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Posts Tagged Selling A Home

Housing Outlook, 2014: Home Prices Head Higher

By: Pat Mertz Esswein
From: Kiplinger’s Personal Finance, January 2014
Full Article

The housing recovery has pushed up home prices nearly everywhere. Over the past year, home prices rose in 225 of the 276 cities tracked by Clear Capital, a provider of real estate data and analysis. (See how home prices are shifting in 276 metro areas.) Prices nationwide rose by 10.9%, pushing the median price for existing homes up by $30,000, to $215,000. For people who have waited to sell their home or refinance their mortgage, that’s good news.

SEE ALSO: The Outlook for Mortgages

Rising home prices in Seattle enabled Mike and Kristin Litke to refinance their first mortgage last summer and pay off a second mortgage that had an 8.2% interest rate. The Litkes, who bought their three-bedroom, 1.5-bath home for $512,500 in 2007 at the peak of Seattle’s housing market, had used the second mortgage to avoid paying private mortgage insurance. In 2010, just as home prices in the area hit a trough, they refinanced their first mortgage to a 30-year fixed rate of 4.375% but were stuck with the second mortgage because they didn’t have enough equity to do a “cash-out” refi.

This time, however, their home appraised for $521,000, allowing them to refinance into one 30-year, fixed-rate mortgage of $416,800 at 4.25%. They have reduced their monthly payment by $360, giving them some wiggle room in their budget and providing an infusion of college-savings funds for their kids: Stephen, 3½, and Stella, 10 months.

What’s Ahead

In 2013, a sense of urgency drove traditional buyers hoping to take advantage of still-affordable home prices and historically low mortgage rates. Buyers found selection limited, and were often forced into bidding wars with investors and other buyers who paid cash. Sellers reaped the rewards in terms of quick sales, often above the asking price. Almost half of the cities tracked by Clear Capital experienced double-digit increases in home prices, led by Las Vegas, with a gain of 32%. Such spikes reflected a continuing “correction to the overcorrection,” says Alex Villacorta, vice-president of research and analytics for Clear Capital. Buyers and investors rushed in to snap up homes with prices that had fallen too far. Homes continue to be affordable, despite recent run-ups—on average, prices are still 31.5% below their 2006 peak. The percentage of monthly family income consumed by a mortgage payment (assuming a mortgage rate of 4.1%) is just 15.6%, on average, compared with 23.5% in mid 2006. “Houses are very cheap,” says David Stiff, principal economist at CoreLogic, a property and mortgage data analytics company.

Right Size Your Life – The Time is NOW!!

Another home SOLD by Keller Williams

It has been a banner year for real estate sales in the DFW market. We are experiencing activity levels not seen in many years, and events with which many agents are not familiar. In Collin County, homes priced in the typical range for first time home buyers are receiving multiple offers, frequently on the day which they are listed. During a recent search in which I represented the Buyer, I had conversations with several listing agents indicating they were unfamiliar with how to handle the influx of offers they were receiving. It has been many years since homes attracted multiple offers, and quite frankly, agents who have only been in the market for 3-5 years have never experienced this phenomena.

In east Dallas, the activity levels are also similar. I had the pleasure of representing a Seller who was able to convey their existing home at the highest $/square foot seen in over 5 years. This allowed them to purchase a much larger home, and they got a great deal on the mortgage. For while sales prices are high, interest rates are still at historical lows. This combination makes today the perfect time to right size your life!

Whether you need to increase the size of your living space, or step down into a smaller home and save a little money, there has never been a better time to act.

How to Sell Your Home in 30 Days!!

If you’re interested in using the flurry of first time home buyers in the market to get you out of your current home, there is still time, but you must act fast. You could be eligible for up to a $6500 tax credit for selling an existing home if you have lived in that home for at least 3 of the last 5 years. Your buyer could be eligible for a tax credit of up to $8,000. The catch?? The contracts must be signed by April 30th.

So with that in mind, how do you sell a home in 30 days or less? The answer is just three simple steps…

First, make it look beautiful. For most, this does not have to be an expensive proposition, but it does require a bit of sweat to accomplish. A thorough, very deep cleaning is in order before your home foes on the market – inside and out. Wash those windows that you have neglected for a year, weed the shrub beds, trim the shrubs and lay down a fresh layer of mulch. Cut the grass and edge the curbs (yes even in the winter months or when the grass is just beginning to come back to life). Scrub the grout in tile floors in halls, kitchens and baths. Scrub the grout in showers. If you have glass shower doors, get them squeaky clean. Dust all of the places that have been ignored. Clean out the closets. The list goes on and on – it’s all the stuff that we all avoid. Now is the time to get it done. For a final touch, look through each room and identify furniture that is seldom used, and then remove it. Your house will sparkle and will look extra large at the end of this step.

Step two, determine the right price for your home. Don’t be greedy – greed and speed do not mix. What you are seeking is a fair price for the current condition of your home. If the interior of your home looks like it was comletely remodelled in 2010, then the top price of the market may be quickly achievable. To elaborate, these homes should have wood floors, marble counters, stainless steel appliances, trendy colors, no wall paper, decorative lighting, etc etc. Most homes do not look like this. If your home has some of these things but not all, it is going to fall in line with the average home. If your home is in need of major repairs, you may still be able to sell it quickly, you just need to discount the price by an amount roughly equal to the cost of performing these repairs. Your best bet at determining this price is to consult with a REALTOR who can present recent sales figures and help you determine the right price for a quick sale.

The third step is intense marketing. Just as you are finding this information on the internet, about 80% of home buyers now start their search on the internet. Your home needs to be advertised on all of the major real estate portals – REALTOR.com, Zillow.com, Trulia.com, Homes.com, Yahoo.com, Google.com, major real estate brokerage sites, your local newspaper’s web site, TV station web sites. Even some retailers have home search web sites. You need to be everywhere at once. For the best presentation, your listing with these sites should be chock full of photos. Interenet consumers want to see what your home looks like. A minimum of 25 pictures is recommended. Think carefully about a virtual tour as well.

Combining all three of these WILL yield a fast sale of your existing home, particularly if it is priced in the range of the first time home buyer. Over the past six months, my average time on market for 3 bedroom, 2 bath homes is 10-14 days. These homes have been located in both Dallas and the suburbs of Plano, Richardson, and Little Elm.

NOW is a great time to be in the real estate market. The next month will see an extraordinary number of sales. Hopefully you will be one of them!!

Strong First Time Home Sales Make This a Move Up Market!

Over the course of the last year, I have noticed that my personal sales history shows that smaller homes are selling much faster than larger homes.  I have seen a number of 3 bedroom, 2 bath homes sell in less than 30 days, even in this austere market.  And these homes are selling for strong prices, several having appreciated in the last year.  One of the small homes that I sold in 2009 set the mark for the highest price per square foot in its Plano neighborhood.

Across the nation, the strength of smaller size homes seems to be consistent.  A USA Today article published this morning addresses this topic directly.  The article quotes statistics from the National Association of Home Builders noting that this trend has not been overlooked by those who bring new product to the market.  The median square footage of homes has dropped about 9%, from a peak of 2300 sq ft in the third quarter of 2006 to 2100 sq ft in the same period of 2009.

I believe there are a couple of factors that cause this trend to occur.  First, the general strength of the economy has everyone scrutinizing expenditures, and people are beginning to realize that they can survive on less.  The thought pattern goes something like this “We’d love to have the media room, but do I really need it?  Perhaps now is not the time – we’ll get that in the next house.”  Second, the strongest segment of the market is in first time home buyers.  People are realizing that given price levels, interest rates and tax incentives, it make sense to buy a home rather than rent for those who can qualify for a mortgage.  First time home buyers have not built up equity over the years and usually start by purchasing smaller homes.  The combination of these occurrences leads to smaller homes outperforming larger homes in the current market.

So what’s the moral of the story?  If you have been in your first home for the last several years, and are thinking that perhaps now is the time to move up, you couldn’t be more right.  Your smaller starter home will yield the best price in the market, and the home that you purchase will likely be discounted from its level of the past couple of years.  The market is taking shape to make now the best time to step into a larger home.

Real Estate Market Not So Bad

Read national newspapers or listen to national evening news on any channel, and you’ll hear that real estate markets are in turmoil across the country. But in Dallas, we have fared better than most. In some areas the real estate markets are depressed, especially in the southern suburbs. But north Dallas real estate continues to see a good market. In fact, the Park Cities and northeast Dallas neighborhoods like Lake Highlands are actually seeing price appreciation.

Across the Dallas Fort Worth area, the number of sales transactions is significantly decreased from a year ago. It seems that only people who really need to sell their house (corporate relocation, divorce, etc) are placing it on the real estate market. The number of active buyers is also quite low. So if you possess the ability to obtain a loan, and are interested in purchasing a home, it’s a great time to buy a home in Dallas. With few other buyers in the Dallas real estate market, those who need to sell their homes are quite happy to see you. This is beginning to translate into improved negotiating posture for the buyer.

In the right part of town, the picture is not absolutely bleak for home sellers. Real estate in outstanding condition is few and far between, and is still commanding an increasing price in north Dallas and the Park Cities. The time to sell a home is rising, and on average has crested 3 months in Dallas. If you need to sell your home, make sure you bring it to the real estate market in the best possible condition. Clean the closets, paint the room that you’ve been neglecting, and get the yard cleaned up (yes, that means bagging up all of the leaves that have been around since autumn). Present your home well, and it may just sell quicker than you think, and for very close to the asking price.

For answers to specific buying or selling questions in the current Dallas real estate market conditions, feel free to call me.