How to Get the Most Money When Selling Your Home

Every homeowner wants to make sure they get the best price when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to ensuring you get the highest price possible.

1. Price it a LITTLE LOW 

This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In reality, this just dramatically lessens the demand for their house (see chart below).

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyerover the price, but will instead have multiple buyers fighting with each other over the house.

Realtor.com gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional

This, too, may seem counterintuitive, as the seller likely believes that he or she will net more money if they don’t have to pay a real estate commission. With that being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

Research posted by the National Association of Realtors revealed that:

“The median selling price for all FSBO homes was $185,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $163,800. However, homes that were sold with the assistance of an agent had a median selling price of $245,000 – nearly $60,000 more for the typical home sale.”

Bottom Line

Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house. Thinking of Selling your home or would like a FREE home evaluation call 619.449.1919

Mortgage Rates Impact on 2017 Home Values

There is no doubt that historically low mortgage interest rates were a major impetus to housing recovery over the last several years. However, many industry experts are showing concern about the possible effect that the rising rates will have moving forward.

The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are all projecting that mortgage interest rates will move upward in 2017. Increasing interest rates will definitely impact purchasers and may stifle demand.

In a recent study of industry experts, “rising mortgage interest rates, and their impact on mortgage affordability” was named by 56% as the force they think will have the most significant impact on U.S. housing in 2017. If rising rates slow demand for housing, home values will be impacted.

To this point, Pulsenomics, recently surveyed a panel of over 100 economists, investment strategists, and housing market analysts, asking the question “In your opinion, at what level will the 30-year fixed rate mortgage rate significantly slow home value appreciation?” The survey revealed the following:

Bottom Line

Most experts believe that rates would need to hit 5% or above to have an impact on home prices.

Where Are the Home Prices Heading in the Next 5 Years?

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 4.4% over the course of 2017, 3.4% in 2018, 2.8% in 2019, 2.7% in 2020, and 2.8% in 2021. That means the average annual appreciation will be 3.22% over the next 5 years.

The prediction for cumulative appreciation fell from 21.4% to 17.3% by 2021. The experts making up the most bearish quartile of the survey are projecting a cumulative appreciation of 6.3%.

Bottom Line

Individual opinions make headlines. We believe this survey is a fairer depiction of future values.

Lack of Homes for Sale Slowing Down the Housing Market

The housing crisis is finally in the rear-view mirror as the real estate market moves down the road to a complete recovery. Home values are up. Home sales are up. Distressed sales (foreclosures and short sales) have fallen dramatically. It seems that 2017 will be the year that the housing market races forward again.

However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory. While buyer demand looks like it will remain strong throughout the winter, supply is not keeping up.

Here are the thoughts of a few industry experts on the subject:

National Association of Realtors

“Total housing inventory at the end of December dropped 10.8%...which is the lowest level since NAR began tracking the supply of all housing types in 1999. Inventory has fallen year-over-year for 19 straight months and is at a 3.6-month supply at the current sales pace.”

Jonathan Smoke, Chief Economist for Realtor.com

“More than two-thirds of the markets are seeing less inventory now compared to a year ago.” 

Lawrence Yun, Chief Economist at NAR:

“The dismal number of listings in the affordable price range is squeezing prospective first-time buyers the most. As a result, young households are missing out on the wealth gains most homeowners have accrued from the 41% cumulative rise in existing home prices since 2011.”

Sam Khater, Deputy Chief Economist at CoreLogic

“The lack of affordable supply is really driving up home prices.”

Peter Muoio, Chief Economist at Auction.com

“Tight housing inventory remains a constraining factor limiting stronger sales growth…

We expect further price growth to entice more homeowners to list their homes, particularly as existing homeowners have greater equity.”

Bottom Line 

If you are thinking of selling, now may be the time. Demand for your house will be strong at a time when there is very little competition. That could lead to a quick sale for a really good price.

2 Myths That May Be Holding Back Buyers

Fannie Mae’s article, “What Consumers (Don’t) Know About Mortgage Qualification Criteria,”revealed that “only 5 to 16 percent of respondents know the correct ranges for key mortgage qualification criteria.”

Myth #1: “I Need a 20% Down Payment”

Fannie Mae’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required.

Many believe that they need at least 20% down to buy their dream home, but many programs actually let buyers put down as little as 3%.

Below are the results of a Digital Risk survey of Millennials who recently purchased a home.

As you can see, 64.2% were able to purchase their home by putting down less than 20%, with 43.8% putting down less than 10%!

Myth #2: “I need a 780 FICO Score or Higher to Buy”

The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary to qualify.

Many Americans believe a ‘good’ credit score is 780 or higher.

To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans. As you can see below, 54.7% of approved mortgages had a credit score of 600-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.

Prices Rose 7.1% Year-Over-Year [INFOGRAPHIC]

Some Highlights:

• CoreLogic’s latest Home Price Index shows that prices rose by 7.1% across the United States year-over-year.
• With mortgage interest rates rising in the short term, CoreLogic believes price appreciation will slow to 4.7% by this time next year.
• 49 out of 50 states, and the District of Columbia, all had positive appreciation over the last 12 months, with the only exception being the state of Connecticut, which experienced a -0.5% appreciation.

3 Tips for Making Your Dream of Buying a Home Come True [INFOGRAPHIC]

Some Highlights:

• Realtor.com recently shared “5 Habits to Start Now If You Hope to Buy a Home in 2017.”
• Setting up an automatic savings plan that saves a small amount of every check is one of the best ways to save without thinking a lot about it.
• Living within a budget now will help you save money for down payments and pay down other debts that might be holding you back.