FIVE SMART HOMEBUYER STRATEGIES

The National Association of REALTORS® has announced that there’s a housing supply shortage. Homes are selling quickly and home prices are starting to inch up again. It’s becoming a seller’s market in many areas.

Any time the market changes, it’s time to change strategies. During a buyer’s market, buyers have the upper hand and can make more demands to sellers over their homes’ price and condition. During a sellers’ market, buyers concede the upper hand to sellers and are more willing to accept higher prices and terms.

When homes are in short supply, buyers don’t have the luxury of taking their time, teasing sellers with lowball offers, demanding that every little thing be fixed, and shopping for homes with multiple real estate agents. Do these five steps instead.

Make a good first impression. Not only do you need to impress sellers, you need to impress real estate agents. Hire one agent and let him or her profile your needs to the marketplace. Be specific about your must-haves so you don’t waste your agent’s and your time viewing homes that lack what you want most. When you find the home you want, send the seller a letter along with your offer outlining why you love the home.

Get preapproved by a lender. Not only will you know how much home you can buy, you’ll be ready to make an offer quickly. Your real estate agent can include the fact that you’re financially preapproved by your lender in with the offer, which will carry weight with the seller.

Shop within your price range. In a seller’s market, it’s wise to shop for homes within or slightly below your price range. This will give you more room to make full-price offers or above in case the home you want is in a bidding war with other buyers. You’ll be able to pay your own closing costs. Trying to buy a home out of your reach during a seller’s market will only cause you and your agent frustration.

Be flexible. No home is perfect. To get more home for your money, you might shop for an older home that needs renovation. Try to look past ugly wallpaper and stained carpet and visualize the home with more attractive finishes. You may be able to get more living space in an established neighborhood than with a newer home that is priced higher for similar square footage.

Be ready. Be ready to see a new listing at a moment’s notice. Be ready to make an offer when you believe this is the right home for your household. Once a seller has accepted your offer, proceed as if you’re in a normal market. Set a reasonable closing date that accommodates the seller as much as possible. Confirm the offer with your lender. Schedule the inspections you’ll need and don’t nitpick the seller over small things.

Whether you’re in a buyer’s market or a seller’s market, you should feel good about the home you choose, the deal you make, and the courteous way you treated all parties to the transaction.

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Mortgage Rates Should Rise in 2015

Mortgage Rates Should Rise in 2015

Even though long-term mortgage interest rates declined for the majority of the last year, most analysts are predicting that higher rates will make a comeback in 2015. Most of those forecasts are based on the fact that the Federal Reserve has ended its bond-buying program and is likely to slowly start raising its target interest rates this year in order to combat inflation. Here’s a look at what the experts are saying:

BankRate.com

Analysts at the mortgage rate tracking website believe that Fed actions will cause rates to rise in 2015. “The Fed is starting to lay the groundwork for the eventuality of interest rate hikes,” says Greg McBride, chief financial analyst for Bankrate.com. “It’s only prudent for consumers to prepare themselves as well.”

Bankrate predicts that the 30-year fixed mortgage rate will rise but not above 5 percent this year.

Freddie Mac

Economists at the mortgage giant see rates as being at the bottom right now. “We expect to see interest rates climb throughout 2015,” commented Freddie Mac vice president and chief economist Frank Nothaft. He foresees long-term rates following the 10-year Treasury upward, making their way to a maximum of 4.6 percent for this year.

Mortgage Bankers Association

The MBA predicts that mortgage rates will be heavily tied to the Federal Reserve’s movements. “QE3 is officially over.  In the FOMC statement following the October meeting, the Fed clearly recognized the stronger economy and job market, seeing past the recent financial market volatility to recognize the improved growth prospects in the US for the year ahead,” wrote MBA economist Joel Kan in the Forecast Summary.  The statement still suggests that there will be a ‘considerable time’ before the Fed increases short-term rates, but we expect this is consistent with a first rate increase in June or July of 2015.”The MBA calls for a rate increase to 5 percent by the end of this year.

National Association of REALTORS

NAR chief economist Lawrence Yun believes the Fed will start raising short-term rates sometime in the first half of this year, which will push mortgage rates up. He forecasts that long-term rates will rise to just below 5 percent by the end of 2015 and to 6 percent by 2016.

“The impact of rising interest rates on affordability will be minimal as long as job creation keeps pace,” he said in a statement. “Furthermore, if the credit box slowly begins to open up, that will also mitigate the impact of rising rates.”

It is important to remember that last year these same economists and analysts predicted mortgage interest rates would rise to 5 percent by the end of 2014. The reality is that long-term mortgage rates actually trended downward for most of the year, ending at an average of 3.87 percent, excluding fees on a 30-year fixed rate conventional mortgage according to Freddie Mac. Even with all the data at their fingertips, there is no way to know for sure what will happen to rates in 2015.

HOW TO STAGE A HOUSE TO SELL QUICKLY

Staging your home is indispensable in the process of preparing your home for sale. It is the art of playing up your home’s best features. It is the genius of giving prospective buyers the ability to see your home as their home. Staging is what happens after repairs are made. By staging your home, you minimize the amount of time your house spends on the market and maximize the sale price. Trying to sell your home without properly staging it is like trying to land a job by showing up to the interview in your pajamas with bed head and morning breath.

 

Here are 10 staging tips on how to stage a house to help put your home’s best foot forward when preparing home for sale.

 

Curb Appeal 
When house shopping, people often decide whether or not they are interested by first driving by. Give the outside of your home a makeover to convince potential buyers to take a closer look. Paint the front door and any shutters and trim to match. Make sure your lawn is mowed and hedges are trimmed. Weed and mulch any existing flower beds. If you have a porch, sweep away stray leaves and cobwebs. Strategically place patio chairs to create an inviting vignette. Nothing says, “Welcome!” like potted flowers near the front door.

De-Clutter
You are going to be moving out of your home soon. Start getting rid of clutter before your home sells to help it sell even faster. Pack up your seasonal items and any collections you may have. Clean out the junk drawer and organize the cupboards. This will go a long way toward helping prospective buyers visualize themselves living in your home.

Clean
This is the most important part of staging your home. A clean home looks and feels more spacious. And a clean home tells your buyer that your home has been well maintained. Dirty homes are a major turn-off to potential buyers. Although you can do it yourself, having a professional come in and clean your home has the advantage of getting a fresh perspective on what needs to be done for your house to be truly clean. The longer you’ve lived in your house, the more you may have come to overlook stains and cluttered areas. Additionally, dirty carpets can give your home an odor that sends both buyers and realtors looking elsewhere, especially if you have pets. Have your carpets professionally cleaned to rid your home of funky odors and carpet stains.

Paint
Paint is a quick and relatively inexpensive way to brighten up your home and give it a clean, crisp feel. Choose neutral colors that appeal to the widest possible audience. Light colors give your home an open and airy feel. A fresh coat of paint also improves the appearance of your house and makes your home seem more spacious and inviting.

Kitchen
The kitchen is one of the main selling points of any house. A well-staged kitchen can clinch the sale. Stage the kitchen in such a way that the area is clean and bright. Remove all counter top appliances. Organize pantries and cupboards. Make every effort to show your potential buyers everything that your kitchen can be. If you have an eat-in kitchen, use a small table to show them just how inviting the space truly is. Cabinets that are outdated may need more than cleaning. For a quick update, replace old knobs and drawer pulls with more modern ones.

Bathroom
After the kitchen, the bathroom is the biggest selling point of your house. Bathrooms can be made to look and feel more spacious by installing a pedestal sink. Make sure that all glass and chrome is clean, bright, and shiny. Pay special attention to shower doors. Give your bathroom a luxurious feel by placing thick, fluffy towels that are color coordinated with floor mats and drapes. Green plants also create an open and spacious ambiance.

Living Room
Arrange furniture in such a way that potential buyers notice nothing but how great a space it is for spending quality time with their families and entertaining guests. You’ll want them to imagine that it is their living room, not remind them that it is yours. Do this by removing your portraits and religious items. Arrange furniture in groupings that promote conversation. If you have a fireplace, remove the television and make the fireplace the center of attention.

Bedrooms
Bedrooms should communicate comfort. Remove any excess furniture and use the smallest size bed possible to make the room appear as spacious as possible. Dress your bed with linens in neutral colors adding a conservative splash of color with throw pillows. Fresh cut flowers and greenery add an inviting touch of comfort.

Closets
Yes, they will look inside your closets! Ample storage space is high on the list of amenities that people look for in a home. Don’t make people imagine how great the closets are. Show them by leaving the closets half full. You’ll be surprised at how much stuff you’ve been meaning to give to charity but never got around to. Now is a good time. You’ll get a tax deduction for your charitable contribution and your house will sell quicker than you anticipated. Next, organize and put on display what remains to showcase that closet’s amazing space.

Back yard
Stage the back yard like an outdoor living room. Make it inviting and comfortable. Make sure that everything is just as neat and tidy as the front yard but with a relaxed feel. If you have a porch, add a patio table and chairs. If there is no porch, add an umbrella to the patio table. If your potential buyers feel like sitting on the back porch and staying a while, you might just have sold your house. Congratulations!

 

 

 

 

Are you home shopping without a REALTOR?

If you’re like some buyers, you may be shopping for a home to buy without using a real estate agent of your own. You don’t trust agents, and you want to shop on your own time at your own pace without some agent pressuring you to buy something you don’t want. They’re just salespeople, right?

Wrong. A salesperson owes you service, but not loyalty, while a real estate agent owes loyalty to whomever they’re contracted to serve. In most cases that’s the seller.

If you call the listing agent on a property, go to see the property, and decide to buy it, don’t expect the agent to represent your best interests.

Here’s how it really works. The listing agent represents the seller in a transaction, and always has the seller’s best interest in mind. Anything you say to the listing agent is not protected and can be used against you in a negotiation.

For example, you might inadvertently tell the agent that you’re relocating and have to find a home to buy in the next week. So when you make an offer, the seller’s agent may tell the seller that you’re motivated to buy quickly, making the seller less likely to lower the price.

If you didn’t know that, you may also not know that you can hire your own agent. who will have your best interest at heart and at no additional cost to you. Like the seller’s agent, the buyer’s agent is paid out of the transaction proceeds.

Your agent can serve you as a buyer’s agent, but in order to do that, you need to sign a representation contract to that effect. Otherwise, she may represent other buyers and sellers, which doesn’t guarantee that you’ll get preferential treatment. This could be crucial in a busy seller’s market when home supplies are short.

In some states, a real estate broker can represent the seller, then appoint one of her agents as a buyer’s representative with no expectation of fiduciary service. Not all agents are comfortable doing that, so they may avoid the issue by only representing buyers and not taking listings, but that’s not practical for most professionals.

Another alternative form of representation is facilitation, where the broker agrees to help move the transaction along for both parties without owing fiduciary responsibilities to either the seller or the buyer.

 

When you hire an agent, he or she will provide a disclosure that explains the types of representation available in your state, and which types of representation the agent offers.

What you should get from any agent is help finding the right house, first and foremost. Next you want help determining the right price and terms to offer based on current market conditions. You want guidance and support throughout negotiations, the inspection and appraisal, the lending process, and escrow and closing.