Move Up Buyers – It’s Time to Move Up!

move up buyers

Here’s the dilemma, at the time you bought your current home, it was the right place for your family’s needs. It was the perfect home that fit your finances, located in a great school district, and cozy enough to be relatively low-maintenance. That was three kids and several promotions ago. With the passing of time, you’re wondering where all the space went?

Longing for More Room or An Upgraded Home?

Like many growing families, that cozy feeling of your current home has gradually drifted into wishing there were more room. You realize it’s time for more space and an upgrade. You figured it’s worth tackling the challenges involved in moving even if it’s just across town. This much we know – it makes no difference if you’re moving across town or across the country, moving is never easy. Plus you have to work through the logistics of selling the home you live in and purchasing a new one, preferably  at the same time. That’s when it gets real complicated and you know you need an expert real estate professional who has experience managing two transactions at the same time.

Here are some tips we recommend to clients moving into a more expensive home.

Preparing for Moving Up

Before you think about buying a more expensive home (that doesn’t necessarily mean bigger), begin by prioritizing your home buying needs. Things have changed since you last bought your current home, so your needs have changed dramatically.

First and foremost, select an experienced real estate professional to help protect your interest and guide you through the real estate transaction.  Interview several before making your choice.  This is one of the most important decisions you will make during the process.

Get loan pre-approval or at least pre-qualified for a mortgage.

Make a budget for the total costs of your new home including the funds for the down payment and funds for your transition.

Ask your Realtor about the available housing inventory and the type of market your area is experiencing.

Get your current home ready for the market.

Price it right!

What if you find a new home for yourself before selling your current home?  Again ask your experienced Realtor the way to broach this in the offer.

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How To Make Your Contract Stand Out

couple jumping

Last year, pent-up housing demand and limited inventory sucked many home buyers into a bidding war frenzy that drove up home values and gave us the best-performing real estate market in several years.  Statistics show that home inventory is starting to shrink.  The days of multiple offers have returned and new construction is back.  All of these things indicate that home buyers need a strategy when they find that “dream house” of how to successfully get the seller to take their offer.

Here are three simple strategies that can help you stand out above the rest.

Hire an Expert Negotiator

When you’re caught up in a bidding war, it’s easy to let your emotions take over. That’s why it’s best to let a third-party professional, your Realtor, handle the negotiations for you. An experienced agent brings a level head to the table and can help you strike a balance between deal-breaking demands and budget-busting bids.

Look for a real estate agent who has a full time business, experience, is an expert in the area you are buying in and understands the importance of communication. If you need to move quickly on a home you’re interested in, you don’t want to be left out in the cold because you couldn’t get in touch with your agent.

Show Them the Money

When it comes to buying a home, Sellers love a buyer who doesn’t waste time closing the deal. According to the National Association of Realtors, 13% of recent home sales fell through because the buyer couldn’t get financing. An all-cash offer makes the decision easy for the seller because it eliminates any mortgage-related guesswork.

If you need to get a mortgage, complete the pre-approval process with your lender before you start house-hunting. Unlike a pre-qualification—a loose estimate based on speculation—a pre-approval gives you a specific loan amount the bank has approved for you. This keeps you from shopping out of your price range and allows you to make an instant offer when you find that perfect home.

Get Personal

If you really want to gain an edge, put yourself in the Seller’s shoes. What’s motivating them to sell? Try to find out more about their life in that home and find ways to connect.  In the situation of relocation time may be of the essence for them to move, offer them a short term to close.  Are the Seller’s downsizing and leaving their family home?  If so this is emotional for them as well.  Assure them you want this to be your family home not a flip.

One strategy that’s gained popularity among recent home buyers is the personal letter. Next time you’re facing a multi-bid situation, why not share your heartfelt vision for the home? Sometimes, a Seller just wants to know the place they raised their family will be filled with just as much love by the next owner. It’s worth a shot to make your dream home a reality!

 

Source – Dave Ramsey blog

Real Estate Myths or Facts?

myths vs facts

Now that the real estate market is significantly bounding, buyers and sellers are back looking for deals. They come into the market with assumptions about how the real estate market works.

Their assumptions may come from TV reality shows or watching their parents’ house-hunting experiences. Maybe they’ve learned about real estate from a co-worker’s recent home buying or selling experience. The trouble is, their assumptions are sometimes based on outdated or generalized “real estate myths.”

Myth: Spring is the best time to sell a home

Real estate seasons used to be based on the summer and the end of the school year. Families were the typical buyers or sellers, and they wanted to move during the summer so their kids could start anew in their new school. That’s how spring became the prime selling season because buyers typically take 3 – 4 months to purchase from the time they start looking.  There are still more homes for sale in the spring,  but, that is not necessarily the best time to sell a home anymore.

 Reality: The best time to sell is Winter

Today, more than half of buyers aren’t married, so their decisions aren’t based upon school schedules. So spring isn’t as relevant as it used to be. Instead, the best time to sell a home is in November, December, January and February.

The real estate market is your typical supply and demand economic theory. Most sellers assume buyers aren’t seriously looking during the winter. There are fewer homes on the market in the winter so buyers have to hunt harder to find the home of their dreams.  It is a sellers paradise season to sell their home.

Myth: There is only one dream house for me

Once you’ve finally found that perfect house, the inclination is to think you won’t find another that you like nearly as much.  Be very careful here and don’t let your heart overrule your financial capabilities.  Just because you can get a loan for a certain amount doesn’t necessary mean you should.

Reality: There is always another house

If something doesn’t feel right or the price is too high, don’t be afraid to wait for the next one. As long as you have realistic goals, no house will ever be truly one of a kind.  Every house has different strength and weaknesses.  If you cannot afford it or it does not met your “must have” attributes, keep looking.

 Myth: I need perfect credit

We highly recommend going to a lender first to get pre-approved so you will know how much house you can afford and that you have the ability to purchase. With the recent housing bubble came a wave of lending restrictions and loan tightening. Most people assume that they have to have stellar credit to get a loan these days, but that’s not always the case.

Reality: Shop around for a reputable lender

Lenders are often willing to work with buyers who have less-than-perfect credit. If you’re concerned about your credit, you may want schedule an appointment with a lender and find out the status of your credit and if it is not up to par they can assist you with ways to improve your credit score.  This is a step that is commonly skipped before you buyer enter the real estate house hunting process. It is true that people with higher credit scores are offered the lowest interest rates on mortgages.

Myth: Start with a low offer

There is no tried and true strategy for making an offer on a home.  The best thing you can do is hire a full time seasoned Realtor to assist you with this process.   The seller could have overpriced or underpriced the home on purpose.  Most buyers assume a full price offer is just nonsense. But times have changed.

 Reality: Low offers may get you nowhere fast

A buyer in a seller’s market (when there are fewer houses on the market or in a particular price point than buyers) today are wasting their time making low offers right from the start. It’s likely a home that’s priced right and shows well can receive multiple offers, sometimes even over the asking price. It is also possible you will offend the seller and they will refuse to sell you the house.  Again, choose a Realtor that is familiar with the market you are looking to buy in that is knowledgeable.  They will assist you in putting together a fair offer that will get  you into your dream house vs writing offer after offer after offer.

 Myth: The cash offer is the best

There’s an assumption that a seller, considering two different offers, will always go with the cash offer because there’s less risk. As a result, many buyers who hear they’re competing with a cash offer assume they won’t get the home. They may not even make a formal offer. At the same time, many cash buyers assume that because they’re paying cash, they can make an offer below the asking price, and it will likely be accepted.

Reality: Savvy sellers might not care

Consider a seller with a home priced at $250,000. The seller receives two offers: One is a cash offer of $225,000. The other is an offer for the full asking price, with 25 percent down, a bank pre-approval letter and swift contingency periods.

A good buyer’s agent when learning their client is competing with a cash offer will arm the listing agent with financial data supporting their client’s finances, such as a credit report and verification of income or assets. The agent might even arrange a call between the seller and buyer lender.  Cash is not always king.  The bottom line is.

Source – Zillow, Credit.com

Things to Consider When Making an Offer

inspection pic

So you have found the home of your dreams and now it is time to make an offer.  How do you know what a “good offer” is on the property?  Many people think of how much money to offer for the property.  However another important thing to consider is the terms of the offer. In some cases, terms can represent thousands of dollars in additional value for buyers — or additional costs.

Terms are extremely important and should be carefully discussed with your Realtor.

How Much?

You sometimes hear that the amount of your offer should be a certain percent below the seller’s asking price or an amount less than you’re really willing to pay. In practice, the offer depends on the basic laws of supply and demand: If many buyers are competing for homes, then sellers will likely get full-price offers and sometimes more. If demand is weak, then offers below the asking price may be in order.

How Do You Make an Offer?

In a typical situation, you will complete a contract with your Realtor and he or she will present to the owner and the owner’s representative. The owner, in turn, may accept the offer, reject it or make a counter-offer.

Because counter-offers are common (any change in an offer can be considered a counter-offer), it’s important for buyers to remain in close contact with their Realtor during the negotiation process so that any proposed changes can be quickly reviewed.

What about Inspections?

A number of inspections are common in residential realty transactions. They include checks for termites, appraisals to determine value for lenders, title reviews and home inspections.

Home inspections are particularly important. During these examinations, an inspector comes to the property to determine if there are material physical defects and whether expensive repairs and replacements are likely.  Some home structure issues must be fixed before the contract can go forward.  Other cosmetic issues are up for negotiation.  These conditions change from state to state.  Inspections usually take two or three hours, and buyers should attend. This is an opportunity to examine the property in detail, ask questions and learn far more about the property than is possible with an informal walk-through.

Summary

It is always to your benefit to choose your Realtor carefully.  Interview several before choosing the Realtor that fits your needs.  Purchasing a home in many cases is the biggest financial decision you will make.   Your Realtor can assist you through this whole process and bring you to the closing table to get the keys to your new home.

Source – Realtor.com

Study Shows States Where Americans Moved in 2013

Migration Map 2010

It is safe to say that the place to be is in the sunny South yet again, South Carolina was ranked #2 place people relocated to and North Carolina #3 . Oregon had the highest percentage of people moving in, while New Jersey once again saw more people moving away.

The 37th Annual Migration Study, which tracks the states the company’s customers move to and from during the course of the year, found that 61 percent of Oregon moves were inbound. South Carolina and North Carolina followed in second and third place, with 60 percent and 58 percent of moves, respectively, being inbound.

On the flip side, the Garden State led the list of outbound migration states for the third time in the last four years, with 64 percent of moves going bye-bye. Illinois continued to share in the exodus experience, finishing in the number two spot for the second straight year with 61 percent of moves headed elsewhere.

“Business incentives, industrial growth and relatively lower costs of living are attracting jobs and people to the Southeastern and Western states such as South Dakota, Colorado and Texas,” said Michael Stoll, economist, professor and chair of the Department of Public Policy at the University of California, Los Angeles. “We’re also seeing continued migration to the Pacific Northwest as young professionals and retirees are drawn to amenities including public transit, green space and the local arts and entertainment scene.”

Michigan finally had good news from the study. After 16 consecutive years at or near the top of the outbound list, the Great Lakes State appeared in the “balanced” category for 2013, with roughly the same number of people moving in as moving out.

“After 16 years with a migration deficit, Michigan has joined the balanced category due to improvement in its economy over the past two years,” Stoll said. “Despite having an unemployment rate higher than the national average, home sales and home prices are up, showing an increased demand for housing, the state’s per capita income is up, and automakers in Detroit have rebounded and are hiring.”

Here are the rankings from the United Van Lines study:
Moving In
1. Oregon
2. South Carolina
3. North Carolina
4. District of Columbia
5. South Dakota
6. Nevada
7. Texas
8. Colorado

Moving Out
1. New Jersey
2. Illinois
3. New York
4. West Virginia
5. Connecticut
6. Utah
7. Kentucky
8. Massachusetts
9. New Mexico

Balanced
Several states gained approximately the same number of residents as they lost. Those states include Nebraska, Tennessee, Iowa, Alabama, Louisiana, Indiana and Michigan.

Resources – Realtor.com, 37th Annual Migration Study, United Van Lines Study

Winter Preparedness Is Important

 

winter house

 

With temperatures today colder than the freezer if you haven’t taken time to make precautions for the winter I would say now is definitely the time. Getting your home ready for winter storm season entails more than insulating pipes and re-caulking doors and windows. Create an emergency kit. Keep a list of supplies in case you and your family aren’t able to leave the house during a winter storm or other disaster.

In the case family members are separated from one another during a winter storm (a real possibility during the day when adults are at work and children are in school), have a plan for getting back together. Teach children how and when to call 9-1-1, the police or fire department.

Monitor severe weather. Be familiar with winter storm warning messages. Know how the public is warned (siren, radio, TV) and the warning terms for each kind of disaster in your community. Some examples:

Winter storm watch—Be alert, a storm is likely.

Winter storm warning—Take action, the storm is in or entering the area.

Winter weather advisory—Winter weather conditions are expected to cause significant inconveniences and may be hazardous, especially to motorists.

Frost/freeze warning—Below freezing temperatures are expected and may cause damage to plants, crops, or fruit trees.

Flash flood or flood watch—Be alert to signs of flash flooding and be ready to evacuate on a moment’s notice.

Flash flood warning—A flash flood is imminent–act quickly to save yourself because you may have only seconds.

Flood warning—Flooding has been reported or is imminent–take necessary precautions at once.

Make sure you have sufficient heat. Because regular fuel sources can be cut off during a severe storm, have safe heating equipment available. If you have a fireplace, make sure you have a supply of dry seasoned wood enough to last several days. Small wood, propane, kerosene heaters or even a camp stove can also be used for warmth, just make sure it is well-ventilated.

Keep pipes from freezing. Know how to shut off water valves. To protect pipes, wrap them in insulation or layers or old newspaper; cover the newspaper with plastic to keep out moisture. Let faucets drip a little to avoid freezing.

Be prepared to help others. Check on elderly or disabled friends, relatives, neighbors or fellow employees.  A friendly call to check on those in your community means the world to those around you.

By preparing ahead of time, you can make good decisions and take action during a emergency.

What Will Home Buying Bring in 2014?

housing chart image

The year 2014 will be a type of test market for the mortgage industry, 2014 is forecasted to bring a rise in rates and new lending rules that are likely to reshape the process of acquiring a mortgage.

Many home experts recommend buying a home early in 2014 rather than later.

One thing for sure the housing market is on the rebound in numerous areas of the country.  It is forecasted that homes will continue to appreciate in value. Buyers time to take advantage purchasing a home for many reasons one, before the market turns into a sellers market.

Internet sources name the key reasons for buying real estate earlier than later in the year 2014.

Among them the fact that rates are already up one to 2% over last year, and it’s still possible to grab a 30-year, FRM at 4.5%, according to lenders cited by HomeFinder.

New lending rules, including the qualified mortgage definition, will shift debt-to-income ratio requirements higher, potentially making it more difficult to buy a property, the report claims.

This holiday season in our area sales have been steady.  With inventory starting to shrink this will be good for sellers by bringing back more negotiation power to them.