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4 Tips to Setting an Accurate Asking Price

Thursday, July 3, 2014
by Tom Stachler,ABR,CDPE - Group One Realty Team

There are many emotions and tough decisions that are present when selling a Home. Perhaps one of the toughest decisions involves how to price your home. While a seller never wants to price a home too low, they also don't want to price themselves out of the market. Use these four tips to setting an accurate asking price when selling your home:

 

  • Living in an age where information is available in an instant can be both a wonderful and an awful thing. Use the information available by gathering enough data to make a smart decision. Educating yourself about the selling process and local market trends, helps you elect the best asking price.
  • While understanding the current market is a great way to begin, it often takes seeing comparable homes to understand what asking price is appropriate for your home. Ask that your Realtor set up showings for other homes in the area so that you can see what those homes have to offer in relation to their price.
  • A bidding war is a seller's dream. Help to ensure multiple offers on your home by staging it effectively. Showing buyers the potential that your home has will increase the amount of offers that you receive on your home. Also be sure to sell the key features of your home. Mentioning the little touches that make life easier goes a long way in securing offers.
  • Selling a home is an emotional time. When pricing a home, it is important to take your emotions out of the process. Buyers are not interested in paying you for the sentimental value of the home. They only want to secure the perfect home at a fair price.

These four tips to setting an accurate asking price will hopefully provide you with the information that you need to make a decision about the selling price of your home. It is important to remember that your real estate agent is someone that possesses the information to assist you through every step of the process, including determining an accurate asking price. Rely on their experience during this difficult decision.

 

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Winning a Bidding War

Monday, June 30, 2014
by Tom Stachler,ABR,CDPE - Group One Realty Team

There are numerous reasons that help to cultivate bidding wars. One of the most common is when the market has fewer homes than interested buyers. This increased competition doesn't mean that you can't get the Home of your dreams. Winning a bidding war is easy when armed with these helpful tips:

  • Being prepared is the best strategy when trying to win a bidding war. This includes having your financing ready. Sellers are more likely to accept an offer that is backed by a preapproval letter. Since preapproval can take a while, having accomplished that step is appealing to the seller.
  • Be sure to avoid making lowball offers. In the case of a bidding war, low offers aren't considered to be serious offers and are rejected immediately. If the home is out of your price range, keep it off of your list. In a competitive market, placing an offer on a home that is out of your range only wastes time and leads to disappointment.
  • Money isn't the only thing that makes an impression during a bidding war. Flexibility can go a long way towards having your offer selected. That flexibility can be shown by offering the buyers preferred move-out date or by the willingness to waive the small items that come up during an inspection.
  • While you may not be able to offer much more than the asking price of the home, using your cash creatively can help your bid win. This could be offering more earnest money than required or offering a larger down payment that necessary. Both of those items can be appealing to sellers.

While a bidding war is a dream for a seller, it can be a nightmare for the buyers involved. Winning a bidding war seems like a daunting task, but is actually something that is very possible when the buyers go in with all of the necessary information.

 

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Pending Home Sales Increase in March

Thursday, June 19, 2014
by Tom Stachler,ABR,CDPE - Group One Realty Team

The recent downturn in the economy affected many sectors of the business world. The real estate market was no exception. After a stagnant market, real estate professionals were pleased to see pending Home sales increase in March. This came after a nine month lull where the market saw no gains.

According the Nationals Association of Realtors, the Pending Homes Sales Index rose 3.4%. This index is the leading indicator for national pending sales. A pending sale occurs when the contract has been signed, but the deal has not yet moved to closing. Most often the sale is closed within a month or two of the contract being signed. The Pending Homes Sales Index is based upon a large national sample, which usually represents approximately 20% of all existing home sales.

This 3.4% gain is still approximately 7.9% below where pending sales where in March of 2013. Pending sales being under where they were a year ago was observed all across the country. Sales were down 10.1% in the Midwest and 5.3% in the South compared to a year ago. The dismal winter was concerned to be part of the reason for the gain in pending sales. More people were starting to get out and more homes were beginning to go on the market. Sales activity is expected to continue to rise as more inventory comes onto the market and financial confidence continues to improve.

Home sales are expected to exceed 4.9 million this year, down from 5.1 million in 2013, and limited inventory is expected to cause home values to rise between 6 and 7%. Analysts predict that now is a great time to place a house for sale.

Seeing the pending home sales increase in March gives many people in the real estate industry confidence that the rest of the spring and summer market will follow.

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Financial Stretches for Buyers

Friday, December 20, 2013
by Tom Stachler,ABR,CDPE - Group One Realty Team

Many prospective Home buyers, at one time or another, fall victim to the "kid-in-a-candy-store" mentality when they find the home of their dreams is available but happens to be priced just a little outside their price range. If you find yourself in this situation, there are some things to contemplate.

Sometimes financial stretches for buyers make sense. This is especially true when you consider that each additional thousand dollars on the overall Home Price equates to a mere $100 - $200 extra on the monthly mortgage payment.  Not only that, but Buying a nicer, larger home will often save you time and money in upgrades in the following years. This means that you can spend your years living in your home instead of working on it.

For a vast majority of people, the purchase of a new home is a long-term financial investment. So if you plan to be in the home for many years to come, then stretching financially may be a great buying strategy for you. 

However, everyone's financial situation is different and sometimes financial stretches for buyers are not a good idea.  For instance, if you are not planning on being in the home for more than 5 years, then you could lose a lot of money in the up and down cycles of the housing market. Also, if you do not have much job security for one reason or another, then you may not want to stretch to a more expensive home.

Financial stretches for buyers can be a calculated risk that pays off well over time. But if you’re a buyer with financial uncertainty, then you’re probably better off not pushing yourself to your financial limit. Talking with an experienced real estate agent is your best step for working out a buying strategy that works well for you.

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Types of Home Loans and Mortgages

Monday, October 7, 2013
by Tom Stachler,ABR,CDPE - Group One Realty Team

The two most common types of mortgages are fixed rate and adjustable rate. There are several others, some of which are described below, but it's best to keep it simple as you enter the labyrinthine maze of Home finance.

Fixed rate

These loans offer one specific rate for its entire duration; however, if interest rates fall, your rate may increase.

Adjustable rate mortgage (ARM)

Adjustable rate mortgages main attraction is their relatively low initial interest rate; however, they are directly impacted by the market conditions at adjustment time. So, your monthly payment can fluctuate, up or down, dramatically over time.

Hybrid ARM

A hybrid ARM is a blending of these first two mortgages in which the interest rate starts out fixed, but after a specified length of time, becomes vulnerable to the whims of the market.

FHA (Federal Housing Administration)

This is a government-secured loan that allows people who may have trouble qualifying for other financing a home loan with one low down payment; however, the size of the loan could be limited.

VA (Veterans Administration)

Here we have another government-backed loan; this one offers eligible veterans, active duty personnel and surviving spouses competitive interest rates, with little to no down payments.

Balloon mortgage

Similar to the aforementioned hybrid ARM, a balloon mortgage starts with a fixed rate, usually at a comparatively low number. Once the fixed period ends, the lender must pay back the full balance of the loan.

Interest-only

Another hybrid of sorts, interest-only loans allow the borrower to pay just the interest for an agreed-upon term, after which the full balance of the loan is due.

Reverse mortgage

This one is aimed at senior citizens who want to convert their home equity into cash. The crucial distinction between reverse and conventional mortgages is that with a reverse mortgage, lenders are not required to pay principal or interest as long as they live in or own the home.

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The Difference Between Pre-approval vs. Pre-qualified

Monday, September 30, 2013
by Tom Stachler,ABR,CDPE - Group One Realty Team

In a meticulous, often confusing process like Home Buying, it's vital for you to understand at least the basic terms. Sometimes real estate professionals and loan officers will use terms like pre-approved and pre-qualified interchangeably when talking about a home loan. They are not, however, the same thing.

Pre-qualification is an estimate of how much money a lender would be willing to loan you, based on a general assessment of your relevant financial information, such as employment status, overall income and estimated value of assets.

The pre-approval process requires the lender to perform a more in-depth investigation and evaluation of your creditworthiness, culminating in a tentative commitment for mortgage funding up to a specific amount.

Here are some more details on each of these to further distinguish these similar but not synonymous terms.

Pre-Qualification

This process begins with you either meeting face-to-face with a loan officer or talking with one over the phone. You'll provide basic information about your personal credit and finances, including any outstanding debts, total income and a potential down payment amount. This data is then used by the lender to provide you with a written estimate of how much you could comfortably afford per month for a mortgage.

There is neither a commitment nor cost associated for either party in a pre-qualification procedure. Its primary purpose is to give you a realistic perspective on how buying a home will impact your month-to-month household budget.

Most real estate professionals will tell you that it's best to make pre-qualification one of the very first steps in your home-buying journey, even prior to looking at houses.

Pre-approval

In order to get a pre-approval, and the tentative commitment that comes with it, you must provide your desired home loan lender with the actual documentation (usually in paper form) of your financial details (assets, debts, income, etc).

You can expect to pay a fee for this part of the process, mainly to cover the lender's expenses incurred by running a credit check, as well as verifying your employment data and financial records.

Your pre-approval is then officially acknowledged via a commitment letter containing the amount the lender is willing to extend to you for your new home purchase.

A pre-approval is neither a guarantee of future mortgage loan approval, nor is it a legally binding contract, meaning you still have the option of choosing another lender.

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