Friday Night Live ticket giveaway #2! #WheresLuke? We are excited to be partnering with Old Town Winchester for Friday Night Live on June 15th. We have 5 pairs of tickets to give away. Luke and Clint dropped off the 2nd pair of tickets somewhere on the Old Town Walking Mall. Watch this short video for a clue to their location. (We make it SO easy!) If you are the first person to go in and ask “Is Luke Here?” you will receive a Luke magnet and an envelope with instructions to claim your tickets! We are looking forward to Friday. Our tent will be set up near Macado’s from 5 pm to 10 pm so stop by and say hello. We will have some NextHome Realty Select swag and you can enter a drawing for an Echo Dot!
How Do I Know the Market Value of a Home?
Home prices in the U.S. have risen more or less steadily over the last few years. In many cities, home values are now at their highest point in history — even higher than the last housing boom.
But what determines the “market value” of a home? How do sellers determine their list prices, and how can buyers evaluate a listing based on current market conditions. Here’s a crash course in determining market value, for sellers and buyers alike.
The Definition of ‘Market Value’
Let’s start off with a quick definition. In a real estate context, the “market value” is the most likely price a home will sell for within a reasonable amount of time. It is based on local housing market conditions and recent sales activity.
You’ll notice this definition does not mention the original price paid by the homeowner. Unless they bought the home a month ago, the original purchase price is likely irrelevant to the current market. Likewise, the market value of a home has nothing to do with the homeowner’s current mortgage balance. Some sellers list their homes for the amount needed to pay off their mortgage loans. But that doesn’t always line up with the current market value of the property.
How to Determine Market Value
So, with that introduction out of the way, let’s get to the heart of the matter. How do you know the market value of a home you’re thinking about buying? Or the value of your own property, when listing it for sale?
The first thing you’d want to do is track home sales in the area. The longer you do this, the better. It gives you a good base of knowledge with regard to asking prices versus selling prices (hint: it’s the latter of these two that determines market value).
Next, you’ll want to review sales data on homes that are similar to the one you’re considering. This is what real estate agents refer to as comparable sales, or comps. The more alike the two properties are, the more accurate the pricing comparison.
Try to find as many comparable home sales as possible. This will help you support your offer amount, by showing the seller you’re using actual market data from recent sales in the area. Remember, home prices can change over time. So recent comps will give you a better idea of what’s happening now, in the current real estate market.
When you determine the market value of a home, you also need to take any unique features into account. For example, let’s say I’ve found sales data for two colonial-style homes that are 2,000 square feet. The home I’m considering is also a colonial with 2,000 square feet. But it has a completely renovated kitchen, a pool, and sits on a more spacious corner lot with a great view. The other houses lack these qualities. So the house I’m considering will likely sell for more than the two comps, despite the fact that the homes are similar in size and style.
Here’s a good “formula” to keep in mind when considering the market value of a home in a particular area:
Comparable sale prices + unique features = a good asking price
An Easier Way: Work With a Real Estate Agent
This is just a basic overview of market value within the context of real estate sales. There’s more work involved to properly evaluate the value of a particular property, especially when the market is changing constantly. And that’s where real estate agents come into the picture.
Real estate agents undergo extensive training in this area. Much of their education has to do with real estate market cycles, home prices and values, and related topics. So whether you’re buying or selling a home, you could save yourself a lot of time and energy by having an agent on your side! Call us today to connect with an agent. We are here to help you make the best decision for you and your family.
Beautiful Nahla was our first Luke’s Furry Friend. We sponsored her for February 2018. She is still looking for her #FurEverHome. You can learn more about her story here in this NVD Article. It is time for this sweet girl to find her #NextHome. We are asking for your help.
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Homes Expected to Sell Fast in 2018, Like Last Year
A recent report showed that homes across the U.S. sold faster than ever during 2017. And experts believe that 2018 could be an even hotter real estate market, due to a chronically low level of homes for sale. So buyers should be prepared for competition.
A Fast-Moving Real Estate Market in 2018
Here’s the big message for home buyers and house hunters in 2018: Be prepared to move quickly when you find a house you want to buy. Nationwide, homes sold at their fastest pace on record last year. And this year could match, or even outpace, that record.
According to a recent report from the real estate information company Zillow, it took a median of 81 days to sell a home in 2017. That was nine days faster than the previous year. The fastest-selling month for houses was June of 2017 when it took about 73 days for a home to sell (including the actual closing process). Since it can take between four and six weeks to close a sale, this means the typical home was on the market for around 30 days, before going under contract.
Buyers Still Dealing With Limited Inventory
So here we are in spring 2018, and housing markets across the country are still red-hot. This is largely due to the dearth of inventory seen in many areas. Home buyers in 2018 are facing limited inventory this home-shopping season, which has been the case for the last three years.
According to the latest figures, housing market inventory across the country has declined on a year-over-year basis for 37 months in a row. This leaves fewer options for home buyers while boosting competition and prices. In 2017, nearly a quarter of all homes sold across the U.S. went for more than the list price. This shows that stiff competition could be leading to bidding wars and driving prices higher.
According to Aaron Terrazas, senior economist at Zillow, 2018 will be marked by fast home sales.
“As demand has outpaced supply in the housing market over the past three years, buying a home has become an exercise in speed and agility,” Terrazas said in a recent news release. “This [year] is shaping up to be another competitive home shopping season for buyers, who may have to linger on the market until they find the right home but then sprint across the finish line once they do.”
Tips for Buying in a ‘Fast’ Market
Fortunately, there are some things you can do to make the house-hunting process more efficient and to make your offer stand out.
Here are five tips for buying in a competitive market:
Review recent home sales in your target area, to get a feel for pricing.
Work with an experienced real estate agent who knows the local market.
Get pre-approved for mortgage financing to help narrow your price range.
Move quickly with a strong offer when the right house comes along.
Keep the big picture in mind; don’t quibble with the seller over “nickels and dimes.”
The fastest-selling real estate markets of 2017 were mostly located in California and the Pacific Northwest, where inventory is most constrained. San Jose, California; San Francisco and Seattle topped the list. But these conditions are affecting many cities and towns across the country, to varying degrees.
Mortgage Rates are climbing. Should I buy a home now, or wait until later in the year? Will I pay more if I postpone my purchase?
These are perennial questions from home buyers nationwide. And a recent upsurge in mortgage rates has some buyers rushing to close on their loans, out of concern that rates could keep rising in the weeks ahead.
On March 8, 2018, Freddie Mac reported the results of its latest survey of the mortgage industry. This long-running survey goes out to more than a hundred lenders across the country, every week. Freddie Mac’s research team then compiles the results into a weekly mortgage rate average that gives us some useful insight into industrywide trends.
Rates Climb to Highest Level Since 2014
According to the latest report, the average rate for a 30-year fixed-rate mortgage loan rose to 4.46%, for the week ending on March 9, 2018. That percentage is significant for two reasons:
1. It marks nine straight weeks of rising loan rates. So it’s a trend — not a fluke.
2. It’s also the highest average for 30-year mortgage rates since January of 2014.
According to Freddie Mac:
“The 10-year Treasury yield has been bouncing around in a narrow 15 basis point range for the last month. While the yield on the 10-year Treasury is currently below the high of 2.95 percent reached two weeks ago, mortgage rates are up for the ninth consecutive week. The U.S. weekly average 30-year fixed mortgage rate rose 3 basis points to 4.46 percent in this week’s survey, its highest level since January 2014.”
It bears repeating: Mortgage rates haven’t been this high since the start of 2014. And it all happened over the last few weeks.
Average rates rose for other commonly used products as well, and that includes the 15-year fixed-rate home loan and the 5/1 adjustable mortgage (ARM).
Still, the Housing Market Marches On
But the recent spike in rates might not last long. Economists from Freddie Mac said they “anticipate rate increases will be gradual [throughout 2018], allowing housing market activity to maintain momentum.” In other words, they don’t expect the recent upward trend to put a damper on home-buying activity in the U.S.
Home Prices Still Rising in Most Cities
Meanwhile, home prices continue to rise in most parts of the country. And this too has added a sense of urgency to the housing market, particularly among home buyers who are eyeing a purchase in the near future.
In many cities across the U.S., real estate markets are experiencing a shortage of homes for sale. This comes at a time when demand for housing is either steady or rising in most markets. This supply-and-demand imbalance is putting upward pressure on home prices, as evidenced by the 6% to 7% increase in U.S. home values over the last year.
What does the future hold? No one can say for certain. But recent trends within the housing and mortgage industry seem to make a strong case for buying a home sooner rather than later. Buyers who postpone their purchases until later in 2018 could encounter higher housing costs.
Seller’s market conditions persist in cities across the country, as inventory continues to fall short of demand. Under these kinds of conditions, sellers typically enjoy competing offers from buyers.
But that doesn’t mean sellers should skimp on the home staging. By staging your house for buyers, you can increase the chance of a quick sale and a full-price offer. And those are good things!
What Is Home Staging?
Home staging is when you take proactive steps to make your house more appealing to the majority of buyers. “Majority” is the key word here. Some people will dislike a certain property no matter what kind of staging is done. Taste is subjective, after all. But there are certain steps you can take to make your property appeal to the majority of potential buyers. And that’s precisely what home staging is all about.
The staging process can include such things as:
* Landscaping the yard, when applicable
* Painting the inside and/or outside of the house
* Replacing outdated fixtures with modern ones
* Arranging, adding, or removing furniture to maximize space
* De-cluttering the entire house
* Cleaning the house thoroughly from top to bottom
In some cases, these kinds of actions might be unnecessary or even cost-prohibitive. For example, a new or recently updated home with modern fixtures won’t require any new knobs, sink handles, or light fixtures. But an older home with outdated fixtures might need extra attention (unless the fixtures are antiques that add charm).
What’s the Point?
Now you know what home staging is, and what it involves. But what’s the point? What can you get out of it, as a home seller?
As a seller, your mission is to sell your house as quickly as possible, and for the best possible price. Staging can help you achieve these goals and in several ways. It creates aesthetic value, which helps to support your asking price. It presents your home in the best possible light, which will make buyers more inclined to make an offer.
Above all, effective home staging helps you set your house apart from others that are listed for sale in the area. This is especially important in a crowded market with many similar properties for sale.
When buyers look at a well-staged home, they tend to say things like:
“I got a great vibe from that house.”
“I didn’t want to leave.”
“I could see myself living there.”
“The owners have taken good care of that house.”
“It seems nicer than the other homes we’ve looked at.”
This is the kind of mindset that can lead to an offer.
Home staging allows you to create a favorable impression in the mind of potential buyers. And these kinds of impressions tend to “accumulate” as the buyer moves through the home. So if you stack enough of them in your favor, you’ll have a much better chance of landing a strong offer. And that’s your primary goal as a seller.
The Different Types of Home Inspections Explained
Home inspections are a common source of confusion for first-time home buyers because there are several different types of inspections that can take place. Here is an overview of the most common types of inspections you could encounter during the buying process.
Primary Home Inspection
When you hear people talk about a “home inspection,” they are generally referring to the primary inspection that is conducted by a licensed home inspector. It’s always a good idea to have a property professionally inspected before buying it.
The inspector will examine the home’s foundation, roof, electrical system, installed appliances, heating and cooling systems, and overall condition. When he’s finished, he will give you a detailed inspection report that explains his findings.
Keep in mind that when you buy a house, you are generally buying it in “as-is” condition (unless specific provisions are added to the contract saying otherwise). For this reason, you want to make sure you know what is, and is not, working in the home. You’ll also want to know what repairs might be needed, and how much they might cost. For all of these reasons, the primary home inspection is essential.
Home inspectors typically don’t look for termites or other wood-destroying insects. So this is usually a separate inspection. This inspection is done on behalf of the buyer and the mortgage company. You might even have to provide a copy of the inspection for your mortgage lender. This is especially true if you live in an area where termites are common. You might be able to skip this process if termites are not commonly found in your area. Termite damage can be extensive and expensive. So these inspections are usually worth the cost.
Well Water Inspections
Depending on where the home is located, you may also need a well water test to make sure the water is potable (safe to drink).
Home Appraisal / Appraiser’s Inspection
If you are using a mortgage loan to buy a house, your bank or lender will send a licensed home appraiser out to evaluate the property. The appraiser is primarily concerned with the market value of the home. He will also examine the overall condition of the property, as it relates to the value.
Final Walk-Through Inspection
Home buyers typically perform one last inspection near the end of the real estate transaction, just to make sure the house is in the same condition it was in when they agreed to buy it. During this final “walk-through,” as it is known, you’ll want to ensure that everything is in working order and that the house has not been damaged in any way since you first signed the contract.
As each inspection takes place, keep in mind that no home is perfect. You’ll need to weigh the pros and cons of every house in order to make the right purchasing decision.
You can expect a number of inspections to take place during your home buying process. Most of these inspections are for your benefit, as the home buyer, so you need to take each inspection seriously and consider the outcome carefully.