Using Your Tax Refund To Achieve Your Homeownership Goals This Year

 

If you’re buying or selling a home this year, you’re likely saving up for a variety of expenses. For buyers, that might include things like your down payment and closing costs. And for sellers, you’re probably working on a bit of spring cleaning and maintenance to spruce up your house before you list it.

Either way, any money you get back from your taxes can help you achieve your goals. Using a tax refund is a common tactic for buyers and sellers. SmartAsset estimates the average American will receive a $2,897 tax refund this year. The map below provides a more detailed estimate by state:

If you’re getting a refund this year, here are a few tips to help with your home purchase or sale this season.

How Buyers Can Use Their Tax Refund

According to American Financing, there are multiple ways your refund check can help you as a homebuyer. A few include:

• Growing your down payment fund – If you haven’t started saving for your down payment, let your tax refund kick off the process. And if you have a fund already, the money you get back could put you closer to your goal.
• Paying for your home inspection – Your home inspection can save you a lot of headaches down the road by helping you determine the condition of the house. As a buyer, you’ll typically be responsible for paying for your inspection, and it’s definitely worth the investment.
• Saving for closing costs – Closing costs are additional expenses you’ll need to pay once it’s time to close. They average anywhere between 2-5% of the purchase price of your home.

This list is a great start, but it isn’t exhaustive of all the costs you may encounter as you set out on your homebuying journey. The best way to prepare is to work with a trusted real estate professional to make sure you understand what’s to come in the process.

How Sellers Can Use Their Tax Refund

If you own a home and are planning to sell this spring, your tax refund can help you make sure your home is ready to list. Here are a few ways current homeowners can put their tax refund to good use:

• Making small upgrades – NerdWallet provides a list of great ways to use your tax refund, including tackling small projects or boosting your curb appeal to help your home stand out.
• Making repairs – If there’s anything in your house that needs to be fixed, American Financing notes that completing repairs is another great use of that money.
• Buying your next home – Whether you’re selling to move up or downsize, you can use your tax refund to help pay for any costs on the purchase of your next home.

Of course, it’s important to talk with your trusted real estate advisor before taking on any projects. They’ll make sure you can focus on areas that’ll help you receive the best possible price when you sell.

Bottom Line

Funding your home purchase or sale can feel like a daunting task, but it doesn’t have to be. Your tax refund can help you reach your goals. Let’s connect to discuss how you can start on your journey.

Spring Cleaning Checklist for Sellers [INFOGRAPHIC]

 

Some Highlights

• If you’re thinking about selling your house this spring, here are some things you’ll want to tackle before you list.
• Spend your time on tasks that make it feel inviting, show it’s cared for, and boost your curb appeal.
• To determine the full list of things you’ll want to tackle for your home, you need the opinion of a trusted expert. Let’s connect to help make sure your house shows well this season.

Why It’s Critical To Price Your House Right

 

When you make a move, you want to sell your house for the highest price possible. That might be why many homeowners are eager to list in today’s sellers’ market. After all, with record-low inventory and high buyer demand, many homes are selling for more than asking price. Data from the National Association of Realtors (NAR) shows 46% of homes are selling above list price today.

But even in a market like we have now, working with an agent to set the right asking price is critical, as pricing it too high or too low could have a negative impact on your final sale. Here’s why.

Pricing Your House Right Is Crucial Even in a Sellers’ Market

The price you set for your house sends a message to potential buyers. Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with the property. Not to mention, you could leave money on the table, which decreases your future buying power if you undervalue your house.

On the other hand, price it too high and you run the risk of deterring buyers. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.

In other words, think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value. Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see a bidding war, too. And when a bidding war happens, you’ll likely get an even higher final sale price. Plus, when homes are priced right, they tend to sell quickly.

To get a look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below:

Lean on a Professional’s Expertise To Price Your House Right

There are several factors that go into pricing your house and balancing them is the key. That’s why it’s important to lean on an expert real estate advisor when you’re ready to move. A local real estate advisor is knowledgeable about:

• The value of homes in your neighborhood
• The current demand for houses in today’s market
• The condition of your house and how it affects the value

A real estate professional will balance these factors to make sure the price of your house makes the best first impression and gives you the greatest return on your investment in the end.

Bottom Line

Even in a sellers’ market, pricing your house right is critical. Don’t rely on guesswork. Let’s connect to make sure your house is perfectly priced.

The Difference Between Renting and Owning [INFOGRAPHIC]

Some Highlights

• If you’re deciding whether to rent or buy, consider the many financial benefits that come with owning a home.
• As a renter, you build your landlord’s wealth and face rising costs. As a homeowner, you build your own net worth and can lock in your monthly payments for the length of your loan.
• If you’re weighing your options, remember that owning a home is a decision that has considerable financial perks. If you want to learn more, let’s connect to talk about the perks of homeownership.

Real Estate Voted the Best Investment Eight Years in a Row

 

In an annual Gallup poll, Americans chose real estate as the best long-term investment. And it’s not the first time it’s topped the list, either. Real estate has been on a winning streak for the past eight years, consistently gaining traction as the best long-term investment (see graph below):

If you’re thinking about purchasing a home this year, this poll should reassure you. Even when inflation is rising like it is today, Americans agree an investment like real estate truly shines.

Why Is Real Estate a Great Investment During Times of High Inflation?

With inflation reaching its highest level in 40 years, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board. That includes goods, services, housing costs, and more. But when you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increasing housing payments. James Royal, Senior Wealth Management Reporter at Bankrate, explains it like this:

“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.” 

If you’re a renter, you don’t have that same benefit, and you aren’t protected from increases in your housing costs, especially rising rents.

History Shows During Inflationary Periods, Home Prices Rise as Well

As a homeowner, your house is an asset that typically increases in value over time, even during inflation. That‘s because, as prices rise, the value of your home does, too. And that makes buying a home a great hedge during periods of high inflation. Natalie Campisi, Advisor Staff for Forbes, notes:

“Tangible assets like real estate get more valuable over time, which makes buying a home a good way to spend your money during inflationary times.”

Bottom Line

Housing truly is a strong investment, especially when inflation is high. When you lock in a mortgage payment, you’re shielded from housing cost increases, and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.

Americans Choose Real Estate as the Best Investment [INFOGRAPHIC]

 

Some Highlights

• According to a Gallup poll, real estate has been rated the best long-term investment for eight years in a row.
• Real estate tops the list because you’re not just buying a place to call home – you’re investing in your future. Real estate is typically considered a stable and secure asset that can grow in value over time.
• Let’s connect today if you’re ready to make real estate your best investment this year.

Why Selling Your House with a Real Estate Professional Is Essential

 

Selling your house is no simple task. And when you sell on your own – known as a FSBO (or For Sale by Owner) – you’re responsible for handling some of the more difficult aspects of the process without the expert guidance you need.

The 2021 Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) surveys homeowners who recently sold their house on their own and asks what difficulties they faced. Those sellers say some of the biggest headaches are prepping their house for sale, pricing it right, and handling the required paperwork.

Working with an agent is the best way to ensure you have an expert on your side to guide you at every turn. Agents have the skills and knowledge that are essential to navigating each step with ease, efficiency, and accuracy. Here are just a few things a real estate agent will do to make sure you get the most out of your sale.

1. Make the Best First Impression

Selling your house requires a significant amount of time and effort. Doing it right takes expertise and an understanding of today’s buyers. Your agent knows the answers to common questions, such as:

• Do I need to take down my personal art?
• How much landscaping does my house need?
• What colors should I paint my walls?

Your time and money are important, and you don’t want to waste either one focusing on the wrong things. A real estate advisor relies on their experience to answer these questions and more, allowing you to make the right investments to prep your house before you list.

2. Maximize Your Buyer Pool – and Your Sale

Today, the average home is getting 3.6 offers per sale according to recent data from NAR. That’s great news if you’re planning to sell, since the more offers you receive, the more likely you are to sell your house in a bidding war, and for a higher price.

Real estate agents have an assortment of tools at their disposal, like social media followers and agency resources, that will ensure your house is viewed by the most buyers. Without access to these tools and your agent’s marketing expertise, your buyer pool – and your home’s selling potential – is limited.

3. Understand the Documentation, Including the Fine Print

Today, when a house is sold, more disclosures and regulations are mandatory, meaning the number of legal documents to juggle is growing. It’s hard to understand all the requirements and fine print (especially if you’re not an expert). That’s why your advisor is an invaluable guide.

Your agent knows exactly what needs to happen, what all the paperwork means, and can work through it efficiently. They’ll help you review the documentation and avoid any costly missteps that could happen if you tackle it on your own.

4. Act as Your Expert Negotiator

If you sell without an agent, you’ll also be solely responsible for all negotiations. That means you have to coordinate with:

• The buyer, who wants the best deal possible
• The buyer’s agent, who will use their expertise to advocate for the buyer
• The inspection company, which works for the buyer and will almost always find concerns with the house
• The appraiser, who assesses the property’s value to protect the lender

Instead of going toe-to-toe with all these parties alone, lean on an expert. Your agent relies on experience and training to make the right moves throughout the negotiation. They’ll know what levers to pull, how to address each individual concern, and when you may want to get a second opinion. When you sell your house yourself, you’ll need to be prepared to have these conversations on your own.

5. Price It Right

Real estate professionals have the expertise to price your house accurately and competitively. To do so, they compare your house to recently sold homes in your area and factor in the current condition of your house. These factors are key to making sure your house is priced to move quickly and get you the maximum return on your investment.

When you sell as a FSBO, you’re operating without this advantage. That could cost you in the long run if you price your house too high or too low.

Bottom Line

There’s a lot that goes into selling your house, and it takes time, effort, and expertise to truly maximize your sale. Instead of tackling it alone, let’s connect to make sure you have an expert on your side.