Top 10 real estate tips for the fall

High demand and low interest rates continue to drive housing sales this month.
While home prices for starter-to-midrange homes are pushing upward toward pre-recession peaks, especially in secondary markets, they’re stabilizing in higher-priced areas.

Prognosticators see the robust markets of Seattle, Portland and Denver as this year’s top performers, with 10 percent to 11 percent price growth. If mortgage rates rise modestly as expected in 2017, sales elsewhere may normalize with smaller price appreciation, especially as housing starts rise to fill the inventory breach, but recently, rates have been on the decline.
Here are 10 tips to adapt to the latest market conditions.

1. First-time homebuyers: Get that starter home now

And we mean now! More than half of the home sales (52 percent) in 2017 are expected to be to first-time buyers, and mostly to the millennial set (19 to 34 years old), many moving from urban rentals, research by the National Association of Realtors shows. That means competition — and bidding wars — could become fierce through the rest of the year for such “starters” in desirable areas.
While there’ll be less inventory this winter, there’ll also be less competition per unit and a higher percent of motivated sellers. Before you shop for homes, 

2. Sellers: Hire the right agent

Oftentimes, the best investment a seller can make is time spent researching agents. A bad hire can cost sellers tens of thousands of dollars and months of worried waiting.
First, look at an agent’s online marketing material and listings. Is there good photography or video? Does it “pop”? Are descriptions accurate and complimentary without seeming exaggerated?
Then, look at profiles of the agents on LinkedIn, Facebook and other social media; and be sure to read web reviews. What kind of vibe is an agent sending out?

Narrow your search to three agents and interview each, ideally in person. Ask for sales-activity reports, existing listings and time-on-the-market averages, plus the requisite local comps.
A seasoned listing agent also will know the best times for open houses and how to initiate a price war if the market allows. Never consent to a listing contract of longer than 90 days in a seller’s market. You can always extend later.

3. Buyers: There’s more loan money out there

Those who couldn’t get mortgages during the downturn because they didn’t have 20 percent to put down can find affordable financing again.
Borrowers with FICO scores as low as 690 are now getting conforming mortgage loans (those under $417,000).
One telling sign: About two-thirds of mortgage refinancers were getting approved in the fourth quarter of 2016 compared to just one-half of those at the end of 2014.
However, borrowers without a 20 percent down payment will still pay private mortgage insurance, or PMI, until they hit the 20 percent to 25 percent equity mark.
The best rates go to those with 800-plus credit scores, though 750-plussers are getting virtually the same terms.
Unfortunately, those seductive interest-only loans are also on the menu again. Avoid them. They’re affordable at first since you’re not paying principal, but then years later, well … see the Great Recession of 2008.

4. Sellers: It may be a seller’s market but …

Home sellers can do several simple things to enhance appearance, increase buyer interest and boost their home’s profile:

• Renew selectively: Instead of wholesale renovations from which sellers recoup maybe 60 percent on investment, do light makeovers everywhere, with an eye on the kitchen and bathrooms. They’re far more cost-effective.
• Clean, clean and clean some more: It’s hard for buyers to picture themselves living in a dirty house. Scrub floors, baths, kitchens, windows and walls, and be sure to clean, vacuum and deodorize rugs. This is simple but effective. 
• Depersonalize, declutter: Show the space, not the contents. Box up family photos, kids’ school papers and excess art, and store bulky and worn furniture. Organize your closets to make them look half empty.
• Illuminate: Think bright and cheery. Open drapes and add brighter light bulbs in dark areas. Repaint where needed but use neutral colors.
  

5. Renters: It might be time to buy

In many cases, rents are rising faster than home values, yet mortgage rates remain low. That, and the fact that renters now account for 37 percent of households (the highest level in 50 years), seem to indicate an imminent coming-out party for renters-turned-buyers, especially if they plan to stay put for five to 10 years after buying.

6. If you’re a buyer, don’t believe the house is yours

Don’t bank on a done deal or other verbal promises from listing agents until you sign a contract.
In heated markets across the country, sales agents are giving buyers false hope and using their offers to bid up the price for preferred buyers who they think can pay more and close faster. Have other homes in mind.
Strategies such as preapproval (versus prequalification), proof of funding, closing flexibility and the always-risky practice of waiving inspection and repair contingencies can help sway buyers.
For added clout, tell sellers you’re willing to “escalate,” or exceed all offers to a certain limit. Some agents even advise buyers to write so-called “love letters” to sellers, telling them how much the home will mean to their families.

7. Sellers: The grass is always greener …

… in yards with a “sold” sign. Major presale upgrades typically aren’t needed, but a little greening outdoors is a must.
Surveys show that strong curb appeal can increase prices by 10 percent or more. Greener grass, whether derived from new sod or fertilizer and water, is a must.
New shrubs, plantings and flowers also project a welcoming feel. Sellers typically enjoy a 100 percent return on the money they put into curb appeal.
Another form of green, sustainable landscaping has become a value-add for buyers. Native plants, native grasses and perennials that require less water and attention fill that bill.
Do some local research or ask your local home-and-garden pro for simple “greening” tips.

8. Sellers and buyers: Know the state of your market

A balanced housing market is defined as one with an average inventory of 6.5 months, according to Texas A&M University Real Estate Center research. When inventory remains below equilibrium, sellers enjoy more control over prices and terms, and the area becomes a seller’s market.
When inventory lingers well above stasis, you have a buyer’s market where sellers must get more serious about price reductions, credits and throw-ins. Of course, these averages don’t necessarily reflect demand in certain desirable and undesirable submarkets.
Go to Realtor.org for such market home sales data by state or to a local agent, business journal and daily newspaper you can read online. In 2016, the U.S. housing inventory average was under five months.

9. Sellers: House going on sale in the spring?

Do some prep work now. First, grab your camera or smartphone and do an exterior autumn photo shoot, with the leaves changing colors.
It’s a much better way to showcase your home than to wait until late winter when everything is still dead and brown and mucky. Also take some landscape shots after the first snow, ideally on a sunny day, to show how cozy your place looks in winter.
Take a preliminary inventory, too. Look through your attic, closets, basement and garage to see what stored items you’ll want to keep, give away or sell in the spring. This will help you determine whether you’ll need a storage unit when your home is on the market and if there are any problem areas that need repairs or attention.
It’s also a good time to start discussing financing options with a local lender and interview prospective listing agents who also might provide additional preparation tips.

10. Buyers: Relocating near a waterfront?

You’d best consider weather and insurance realities. Major hurricanes and floods of the past dozen years have pushed the National Flood Insurance Program into a $23 billion hole, forcing flood-insurance rates to spiral.
FEMA flood-map changes are aggressively expanding flood zones, especially along the East Coast and Gulf Coast, forcing hundreds of thousands of homeowners to buy flood insurance for the first time and others to pay thousands more annually.
Parts of Florida saw 20 percent increases in 2016 and will likely see similar hikes through the end of 2017. Insurers also are imposing coverage caps so there’s no guarantee you’ll be made whole post-catastrophe.
Some home sellers and their agents are conveniently not disclosing these realities, so buyers will have to ask pointed questions and do their own research. 

Tips for Home Buying and Selling

Follow these steps to save the most on one of the biggest transactions you'll ever make

Buying or selling a home for the first time is like learning to play chess. There are terms to master, skills to learn, strategies to grasp, competitors to outmaneuver. These home buying and selling tips can help you capitalize on strengths and play down weaknesses:

Buyers: Edge Out the Competition

Establish a price range. Use Redfin’s home-affordability calculator. This home buying tool considers not only your income and down payment but also total recurring monthly payments such as car payments, student loans, and credit card minimum payments.

Clean up your credit. If your credit reports are accurate, the home buying process is likely to go more smoothly. Read “Are Mortgages Now Harder or Easier to Get?" for more for information.

Get preapproved. Usually, that means a mortgage lender has checked your credit reports and determined how much it could lend you. It’s one step better than prequalification, in which a lender just gives you an idea of what you can afford. Lenders use different terminology, though, so make sure you ask for clarification. For instance, EverBank, based in Jacksonville, Fla., uses the term “preapproval” for what other banks define as prequalification. And what most banks call a “pre­approval,” EverBank terms a “credit only approval.”

Sweeten the deal. Cash offers or large down payments get attention in a competitive bidding situation when you're buying a home. But other considerations, such as flexibility with the closing date and shorter inspection periods, can sway sellers.

Shop for mortgages. Online sites such as Bankrate and HSH make it easy to find a variety of lenders. Investigate several. Find local credit unions at culookup.com. New standardized loan estimates mandated by the Consumer Financial Protection Bureau should make it easy to compare terms.  

Sellers: Put Your Best Square Footage Forward

Get the best deal from your broker. The traditional 5 to 6 percent sales commission isn’t carved in stone. Our 2015 survey of real estate brokers found that 63 percent negotiated their fees at least half the time. Almost half of agents charged 4 percent or less. An agent may be more amenable if you’ve sent him or her referrals, or have done some legwork, says Lee Williams, an agent with Level Group, a New York City residential brokerage firm. That might involve obtaining property surveys, original floor plans, or tax records.

Fix the big things. Prior to listing your home, get inspections for roof damage, termites, and other hidden concerns, says Aaron Drucker, a Redfin Realtor based in Miami. Make sure certificates of occupancy are in order.

Declutter, depersonalize. Remove family mementos from the main living areas. Clear surfaces of daily detritus. Clean out closets, too. “Overstuffed closets, no matter how large, give the impression of a lack of storage,” says Christine Lutz, director of residential brokerage for Kinzie Brokerage, based in Chicago. Taking those simple, cost-free steps could add 3 percent to a home’s value, according to Bree Al-Rashid, a managing broker for Redfin in Seattle. For an edge, hire a home stager. Prices vary, but a 2-hour consultation can cost about $300.

Post lots of images. A survey last year by Zillow found that listings with fewer than nine photos were 20 percent less likely to sell within 60 days than those with 22 to 27 photos. More than that, the study found, didn’t help much.
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How to buy and sell Property at the same time

The dreaded property chain can cause chaos, tripping you up at the last minute. Here we take a look at the steps you can take to make things run more smoothy if you have to buy and sell at the same time.

In an ideal world, you’d sell your home the minute you put it on the market and then have all the time you need to find your next dream home while your buyers wait patiently until you’re ready to move. Unfortunately, we don’t live in an ideal world and in most cases you’ll find yourself in a chain. While not uncommon, property chains can cause significant headaches, so if you’re planning to buy and sell at the same time, make sure you’re prepared.

Get your property valued

Before you start making plans to buy your new home, you need to get a clear idea of how much your current home is worth. Start online with our free instant valuation tool. Then get at least three local estate agents to give you their valuation. This is a chance for them to apply their local knowledge and  take account of any unique features or home improvements which add value to the property, so you can get the most accurate figure. Some agents are renowned for giving an overly high valuation in order to gain your business. By getting three agents round you are hopefully reducing the risk of setting off with an asking price you have to reduce a few weeks down the line.

Work out your finances

Start by getting your head round your finances; how much can you afford to spend on your next house? How much equity do you have in your current home?

Then there is the chain to consider. When you exchange contracts on the property you want to buy, you’ll need to pay a deposit. You should exchange on the same day as your buyer exchanges, and therefore you’re able to use the deposit they pay you to pay your deposit on the property you’re buying. Still with us?

However, if your new house is more expensive than your current house it’s likely that the deposit required will be more than the deposit you receive. If this is the case, it may be that your solicitor can agree with your seller’s solicitor that the smaller deposit will be enough. If this isn’t possible, you’ll need to find the extra cash. It’s worth checking to see if you’re financially able to do this before you start the process.

You should also bear in mind additional costs such as stamp duty. You should be able to absorb this into your mortgage borrowing – but it’s a substantial cost to be aware of it.

Speak to a mortgage broker

If this is bamboozling you already, then a mortgage broker can help guide you to finding the right solution. That may involve re-mortgaging or porting your mortgage. The latter involves transferring your existing mortgage to your new property. Either way, a whole of market mortgage broker will be able to help.

Be prepared to wait

Buying a property should generally take around 6-12 weeks from having an offer accepted to completion – although things can and often do go wrong leading to delays. When you’re buying as part of a chain however, things can take much longer. According to Zoopla, the average sale time in a chain is six months so be realistic with your expectations for when you’ll complete.

Maximise your negotiating power

While you’re perfectly entitled to put in an offer on a property when your own house is still up for sale, your offer will be taken more seriously if your own property is under offer. Indeed, depending on the market your offer may not be accepted at all. You’ll also be in a better position to negotiate a good price if your property is under offer.

Find a property and do your sums

Once you’ve found a property you like, work out the sums. Consider what work, if any, you’d need to do on the property and the associated costs and consult your broker again. Perhaps the survey has flagged up issues or perhaps you want to rip out the avocado bathroom suit (remember those?) as soon as you move in. Once you’ve done the math, if you’re happy it works out, make an offer.

Get a good conveyancing solicitor

This critical part of the buying and selling process can be long and drawn out. Your conveyancing solicitor will need to conduct numerous property searches before any contracts can be exchanged. Unfortunately, this process can take even longer if you have a solicitor who is less than proactive.

Shop around for your conveyancing solicitor, get quotes from and speak to a few and read reviews before instructing them. The process should move smoothly but if you aren’t happy with the level of communication or speed of the process, get in touch and consider asking for a new case handler if things don’t improve.

Make sure you read, sign and return any paperwork sent to you quickly and either hand deliver or use a special delivery service to ensure they’re received on time. Increasingly, conveyancers scan documents and share them on an online system you can login into. Make the most of this but don’t hesitate to speak to your solicitor on areas where you want clarification.

Take charge of communication

Your conveyancing solicitor may not agree with this tip, but there’s a lot to be said about managing communication of all parties in the chain. Ask the owner of the property you’re buying and the person buying your home for their contact details and maintain contact via email. They can also add people to the email if their are more links in the chain. This is a good way of ensuring everyone knows what’s happening and unplugging any blockages.

Don’t feel pressured by your estate agent

Remember, your estate agent is primarily concerned with getting paid. That means they’ll be keen to keep your buyer sweet, even though you’re the one paying them. While estate agents can help to move things along, they can also pile on the pressure for you to break the chain or rush into a sale when you aren’t completely comfortable. It is a personal judgement call as to whether you want to involve them more in the process and let them chase up loose ends with other parties in the chain, or instruct them to keep their involvement to a minimum.

Set a completion date

Once contracts have been exchanged a completion date can be set. This is the date on which the funds will be transferred and the keys will be given to the new buyer. It’s important that all parties co-ordinate a completion date that works for everyone. This will take some correspondence – via your solicitor and those of the other members of the chain – and you’ll need to be prepared to compromise.

In summary when buying and selling as a part of a chain you should:

1.     Get your property valued: invite 3 local agents round to get the right value

2.     Sort out your finances: How much mortgage do you need to bridge the gap to buy your next home?

3.     Speak to a mortgage broker to work through the finances and any deposit needed

4.     Take charge of communication

5.     Don’t feel pressured to do anything you’re not comfortable with