selling a home Archives - Page 2 of 13 - Real Estate News and Commentary

July 1, 2022July 1, 2022

Local housing market changing

Lately, the housing market is definitely making noise and grabbing everyone’s attention, and not in a good way. However, we won’t actually know how it plays out until it’s over. As the idiom says “hindsight is 20/20.” Nevertheless, if you’re currently in the market to sell or buy a home, pay attention to current local housing market conditions as they are critical to your decision making.

Here we go…

Changing housing market — More home are being listed for sale

The S&P CoreLogic Case-Shiller Home Price Index (spglobal.com) reported in a June 28 press release that average April 2022 home prices increased 20.4 percent from April 2021. Tampa, Miami, and Phoenix led metro areas with 35.8 percent, 33.3 percent and 31.3 percent gains respectively.

We won’t really know if rising interest rates have any effect on home prices for several months. Home pricing and sales data is reported in hindsight (data is reported three to four months behind). The Case-Shiller release points out that mortgage rates just began to increase when these stats were being compiled (April). However, the recent S&P CoreLogic Case-Shiller Home Price Index is already showing home price moderation (even before rising mortgage rates). The Year-to Date S&P CoreLogic Case-Shiller Home Price Index for the US only shows an increase of 7.95 percent, while the 3-month index increased 6.66 percent and 1-month only increased 2.08 percent.

Rising mortgage interest rates is only part of the economic story that is developing. It was likely that home prices were already moderating as a reaction to the year and a half of sharp increases. As I wrote last week, we are in the beginning of the shifting housing cycle. Mixing in other economic factors, such as mortgage rates etc., can either make the housing market more sever or temperate. And as I mentioned, we won’t know for sure until it has happened.

Bottom line

If you’re currently in the market to buy and/or sell a home, focus on the short-term local trends. Speculation of future national home prices and home sales may be interesting, however is meaningless in the here and now. You should hire a seasoned professional to help understand your neighborhood’s trend, as well as being informed about your potential competition and the local housing market inventory.

If you’re buying a home, work with a seasoned real estate agent who can provide valid comps and analysis before you make an offer. Also, consider having a thorough home inspection. In the last year and half, home buyers felt forced to forgo the inspection to make their offer competitive. However, in the changing market, home inspections will return.

If you’re selling a home, be aware that home pricing strategies that were lucrative last year won’t work to your advantage this year. It’s nice to think that your home could sell for a peak price much like other neighborhood homes that sold twelve to twenty-four months ago. However, in a changing market, overpricing your home sale could be counterproductive, driving potential home buyers to competing homes.

By Dan Krell
Copyright © 2022

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

June 24, 2022June 24, 2022

Housing Market Pause, Slowdown, or Collapse?

Is the housing market in a pause, going into a slowdown, or worse – headed for a collapse? Looking back to an article I wrote an article in the summer of 2018 asking the same question, we were at a similar point then and asking the same questions. Just like today, the summer of 2018 saw decreasing home sales after a sellers’ and sharply rising home sale prices. Instead of being in full swing, the housing market of the summer of 2018 was cooling down.

During that time, it was common place to hear about the impending doom and gloom in a housing collapse from the media. In hindsight, what occurred that summer was a normal reaction to an overheated market where stressed home buyers basically took a break. Even with the short pause, the housing remained an active and viable aspect of the US economy.

Housing, like other facets of the economy, go through cycles of boom and bust. Most are familiar with the extreme boom and bust cycles, such as what occurred during 2005-2007. However, many are unfamiliar with the concept of the mini-cycle. The mini cycle is a period of short-term growth and slowdown, modulating to maintain a relative balance. Instead going through a protracted cycle of expansion, hyper-supply, and recession, the housing market could be correcting itself via mini cycles.

Prior to the lockdowns of 2020, the housing market was in the process of correcting itself from sharp home price increases during a hot 2017-2018 market. At that time, home sale inventory was already at historic lows (which began in 2013). As you can understand, the lockdowns further exacerbated the home sale inventory shortage and pushing the housing market and home buyers into an unprecedented situation. The double-digit multiple offers and six-figure escalations pushed home buyers to the edge, exhausting and discouraging many.

After a year and a half of sensational activity and home price gains, it’s not unthinkable that home sales would correct itself. As reported in the June 21^st National Association of Realtors press release (https://www.nar.realtor/newsroom/existing-home-sales-fell-3-4-in-may-median-sales-price-surpasses-400000-for-the-first-time), May 2022 home sales decreased 3.4 percent from April, and decreased 8.6 percent from May 2021. Home sale inventory continues to increase, and was reported to be about 2.6 months of supply, which gives home buyers more opportunities.

Home prices, on the other hand, continue to increase. As reported in the NAR press release, median home prices are 14.8 percent higher than a year ago! The $407,600 median home sale price is the first time the median sale price exceeded $400,000.

Of course, housing is also affected by outside economic factors, which are concerning to everyone. If you are in the market to buy or sell a home, look at the facts and make decisions that make sense for your situation. Finally, work with a seasoned professional to assist you to understand and navigate your local market.

By Dan Krell
Copyright © 2022

February 5, 2021February 5, 2021

Short Sale Home Selling

As you probably know, it’s been a sellers’ market with many listings getting multiple offers. With such a strong housing market, it would seem unthinkable that some home owners would be underwater on their mortgages when selling their homes. But the fact remains that there are many home owners who have to go through the short sale home selling process to sell their homes.

On the face of it, the January 14th press release from ATTOM Data Solutions (attomdata.com) seems to add credence to the housing market’s strength, touting that foreclosure activity is the lowest in sixteen years. The report stated that default notices, auctions, and repossessions decreased 57 percent from the previous year, and decreased 93 percent from 2010’s peak would seem to be terrific news. But the low foreclosure activity stats are actually a manifestation of a government moratoria on foreclosure activities that was imposed due to the pandemic emergency.

Rick Sharga, Executive Vice President of RealtyTrac, an ATTOM Data Solutions company, stated “The government’s moratoria have effectively stopped foreclosure activity on everything but vacant and abandoned properties. There is a backlog of foreclosures building up – loans that were in foreclosure prior to the moratoria; loans that would have defaulted under normal circumstances; and loans whose borrowers are in financial distress due to the pandemic.” Further commenting on the foreclosure backlog, Sharga believes that the foreclosure wave won’t be as bad as what occurred prior and during the Great Recession. But he cautioned that we won’t know how large the foreclosure wave will be until the moratoria expires.

So, in the face of a strong housing market, there are many home owners who need to sell (due to job loss, job relocation, divorce, etc.) but can’t because the proposed sale price is short of the amount needed to cover the costs of selling (which typically includes mortgage, closing costs, realtor & title fees, etc.). This is where a short sale can be considered.

A short sale is basically when your sales net isn’t enough to pay the mortgage(s) on the property. In many cases, short selling home owners don’t have the funds to make up the shortage needed at settlement. Instead, they seek lender approval to allow a lower mortgage payoff in order for the transaction to close. Because short sales have become a common form of transaction in the real estate landscape, the process has become more standardized since the Great Recession. Although the typical time to complete a short sale can take three to six months, short sales can take as little as forty-five days. However, it’s important to note short sale approval can also take more than six months.

Although the core process is the same, lenders have different requirements when collecting information and conducting their due diligence. Having a professional negotiator helps facilitate your short sale. Seasoned short sale listing agents typically work with experienced attorneys to negotiate and handle the process.

If you are thinking of short sale home selling, interview several experienced and local short sale agents. Ask about their track record for successful short sales and how they work on your behalf to get the job done. Also talk to their negotiator, and ask about their track record in successfully negotiating short sales.

When considering a short sale, consider all your other options as well and get professional advice from an attorney and CPA to determine your best solution.

By Dan Krell
Copyright © 2021

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January 22, 2021January 22, 2021

Home Selling with Pets

We love our pets, they’re part of the family! If you’re home selling with pets, you’ll find home buyer pet owners will likely be drawn to your pet accommodations. According to the 2020 Animal House: Pets in the Home Buying and Selling Process report (nar.realtor, April 2020) many home buyers make decisions with their pets in mind. Some highlights include: 43 percent of pet owners would move to find a better home for their pet; paramount to 18 percent of pet owners is outdoor spaces and convenience to a vet; 68 percent of home buyers’ decision to buy or rent was based on the community’s animal policy.

But there are many other buyers who don’t have pets. Non-pet home buyers are often turned off by a “pet home” for various reasons. Some have pet allergies, and can be affected when they enter the home. Others are turned off by pet odors. And some are distracted by free-roaming pets while touring the home. Is there a home selling with pets strategy that can make your home more appealing to all home buyers?

Professionally deep-clean your home.

One of the most common obstacles home buyers encounter when viewing a home is that their allergies are triggered when they enter a home where a dog and/or a cat live. A common cause for this is pet dander and odor. These issues are typically addressed by hiring a professional to clean carpets and furniture. Refusing to do this could devalue the home and stay on the market longer.

Repair pet related damage.

Pets are wonderful, but they sometimes scratch walls, doors, and furniture. Carpets sometimes get ripped and stained. Wood floors can also be scratched and stained. Pets can also dig holes in the yard and garden beds. If your pet has done any of these things to your home, consider making repairs. Failing to repair pet related damage can turn off potential buyers, and devalue your home.

Before a buyer visits a home.

Before buyers visit your home, vacuum rugs and furniture, and sweep up dander in any other areas. Inspect your home to make sure there are no surprise droppings from your pet. Put away your pet’s toys. Professionals recommend placing non-toxic flowers and plants through the home to help provide a fresh environment. Because not everyone is a dog lover, take your dog out for a walk while buyers tour your home.

Many professionals advise pet owning home sellers to hide traces of their pets as much as possible. However, it many feel this is more work than they signed on for. Is there a balance where you don’t have ot remove your pet while selling?

Melissa Dittmann Tracey, in her NAR article Can You Stage the Household Dog? (March 26, 2012; nar.realtor) relates her experience about selling her home by getting her dogs in on the sale. The staging is basically making the pet area more homely. Tracey dressed her dogs for a photo to be placed in their area. The photo said “Welcome to our home.” She related that when she removed her pets, she didn’t get an offer. However, when the pets where in the home, she received two offers. Of course, Tracey’s experience is purely anecdotal, but it’s something to think about as an alternative staging idea.

By Dan Krell
Copyright © 2021

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January 14, 2021December 13, 2022

Clean your home

“Clean your home” is one of the most underrated activities when preparing to sell your home. Although it’s seemingly the easiest thing to do to get a higher price and faster sale, it’s often misunderstood or shrugged off. because there’s so much going on when selling a home. Besides getting the home ready to list, you’re likely planning a move. With so much on your mind, it’s easy to put it off.

A New York Times piece by Tim McKeough (Market Ready; nytimes.com; July 25, 2012) gave advice from a real estate broker and a cleaning professional on properly cleaning before listing a home. The real estate broker commented on cleaning windows and floors; as well as polishing furniture. Paramount is the condition of home entry, kitchen and bathrooms. The entryway is important because it’s the area where the home buyer gets their first impression of the home. The kitchen and bathrooms get much of the home buyers’ attention, and should also be a focus of a deep cleaning. It’s advised that the entryway be decluttered, and the kitchen and bathrooms should be “spotless.”

Attention to detail is important, such as cleaning the oven/range, clean tile grout and a new shower curtain. Because dirty grout can leave a bad impression with home buyers, consider regrouting. “Horizontal surfaces” (such as windowsills, picture frames, baseboards, and shelves) should also be a focus of cleaning. Also, a deep cleaning should focus on areas where cleaning finger prints are found, such as light switches and door knobs. When showing the home, the sink should be clean and dishes put away, as well as putting away toiletries and making the beds.

When your agent recommends to clean your home, they mean to get a deep cleaning. However, home sellers often misconstrue “deep cleaning” as a routine cleaning. Don’t get me wrong, cleaning your home anytime is positive. However, a deep cleaning goes after dirt and grime that has accumulated while you lived in the home. A deep cleaning includes and goes beyond the basic cleaning. A deep cleaning typically includes (but isn’t limited to) shampooing rugs and carpets, cleaning grime from oven and range burners, cleaning bathroom grout, cleaning windows, cleaning baseboards and corners, and ceiling fans. If you have a pet, your deep cleaning should also focus on removing pet hair, dander and lingering odors.

Most home sellers hire a cleaning service for the “deep clean.” The Better Business Bureau (bbb.org) offers these tips when hiring a cleaning service: 1) Research the company. Ask friends, family members, and neighbors for recommendations. Interview at least three companies. Check if the company has complaints. 2) When interviewing the service, ask to also meet with someone who will be doing the cleaning to understand their process. Also ask what cleaning products are used, especially if anyone in the home has sensitivities and allergies. 3) Most important – check credentials. Check if their operating license is in good standing. Ask for proof of their bond and insurance. Request or conduct your own background check. 4) Ask for and contact past client references. 5) When talking about the cost, consider the time that will needed for the cleaning. Make sure that the service includes everything that you need to be cleaned. A home walkthrough is recommended to provide a service estimate. Although it’s typical to be attracted to the least expensive service, it may not be the best value. 6) When you decide on the service, get it in writing and make sure it’s specific as to what the service will do and the time they will be in your home.

By Dan Krell
Copyright © 2021

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