5 Reasons to Stage Your Home Before Buyers Visit

Sellers seem to have mixed reactions when they hear the word “staging.” Some go all-in, while others are somewhat resistant to the idea. The more reluctant homeowners ask questions like: Why would anyone bother staging a home before selling it? It sounds like a lot of extra work for me. What do I get out of it?

There’s a simple answer to these questions. By staging your home effectively, you have a better chance of selling it quickly and for the highest possible price. This alone should be enough to motivate even the most reluctant seller.

But those aren’t the only reasons to stage your home before inviting buyers for a visit. Here’s a more complete list of benefits…

1. Staging forces you to de-clutter and organize the home.

Clearing away shelves, cabinets and closets is a big part of the home staging process. It also helps with the moving process, because you’ll have to pack things away at some point anyway. So when you stage your home, you will also be giving yourself a good head start on the packing and moving process (in addition to making it seem more spacious).

2. Staging requires you to think like a home buyer, and that’s a good thing.

When you set out to stage your home for the market, you’ll be viewing the property as if you were a buyer and not the actual owner. You’ll be thinking about the home more objectively, with less personal attachment. Adopting this kind of mindset early on will help you in many ways, from marketing to negotiating.

3. Staging increases the likelihood of a quick sale.

When listing your home for sale, you’ll want to do everything in your power to increase the chance of a quick sale. Because let’s face it, having your home on the market isn’t very much fun. It can be invasive and inconvenient. Anyone who has sold a home in the past can attest to this fact. So the less time your house is on the market, the better. Besides, you probably have a timeline for your move, your next residence, etc. Home staging can give you an extra edge in selling the home quickly.

4. Staging helps to justify the asking price.

If you are in a seller’s market, and you price your home correctly, you probably won’t have to go back and forth negotiating over the asking price. You’ll get offers soon enough. But in a market that leans toward the buyer, you need everything in your favor to get top dollar. When done right, staging can help you justify the asking price by positioning the home more favorably in the buyer’s mind. And even if you are in a seller’s market, you still want to earn the best possible price. So stage away!

5. Staging can actually be fun!

At first, home staging might sound like “all work and no play.” De-cluttering, painting, strategic furniture placement — all of these things require some effort on your part. You’ll have to roll up your sleeves and put in some elbow grease. But staging a home can be a creative process as well, and many people find they enjoy it once they’ve begun. Put on your amateur decorator hat, and have some fun.

5 Things Buyers Should Know About Home Inspections

Home buyers tend to have a lot of questions about home inspections. Are they required? How are they different from appraisals? When does it take place? Here are answers to these and other common questions.

1. Home inspections aren’t required, but they’re worth it.

There is no law that says you have to have an inspection when buying a house. It’s an option that is generally left up to the home buyer. But while you’re not required to have a house inspected before purchasing, it’s generally a wise idea to do so. Unless you are a licensed contractor or builder, you probably don’t have the experience necessary to evaluate the structural aspects of the home. Home inspectors specialize in that very thing.

2. It’s different from a home appraisal.

Home appraisals and inspections are similar procedures, but they have two very different goals in mind.

  • A home inspector will alert you to any potential repair issues, or other problems with the structure and installed systems.
  • A home appraiser, on the other hand, is primarily focused on determining the market value of the house.

If you are planning to use a mortgage loan to finance your purchase, there’s a good chance the mortgage lender will require you to have a home appraisal. They do this to determine how much the house is worth. But the inspection is usually optional, and it focuses on the condition of the home. They are two different things.

3. It usually happens soon after the contract is signed.

As far as the timeline goes, a home inspection typically takes place shortly after the buyer and seller have agreed on the purchase price and signed a contract. At that point, the buyer will often hire an inspector to perform a complete home inspection.

The seller does not need to be present for the inspection. In most cases, the seller will actually leave the premises so the inspector can come in and do what he/she needs to do. Home buyers are almost always present during this process. The seller’s listing agent might grant the inspector access to the home. Or they might put a lockbox on the door. But as far as the timing goes, it typically takes place soon after the purchase agreement has been signed.

4. It helps you uncover any serious issues with the house.

The inspector will closely examine almost every aspect of the house. That includes the foundation, the roof, the electrical and plumbing systems, HVAC and more. He will provide you with a detailed report of any repair issues or other problems that he finds. This kind of report is invaluable to someone buying a home, especially when you consider how much money is on the line.

5. It’s a small price to pay for peace of mind.

Home inspections typically range from $250 – $400, depending on the size of the house and other factors. When you consider the amount of money you are going to put into the home – and the amount you might be borrowing from a lender – it’s a relatively small price to pay for peace of mind.

How Do I Know the Market Value of a Home?

Home prices in the U.S. have risen more or less steadily over the last few years. In many cities, home values are now at their highest point in history — even higher than the last housing boom.

But what determines the “market value” of a home? How do sellers determine their list prices, and how can buyers evaluate a listing based on current market conditions. Here’s a crash course in determining market value, for sellers and buyers alike.

The Definition of ‘Market Value’

Let’s start off with a quick definition. In a real estate context, the “market value” is the most likely price a home will sell for within a reasonable amount of time. It is based on local housing market conditions and recent sales activity.

You’ll notice this definition does not mention the original price paid by the homeowner. Unless they bought the home a month ago, the original purchase price is likely irrelevant to the current market. Likewise, the market value of a home has nothing to do with the homeowner’s current mortgage balance. Some sellers list their homes for the amount needed to pay off their mortgage loans. But that doesn’t always line up with the current market value of the property.

How to Determine Market Value

So, with that introduction out of the way, let’s get to the heart of the matter. How do you know the market value of a home you’re thinking about buying? Or the value of your own property, when listing it for sale?

The first thing you’d want to do is track home sales in the area. The longer you do this, the better. It gives you a good base of knowledge with regard to asking prices versus selling prices (hint: it’s the latter of these two that determines market value).

Next, you’ll want to review sales data on homes that are similar to the one you’re considering. This is what real estate agents refer to as comparable sales, or comps. The more alike the two properties are, the more accurate the pricing comparison.

Try to find as many comparable home sales as possible. This will help you support your offer amount, by showing the seller you’re using actual market data from recent sales in the area. Remember, home prices can change over time. So recent comps will give you a better idea of what’s happening now, in the current real estate market.

When you determine the market value of a home, you also need to take any unique features into account. For example, let’s say I’ve found sales data for two colonial-style homes that are 2,000 square feet. The home I’m considering is also a colonial with 2,000 square feet. But it has a completely renovated kitchen, a pool, and sits on a more spacious corner lot with a great view. The other houses lack these qualities. So the house I’m considering will likely sell for more than the two comps, despite the fact that the homes are similar in size and style.

Here’s a good “formula” to keep in mind when considering the market value of a home in a particular area:

Comparable sale prices + unique features = a good asking price

An Easier Way: Work With a Real Estate Agent

This is just a basic overview of market value within the context of real estate sales. There’s more work involved to properly evaluate the value of a particular property, especially when the market is changing constantly. And that’s where real estate agents come into the picture.

Real estate agents undergo extensive training in this area. Much of their education has to do with real estate market cycles, home prices and values, and related topics. So whether you’re buying or selling a home, you could save yourself a lot of time and energy by having an agent on your side!

Income Needed to Qualify for a Mortgage Loan

When you apply for a home loan, the mortgage lender will conduct a thorough review of your income situation. Income is one of the most important factors to a lender, along with your credit score and debt level. This article answers a common, income-related question that home buyers often ask: How much income is needed to qualify for a mortgage loan?

The first thing to know is that mortgage lending standards and requirements can vary from one lender to the next. For example, if I approach a handful of lenders about a certain home loan, and my income level is on the “border” of acceptability, one company might approve me for the loan while others turn me down. That’s because they have their own business models and assessment procedures.

In addition, your household income level is only one piece of the mortgage qualification process. Lenders will review other things as well, including your credit score and your total amount of debt. Remember, your debt takes away a big part of your income — so the two things are usually reviewed together.

How Much Income to Qualify?

These days, most lenders set the bar somewhere around 43% to 45% for the total debt-to-income ratio, or DTI. This means that if your recurring monthly debts use up more than 45% of your monthly income, you might have trouble qualifying for a loan. On the other hand, a borrower who only uses about 35% of her income to cover the monthly debts should be in good shape, as far as lenders are concerned.

These numbers are not set in stone. Some lenders may allow total DTI ratios above 45%, especially when there are certain “compensating factors.”

According to the Consumer Financial Protection Bureau (CFPB):

“Larger lenders may still make a mortgage loan if your debt-to-income ratio is more than 43 percent … But they will have to make a reasonable, good-faith effort, following the CFPB’s rules, to determine that you have the ability to repay the loan.”

So, where do you stand? What’s your total debt-to-income ratio? You can find plenty of calculators online to help you calculate your DTI level. That’s a good place to continue your research.

Applying for a Mortgage Quote

When you’ve done the necessary research, and feel that you’re ready to take on a mortgage loan, the next logical step is to apply for quotes from lenders. The good news is that this process is easier than ever, thanks to the internet. You can apply online and get information sent to you by email.

Granted, you’ll have to fill out a more complete application at some point, along with plenty of supporting documents (tax records, bank statements, etc.). But the initial online application is a good way to get the ball rolling.

Don’t Overstretch Your Income

The last point I want to make is that a mortgage lender cannot tell you what you can afford. They can only tell you what they are willing to lend you, in terms of a loan. You must determine your own affordability limits, before you even start talking to lenders.

Doing some basic budget math up front could help you avoid financial issues down the road. So take a good, hard look at your current debt and income situation — and decide what you’re comfortable paying each month in the form of a mortgage payment.

Mortgage Rates Rise to Their Highest Level in Over Four Years

Are you thinking about buying a home in the near future? Do you need a mortgage loan to finance your purchase? Here’s a trend you should know about. This week, the average rate for a 30-year fixed-rate mortgage loan rose to its highest level since 2013. This is based on the weekly industry survey conducted by Freddie Mac.

Mortgage Rates Hit 4-Year High in April 2018

On April 26, 2018, Freddie Mac published the latest results of its Primary Mortgage Market Survey (PMMS). This survey has been running for decades, and it gives us good insight into various trends. The company describes it as “the foremost reliable, representative source of regional and national mortgage rate trends.”

Here are the results of the survey for the week of April 26, 2018:

•    30-year fixed mortgage loans had an average rate of 4.58%.
•    15-year fixed mortgage loans had an average rate of 4.02%.
•    5/1 adjustable (ARM) loans had an average rate of 3.74%.

Here’s what is truly noteworthy about these latest indicators. The average rate for a 30-year fixed mortgage (the most popular loan product used by home buyers) just hit its highest level in years. To date, the average rate for a 30-year home loan hasn’t been this high since August 2013.

As Freddie Mac officials reported in their April 26 report:

“Mortgage rates increased for the third consecutive week, climbing 11 basis points to 4.58 percent. Rates are now at their highest level since the week of August 22, 2013. Higher Treasury yields, driven by rising commodity prices, more Treasury issuances and the steady stream of solid economic news, are behind the uptick in rates over the past week.”

Buying a Home Now Versus Later

Granted, the interest rates that are actually assigned to home loans can vary from one borrower to the next, and for a number of reasons. Loan type, credit scores, and discount points all play a role. The numbers above are merely averages across all of the surveyed lenders.

It’s the overall trend here that’s most important. And the trend is that average mortgage rates have shot up quite a bit over the last few months.

Home prices, meanwhile, continue to rise in most cities across the country. According to the real estate information company Zillow, the nationwide median home value rose by around 8% over the last year (as of April 2018). And while prices have slowed a down a bit in many areas, they are expected to continue moving north over the coming months — and into 2019.

These are important trends for home buyers, particularly those who need mortgage financing to complete their purchases. Rising rates can chip away at your buying power, as can rising home values. So those who are planning to buy a home in 2018 might want to consider purchasing sooner rather than later.

Disclaimer: This article includes data, trends and forecasts relating to the housing industry nationwide. This information was provided by third-party sources outside of our company. The information above is deemed reliable but not guaranteed.

Homes Expected to Sell Fast in 2018, Like Last Year

A recent report showed that homes across the U.S. sold faster than ever during 2017. And experts believe that 2018 could be an even hotter real estate market, due to a chronically low level of homes for sale. So buyers should be prepared for competition.

A Fast-Moving Real Estate Market in 2018

Here’s the big message for home buyers and house hunters in 2018: Be prepared to move quickly when you find a house you want to buy. Nationwide, homes sold at their fastest pace on record last year. And this year could match, or even outpace, that record.

According to a recent report from the real estate information company Zillow, it took a median of 81 days to sell a home in 2017. That was nine days faster than the previous year. The fastest-selling month for houses was June of 2017, when it took about 73 days for a home to sell (including the actual closing process). Since it can take between four and six weeks to close a sale, this means the typical home was on the market for around 30 days, before going under contract.

Buyers Still Dealing With Limited Inventory

So here we are in spring 2018, and housing markets across the country are still red-hot. This is largely due to the dearth of inventory seen in many areas. Home buyers in 2018 are facing limited inventory this home-shopping season, which has been the case for the last three years.

According to the latest figures, housing market inventory across the country has declined on a year-over-year basis for 37 months in a row. This leaves fewer options for home buyers, while boosting competition and prices. In 2017, nearly a quarter of all homes sold across the U.S. went for more than the list price. This shows that stiff competition could be leading to bidding wars and driving prices higher.

According to Aaron Terrazas, senior economist at Zillow, 2018 will be marked by fast home sales.

“As demand has outpaced supply in the housing market over the past three years, buying a home has become an exercise in speed and agility,” Terrazas said in a recent news release. “This [year] is shaping up to be another competitive home shopping season for buyers, who may have to linger on the market until they find the right home but then sprint across the finish line once they do.”

Tips for Buying in a ‘Fast’ Market

Fortunately, there are some things you can do to make the house-hunting process more efficient, and to make your offer stand out.

  1. Here are five tips for buying in a competitive market:
  2. Review recent home sales in your target area, to get a feel for pricing.
  3. Work with an experienced real estate agent who knows the local market.
  4. Get pre-approved for mortgage financing to help narrow your price range.
  5. Move quickly with a strong offer when the right house comes along.
  6. Keep the big picture in mind; don’t quibble with the seller over “nickels and dimes.”

The fastest-selling real estate markets of 2017 were mostly located in California and the Pacific Northwest, where inventory is most constrained. San Jose, California; San Francisco and Seattle topped the list. But these conditions are affecting many cities and towns across the country, to varying degrees.

Article provided by MetroDepth real estate content.

Mortgage Rates Keep Climbing, According to Industry Survey 

Should I buy a home now, or wait until later in the year? Will I pay more if I postpone my purchase?

These are perennial questions from home buyers nationwide. And a recent upsurge in mortgage rates has some buyers rushing to close on their loans, out of concern that rates could keep rising in the weeks ahead.

On March 8, 2018, Freddie Mac reported the results of its latest survey of the mortgage industry. This long-running survey goes out to more than a hundred lenders across the country, every week. Freddie Mac’s research team then compiles the results into a weekly mortgage rate average that gives us some useful insight into industrywide trends.

Rates Climb to Highest Level Since 2014

According to the latest report, the average rate for a 30-year fixed-rate mortgage loan rose to 4.46%, for the week ending on March 9, 2018. That percentage is significant for two reasons:

1. It marks nine straight weeks of rising loan rates. So it’s a trend — not a fluke.

2. It’s also the highest average for 30-year mortgage rates since January of 2014.

According to Freddie Mac:

“The 10-year Treasury yield has been bouncing around in a narrow 15 basis point range for the last month. While the yield on the 10-year Treasury is currently below the high of 2.95 percent reached two weeks ago, mortgage rates are up for the ninth consecutive week. The U.S. weekly average 30-year fixed mortgage rate rose 3 basis points to 4.46 percent in this week’s survey, its highest level since January 2014.”

It bears repeating: Mortgage rates haven’t been this high since the start of 2014. And it all happened over the last few weeks.

Average rates rose for other commonly used products as well, and that includes the 15-year fixed-rate home loan and the 5/1 adjustable mortgage (ARM).

Still, the Housing Market Marches On

But the recent spike in rates might not last long. Economists from Freddie Mac said they “anticipate rate increases will be gradual [throughout 2018], allowing housing market activity to maintain momentum.” In other words, they don’t expect the recent upward trend to put a damper on home-buying activity in the U.S.

Home Prices Still Rising in Most Cities

Meanwhile, home prices continue to rise in most parts of the country. And this too has added a sense of urgency to the housing market, particularly among home buyers who are eyeing a purchase in the near future.

In many cities across the U.S., real estate markets are experiencing a shortage of homes for sale. This comes at a time when demand for housing is either steady or rising in most markets. This supply-and-demand imbalance is putting upward pressure on home prices, as evidenced by the 6% to 7% increase in U.S. home values over the last year.

What does the future hold? No one can say for certain. But recent trends within the housing and mortgage industry seem to make a strong case for buying a home sooner rather than later. Buyers who postpone their purchases until later in 2018 could encounter higher housing costs.