
There was a 9.3% monthly drop in newly constructed home sales, totaling 625,000 in December, according to a joint report by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. December sales were up 14.1% year over year.
The monthly decline is thanks to a blockbuster November. Because of the shortage of homes on the market, buyers who couldn't find their perfect abode in summer, when buying typically peaks, extended their searches and finally closed in the fall. So fewer home shoppers were out during the holidays.
"Sales were unusually high in the previous two months, which means that sales dropped in December because people had [already] bought their homes," says Joseph Kirchner, senior economist.
The most sales were in the South, at 331,000, and they were down 9.8% from November. They were up, however, 15.7% from the previous December.
That region was followed by the West, at 190,000. They were down 9.5% month over month, but up 18.8% year over year. In the Midwest, there were 63,000 sales, down 10% monthly and showing a 3.1% annual drop. There were only 41,000 sales in the Northeast. They were down 2.4% from November, but up 10.8% from the previous year.
Nationally, the median price of a new home was $335,400 in December, according to the report. That's up nearly 0.15% from November and almost 2.6% over the previous year. And it was nearly 35.9% higher than the $246,800 median price tag of an existing home, according to data from the National Association of Realtors®.
“Affordability continues to be a problem," Kirchner says. "In general, new home construction is focused on more expensive homes.”
That's because builders are contending with construction labor shortages, rising land and materials costs, regulatory delays, and difficulties obtaining financing.
Just 4% of the new homes sold in December were $150,000 or under. An additional 13% were between $150,000 and $199,999. The bulk of the sales, about 47%, were of residences costing $200,000 to $399,999. About 11% of homes sold went for $400,000 to $499,999. New homes costing $500,000 and up made up the second-largest chunk of sales, at 25%.
Close friends and relatives should generally be avoided.
Being a real estate agent involves more than just knowing the combination to the lock box. It means having sales and marketing know-how, the diplomatic skills to close a deal and the ability to represent a client’s interests above all else.
So how do you pick the best real estate agent for you? Here are a few things that agents and real estate experts say must be considered:
Real estate is local ― hyper-local, actually. Your agent should be, too.
You want someone who has knowledge of the neighborhood, who understands the housing market there, knows the inventory, is familiar with the schools, local issues, traffic concerns and much, much more, said Tim Freund, an agent with Dilbeck Estates in Thousand Oaks, California.
Your college roommate who sells homes in a town 30 miles away should probably not be your agent ― even if she is the biggest producer in her office. You want someone who knows the specific neighborhood you want to buy in.
So how do you find these agents?
“Pay attention to who sells in your neighborhood,” says Deidre Woollard, a real estate publicist with Lion & Orb, which is headquartered in Los Angeles. That’s right: Drive or walk around and see who has the most signs up. All your neighbors can’t be wrong. And avail yourself of the vast pool of information available online, she told HuffPost.
“Zillow, Homesnap, Realtor.com and others let you see who is most active in your area,” she said. “You don’t always need the top agent but you do need someone who has sold recently.”
Be sure to do a little self-examination as well. You want to be compatible with whichever agent you pick. If you are someone who wants answers ASAP, consider hiring someone who has a support team, Woollard said.
Getting referrals are a big measure of how successful an agent is. “Ask friends who live in your targeted neighborhood for the top local Realtor,” said Maxi Lilley of Red Oak Realty in Oakland, California.
Specifically ask who they would use today. According to the National Association of Realtors, 64 percent of sellers who used an agent found them through a referral by friends or family. And among that group, 70 percent said they would definitely use that agent again.
Your friend or relative may not be the best agent for the job.
Think of it like this: A real estate transaction is likely going to be the biggest money deal you make in your lifetime, and there really is no room for mistakes. It is not the time to toss a bone to your friend or relative who just got a real estate license and lives 20 miles away.
Your newly licensed sister-in-law may be a lovely person, and not giving her your business (and a shot at a hefty commission) is sure to add stress to the Thanksgiving dinner. But in many cases, listing a house for sale or submitting an offer through a relative or close friend isn’t such a hot idea ― especially if that relative or friend doesn’t have much experience or first-hand knowledge of the neighborhood you want to buy or sell in.
Freund has written blogs about the sticky situation of having friends and relatives in the business. He told HuffPost that letting a relative know you are picking another agent can be a tough conversation to have. He suggests that to soften the blow, you spell out your concerns and propose a compromise solution. If inexperience is the concern, ask them if there is a more experienced agent in their office (assuming it’s local) with whom they can co-list your house. And if they aren’t local, ask them to help you find a local agent and make a referral; referring agents are paid a fee when the house sells.
Blood and friendship may run deep, but at the end of the day, you have to hire the most qualified person to represent you because if you don’t, there’s plenty that could go wrong, Freund said.
“Real estate often brings out the worst in people. It’s very stressful,” he said. “It’s a big and expensive life decision. Sometimes you just need the assistance of someone who doesn’t have a personal relationship with you.”
For one thing, if the home-buying process isn’t going well, you need to be able to fire that person, Freund said. And as hard as it may be to tell your friends and relatives you can’t hire them right off the bat, it pales in comparison to when you need to fire them.
The best listing agent is not the one who tells you what you want to hear.
Everyone selling a home hopes it will fetch top dollar, and it’s widely recommended that potential sellers invite at least three agents over before picking one. As human nature would have it, we tend to like the guy who suggests the highest listing price.
That is often a foolish thing to do, Woollard said.
“You want the agent who backs up the price with local data and doesn’t just say what you want to hear,” she said.
An agent who plays along with your pricing fantasy likely isn’t going to produce a sale. More likely, he is pricing it high to curry favor and will come back to you in a few weeks, asking for a price reduction.
There are many strategies to marketing a house for sale. Some agents think pricing low and letting the marketplace drive up the price in a bidding war is the way to go. Others think pricing high and testing the waters will get you more comfortable with the idea that your house isn’t really worth as much as you thought; that’s the agent who tells you what you want to hear.
Go with the agent who actually closes deals.
There are career real estate agents and there are those whom career real estate agents call “hobbyists,” said Freund. Some people get a real estate license just to represent themselves in a transaction. Others do it a few hours a day while their kids are in school. Still others treat real estate as a second job to supplement their “real” occupation.
While some part-time agents do regularly close deals, Alex Newell, a loan officer with GMH Mortgage Services in Nashua, New Hampshire, advises asking potential agents how many transactions they closed in the previous 12 months. “Make sure it’s at least one a month,” Newell said, which is what the National Association of Realtors says is on par with the national average.
Working fewer than 20 hours a week in real estate sales delivers a median gross income of $8,550 a year, according to the 2016 member profile of the National Association of Realtors. In comparison, working 60 hours or more a week produces a median gross income of $93,400, the NAR report shows. The more an agent works, the more transactions they close and the more experience they get.
“This is hard work,” Freund said, reiterating Newell’s advice to ask agents how many deals they’ve closed. “If you are inexperienced, it’s hard to answer that question.”
Virtual Real Estate Transaction Coordinator Company
Want to buy or sell a home in 2018? Here’s what agents say you should do to get ready
Tips for Sellers
1. Declutter and Organize
“After the holidays is a great time to clear out all the things you no longer need,” says Charleston agent Tammy Trenholm. “Decide what you want to keep and then pack and store anything you don’t immediately need at your new place. Be sure to organize your closets and pantries so they are tidy. This will help showcase your storage space.”
2. Paint Inside and Out
“First impressions mean everything. Make sure interior rooms are freshly painted with a neutral color,” said Trenholm. “The exterior should be power-washed and painted if needed; often the front door can use a fresh coat of paint or stain, too.”
3. Make Updates to Increase Your Home’s Value
You should talk to your agent about small changes you can make that might have a big impact on buyers, says Washington D.C. agent Chelsea Traylor. Updates like a kitchen backsplash or new hardware throughout the house can leave a lasting impression.
“The more value a buyer sees in a property, the greater the chances that one or more buyers will make an offer at your list price, if not more,” says Traylor.
4. Talk to and Collaborate With Your Neighbors
“If you have nearby neighbors, buyers will likely be curious about how well your neighbors keep up their homes,” says Traylor. “If you share a hallway or lawn, let your neighbors know of your plans to sell and kindly ask them to tidy up. A speedy and profitable sale for you only means great things for your neighbors when they decide to sell.”
5. Figure Out the Right Time to Sell
Sellers tend to think they need to wait until spring in order to sell quickly, but in many markets that’s not the case, says Phoenix agent Raegan Kraft.
“Homes sell well year round in the Phoenix area; there are more sales in the spring and summer months. But because there are more buyers at that time, there are also more sellers and more competition,” she said. “Ultimately, sellers should sell at the time that makes the most sense for them. The beginning of 2018 is a great time to list, as buyers left over from 2017 have exhausted the limited inventory, and new buyers will begin looking as well.”
6. Price Your Home to Sell
“Look at key market indicators such as recent sales, pricing trends and inventory to guide you to the best listing price,” says Traylor. “Be cautious of overpricing and underpricing. Overpricing could scare off potential buyers who may think a seller isn’t being realistic, while underpricing means that you as a seller could leave money on the table. Agents use a tech-powered comparative market analysis tool to help guide sellers to the right price. Work with your agent to develop the right pricing strategy so that your list price is either at or slightly below market value, thereby creating as much interest as possible from the buying community.”
Tips for Buyers
1. Limit Credit Card Spending and New Purchases
“Commit to refining your purchasing habits. Reducing credit card use, not opening new credit cards, and avoiding large purchases can all help improve your credit score,” says Miami agent Jessica Johnson. “Sometimes a difference of a few points can increase your purchase price approval or get you a better rate. What better time to implement new habits than a new year!”
2. Find Out How the New Tax Bill Affects You
“The 2017 tax bill that has been signed into law changes several financial considerations when buying a home, and the conforming loan limit has also been increased,” says Chicago agent Daniel Close. “There are several changes you will want to acquaint yourself with that buyers in 2017 did not have to consider.”
3. Maximize Savings
“Review your finances and set a monthly budget to start saving up for a down payment, if you haven’t already,” says San Francisco agent Miriam Westberg. “If you already have a savings account, think about other ways you can add to it. Can you cut monthly expenses somewhere else to offset more savings? Keep upcoming tax payments and/or refunds in mind too!”
4. Get Pre-approved
Many sellers won’t even entertain an offer without a pre-approval letter, says Redfin agent Danielle Parent in Cleveland. So it’s best to find a local lender who has a reputation for closing on time and get pre-approved before you submit an offer.
“The market has been so competitive that I have had sellers request a pre-approval from a local bank. In multiple offer situations, if you have a pre-approval for an FHA loan with 3.5 percent down, you should see if you can qualify for a conventional loan with 5 percent down, as this will make your offer more competitive.”
5. Set Up a Saved Search
“Once you have a general idea of your borrowing ability, jump onto app and start setting up saved searches; Will send you a smartphone notification or email when a home that meets your criteria is listed,” said Seattle agent Allie Howard.
“You can set a price cap and filter by location. If you want your child to go to a specific school, you can filter by that school etc. One thing to keep in mind, however, is that in a strong seller’s market like we have in Seattle, many of the homes will end up selling above list price. So it can be a good exercise to set your search for approximately 10 percent below your price cap to allow some room to escalate up in price if a home you like ends up receiving multiple offers.”
6. Start Exploring in Person and Online
It’s good to check out different neighborhoods to get an idea of what you’re looking for, says Westberg. Then, look up the neighborhoods you like on Redfin.com and review sold homes to get a sense of sale prices in that area. Once you’re ready, you can start looking at homes.
“We saw a very busy, hot market starting in early 2017, so buyers should plan to hit the ground running,” says Close. “Do your research before February and go see some homes to get the process started. Well-prepared and experienced buyers will have the best chance at success.”
Parent says you should request a tour as soon as you see a home you like hit the market. “The Redfin team can accommodate same-day tours and if it turns out to be ‘the one’, we will be able to place a bid quickly,” she said.
7. Be Creative With Your Search
“While everyone else is looking for the three-bed, two-bath home in the ‘established’ neighborhoods, I believe you can get a better deal on homes that have room to build an extra bedroom or bathroom,” said agent Gus Sanchez in Portland. “Look for the up-and-coming neighborhoods in your area that are expected to improve and appreciate over the next few years. Renovation financing for ‘fix up’ buyers and creative financing for contingent buyers will also be key in obtaining your goals!”
8. Be Flexible With Sellers
You can make yourself more competitive by accommodating the seller’s needs, says Parent. “I will often ask the listing agent what day the seller prefers to close as this can be a consideration when looking over multiple offers. I have won offers because of my buyer’s willingness to close when the seller needs to. The more accommodating you can make your offer, the more appealing it will be to the seller.”
9. Be Patient
“Keep at it!” says Parent. “It will take time to find your perfect home but don’t get discouraged. If you lose out on a home or two, it wasn’t meant to be. In most cases, my buyers end up with a better home than the ones they lost bids on. Be patient. It will happen!”
Virtual Real Estate Transaction Coordinator
Figuring out when to plunge into the real estate market can be quite intimidating—especially when prices are high, choices are limited, and history urges restraint.
"We’ve seen two or three years of what could be considered unsustainable levels of price appreciation, as well as an inventory shortage that resulted in a record-low number of homes for sale across the country," says Javier Vivas, director of economic research. "When you factor those together, you have a market that has to either explode or see some relief."
Comforting, right? Well, take heart: Experts agree that relief is indeed on the horizon.
New predictions for 2018 forecast more moderate gains in home prices and rising inventory levels, while low unemployment and record levels of consumer confidence mean more buyers are feeling good about their finances.
A lot depends on where you live (and how much you plan to finance), but these factors combined could mean 2018 will be your year to take the buying plunge.
1. Rates are going up
After years of record-low interest rates (hello, 3%!), the Fed is finally making some noticeable increases: The rate for a 30-year fixed mortgage broke the 4% mark last year. And with economic growth continuing to carry momentum, Vivas predicts we'll see at least two to four more rate increases throughout 2018. Rates are anticipated to hit 5% by the end of the year.
"The big story there is that those increases will further constrict affordability," Vivas says. "The more buyers wait, the more expensive it will get to buy—not just because of home prices, but because of inflationary pressure."
In other words, if you want in on the American dream, now might be the time.
2. Prices are climbing, but not crazily fast
Home prices have soared over the past few years, pricing otherwise well-positioned buyers out of high-cost areas and leading some experts to cry "bubble". But in 2018, price increases are expected to moderate.
Vivas forecasts a home price increase of 3.2% year over year, after finishing 2017 with a 5.5% year-over-year increase. Existing-home sale prices are predicted to increase 2.5% year over year.
Of course, it all depends on where you live. While red-hot markets such as San Francisco are predicted to finally lose some steam, sales numbers and home prices are poised to climb in Southern states such as Texas and Florida, where economic momentum continues chugging along and new construction is happening in the right price points.
So what does that mean? Basically, home prices will still increase, but not at the same pace as they have over the past few years.
3. Inventory levels will begin to increase
An inventory shortage has plagued the U.S. housing market since 2015, forcing some buyers to settle (a tiny house with linoleum floors for $1 million, anyone?) and keeping others out of the buying game entirely. But by fall 2018, the tides will begin to turn, with markets such as Boston; Detroit; and Nashville, TN, recovering first.
The majority of inventory growth will happen in the middle- to upper-tier price point, in the ranges of $350,000 and $750,000 and above $750,000, Vivas predicts.
New home construction is also expected to expand. But that will happen slowly, thanks to a constricted labor market, limitations on the amount of lots and land that's available, tight bank financing for building loans, and a run-up in building material prices, says National Association of Home Builders chief economist Robert Dietz.
"It's been a slow climb back from the recession, and now we're confronting all of these limiting factors and supply-side constraints," Dietz says.
It's particularly tough, he says, for builders to break ground at the entry level for first-time buyers, particularity in high-cost coastal markets such as California. That means it will take longer for those inventory levels to recover.
But there's a bright spot: Builder confidence is at its highest level since 1999, according to the NAHB. And that means hope is on the horizon.
"As we head into 2019 and beyond, we expect to see the inventory increases take hold and provide relief for first-timers and drive sales growth," Vivas says.
The wildcard: Taxes and politics
When the Republican tax plan was introduced, the proposed elimination of the mortgage interest deduction was all anyone could talk about: While the new limitations on the deduction will affect only 2.5% of all existing mortgages in the U.S., it will have a disproportionate effect on Western markets, where 20% to 30% of mortgages are above the new threshold, according to Vivas.
Across the board, experts agree that the new tax plan decreases incentives for homeownership and reduces the tax benefits of owning a home—particularly in highly taxed, expensive markets such as California, Illinois, New York, and New Jersey. But on the flip side, that means that if fewer folks are motivated to buy, then there’s less competition for those who want in the game. Plus, some taxpayers—including renters—will see a tax cut. That increase in buyers' disposable income could spur demand from folks who are looking to build equity as a homeowner, rather than flushing away their savings in rent.
"Buying remains the more attractive option in the long term—that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option," Vivas says. "As people get more savings in their pocket, buying becomes the better option."
Virtual Real Estate Transaction Coordinator
It's been nearly a decade since the Great Recession delivered the worst housing crash in modern memory. But these days, the fallout feels squarely in the rearview mirror. Markets have bounced back with fervor, and confidence is skyrocketing: From Charlotte, NC, to Stockton, CA—and everywhere in between—homes are flying off the market at record prices, and buyers are still clamoring to get in the game.
One thing is clear: It's a great time to be a seller.
It's been nearly a decade since the Great Recession delivered the worst housing crash in modern memory. But these days, the fallout feels squarely in the rearview mirror. Markets have bounced back with fervor, and confidence is skyrocketing: From Charlotte, NC, to Stockton, CA--and everywhere in between—homes are flying off the market at record prices, and buyers are still clamoring to get in the game.
One thing is clear: It's a great time to be a seller.
"We’ve seen two or three years of what could be considered unsustainable levels of price appreciation, as well as an inventory shortage that resulted in a record low number of homes for sale across the country," says Javier Vivas, director of economic research
In other words: Today's buyers are exhausted. And in many cases that means they're willing to sacrifice to get a toehold in the market.
Sounds like the stuff of seller's dreams, right? But know this: If you plan to sell in 2018—and you want to unload your home quickly and for maximum money—your window of opportunity may be rapidly narrowing. Here's why you should get moving ASAP.
1. Rates are still historically low, drawing buyers into the market
We may not be enjoying the rock-bottom interest rates of yore, but by historical standards, today's 30-year mortgage rates—hovering just above 4%—are still low. And experts agree mortgage credit will remain relatively cheap for most of the year.
That means the getting's still good for buyers—and, subsequently, for sellers looking to unload their homes.
But rates are on the rise, and it's been widely predicted that they'll reach 5% before year's end. Buyers know that the longer they wait to buy, the more expensive it will be.
Roughly translated, that means you'd be wise to list your home earlier in the year, before more rate hikes kick in. Not only will you capture the market of buyers scurrying to close a deal, but if you're buying after you sell, you'll also benefit from those lower rates.
2. Inventory remains tight—and demand high
Simply put, there are more buyers than available homes—particularly in red-hot markets where land is scarce and it isn't cheap to build.
And the housing shortage will likely get worse before it gets better: Realtor.com data predict inventory will remain tight in the first part of this year, reaching a 4% year-over-year decline by March.
Sellers, that means this is your opportunity to be wooed. Buyers, their choices limited, are going to great lengths (and making some major concessions) to win the house, says Katie Griswold, a Realtor® with Pacific Sotheby's in Southern California.
"We're in a very favorable seller's market," she says. "We're seeing bidding wars—which push up prices—and buyers are submitting offers with very pro-seller terms, like forgoing the repair request or waiving the appraisal contingency."
And cash investors are in the mix, too, accounting for 22% of all home sales transactions in November 2017 (up from 20% in October), according to the National Association of Realtors®.
Those cash buyers are snapping up homes in an already tight market and keeping some first-time buyers at bay (sorry, buyers!). But if you're selling, you stand a better shot at an all-cash offer—one you just might be crazy to refuse.
Of course, there's a catch: Inventory levels are predicted to begin rising in the fourth quarter, marking the first inventory gain since 2015 and setting the stage for more dramatic housing gains to come. So if you're thinking of selling, start preparing now in order to walk away with a sweet paycheck.
3. Home prices are still increasing
From coast to coast, home prices continue to rise—which translates to more money in your pocket when you sell.
But the gains are predicted to be more moderate than in years past. Realtor.com data suggest a 3.2% increase year over year, after finishing 2017 with a 5.5% year-over-year increase.
Bottom line: You still stand to make a pretty profit if you sell this year, but the earlier you can list, the better off you'll be.
4. People have more money in their pocket
Record levels of consumer confidence, low unemployment, and stock market surges are setting the stage for high home buyer turnout in 2018. For the first time since the 1960s, the Fed has projected that the unemployment rate will drop below 4%, and the domestic stock market is enjoying a nearly unprecedented rally.
The housing market is already reflecting this boom: Existing-home sales soared 5.6% in November 2017 (the most recent month for which data are available) and reached their strongest pace in almost 11 years, according to the NAR.
"Incomes are growing and people are finding better and more stable jobs," Vivas says. Buyers "are feeling pretty good about (their) finances."
And thanks to the GOP tax legislation, which nearly doubles the standard deduction, we'll see fewer people itemizing, says National Association of Home Builders Chief Economist Robert Dietz.
"The income effect of that is that most people are getting a tax cut—which should help (buyer) demand," Dietz says.
All of these factors combined mean more buyers could be on the hunt, with more money in their pockets to shell out on a home for sale—possibly yours!
5. Millennials are ready to commit
Millennials, often crippled by student debt, have been especially hampered by rising interest rates and high home prices.
But the aforementioned conditions are ripe in 2018 for these first-time buyers to take the plunge, and experts predict that millennials will make up a vital part of the buyer pool over the coming year: Millennials could account for 43% of home buyers taking out a mortgage in 2018 (a 3% year-over-year increase), according to realtor.com data.
"As people move into their 30s, they're looking to move from renting to homeownership," Dietz says. "And we predict that trend will continue even more this year."
More home buyers flooding the market can only mean good things for sellers—at all price points.
Virtual Real Estate Transaction Coordinator
From housing inventory to price appreciation to generational and regional shifts, these are the top trends that will shape, and reshape, real estate markets in 2018. Buckle up! It's going to be quite a ride.
Game-changer no. 1: Supply finally catching up with demand
After three years of a crushing shortage of homes for sale, the realtor.com economics team is predicting that the shortfall will finally ease up in the second half of 2018.
“The majority of the year should be challenging for most buyers, but we do expect growth in inventory starting in the fall,” says Danielle Hale, chief economist for realtor.com.
That’s a potentially transformative development for many would-be buyers who've been frustrated in their search for a home that meets their needs—and their budget.
“Once we start to see inventory turn around, there is plenty of demand in the market,” Hale says.
Although for-sale housing inventory is expected to stay tight in the first quarter of the year, reaching a 4% year-over-year decline in March, if it increases as predicted by fall, that will be the first net inventory gain since 2015. Markets such as Boston, Detroit, and Nashville—all of which recently made it onto our monthly list of the nation's hottest real estate markets—may see inventory recover first.
Bullish construction is the engine that’s turning this ship around, bringing new homes to the market and creating opportunity for people to trade up into new homes.
“It’s adding inventory instead of just shuffling people around in existing homes,” Hale says.
But those itching to buy a starter home may have to be patient for a while longer.
“We expect the relief to start in the upper tiers, and it will make its way down to the lower tiers,” Hale says. Specifically, most of the initial inventory growth will be in the mid- and upper-tier price ranges, $350,000 and up.
As the market eases, home prices are expected to slow to 3.2% growth year over year nationally. But again, it’s the higher-priced homes that will be appreciating less. And even slower appreciation still means that prices will continue to rise.
“Overall, prices are expected to increase, and we’re expecting to see more of that in lower-priced homes,” Hale says. “It will get a bit worse before it gets better for buyers of starter and midprice homes.”
Game-changer no. 2: Millennials starting to come into their own
The housing market in 2018 will continue to present challenges for millennials—sorry, all of that student loan debt isn’t just going to disappear—but there are some bright spots on the horizon for these millions of Americans.
Millennials seem to be having more success at taking out mortgages on homes at varying prices, and not just starter homes, Hale says.
“They’re at that point where they’re seeing their incomes grow, and that will help them take on bigger mortgages,” she says. That’s because of both the overall strong economy and their own career development.
And as the largest generation in U.S. history reaches that sweet spot in their 20s to 30s when they're settling down and starting families, they're particularly motivated to buy. Millennials could make up 43% of home buyers taking out a mortgage by the end of 2018, up from an estimated 40% in 2017, based on mortgage originations. That 3% uptick could translate into hundreds of thousands of additional new homes. As inventory starts to rebound in late 2018 and in years to come, first-time home buyers will likely make up an even larger share of the market.
They probably shouldn't wait too long to buy, either—mortgage rates are expected to reach 5% by the end of 2018 due to stronger economic growth, inflationary pressure, and monetary policy normalization.
Game-changer no. 3: Southern homes selling like crazy
When it comes to home sales growth, bet on Southern cities to beat the national average in 2018. We’re especially looking at you, Tulsa, OK; Little Rock, AR; Dallas; and Charlotte, NC. Those markets are expected to see 6% growth or more, compared with 2.5% nationally.
The South has been luring corporations and individuals to its balmy cities with its low costs of real estate, and living in general. The resulting strong economic growth and strong household growth, combined with an accommodating attitude toward builders, is setting the stage for an accelerating boom in home ownership, Hale says.
As soon as there are more homes to sell, these places will be selling strong.
Game-changer no. 4: Tax reform (maybe)
The Republican Party’s proposed changes to the tax system could change everything—but with both the House and Senate versions in limbo, the jury is still out on this one.
If a version of tax reform does pass with the current provisions affecting real estate, Hale says she would expect to see fewer home sales and declining home prices. However, it would be the upper price tiers that would likely be affected the most, in areas with expensive homes and high taxes, such as coastal cities, especially in California.
Virtual Real Estate Transaction Coordinator