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5 Coronavirus Real Estate Myths Everyone Thinks Are True—Debunked

July 30, 2020

Luke Sharrett/Bloomberg

Every day, our conversations online and off are filled with “did you hear this yet?” news about the coronavirus pandemic. And, alas, not all of what you hear is true—particularly when it comes to real estate.

For instance: Do you assume, as many do, that it’s a terrible time to sell a home since real estate prices are plummeting? On the contrary, the latest data shows that home prices and buyer demand are through the roof. Or have you heard that the coronavirus has forced all city dwellers to flee to the burbs? Some have, but the mass exodus you might envision is by no means the reality.

There’s a potential cost to these misguided beliefs: missing out on some profitable opportunities. For instance, home sellers sitting on the sidelines might be passing up the chance to make tons of money on their sale. Meanwhile, home buyers who wrongly assume they can’t schedule home tours right now might be forfeiting their chance to snag their dream home this summer—at record-low interest rates no less.

To help you separate the truths from the half-truths from the utter falsehoods that might be filling your social media feeds, here are five prevalent myths about real estate during the COVID-19 pandemic—and some much-needed reality checks.

1. It’s a terrible time to sell your home

Many home sellers who may have hoped to put their house on the market this summer have put those plans on hold. In early July, new home listings dropped 14% compared with a year ago, and total home inventory was 32% lower, according to realtor.com®’s Weekly Housing Trends report for July 11.

Fear of coronavirus exposure is probably the main reason people are keeping their homes off the market, but many might also assume that selling a home right now is just a futile endeavor, plagued by few home buyers and low prices.

But on the contrary, the latest statistics suggest that now is one of the best times in years to sell a home for several reasons.

“Given the pandemic and uncertainty it’s caused, the general sentiment [among some owners] is that now is not a good time to sell your home,” says Danielle Hale, chief economist at realtor.com. “Yet so far, the data suggests the opposite—that buyers outnumber sellers in the housing market, which means it’s better to be a seller than a buyer.”

The aforementioned low housing inventory is one reason why those who do list their homes will enjoy a strong seller’s market, characterized by bidding wars that could fetch them a high price.

“Multiple offers could be fairly common over the next few months,” predicts Lawrence Yun, chief economist at the National Association of Realtors®.

“As long as buyer demand remains strong, I expect the market to remain tipped in favor of sellers,” says Hale.

2. Home prices are plummeting

Data shows just the opposite: Home prices are actually rising.

According to the NAR, the national median price for single-family homes grew 7.7% during the first quarter of 2020, to $274,600.

“We’re seeing home prices grow faster than pre-COVID-19,” Hale says. “In fact, they are on pace with the home price growth we saw this time last year.”

The reason is record-low mortgage rates.

“Record-low mortgage rates boost buying power,” Yun says, “and, when combined with a lack of supply, will result in higher and higher home prices.”

3. Buyers are holding off on home purchases

According to NAR’s Pending Home Sales Index (a forward-looking glimpse at home sales based on contract signings), pending home sales jumped 44.3% in May, the largest month-over-month increase since the index’s inception in 2001.

Record-low interest rates are driving much of the buyer demand, Hale says.

Mortgage interest rates dipped below 3% for the first time in 50 years, to 2.98% as of July 16, according to Freddie Mac.

“Certainly low interest rates help,” says Karl Jacob, CEO of LoanSnap. “You can lock in a rate that you just wouldn’t even have been able to imagine six, seven months ago.”

One caveat: Not all borrowers will qualify for the lowest interest rate, Jacob says. A borrower’s debt-to-income ratio and credit score typically affect the type of loan and interest rates, so someone with large amounts of debt or a low credit score may be offered a higher rate.

And although the market is booming now, it may not remain that way for long depending on what unfolds.

“If [COVID-19] cases worsen and that leads to a broad reversal of reopenings, this could cause longer-term job loss that would put a dent in buyer demand,” says Hale.

4. Homes can’t be viewed in person

As states issued stay-at-home and social distancing mandates to stop the spread of COVID-19, many in-person home showings and open houses were put on hold temporarily in favor of virtual home tours. But by now, most of these restrictions are being lifted across the country so homes can be viewed in person—and real estate agents are taking extra precautions to protect buyers and sellers.

Peggy Zabakolas, a licensed real estate broker with Nest Seekers International, who specializes in Manhattan and Hamptons markets, says she’s been showing homes virtually. If a buyer is interested, she schedules an in-person showing that follows social distancing guidelines, and requires everyone involved to fill out a COVID-19 disclosure form and limitation of liability form. And, she’s sure to have gloves, masks, shoe coverings, and hand sanitizer on hand.

Hale says she’s also heard some real estate agents are requiring potential buyers to have pre-approval letters or review a home inspection report before they can see a home in person.

“These extra steps also weed out the nonserious buyers,” Zabakolas says. “If someone is willing to go through all those steps and then schedule a physical tour, you know they are serious.”

Important to note: With infection rates in some parts of the country rising, some restrictions on home showings may take hold again. Check with your local real estate professionals for current guidelines.

5. Everyone’s fleeing cities for the suburbs

This is probably the most rampant myth of all, and it certainly makes sense from a pure impulse level. Since urban centers like New York City make social distancing far more challenging than in less densely populated areas, why wouldn’t city dwellers flee en masse and try to buy a house in the burbs?

Well, this is only partly true. Yes, listings in the suburbs are drawing more attention these days. In May, the number of views on properties with suburban ZIP codes increased 13%, almost double those in urban areas, according to realtor.com data.

“We have seen home-buying demand recover faster in the suburbs and rural areas than urban areas,” Hale says. “There’s also evidence of home shoppers in cities that were hit early and hard by COVID-19, such as New York and Philadelphia, seeking homes in nearby smaller communities at a higher pace, like the Poconos.”

That doesn’t mean everyone is fleeing to the suburbs, though.

For one, unless you’re extremely wealthy, it’s not that easy to pick up and move. This is particularly true since, while a few companies have announced that their employees can work from home indefinitely, most firms haven’t decided yet whether their employees will one day have to return to the office.

As a result, many of those people surfing suburban real estate listings might not be all that serious about following through. They might fantasize about moving, but when it comes to making an offer on a house and packing up their belongings, many may prefer to stay put and see how the coronavirus pandemic shakes out first.

“This pandemic, although bad, will eventually pass,” points out Jacob. “And when it does, are people really going to stop wanting to be in a city? I just don’t think that’s the case. Even though you can get delivery from Grubhub every night, it doesn’t mean you’re never going to want to go out to a restaurant, and if you have to drive 30 minutes to a restaurant versus being able to walk around the corner, that’s a different lifestyle.”

The post 5 Coronavirus Real Estate Myths Everyone Thinks Are True—Debunked appeared first on Real Estate News & Insights | realtor.com®.

5 Sweet Tax Deductions When Selling a Home: Did You Take Them All?

February 24, 2020

MariuszBlach/iStock

You may be wondering if there are tax deductions when selling a home. And the answer is: You bet!

Sure, you may remember 2018’s new tax code—aka the Tax Cuts and Jobs Act—changed some rules for homeowners. But rest assured that if you sold your home last year (or are planning to in the future), your tax deductions when you file with the IRS can still amount to sizable savings.

Want a full rundown of all the deductions (as well as tax exemptions or other write-offs) at a home seller’s disposal? Check out this list to make sure you miss none of them.

1. Selling costs

These deductions are allowed as long as they are directly tied to the sale of the home, and you lived in the home for at least two out of the five years preceding the sale. Another caveat: The home must be a principal residence and not an investment property.

“You can deduct any costs associated with selling the home—including legal fees, escrow fees, advertising costs, and real estate agent commissions,” says Joshua Zimmelman, president of Westwood Tax and Consulting in Rockville Center, NY.

This could also include home staging fees, according to Thomas J. Williams, a tax accountant who operates Your Small Biz Accountant in Kissimmee, FL.

Just remember that you can’t deduct these costs in the same way as, say, mortgage interest. Instead, you subtract them from the sales price of your home, which in turn positively affects your capital gains tax (more on that below).

2. Home improvements and repairs

Score again! If you renovated a few rooms to make your home more marketable (and so you could fetch a higher sales price), you can deduct those upgrade costs as well. This includes painting the house or repairing the roof or water heater.

But there’s a catch, and it all boils down to timing.

“If you needed to make home improvements in order to sell your home, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing,” says Zimmelman.

3. Property taxes

This deduction is capped at $10,000, Zimmelman says. So if you were dutifully paying your property taxes up to the point when you sold your home, you can deduct the amount you paid in property taxes this year up to $10,000.

4. Mortgage interest

As with property taxes, you can deduct the interest on your mortgage for the portion of the year you owned your home.

Just remember that under the 2018 tax code, new homeowners (and home sellers) can deduct the interest on up to only $750,000 of mortgage debt, though homeowners who got their mortgage before Dec. 15, 2017, can continue deducting up to the original amount up to $1 million, according to Zimmelman.

Note that the mortgage interest and property taxes are itemized deductions. This means that for it to work in your favor, all of your itemized deductions need to be greater than the new standard deduction, which the Tax Cuts and Jobs Act nearly doubled to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly. (For comparison, it used to be $12,700 for married couples filing jointly.)

5. Capital gains tax for sellers

The capital gains rule isn’t technically a deduction (it’s an exclusion), but you’re still going to like it.

As a reminder, capital gains are your profits from selling your home—whatever cash is left after paying off your expenses, plus any outstanding mortgage debt. And yes, these profits are taxed as income. But here’s the good news: You can exclude up to $250,000 of the capital gains from the sale if you’re single, and $500,000 if married. The only big catch is you must have lived in your home at least two of the past five years.

However, look for the rules of this exemption to possibly change in a future tax bill.

Ralph DiBugnara, vice president at Cardinal Financial, says lawmakers might push to change this so that homeowners would have to live in the property for five of the past eight years, instead of two out of five.

The post 5 Sweet Tax Deductions When Selling a Home: Did You Take Them All? appeared first on Real Estate News & Insights | realtor.com®.

How to Sell Your House Fast: 5 Must-Know Tips to Move Your Property

December 12, 2019

MarkCoffeyPhoto/iStock

If you need to sell your house fast, you probably don’t have a whole lot of time to research the current real estate market and ponder how it’ll affect your home sale. You just want sales guidance from a real estate agent or other pro that will help you find a buyer as fast as possible.

Well, here’s the good news: It is possible for you, as a seller, to offload your home quickly. The experts say selling comes down to a few key to-do’s that you should take care of before your property hits the market.

If you’re ready to unload your abode, heed the selling advice of the experts below. Of course, we can’t guarantee all homeowners a quick sale, but putting these tips into practice definitely won’t hurt the chances of securing a buyer.

1. Tidy up to make your house stand out (and sell!)

If you’re looking to sell quickly, you’re going to want to start cleaning, especially before those listing photos are taken by your Realtor®.

“Pristine houses from sellers are more attractive to a buyer, which will keep the buyer excited,” says Debi Benoit, principal and broker at Benoit Mizner Simon & Co. Real Estate in Wellesley, MA. “And an excited buyer may pay top dollar to the seller and will usually write an offer quickly.”

Fast selling means getting rid of clutter both inside the house and in the yard and putting some elbow grease into making everything look like a brand-new home (yup, you might need a storage unit for maximum curb appeal).

And selling fast means cleaning from top to bottom in every room of the house. Wipe down cabinets, light fixtures, and drawers, remove any scuffs from the walls, give all kitchen appliances a once-over, clean air vents, shampoo your carpets, and then sweep, vacuum, or mop every inch of the house.

It will take you several days of work to declutter, but the payoff (making a sale!) will be worth it for a potential buyer. Trust us—this is a major part of selling a home quickly.

2. Have your house staged to sell fast

Be the best seller you can be, and go extra mile beyond cleaning. To do this, consider having your house staged, a real estate term that means decorating your place so that it is more attractive to buyers.

“It’s best to present the home in its best light when you’re selling,” explains Nile Lundgren, an agent with Trent & Company in New York City. He once had a real estate listing—unstaged—on the market for five months without ever getting an offer to sell.

“We took it off the market, staged it, reshot photos, and put it back on the market,” he says. “Within two weeks, we got into a bidding war and signed a contract for a sale shortly thereafter.”

Real estate staging typically takes anywhere from a few days to a couple of weeks, depending on the availability of rental furniture, the movers, and the installers.

If you’re facing a major time crunch to sell, Lundgren suggests focusing on staging the beds, sofas, tables, chairs, and art—items that make a house feel like a well-maintained home where people can live and get comfortable.

3. Hire a photographer to take listing photos for a quick sale

It may feel like hiring a professional will be a waste of money. After all, your cellphone has a great camera, right? But that can be a sale killer, says Rosamaria Acuña, a Realtor with Berkshire Hathaway HomeServices California Properties in La Jolla.

“First impressions are everything, and need to be done right,” she says. “A professional photographer has all the tools to capture the right lighting and make everything look brighter and inviting.” The pros also have wide-angle lenses to fit the entire room in the photo.

4. Selling quick means making your home available for showings

Once everything is set up, get ready to spend a lot of time away from your home so buyers and real estate agents can view the property comfortably—without you or your pets wandering around the halls. Selling fast is best done when homeowners aren’t there for an open house.

Remember: If you want to sell your home pronto, you need to be flexible and open with your time, to allow buyers and real estate agents to tour it as often as possible.

5. Attract a buyer with the right price

Staging and marketing your home are important components, but at the end of the day, the amount of money you’re asking buyers to pay could be what seals the deal.

“Nothing will help sell a poorly priced home—and a well-priced home can overcome many other issues,” says Aaron Hendon, a Realtor with Christine & Company in Seattle. “To sell your home fast, your house needs to be priced to compete with the others currently on the market.”

Your real estate agent will help you decide on the right listing price for your home by looking at a variety of factors: your house’s age, any updates, square footage, and the school district.

An agent will pull up comparable homes, or “comps,” that have sold in the area to evaluate the best sale price.

The post How to Sell Your House Fast: 5 Must-Know Tips to Move Your Property appeared first on Real Estate News & Insights | realtor.com®.

Will They Dig It? How to Keep Your Oh-So-Perfect Landscaping From Scaring Off Buyers

September 11, 2019

ANGHI/iStock; realtor.com

For many buyers, a beautifully landscaped yard with show-stopping curb appeal can seal the deal. After all, who doesn’t want cascading blooms, immaculately trimmed shrubbery, and a carpet of emerald sod with their new home?

Surprise: As it turns out, there are indeed some buyers who might take one look at your sprawling outdoor oasis and think, “It will take a ton of work to maintain all of this!”

“I see many home buyers looking for yards that don’t require a lot of maintenance,” says Monica Kemp, a Realtor® with Coldwell Banker Residential Brokerage and accredited real estate staging professional in Leesburg, VA. “It can be generational—a lot of younger, first-time buyers don’t want to be home all day gardening or dealing with the lawn.”

Your garden should feel inviting and relaxing, not overwhelming, says Andrea Duane, a Realtor with Coldwell Banker in the El Dorado Hills, CA, area.

“A beautiful garden is more of a benefit to sellers than a deterrent, but there’s definitely a percentage of buyers in the marketplace that don’t feel comfortable with that amount of landscaping,” Duane says. “It may feel daunting because they’ve never owned a home before or they just don’t have a green thumb.”

So if you’re selling a property with lots of lovingly tended flower beds and veggie gardens, how do you leverage your landscape—and not scare people off? Here’s how to reassure buyers that your yard will bring enjoyment, not exhaustion.

Declutter your yard

Be sure your outdoor space is sending the right message to buyers, Kemp says. You want your yard to say, “Sit down, have a cold beverage and relax,” rather than, “Please weed me.”

So stage the outside areas as you would the inside of your home: Declutter so that the essential elements can shine.

“Make sure trees and shrubs are trimmed, whether you hire a professional or do it yourself,” Kemp says. “Remove anything that’s dead or dying or doesn’t give you a positive first impression.”

Divide overgrown plants, so your garden looks neat instead of needing attention. And lose the whimsical gnome statues, tacky lawn ornaments, and noisy wind chimes in your garden that won’t let buyers imagine themselves in that space.

Hide the high-maintenance plants—and pack in the perennials

Perennials
Daffodils and tulips are perennials.

kdow/iStock

If you have rare heirloom roses or other specialty plants requiring extensive pampering, you might want to scale back before you put your house on the market, Kemp says.

Dig up rare or hard-to-care-for plants, and put them in pots to take with you. Be sure to exclude these on the listing, so buyers know they are not part of the sale.

But you don’t have to strip everything bare! Gardens consisting of perennial plants that grow back year after year can be a huge selling point, says Kemp, who points out such flowers and shrubs during house tours. Annuals, on the other hand, often are more vibrant and colorful but last only one year. A savvy buyer could see annuals as high-maintenance feature.

“Annuals can really make your house look nice, but I wouldn’t do an entire yardful—maybe just along your walkways, with some planters on your front stoop, or by the slider doors on your back deck, just for pops of color,” Kemp says.

Rethink your pond or water features

Water features
Think twice about the impression your water features are making on buyers.

Tim Abramowitz/iStock

Water features make gorgeous focal points and help create a resortlike environment in your own backyard. But beware: Your koi pond might deter buyers.

“Personally, I think fish ponds are really cool, but I would never describe it as a selling feature because people tend to see them as added maintenance,” Kemp says. “What if the pump fails? How am I going to keep those fish alive in the winter? They might have little kids, so there’s a safety concern.”

Duane agrees that ponds are often deal breakers if a buyer doesn’t know how to take care of it.

“One option is fill in the pond,” she suggests. “I did that in my own yard, even though I love ponds and fish; it just wasn’t something I needed or wanted.”

Not keen on filling in your pond? Kemp suggests compiling some helpful care and maintenance tips for potential buyers, along with names of service companies.

Get rid of some grass

Just as a massive swath of flower beds can alarm buyers, so too can a large expanse of lawn, Duane says.

“People might be thinking, ‘That’s a lot of mowing, and that needs a lot of water,’” she says.

Plus, allergy-suffering buyers will probably not appreciate all of the pollen that grass releases in early spring. Instead, pop in a row or circle of boxwood shrubs, which can add texture and interest and need very little maintenance beyond occasional trimming.

Be proactive with tips for buyers

Maybe you do have lush landscaping—but perhaps you’ve also figured out an efficient way to take care of it. If so, point this out to buyers. For example, noting that the large flower bed consists of easy-care plants and an in-ground irrigation system tells buyers that they won’t have much to do—and ends up being a perk.

And get ahead of any kind of hesitation by telling buyers what they’re in for: Draw up a garden plan so buyers can see the plant varieties that blossom at different times of the year, Kemp says. Make sure to include names of flowers and any seasonal care tips that have worked for you.

The post Will They Dig It? How to Keep Your Oh-So-Perfect Landscaping From Scaring Off Buyers appeared first on Real Estate News & Insights | realtor.com®.

How Soon Can You Sell a House After Buying? 3 Times to Break the 5-Year Rule

August 22, 2019

How Soon Can You Sell a House After Buying? 3 Times to Break the 5-Year Rule

iStock; realtor.com

They don’t call it a forever home for nothing. Most of us buy with the intent of staying a long time—sometimes indefinitely. But here’s the rub: Things change. Life takes us in a different direction, or the house you fell in love with only a few short months ago somehow becomes your biggest regret. Maybe the neighborhood is changing, or financial difficulties are making it impossible to enjoy your new home.

Whatever the reason, you just might find yourself asking, “How soon can I sell this house?”—mere months after you moved in.

But then there’s that pesky five-year rule that everyone cites. Basically, it says you should never even consider selling until you’ve lived in the home for at least five years. And it’s not arbitrary—there’s good reason for it.

“Unless it’s a superhot market, a seller likely won’t even recoup their transaction costs if they sell within a few years of buying,” says James McGrath, real estate broker and co-founder of Yoreevo.

McGrath, like many real estate professionals, even advises clients to avoid buying a house unless they plan on staying for at least five years, which is the typical amount of time it takes to break even on your initial investment.

But rules are meant to be broken as needed, and sometimes your situation actually requires you to break them. Here are three times you should say to heck with it all and get out of that house.

Exception No. 1: Your property value goes way up

Sometimes the market is so white-hot that it seems like property values jump overnight. This would definitely qualify as one of those times you can get away with ignoring the five-year rule and selling your home, even if you haven’t been in it for long.

But a lot depends on where you plan to go next. Moving to a lower-cost metro? You’re golden. Staying in the same area? You might not be able to get into a nicer place, or end up paying more money for a home much like the one you currently own. Look around and run the numbers carefully.

Also, keep in mind this tactic works only if the profit you make from the sale is really significant—otherwise you might see it eaten up by closing costs and a little thing called capital gains tax.

“Selling a home after owning it for less than a year generates a short-term capital gains tax,” says Denver real estate agent Alex Kishinevsky. “In this scenario, any equity you have accumulated from the sale is subject to taxation as ordinary income, according to the IRS.”

Exception No. 2: The neighborhood is going downhill

A bad neighborhood is bad news, and if there’s a clear downward trend, you’d best get ahead of it. A declining neighborhood could ruin your chances of a profitable sale in the future.

Neighborhoods can start spiraling downward for a number of reasons, not the least of which is when something new gets built—or destroyed—and disrupts the quality of life. We’re talking about malls, prisons, factories, and more.

“How far away are you from the lights and noise it produces? Are citizens concerned about possible pollutants?” asks Benjamin Ross, a Realtor® with Mission Real Estate Group. “Are town hall meetings getting volatile? If the answers to these questions are yes, it may be smart to sell early and take a small loss, versus stay and lose your shirt.”

Whatever is changing your neighborhood’s landscape, ask yourself if it devalues your home. If the answer is yes, break the five-year rule and get out.

Exception No. 3: You really hate living there

Although we keep harping on it, making a profitable sale isn’t the only important thing when it comes to deciding where to live and for how long. Your happiness is also significant. If you really, really hate where you live, then you might just need to get out—regardless of the cost.

Depending on your mortgage and home insurance policy, you might even consider turning the house into an investment property. A lot of homeowners choose to rent out their homes when the market is less than stellar but they want to stop living there.

“Allow someone else to pay your mortgage and grow your net worth,” says Seattle real estate agent Tyler Kirages.

No matter why you’re considering breaking the five-year rule, always keep in mind that listing isn’t the same thing as selling.

“Put it up and see what you can get,” Ross says. “Just because you list doesn’t mean you have to sell. Explore your options by finding real values in a possible deal, and do it if it makes sense.”

The post How Soon Can You Sell a House After Buying? 3 Times to Break the 5-Year Rule appeared first on Real Estate News & Insights | realtor.com®.

Should Home Sellers Get an Appraisal Before Listing? Here’s Why It’ll Cost You

August 8, 2019

William_Potter/iStock

Even if you’re new to this whole selling-a-house thing, chances are good you’ve heard of a home appraisal. And if you know just a little about the process, you know that the appraisal—a value put on your home by an objective third-party expert—can make or break your home sale.

So with so much riding on this step of the home-selling process, you might be wondering: What does it hurt to go ahead and get an appraisal before you list? After all, it’ll give you an idea of what your home is valued at, and could even help you figure out an appropriate asking price, right?

Not so fast. While an appraisal is an important step in selling your home, there’s a reason it typically doesn’t happen until much later in the process.

In fact, getting an appraisal done too early is way more likely to end up costing you money than making you money. So what is an appraisal and why don’t you need one (just yet)?

Why do appraisals happen late in the home-buying process?

Simply put, home appraisals are meant for the buyer’s lender more than any other party. If a buyer needs a loan to purchase your home, the lender will require an appraisal toward the end of the loan application process just to make sure the home is actually worth its purported value.

“The collateral for the loan is the home, so lenders require an independent appraiser to inspect it and advise on its value,” explains Michael Drake, president of PMG Home Loans. “The appraisal is intended to make sure the home is in normal condition without obvious repairs needed.”

Plus, even if you’re a seller eager to know the appraised value of your home, remember this: The cost of the appraisal is typically seen as the buyer’s responsibility (since it’s a requirement for the loan). Furthermore, a lender isn’t likely to even accept your appraisal for its purposes; the lender will want to choose the appraiser to ensure it’s a truly unbiased third party assessing the property.

“Appraisals aren’t done at the beginning because the lender wants to assign the appraisal company that they work with,” says Julie Upton, a Realtor® in California’s Marin County. “And they may not accept an appraisal that the seller did at the time of listing.”

Appraisal value isn’t the same as market value

We know, the lingo can be confusing, but trust us on this one: There’s a world of difference between the “appraisal value” and the “market value” of your home.

The listing price is derived from the market value, which is assessed by a number of factors that don’t go into an appraisal—and many of which revolve around the current state of the housing market you’re selling in.

“The market value is what someone is willing to pay for a property—often influenced by emotion and how competitive the area is,” Upton explains. “In a multiple bidding situation, prices are driven up because buyers get emotionally caught up in the bidding process and may pay well over an appraised value. If someone really wants a property, they won’t care what the appraised value is, they simply want it no matter what.”

Meanwhile, the appraisal has more to do with “bones” and any significant historical changes made to the property, according to Upton.

While both real estate agents and appraisers use comparable sales (also called “comps”), and the two values might even end up being similar, the market value is the one you should be most concerned with as a seller. Got it?

So how is market value determined, if not with an appraisal?

Real estate agents will use comps to pull recent data on other houses (that are similar to yours) to arrive at a market value.

“We compare other properties that are close to this property, similar in size, construction, and condition, that have recently sold or are on the market,” Upton says.

Agents will also do a walk-through of your property and talk with you before arriving at a number you both feel comfortable listing at.

The final word

Getting an appraisal in advance isn’t just a waste of your time—it’s also expensive. Depending on where you live, appraisals start at $300 to $500, and if you own a lot of land or a very large house, you may end up paying a lot more.

“An appraisal can cost thousands depending upon how big the home is,” Upton says. “Land is also very hard to appraise, so sometimes a land appraisal is higher than homes.”

Getting an appraisal done ahead of time might even end up losing you money on your home sale.

“Getting an appraisal before putting your property on the market may actually cause you to get less for your property, as the appraised value could very likely be lower than what you believe is the property’s market value,” Upton says.

The final word? Save yourself some time and aggravation—let the buyer foot the bill on this one.

The post Should Home Sellers Get an Appraisal Before Listing? Here’s Why It’ll Cost You appeared first on Real Estate News & Insights | realtor.com®.

Mercury in Retrograde: Your Guide to Buying and Selling While the Planets Go Crazy

July 17, 2019

iStock; realtor.com

If the sh*t really started hitting the fan for you right around July 7, you wouldn’t be the only one. Mercury is in retrograde until July 31, which explains why your mood might be all over the place and why you and your S.O. got in those epically dumb fights last week. It also explains why, as I was writing this piece, I found myself running to catch a flight at the changed (unannounced) gate, laptop open, coffee spilling down my shirt, only to end up having my seat moved to an aisle with the world’s unhappiest children.

But let’s back up for a second: Several times a year, planet Mercury is said to go retrograde—meaning it moves in an opposite direction to Earth. (“This backward movement is actually an illusion, similar to the one you experience when you’re in a car on the highway moving faster than a train alongside you,” according to Mother Nature Network.) Regardless, astrologers believe that this brief planetary upheaval also throws chaos into life down here on our planet.

While there’s no need to stock up on your favorite instant mac and cheese and prepare for the apocalypse, you might want to be a little extra cautious during this time, says astrologer and psychic Suzie Kerr Wright—especially if you find yourself about to make a particularly huge and consequential decision, like, say, buying or selling a house.

“Mercury rules our communication and thinking, so all of that can become murky,” Wright explains. “The period messes with our minds so we may misplace or lose things, we might feel a little off, or, if we’re rushing to send an email, we may reply to all instead of one person. We may find we’re a bit clumsier too.”

So how does Mercury play into buying and selling?

“Some people out there are more sensitive to Mercury retrograde than others,” explains Mary Dunne, real estate broker at Warburg Realty in New York. “In many instances, I believe a Mercury retrograde can add some complications or delay some aspects of the process, and generally highlight the need to read the fine print.”

With all of the craziness happening, you might start thinking a moving Mercury might wind up derailing the close on your new house. But both Dunne and Wright insist this isn’t the case.

“I don’t highlight the timing to clients unless it’s brought up,” Dunne says. “I just play more cautious around the time.”

And despite all of the spilled coffee and drama-filled days, Wright actually insists that Mercury in retrograde can be a positive thing.

“The real purpose of a retrograde period is to get us to slow down, rethink what we’ve been doing, revisit old ideas, and reconnect with ourselves and others,” she says. “It’s a break, not a curse.”

How to get through a retrograde sale

The key to getting through a big decision while Mercury does its business isn’t to hole up and hide away. Get out there and keep on keepin’ on—just do it thoughtfully.

“Make decisions from the perspective you had prior to the retrograde,” Wright says. “In other words, if you want a Craftsman home and that’s what you’ve always wanted, but you find a ranch during a retrograde you feel you can’t live without, step back. Think, think, and then think again. Is this really what you would want long-term and why did you want a Craftsman for all this time?”

Some fine print details to get you through the crazy

  • Check contract numbers twice, and double-check everything before signing anything.
  • Overcommunicate your expectations to everyone involved in the deal. That means your real estate agent, and possibly even your buyer or your seller. Make sure everyone is on the same page, and avoid any miscommunications.
  • Avoid last-minute changes. “Buying and selling during retrograde is fine,” Wright says, “so long as contracts have been drawn up before.” If any major last-minute changes take place, consider waiting until after retrograde to sign the paperwork.
  • Don’t be swayed by your own change of heart. Lots of folks are changing their minds right now, so don’t let your new inkling for a ranch make you throw out weeks of negotiating on your former Craftsman dream home.

The bottom line

Sure, weird stuff might happen during this period. But ultimately, everything is going to be OK.

“Starting something new in a retrograde period is not advised, but life goes on and you won’t die if you do,” Wright says. “Just double-check everything, and stay out of the panic mode.”

The post Mercury in Retrograde: Your Guide to Buying and Selling While the Planets Go Crazy appeared first on Real Estate News & Insights | realtor.com®.

Doing This One Thing Before Putting Your Home on the Market Can Help Sell It Faster

July 17, 2019

AndreyPopov/iStock; realtor.com

You’ve lived in your home for years and haven’t exactly been on top of regular maintenance tasks. Now, your windows are covered in plastic wrap to cut down on the cold drafts, your ceiling seems to be leaking, and those shrubs you planted to conceal a few small cracks in the foundation just aren’t cutting it anymore.

Hey, we’re not judging! But if you’re ready to put your home up for sale, know this: Buyers and their agents are going to zero in on all those things that need doing—as well as some things you hadn’t even noticed yourself.

So why not get ahead of the curve by hiring a licensed home inspector who can pinpoint what needs fixing?

Of course, most sellers don’t get their homes inspected before listing them, because the buyer usually orders an inspection during escrow, says Marc Lyman, a Realtor® with Pacific Sotheby’s International Realty in San Diego, CA. And who wants to pay for something twice?

But if you’re willing to invest the time and money, a thorough inspection before listing your property can make it easier to price your home, manage repairs, and even help sell it faster—and for more money.

So what are the some of the reasons why a pre-listing inspection makes sense? Let’s take a look.

It can save you if you’ve neglected home maintenance

If you have a busy life—or maybe even if you don’t—chances are that obsessing over regular home maintenance might not be your No. 1 priority during downtime. Trouble is, letting painting, roof repairs, and other routine chores slide can lead to bigger issues down the road, says Chicago-based Frank Lesh, ambassador for the American Society of Home Inspectors.

“In a lot of cases, people think, ‘I’ve been here for 30 years; the house is fine. There’s nothing wrong with it,’” he says. “But they’re looking at it with rose-colored glasses.”

Instead of worrying what a buyer’s inspector will uncover—and which could potentially kill the sale—be proactive with a pre-listing inspection, Lesh says. This way, rather than being blindsided, you can then decide whether to make the necessary repairs or to account for that deferred maintenance by reducing the list price. Which leads us to…

You can make more a bigger profit on your sale

Sure, a home inspection that you don’t have to do is going to cost money. (An inspection for a 1,200- to 1,500-square-foot house in an average market, for instance, will cost between $350 and $600, Lesh says.) But as the saying goes: Sometimes you have to spend money to make money.

After all, if you invest a little more to repair and spruce up anything the pre-inspection reveals, you can justify listing your home at a higher price, Lyman says. Plus, he adds, in most states, home improvement repairs you carry out before selling your house are deductible from the profit you make from the sale.

Sometimes, just knowing that a pro has given the house a proper once-over can persuade a buyer to make a bid (assuming that you actually follow the inspector’s recommendations).

“It minimizes surprises for a buyer, and can give a buyer more confidence in the property,” Lyman says.

You won’t have to scramble to fix things at the last minute

Once a buyer’s inspector submits a report, sellers are usually faced with two choices: If problems are found with the house, they can then either slash money from the sale price, or opt to carry out repairs before the closing date. That often leaves sellers in the lurch, having to get work done pronto—and sometimes paying a premium for the rush work.

After a pre-listing inspection, sellers can research contractors and make the necessary repairs within a time frame of their choosing, so that everything is ready before potential buyers even visit the property.

It’ll minimize back-and-forth negotiation

Buyers often use their home inspection as leverage, asking the seller (that’s you!) for steep discounts based on what their inspector’s report reveals. Not surprisingly, the buyer’s inspection is often where the deal falls apart.

If you’ve already uncovered the issues and addressed them, you can raise the price of your home accordingly, Lyman says. “That gives the buyer less leverage in the request for repair process,” he explains.

Also, in red-hot markets where multiple bids come fast and furious, there’s always a chance that buyers might accept your pre-listing inspection without insisting on doing their own. This can make for a quicker sale, Lesh says.

But make sure a pre-inspection doesn’t work against you

As advantageous as a pre-inspection can be, don’t forget that the inspector’s report could be a double-edged sword: Once you know about a problem, you can’t ignore it, Lyman says.

Sellers are legally obligated to disclose any problems that a home inspection unearths.

“For sellers unwilling to do repairs, their own inspection could be used as leverage to negotiate on price and in the request-for-repair process,” he says.

Before committing to a pre-inspection, find out what other sellers in your area are doing. Your agent can help guide you on whether it’s necessary to sell for more, or if there’s a better—and more affordable—strategy for getting your home sold.

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Sleep On It: Why Letting Buyers Spend the Night Could Pay Off Big for Sellers

June 20, 2019

Nattakorn Maneerat/iStock

For most buyers, thoroughly vetting a house includes opening every cabinet, driving by the neighborhood at different times of the day and night, and getting a thorough home inspection. But if a buyer close to making an offer asked to spend the night in your house, would you accommodate the request?

Well, maybe you should. Although extreme, this “try before you buy” approach can show some positive results.

The idea first took shape among buyers considering planned communities and luxury properties.

Bob Kanjian, director of sales at AV Homes, says the two 55-plus communities he sells properties in give prospective buyers the opportunity to pay a reasonable rate to stay a few nights and test-drive the community. And it works: A third of the people who participate in the sleepover showings end up purchasing a home in the community, a rate three times higher than potential buyers who don’t spend the night.

Sellers of luxury properties have also been known to cater to genuine buyers who request an overnight stay.

“On the rare occasions that I do see a request for an extended showing, the situation often involves a very high-end property and an international buyer who is trying to get a feel for the entire community as much as the home,” says Bruce Elliott, president of the Orlando Regional Realtor Association.

Part of the reason it’s relatively rare is that there are significant liability issues involved.

“With any type of sleepover showing, it’s advisable to prescreen buyers to ensure they have the financial wherewithal to purchase the property, to ensure the appropriate insurance policies are in place, and to have both parties sign a protective waiver,” Elliott says.

Still, should you get your place ready for a serious-buyer sleepover? Let’s weigh the pros and cons for the everyday seller.

Why sellers should consider sleepover showings

There are a number of things buyers can learn from spending 24 hours in a property that they wouldn’t pick up on during the day. An overnight stay would allow them to test-drive all of the amenities in your home—from the dishwasher to the rain shower in the master bath.

Concerns about night noise from roads, neighbors, or other potential sleep disruptions nearby could all be addressed during an overnight stay.

An extended showing would also allow the buyers to check out not just the home itself but also the community at large. Potential buyers could walk to a nearby park, explore the local restaurants and cafes, and experience the morning traffic.

Disadvantages of a sleepover showing

Unless there is some pressing concern that can’t be addressed in any other way, sellers may balk at a buyer’s request for an extended showing of their home. It can be a hassle to prepare the home for strangers (e.g., stashing your valuables and cleaning everything) and find a place for them to stay the night.

Allowing potential buyers to occupy your place will also cut into the number of days the home is on the market. And the more time your listing spends on the market, the less desirable it looks to typical buyers.

“Days on market is key. If you allow someone to spend the night for 24 or 48 hours, you’re limiting the exposure to other buyers,” says Dillar Schwartz, a Realtor in Austin, TX.

How do you make a sleepover showing work in your favor?

You don’t want to let just anyone spend the night in your home, so how do you make sure the test drive goes as smooth as possible?

According to Elliott, potential buyers should prove that they are serious about buying your home and have no problem signing a waiver that protects you from any liability. It’s also reasonable to ask the buyer to pay a deposit to cover potential damages.

If you’d prefer buyers to pay for their stay, the local Airbnb or VRBO rates can help you determine a reasonable price per night. Even better, if your sellers have been an Airbnb host in the past, they might be willing to go through the service again to rent you their home for a night.

Since sleepover showings are a relatively new thing, there is not really a standard procedure for setting one up. The details all depend on your comfort level, the advice of your lawyer or real estate agent about liability issues, and how far you’re willing to go to cater to a buyer.

Still, buyers make unusual requests all the time. If a sleepover is the only way to put an earnest buyer’s mind at ease, it might be worth it to put fresh sheets on the master bed and allow the sleepover in your home.

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7 Things in Your Living Room That Are Freaking Out Potential Buyers

November 1, 2018

It’s easy to think of creepy items in your living room that would be instant deal breakers for potential buyers: a coffin, for instance. (With or without someone in it.) A meth lab. A ghost with an attitude problem.

First impressions start with curb appeal, but next to the kitchen, the space that arguably carries the most weight is—you guessed it—your living area. After all, it’s where we spend the most time trying to decompress and escape the worries of the day. So buyers, of course, are going to run full speed the other way if they stumble across a living room that freaks them out.

We asked real estate pros about the biggest buyer deal breakers they’ve encountered in a living room.

1. Dead bugs

Nancy Wallace-Laabs, a licensed real estate broker in Texas, once viewed a house where hundreds of dead June bugs were piled up inside a living room window screen—“about an inch deep all the way around,” she recalls.

The insect graveyard was an instant turnoff—to everyone.

“No one was even attempting to buy the place,” Wallace-Laabs says.

Surprise ending: She and her husband ended up buying the home themselves at a steep discount, giving those June bugs a proper burial, and turning the property into a rental.

The lesson: Make sure every corner of your living room is pest-free before you show your home.

2. Your collection of _________

Those sad clown paintings on your living room walls might strike you as hilarious, but a potential seller will slowly back out the door.

“Anything too thematic should be removed from your living room,” says Marie Bromberg, a licensed real estate salesperson with Corcoran in New York City. “Keep in mind, the more obscure the collection, the creepier it is.”

Victorian dolls? An obvious no. But even a huge array of decorative items can strike buyers as icky.

Bromberg’s example of choice: cowhide and animal skulls. At some point, they veer from “Southwestern vibe” to “Silence of the Lambs.”

Pack your precious collections away, no matter how harmless they may seem to you.

“Even too many pet accessories will make the apartment feel like a shelter,” Bromberg adds.

3. Surprise smells

Without question, experts list bad—or just unexpected—odors as the No.1 living room turnoff.

“One time I brought a buyer to a listing and the owner’s tenant was cooking hotdogs on a Foreman grill,” Bromberg recalls. “It was an open layout, meaning the kitchen had no wall between itself and the living room. The hotdog became more memorable than the apartment.”

Pat Vosburgh, a licensed Realtor® with NextHome Gulf to Bay in St. Petersburg, FL, has had clients that never made it past the living room because of the overpowering scent of cigarette smoke.

“Smells can really break a deal,” she says.

The best scent in your house?

“The smell of nothing,” says Justin Riordan, founder of Spade and Archer Design Agency, a Portland, OR–based firm that offers home staging. “It clearly communicates that the house is clean and stink-free.”

4. Evidence of your pets

You might accept the fact that your beloved German shepherd sheds his whole coat onto your couch cushions. But potential buyers won’t be as understanding.

“Yes, [buyers] will vacuum when they buy the home, but some feel they will never get all the hair up,” Vosburgh says.

And it’s not just hair that can gross them out.

Vosburgh remembers taking clients through one house and coming out covered in dog hair—and fleas.

“My husband had on dark pants, so he didn’t see them until we got in our car. They were jumping all over the place,” Vosburgh recalls. “We had hundreds on us.”

She had to flea-bomb her car. Her clients had to do the same.

“They were freaked out,” Vosburgh says. (Unsurprisingly, they didn’t make an offer on the home.)

“Nobody ever bought a house because it has evidence of a pet,” Riordan says. “They have, however, decided not to buy a house because it stunk, they were afraid, or allergic.”

5. Darkness

“Light is the No. 1 seller of homes,” Riordan says. “Please, for goodness’ sake, let in the light.”

He recalls one client who hated the fact that her living room window faced the street and insisted on heavy sheers to block the view—even though they kept the space in gloomy semidarkness.

“She left the sheers up against our request to take them down and when the house sat on the market for a few weeks, complained that our staging wasn’t working,” Riordan says.

He persuaded her to take down the draperies for just one open house.

“Funny enough, she had three offers by the end of it and the property sold for over asking,” he recalls. “Light. Sells. Spaces.”

6. Evidence of death or hoarding in the home

Jennifer Salomon works for a Central Florida company called Bio-One, which specializes in trauma scene cleanup and hoarding.

“We’ve cleaned everything from animal hoarding to decomposing bodies to homes covered entirely in trash,” Salomon says.

But here’s the thing: They’re not always called right away.

“We’ve had families who’ve tried to clean a past loved one’s home [before it goes on the market], and it just gets to be too much, both emotionally and physically,” Salomon says.

“I would not recommend a biohazard scene such as a crime or death that occurred in a home to be done by unlicensed professionals,” she adds. “It’s illegal and a huge safety concern for all involved.”

It’s also a deal breaker for buyers.

7. Any personal photos

A photo on the living room wall of you and your family at Disney World isn’t creepy (usually), but can still be a major turnoff to buyers.

“Everyone says this, and somehow no one believes it,” Bromberg says. “Every client I’ve had pushes back with ‘But the photos are professional,’ ‘They look like magazine photos,’ ‘My kids are cute,’ and ‘Families will want to see another family lived here.’”

It doesn’t matter.

Bromberg once toured a home where many of the family photos were “Star Wars”–themed—”like family members in full Yoda and Padmé regalia,” she says. “My buyers found it very awkward.”

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