I am 35 and I’ve never owned a home. Now that I am paying attention to mortgage rates, I see an increase. Should I wait — or worry?
Simply put: It’s a fantastic time to buy (and with home prices rising it is a great time to sell, too).
You are at exactly the right age, on the high end of the millennial generation, to buy a home.
It’s true that in the last couple of years, a string of incremental rate increases by The Federal Reserve has put the focus on the housing market, where mortgage rates reflect those rate increases. Some assume that, as The Fed raises short-term interest rates, mortgage rates also rise and buyers are scared off by higher monthly payments.
While payments do indeed rise, how serious is it? Sometimes it’s not as much as you might think. If you are not paying cash for your house, you have to get a loan anyway. It’s not unreasonable to ask how much a slight raise in rates actually affects your payments.
Online mortgage calculators let you plug in your purchase price, down payment, length of loan, and interest rate. A 30-year fixed loan for $200,000 at 4.5 percent results in a payment of $1,013. Here we aren’t factoring in a down payment, taxes, or insurance, which vary. (As you move along in your home purchase, you will have all that information.)
But compare that rate to the same loan for the same amount at 4.75 percent. The monthly payment is $1,043 — a difference of $30 a month. When you find the right home, a jump of $30 probably won’t be a deal killer.
Right now, The Fed has signaled that interest rates may not rise in the near term, since inflation is low. But remember, rates do rise and fall over time. In 1999, the mortgage rate was 6.98 percent. In the 1980s, rates were a catastrophic 18 percent. A rate of about 4.5 to 4.75 percent isn’t the lowest historically but it certainly is affordable and nowhere near the highest.
Have no fear about buying today. Inflation is low and even if it rises, your mortgage payment won’t.
6 things to fix before selling your home
If you’re thinking about putting your house on the market, make sure to fix these six things first. This way you’ll avoid possibly undoing a sale following a home inspection.
1. Foundation issues. Problems with the foundation can undermine a potential sale. Look for cracks in the walls or ceiling as they can indicate that the foundation has shifted. Get problems repaired as soon as possible.
2. Water damage. Any sign of water damage, no matter how benign the cause, is likely to alarm potential buyers. Make sure all stains are removed or painted over once the issue has been resolved.
3. Wiring problems. Home inspectors can easily spot electrical work that isn’t up to code, so you’ll want to make sure everything is in order. Otherwise, you may be asked to pay for repairs.
4. An old roof. If your roof is nearing the end of its lifespan, consider replacing it. Many potential buyers will look elsewhere if the roof needs to be updated.
5. Inefficient heating and cooling. If you have an older heating and cooling system, particularly one that has an oil tank, consider updating it. Many buyers prefer to bid on homes with an energy-efficient system.
6. Plumbing issues. Since even minor plumbing concerns can become big problems, many buyers are unwilling to deal with homes that have them. Get your plumbing inspected — it might save you a lot of trouble.
Bad home inspection surprises can ruin a sale, so be sure to make all essential repairs beforehand.
Warren County Market Report – July 2020
Seller’s Market – Moving faster than ever!
You don’t want to miss this month’s market reports. Take the time to review. The market is very strong for listing your home. Houses are selling for top dollar, with multiple offers in the first few days of listing. The market can feel frustrating to qualified buyers because inventory is low compared to the number of buyers who are hunting the market right now. If you have thought about listing, NOW is the time. Be ready to move, the market is fast. How long will it last?
Recommendation to buyers, find yourself an aggressive agent who is available to show and write offers same day if you find the right home. Have your financing in order and a pre-approval letter ready to present with your offer.
Recommendation to sellers, be READY. You will have showings right away. Become educated on loan products so you can pick the right one for your sale if given the options. Don’t hesitate to do your homework and make sure your buyers have solid financing. Lenders are often willing to speak with the seller side to confirm basic questions about their loan and qualifications of the buyer.
Watch this video for a quick summary of Warren County real estate for July 2020. Charts demonstrate the changes in the market, so be sure to click play!
In general summary:
- New Listings are UP 19.6%.
- New Pending UP 55.7%.
- Closed sales are UP 33.8%
- Average Median Sold $275,000
- Average Days on Market 44
*If you would like a copy of this report emailed to you, please send request to email@example.com.
Resource: July 2020 Market Stats by ShowingTime
MRIS: Statistics calculated August 2020
Jennifer Avery, Realtor
“Your Happy Home Expert”
BPOR, SRS, CNE, E-Pro Certified | Licensed in VA
firstname.lastname@example.org | 540-683-0790
CRUM REALTY, INC | 318 S Loudoun St., Winchester, VA 22601 | 540-662-0400
How to avoid buyer’s remorse
If you want to buy a home, the fear of regretting your purchase could make it hard to commit to a particular property. Here are some tips for making a good decision and avoiding buyer’s remorse.
Check and double-check your needs list
It’s important to have a clear idea of what you need and want out of a property before you start looking for a new home. When deciding whether to make an offer on a house, check that it meets all of your non-negotiable requirements and that it’s within your budget. Choosing a property that truly meets your needs will help you keep regrets at bay.
Take outside input with a grain of salt
Trust your real estate agent
One source of advice you should listen to, however, is your realtor. While agents can’t find the right house for you on their own, they can provide you with all the information you need to make a sound choice.
Finally, remember that there’s a difference between wondering if there’s a better house out there and having real concerns. If something about the transaction doesn’t sit well with you or a big issue is uncovered during the inspection, it’s all right to keep looking.
Why your agent won’t make offers for you
Real estate agents provide homebuyers with insider information, advice about the local market, and much more. However, they won’t tell you how much to offer for a specific property. Though they may suggest a range, making the bid is your responsibility. Here’s why.
1. The offer may be too low
A lowball offer can dissuade a seller. If an agent encourages a buyer to make a bid that’s judged to be too low, the realtor is likely to be blamed for any consequences.
2. The offer may be too high
3. The agent isn’t buying the house
It’s important to keep in mind that while realtors can provide valuable advice about the local market, they can’t tell you how to plan your finances for years to come. You’re buying the home and you’ll be paying the mortgage on it. This is why only you can decide how much to offer for a house.
The bottom line is that real estate agents have a mandate to act in your best interest. Telling you how much to offer for a home could actively work against this duty, and realtors have faced legal action in the past for doing so. For these reasons, bidding on a home is solely the buyer’s responsibility.
How sellers can add a contingency clause to a purchase agreement
If the sale of your home is contingent on you finding a new place to live, buyers may be dissuaded from making a bid. However, this clause doesn’t have to be a hindrance. Here’s how to best include this type of contingency in a purchase agreement.
Make it clear
Ensure that the contingency clause is as clear as possible. One of the main concerns buyers have with regard to these clauses is that they’re vague. Understanding the specific circumstances in which a seller may back out is likely to reassure buyers, as they’ll know what they’re signing up for.
Specify time frames
Typically, the contingency of the seller finding a new home will take precedence on the buyer’s contingencies. In particular, if the buyer has asked for an appraisal or inspection and has specified a time frame within which to complete these, the countdown on finishing them won’t begin until after the seller has found a new property.
Finally, be clear about the seller’s right to extend the closing date should they fail to find a new home within the time originally specified.
How to quickly sell your home
If you want to sell your home in a hurry, here are a few tips to help you get it off the market in record time.
Hire a realtor
Choose a real estate agent who knows your region well and works for an agency you trust. Consider meeting with more than one realtor before you make a decision. A professional agent will be able to provide clear answers to any questions you have. Throughout the selling process, you should feel comfortable making inquiries about how the sale is proceeding.
Set a fair price
Thoroughly clean your home and remove all clutter. This will make each room look larger and more inviting. If you need to refresh the walls, choose neutral paint shades. You should also hide family portraits and other items that personalize the space. This will make it easier for potential buyers to imagine themselves living in your house. Consider hiring a home staging consultant who can help you showcase your home.
Get the word out
To increase the chance that it’ll sell quickly, show your home to as many people as possible. Once your realtor puts it on the market, there are several steps you can take to increase its visibility. Consider promoting the sale on real estate websites, in local newspapers, and on social media. Additionally, make sure the for sale sign is clearly visible on your property and will catch the eye of potential buyers who drive through the area.
Meet with potential buyers
Be upfront and answer visitor questions honestly. Make note of both positive and negative feedback you get about your house. If the buyers you meet have reservations about the property, try to determine the reason. This information can be used to justify a price adjustment or better market your house to the next visitors.
The housing market can be unpredictable, but following these recommendations will greatly improve your chances of selling your home quickly.