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Home-selling “tips” you should ignore

Home-selling “tips” you should ignore

by | Nov 13, 2020 | Blog, Buyers, Homeowners, Homes, Villas and Condos, Investment Property in Florida, Mortgages, News, Property for Sale in Orlando, Real Estate News, Renters, Sellers

Home-selling “tips” you should ignore

One of the hardest parts of selling your home is all the unknowns: Who will buy your place, and for how much? How long will it take? That uncertainty might make you particularly eager to soak up advice from just about anyone who’s willing to share. Problem is, just because your sister or co-worker swear by certain rules that worked for them, it doesn’t mean they’ll be a magic solution for you, too.

Fact is, a lot of the real estate advice circulating out there is outdated, region-specific, or just plain wrong. As proof, check out this list of tips that many home sellers hear … then learn how these words of wisdom don’t always hold water. Let this serve as a reminder that when selling a home, you should take everything you hear with a huge grain of salt.

 

 

‘You should always list your home in the spring’

Common knowledge says home-buying season starts in the spring and goes through the fall. Not true, says Melisa Aponte, a real estate agent with the Keyes Group in Miami, FL.

“January is a great listing month,” she points out. “People are back from the holidays and ready to start looking.”

Well, at least in places that don’t have a nasty winter, like Miami. Which makes a larger point about real estate advice in general, Aponte says: Every market is different, and what’s great advice in one area can be terrible advice in another.

Besides, when it comes to deciding when to list a home, there are two sides to the coin. Busier times mean more buyers, but also more sellers and more competition. Listing your home when inventory is low could snag the right buyer quickly. Life is unpredictable, and there will always be buyers looking in the “off season,” too.

‘You’ll find your buyer at an open house’

Open houses are exciting, akin to a debutante ball where your home makes its fresh-faced appearance to scads of suitors all at once. And that’s fine, but don’t expect this to be the venue where you find “the one” who makes an offer. While that can occur, open houses are more like parties, filled with swains who aren’t ready to settle down, says Anita Clark, a real estate agent in Warner Robins, GA. Serious home buyers will more often request a private one-on-one showing instead.

Of course, you don’t want to skip the open house entirely. It’s a great way for people to browse, and hey, you never know. Maybe your looky-loo neighbor has a family member who would love to buy your place after all. But it’s time to let go of the idea that an open house is a key step on the road to your ultimate buyer.

‘You can save money by paying less in commission’

Reluctant to fork over the 6% commission that real estate agents typically request to sell your home? Sure, that may seem like a lot of money, but what you might not realize is just how much work an agent does behind the scenes.

“A lot of people don’t understand that an agent’s job is more than just listing the home on the MLS,” says Aponte. Agents’ commissions pay for their time and for marketing materials. Posters, flyers, broker open houses, and yard signs all come from the money you pay your agent.

But beyond that, “it gives your agent the power to offer money to other agents who have qualified buyers,” she explains. That’s because the buyer’s agent and the seller’s agent split the commission.

Though in an ideal world, buyers’ agents would show them every property in their price range, regardless of commission, unfortunately it doesn’t always work that way, says Aponte.

“So if there are a lot of properties on the market and you’re only offering 2% commission, there are agents who won’t show that property,” she says.

Ultimately, you get what you pay for, and a higher commission can often justify itself in the sense that you can reel in tons of buyers, and (hopefully) spark a bidding war that’ll fetch top dollar.

‘Price your home high—and hold out for a buyer who’ll pay it’

Of course you want to get the most you can for your property. Still, pricing it sky-high and hoping a gullible buyer will fall for this aspirational sum? Not a great plan.

“I want to sell your property for a million dollars too, but I would be doing you a disservice to price it that way if the comps are saying $500,000,” says Aponte. Home buyers are highly sensitive to overpaying, and will quickly steer clear. And the longer your house sits on the market, the more buyers will begin to think something’s wrong with it … and lob you a lowball offer.

The best way to avoid this debacle is to price a house right from the start—not too high, not too low—and then seriously consider any offers that roll in, even if they aren’t as great as you’d hoped. To start things off, you can enter your address in a home value estimator to get a ballpark figure of how much your home is worth, then fine-tune that number with an agent’s help.

‘Here’s what the market is going to look like next year…’

Sure, it makes sense that real estate professionals will make educated guesses to help guide buyers’ and sellers’ decision-making. The operative word here is “educated.” Fact is, nobody really knows what the market is going to do; if they did, the housing crash of 2008 would have looked a lot different!

“Beware of ‘future’ predictions that don’t come from a reputable source,” says Dillar Schwartz, a real estate agent in Austin, TX. Sure, your brother-in-law or best friend might be trying to help, but keep in mind that their armchair philosophizing about the future of real estate is just an opinion—nothing more.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

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Real Estate Sales Snapshot-August

Real Estate Sales Snapshot-August

by | Sep 25, 2020 | Blog, Homeowners, Homes, Villas and Condos, Investment Property in Florida, Mortgages, New Construction, News

Real Estate Sales Snapshot-August

August 2020 brought 6.00 million in sales, a median sales price of $310,600, and 3.0 months of inventory. The median sales price is up 11.4% year over year, and inventory is down 1.0 month from August 2020.

 

The Existing-Home Sales data measures sales and prices of existing single-family homes for the nation overall, and gives breakdowns for the West, Midwest, South, and Northeast regions of the country. These figures include condos and co-ops, in addition to single-family homes.

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July Real Estate Sales were Insane!!

July Real Estate Sales were Insane!!

by | Aug 21, 2020 | Blog, Investment Property in Florida, Mortgages, New Construction, News

July Real Estate Sales were Insane!!

WASHINGTON (August 21, 2020) – Existing-home sales continued on a strong, upward trajectory in July, marking two consecutive months of significant sales gains, according to the National Association of Realtors®. Each of the four major regions attained double-digit, month-over-month increases, while the Northeast was the only region to show a year-over-year decline.

Total existing-home sales,1 https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 24.7% from June to a seasonally-adjusted annual rate of 5.86 million in July. The previous record monthly increase in sales was 20.7% in June of this year. Sales as a whole rose year-over-year, up 8.7% from a year ago (5.39 million in July 2019).

“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”

The median existing-home price2 for all housing types in July was $304,100, up 8.5% from July 2019 ($280,400), as prices rose in every region. July’s national price increase marks 101 straight months of year-over-year gains. For the first time ever, national median home prices breached the $300,000 level.

Total housing inventory3 at the end of July totaled 1.50 million units, down from both 2.6% in June and 21.1% from one year ago (1.90 million). Unsold inventory sits at a 3.1-month supply at the current sales pace, down from 3.9 months in June and down from the 4.2-month figure recorded in July 2019.

Yun notes these dire inventory totals have a substantial effect on sales.

“The number of new listings is increasing, but they are quickly taken out of the market from heavy buyer competition,” he said. “More homes need to be built.”

Last week, NAR released its latest data for metro home prices, which found that in 2020’s second quarter, median single-family home prices saw a 96% increase when compared to a year earlier.

Properties typically remained on the market for 22 days in July, seasonally down from 24 days in June and from 29 days in July 2019. Sixty-eight percent of homes sold in July 2020 were on the market for less than a month.

First-time buyers were responsible for 34% of sales in July, down from 35% in June 2020 and up from 32% in July 2019. NAR’s 2019 Profile of Home Buyers and Sellers – released in late 20194 – revealed that the annual share of first-time buyers was 33%.

Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in July, up from both 9% in June 2020 and from 11% in July 2019. All-cash sales accounted for 16% of transactions in July, equal to the percentage in June 2020 and down from 19% in July 2019.

Distressed sales5 – foreclosures and short sales – represented less than 1% of sales in July, down from 3% in June up from 2% in June 2019.

“Homebuyers’ eagerness to secure housing has helped rejuvenate our nation’s economy despite incredibly difficult circumstances,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif. “Admittedly, we have a way to go toward full recovery, but I have faith in our communities, the real estate industry and in NAR’s 1.4 million members, and I know collectively we will continue to mount an impressive recovery.”

Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listing views per property, revealed that the hottest metro areas in July were Topeka, Kan.; Rochester, N.Y.; Burlington, N.C.; Columbus, Ohio; and Reading, Pa.

According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 3.02% in July, down from 3.16% in June. The average commitment rate across all of 2019 was 3.94%.

Single-family and Condo/Co-op Sales

Single-family home sales sat at a seasonally-adjusted annual rate of 5.28 million in July, up 23.9% from 4.26 million in June, and up 9.8% from one year ago. The median existing single-family home price was $307,800 in July, up 8.5% from July 2019.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 580,000 units in July, up 31.8% from June and equal to a year ago. The median existing condo price was $270,100 in July, an increase of 6.4% from a year ago.

“Luxury homes in the suburbs are attracting buyers after having lagged the broader market for the past couple of years,” Yun said. “Single-family homes are continuing to outperform condominium units, suggesting a preference shift for a larger home, including an extra room for a home office.”

Regional Breakdown

For the second consecutive month, sales for July increased in every region and median home prices grew in each of the four major regions from one year ago.

July 2020 existing-home sales in the Northeast rocketed 30.6%, recording an annual rate of 640,000, a 5.9% decrease from a year ago. The median price in the Northeast was $317,800, up 4.0% from July 2019.

Existing-home sales jumped 27.5% in the Midwest to an annual rate of 1,390,000 in July, up 10.3% from a year ago. The median price in the Midwest was $244,500, an 8.0% increase from July 2019.

Existing-home sales in the South shot up 19.4% to an annual rate of 2.59 million in July, up 12.6% from the same time one year ago. The median price in the South was $268,500, a 9.9% increase from a year ago.

Existing-home sales in the West ascended 30.5% to an annual rate of 1,240,000 in July, a 7.8% increase from a year ago. The median price in the West was $453,800, up 11.3% from July 2019.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

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Strongest Sales in a Decade

by | Jun 25, 2020 | Blog, Buyers, Homeowners, Local Events, Mortgages, News, Real Estate News, Renters, Sellers

Strongest Sales in a Decade

The new-home market is booming as states wind down sheltering-in-place restrictions, easing the search for a new home. Sales of newly built single-family homes last month jumped nearly 13% over 2019—that is the strongest May since 2007, according to newly released data from the U.S. Census Bureau.

However, while sales are rebounding, housing starts—the construction of new homes—posted a lackluster month, showing that builders are struggling to keep up with the quick resurgence in buyer demand. The strong rebound has caught builders off guard. Single-family housing starts in May were about 18% lower annually and building permits, a sign of future construction, was down about 10%.

Builders have a lot of catching up to do. The largest sales jump in May for the new-home sector was from homes that had not yet been started.

“Sales of homes not yet under construction are rising given capacity limitations in the building industry,” says Robert Dietz, chief economist at the National Association of Home Builders. “Due to labor and land constraints, homebuilders were already producing too few single-family homes given potential demand. As housing demand has picked up in recent weeks, builders have shifted sales to homes not yet under construction—a 20% year-over-year gain for such sales.

Homebuilders are ramping up hiring to help meet demand.

“There has been a production deficit in housing,” Stuart Miller, chairman and former CEO of Lennar, told CNBC. “We are shelter-supply-constrained, and that supply constraint means that all forms of shelter are going to thrive in the current market and probably be sustainable for the next year or two.”

The median sales price in May for a new home was $317,900.

Regionally, new home sales in May saw the largest annual gains in the Midwest (up 9.5%) and Northeast (up 6.8%), followed by more muted upticks in the West (up 1.4%) and South (up 0.3%).

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

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What is an Earnest Money Deposit?

What is an Earnest Money Deposit?

by | Jan 16, 2020 | Blog, Buyers, Mortgages, News, Real Estate Components, Real Estate News, Renters

What is an Earnest Money Deposit?

What is an Earnest Money Deposit? Real estate agents are expected to understand and explain earnest money deposits to their clients, including why they’re necessary and how they affect the home buying process. A deposit like this shows the seller that a buyer is serious—in other words, “earnest” in their intention to purchase the house.

Knowing how earnest money works is essential knowledge for both the buyer’s and the seller’s agents. The point of the earnest deposit is to stop would-be buyers from making offers on multiple houses they’re interested in, which would result in all of those properties temporarily taken off the market until the buyer commits to one of them. For this reason, it’s unusual for a seller to entertain an offer on their house without it being backed up by a deposit that a buyer could lose.

If the sale proceeds successfully, the earnest money can be used for the down payment or the closing costs of the sale. It can be looked at by buyers as putting aside some funds to cover part of these later costs.

Since it is a deposit, it does mean that there are many situations that allow buyers to reclaim these funds when things don’t go according to plan. A well-trained buyer’s agent realizes that earnest money needs to be protected from loss.

How Much Should a Buyer Offer in Earnest Money?

Typically, the deposit required by a buyer will be between 1% and 5% of the purchase price. There are a few factors that can affect this, however, including the state of the real estate market and what the seller requests as a deposit.

A higher deposit can be required if there is a lot of demand in the local market, but on the other hand, a low deposit might be accepted if there isn’t much demand. Also, the customs around earnest money vary from state to state, which makes it essential for real estate agents to educate their clients.

Some real estate agents might recommend that their clients put down a higher deposit if they think it will lead to an offer being accepted. Higher deposits could also lead to the seller being more flexible on other terms in the offer.

Agents should explain to their clients that although it is a deposit, a buyer will not see their money again for perhaps a few months. Smart real estate agents will check with their clients to make sure holding the earnest money will not put undue pressure on the buyer’s finances.

What Happens to the Earnest Money Deposit?

New real estate agents should understand that when an offer has been accepted, a purchase agreement for the house will be executed. This agreement should state who is going to be holding the deposit. This will normally be the title company or seller’s real estate agency, who will keep it in their escrow account. The earnest money will be accounted for at the time of the closing.

If you’ve been a real estate agent for a while, you know that you shouldn’t hand over earnest money to the seller of the house. If things don’t go as planned, it could be very difficult to recover that money.

How Do Earnest Money and a Down Payment Differ?

Quite often, buyers get confused about the difference between earnest money and a down payment. It is important for real estate agents to explain the two. While they both contribute to the purchase price of the house, the earnest money is security for the seller, while a down payment is money a buyer has to put towards the purchase price. The balance of a buyer’s funds for purchasing a house will come from the procurement of a mortgage.

Is It Possible to Get an Earnest Money Deposit Back?

There are many situations that will allow purchasers to get their earnest money deposits back. When things go wrong, and the deal falls through, buyers should be able to get their money back most of the time.

Buyer’s agents and their clients should review the terms given in the purchase agreement contract to find out exactly how refunds are dealt with. It’s imperative for buyer’s agents to educate their clients in these matters. There should be contingencies in the contract to allow for situations where the buyer can walk away with their deposit returned to them. Common contingencies would include finding problems with the house when it is inspected or the buyer failing to secure financing for the purchase price.

If problems are found during the home inspection, the buyer can choose to cancel the offer, renegotiate the price, or have the seller rectify the problem before they proceed. If the buyer is not able to proceed with the sale because they cannot get the financing, they also would be able to get their earnest money returned.

Real estate agents should educate and inform their clients what contingencies are in place in the contract, so that they are fully aware of what protections they have during the sales process.

Can You Lose Your Earnest Money Deposit?

A buyer’s agent should always inform their clients they absolutely can lose their earnest money deposit—otherwise, what would be the point of having one? Real estate agents should be reminding their buyer clients they can forfeit their earnest money when they don’t pay attention to the terms of the contract.

Here are the most common ways buyers can lose their deposit:

They don’t respond in writing for extensions they have in the contract, such as a home inspection or financing.
They get cold feet and just walk away from the sale.
They find another property they like better and don’t proceed.
They decided to put up a nonrefundable deposit to make their offer more attractive to the seller.
Some buyers have no idea their earnest money deposit is at risk if they violate the terms of the contract. A significant role of any buyer’s agent is to explain the earnest money process. An agent should also do their utmost to protect the buyer from losing their finds. This includes reminders on any essential deadlines that must be met.

Real estate agents must always remember the fiduciary interests of their clients. In fact, it’s a significant reason why dual agency is looked at unfavorably, as you don’t have a fiduciary in this arrangement.

Final Thoughts on Earnest Money Deposits

Real estate agents should explain to their clients that there are situations where earnest money could be more significant. For example, a builder will usually require a buyer to put down a larger earnest money deposit. It is not uncommon for a builder to want to have 10% of the purchase price. At times, they also require the ability to use the funds and not have them held in an escrow account.

Giving funds to a builder can be somewhat risky if they are not financially sound. Buyer’s agents should always advise their clients to consult with an attorney before agreeing to release earnest money to a construction company.

New agents and seasoned agents alike should always look at earnest money as the glue in a successful real estate transaction.

Source:

https://magazine.realtor/sales-and-marketing/feature/article/2020/01/earnest-money-a-primer-for-new-agents?hs_social=twitter&hs_profile=realtormag&hs_sid=8d3c7a24-9d73-424f-9f06-cbd0a7fe8ed6

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

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How to Finance a Home Creatively

by | Dec 16, 2019 | Blog, Mortgages, Real Estate News

How to Finance a Home Creatively

Financing a home is one of the most critical factors for buyers looking to purchase real estate. Here are some suggestions on How to Finance a Home Creatively that you may not have been aware of. 

 

Investigate local, state, and national down payment assistance programs.

These programs give qualified applicants loans or grants to cover all or part of your required down payment. National programs include the Nehemiah program, Getdownpayment.com, and the American Dream Down Payment Fund from the Department of Housing and Urban Development.

Explore seller financing.

In some cases, sellers may be willing to finance all or part of the purchase price of the home and let you repay them gradually, just as you would do with a mortgage. A similar option is the assumable mortgage, where a home buyer takes over the seller’s existing loan (with bank approval). This can be especially helpful when interest rates are on the rise.

Ask your family for help.

Perhaps a family member will loan you money for the down payment or act as a cosigner for the mortgage. Lenders often like to have a cosigner if you have minimal credit history.

Consider a shared-appreciation or shared-equity arrangement.

Under this agreement, your family, friends, or even a third party may buy a portion of the home and share in any appreciation when the home is sold. The owner-occupant usually pays the mortgage, property taxes, and maintenance costs, but all the investors’ names are usually on the mortgage.

Lease with the option to buy.

Renting the home for a year or more will give you the chance to save more toward your down payment. And in many cases, owners will apply some of the rental amount toward the purchase price.

Consider a short-term second mortgage.

If you can qualify for a short-term second mortgage, this would give you money to make a larger down payment. This may be possible if you’re in good financial standing, with a strong income and little debt. Such arrangements may also help you avoid jumbo loan restrictions and/or minimize the amount of private mortgage insurance you have to pay.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

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