With today's real estate market moving as fast as it is, working with a real estate professional is more essential than ever. They have the skills, experience, and expertise it takes to navigate the highly detailed and involved process of selling a home. That may be why the percentage of people who list their houses on their own, known as a FSBO or For Sale By Owner, has reached its lowest point since 1985 (see graph below):
Before you decide which projects and repairs to take on, connect with a real estate professional. They have first-hand experience with today's buyers, what they expect, and what you need to do to make sure your house shows well.
If you don't lean on their expertise, you may spend your time and money on something that isn't essential. That's because, in today's low-inventory market, buyers are willing to take on more of the renovation work themselves. A survey from Freddie Mac finds that:
". . . nearly two-in-five potential homebuyers would consider purchasing a home requiring renovations."
A professional can help you decide what you need to tackle. It's not canned advice you could find online – it's recommendations specific to your house and your area.
Today, the average home is getting 4.8 offers per sale according to recent data from the National Association of Realtors (NAR), and that competition is pushing prices up. While that's promising for you as a seller, it's important to understand your agent's role in bringing buyers in.
Real estate professionals have an assortment of tools at their disposal, such as social media followers, agency resources, and the MLS to ensure your house is viewed by the most buyers. According to realtor.com:
"Only licensed real estate agents can list homes on the MLS, which is a one-stop online shop of sorts for getting a house seen by thousands of agents and home buyers. . . . This is certainly one of many good reasons why the majority of home sellers decide to employ the services of a listing agent rather than going it alone."
Without access to these tools, your buyer pool is limited. And you want more buyers to view your house since buyer competition can drive your final sales price higher.
Today, more disclosures and regulations are mandatory when selling a house. That means the number of legal documents you'll need to juggle is growing. That's why Investopedia says:
"One of the biggest risks of FSBO is not having the experience or expertise to navigate all of the legal and regulatory requirements that come with selling a home."
A real estate professional knows exactly what needs to happen, what all the paperwork means, and how to work through it efficiently. They'll help you review the documents and avoid any costly missteps that could occur if you try to handle them on your own.
If you sell without a professional, you'll also be solely responsible for all the negotiations. That means you'll have to coordinate with:
Instead of going toe-to-toe with all these parties alone, lean on an expert. They'll know what levers to pull, how to address everyone's concerns, and when you may want to get a second opinion.
If you sell your house on your own, you may over or undershoot your asking price. That could mean you'll leave money on the table because you priced it too low or your house will sit on the market because you priced it too high. Pricing a house requires expertise. Investopedia explains it like this:
". . . There is no easy or universal way to determine market value for real estate."
Real estate professionals know the ins and outs of how 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 it's priced to move quickly while still getting you the highest possible final sale price.
There's a lot that goes into selling your house. Instead of tackling it alone, let's connect so you have an expert on your side throughout the entire process.
You can't read an article about residential real estate without the author mentioning the affordability challenges that today's buyers face. There's no doubt homes are less affordable today than they were over the last two years, but that doesn't mean homes are now unaffordable.
There are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let's look closely at each of these components.
The most recent Home Price Insights report by CoreLogic shows home values have increased by 19.1% from last January to this January. That was one reason affordability declined over the past year.
While the current global uncertainty makes it difficult to project mortgage rates, we do know current rates are almost one full percentage point higher than they were last year. According to Freddie Mac, the average monthly rate for last February was 2.81%. This February it was 3.76%. That increase in the mortgage rate also contributes to homes being less affordable than they were last year.
The one big, positive component in the affordability equation is an increase in American wages. In a recent article by RealtyTrac, Peter Miller addresses that point:
"Prices are up, but what about wages? ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income."
The National Association of Realtors (NAR) also recently released information that looks at income and affordability. The NAR data provides a comparison of the current median family income versus the qualifying income for a median-priced home in each region of the country. Here's a graph of their findings:
As the graph shows, the median family income (shown in blue on the graph) is greater than the qualifying income needed to buy a median-priced home (shown in green on the graph) in all four regions of the country. While those figures may vary in certain locations within each region, it's important to note that, in most of the country, homes are still affordable.
So, when you think about affordability, remember that the picture includes more than just home prices and mortgage rates. When prices rise and rates rise, it does impact affordability, and experts project both of those things will climb in the months ahead. That's why it's less affordable to buy a home than it was over the past two years when prices and rates were lower than they are today. But wages need to be factored into affordability as well. Because wages have been rising, they're a big reason that, while less affordable, homes are not unaffordable today.
To find out more about affordability in our local area, lets discuss where home prices are locally, what's happening with mortgage rates, and get you in contact with a lender so you can make an informed financial decision. Remember, while less affordable, homes are not unaffordable, which still gives you an opportunity to buy today.
Berkshire Hathaway HomeServices Bay Street Realty Group is excited to announce the hiring of veteran Realtor, Lisa Evans. In this role, she will continue her passion for helping others buy and sell real estate in the Beaufort area. Evans has been a licensed real estate agent in South Carolina since 2004. The Habersham community has always been her place of focus, but the entire Lowcountry is special to her. Prior to working in real estate, she worked as an independent sales representative for various companies in both North and South Carolina. Originally from Columbia, she graduated from Columbia College. She now lives in downtown Beaufort on the intracoastal waterway. In her free time, she loves walking downtown, enjoying great restaurants, shopping, gardening and spending time with family, friends and her pets. Bay Street Realty Group is excited for Lisa Evans to join their sales team in South Carolina, and to continue sharing her love for this region.
SAVANNAH, GA -- Berkshire Hathaway HomeServices Bay Street Realty Group is excited to announce the hiring of Stefanie W. Culbreth as Realtor. She joins the team with over five years of real estate experience and will continue to guide home buyers and sellers through the process, while also advising her clients on market trends.
Culbreth previously worked as a Realtor for Southbridge Greater Savannah Realty, where she lived at the time, prior to moving to the Landings. Originally from Brunswick, Georgia, she has called Savannah home for over two decades and is excited to continue helping others find their forever home here. She has a passion for tennis, plays on several teams, is the President of Savannah Tennis League and the President of the Landings Women's Tennis League.
Culbreth has a 16 year old son, and now that he is grown, she looks forward to investing her time into her clients and growing her real estate business. Berkshire Hathaway HomeServices Bay Street Realty Group looks forward to bringing her experience to their growing team.
Berkshire Hathaway HomeServices Bay Street Realty Group is excited to announce the hiring of Justin Kennedy as Realtor. He recently began his career in real estate, and looks forward to guiding home buyers and sellers through the process, advising clients and staying on top of market trends. Kennedy holds a Bachelor's degree in Pre-Sports Medicine. Originally from Richmond Hill, he has a passion for the region. He most recently worked in management for a local landscaping company and is excited to share with others why the Lowcountry is the most beautiful place to call home. Bay Street Realty Group is excited to add Kennedy to their Georgia sales team.
For more information, visit www.baystreetrealtygroup.com.
We're so thankful to have a great group of agents and staff working under the Bay Street Realty Group umbrella. We celebrated in style this year at our two office holiday parties, one in Savannah and one in Beaufort. With great food and even better spirits, we're all excited to see what 2022 will bring!
If you're a renter with a desire to become a homeowner, or a homeowner who's decided your current house no longer fits your needs, you may be hoping that waiting a year might mean better market conditions to purchase a home.
To determine if you should buy now or wait, you need to ask yourself two simple questions:
Let's shed some light on the answers to both of these questions.
Three major housing industry entities project continued home price appreciation for 2022. Here are their forecasts:
Using the average of the three projections (6.27%), a home that sells for $350,000 today would be valued at $371,945 by the end of next year. That means, if you delay, it could cost you more. As a prospective buyer, you could pay an additional $21,945 if you wait.
Today, the 30-year fixed mortgage rate is hovering near historic lows. However, most experts believe rates will rise as the economy continues to recover. Here are the forecasts for the fourth quarter of 2022 by the three major entities mentioned above:
That averages out to 3.7% if you include all three forecasts, and it's nearly a full percentage point higher than today's rates. Any increase in mortgage rates will increase your cost.
You'll pay more in mortgage payments each month if both variables increase. Let's assume you purchase a $350,000 home this year with a 30-year fixed-rate loan at 2.86% after making a 10% down payment. According to the mortgage calculator from Smart Asset, your monthly mortgage payment (including principal and interest payments, and estimated home insurance, taxes in your area, and other fees) would be approximately $1,899.
That same home could cost $371,945 by the end of 2022, and the mortgage rate could be 3.7% (based on the industry forecasts mentioned above). Your monthly mortgage payment, after putting down 10%, would increase to $2,166.
The difference in your monthly mortgage payment would be $267. That's $3,204 more per year and $96,120 over the life of the loan.
If you consider that purchasing now will also let you take advantage of the equity you'll build up over the next calendar year, which is approximately $22,000 for a house with a similar value, then the total net worth increase you could gain from buying this year is over $118,000.
When asking if you should buy a home, you probably think of the non-financial benefits of owning a home as a driving motivator. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year. Let's connect when you are ready to buy!