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Selling Your Home in a Rising Rate Market

by Tim Hart

This past year has brought with it significant improvements to the wounded market we all lived through last year. With this healing process, the world of a seller became an ease as the constraints of limited inventory, low prices, and low mortgage rates all converged. Slowly listing prices began to rise and now, mortgage rates are following suit. “There’s no one in the business right now who doesn’t think the market hasn’t taken a step back. The evidence is all around us,” said Glenn Kelman, chief executive of real-estate brokerage Redfin. (SOURCE) A good rule to follow is that 1% increase in mortgage rates will equate to a 10% reduction in affordability or purchasing power a buyer has. The most recent leaps in rates have made homes just about 10% more expensive to buyers who need to finance their purchase.

So how do you sell your home in this market condition?

  • First, you must remember, even at 5%, rates are still low and homes are still affordable when you look at historical standards. With that being said, this is a stock to the buyer’s side of the market. Buyers oftentimes shop for a home based upon their monthly mortgage payment which does mean they will be looking at a slightly lower price range for their purchase—but at this point, the market feels they buyers are still actively looking so be sure if you are on the fence, you get your house on the market!
  • It is all about balance. The market that will take the biggest hit is most likely to be the high end of the market. Oh the other side of the spectrum, the market that will perhaps most benefit from this new market environment would be that of the real estate investors. Investors who have been taking advantage of the low rates and buying properties to rent will see the influx of renters come back to the market as they see their buying potential dwindle. Because of both these factors, home inventory will finally catch up to the demand and the market will stabilize so that both buyer and seller alike are entering a more stabilized marketplace.
  • The hit to home prices is still out there in the future and has not happened yet. It is more of a shockwave impact where the news hit, sellers and buyers have time adjust and react and then the market adjustments happen. Here in Montana we get an even bigger buffer zone because we are always a few months behind the national trends. If you are looking to buy or sell right now, the market is still in a very advantageous place for you. In fact, pending home sales are reaching new highs.

“The number of pending home sales seen through the end of May increased 6.7 percent from April and 12.1 percent on an annual basis, bringing the current level seen nationwide to its highest point since December 2006, just prior to the start of the housing meltdown beginning in earnest, according to the latest Pending Home Sales Index from the National Association of Realtors.” (SOURCE)

Seller Disclosures: Protecting Yourself As You Sell

by Tim Hart

When a listing file gets turned into me here at the office I oftentimes do not have the seller’s disclosures tucked away neatly inside. In fact, the seller disclosures are the primary documentation I have to ask for from the sellers as soon as an offer comes in. Why do we give the seller so much extra time with these disclosures? Well, it is because the information disclosed within a seller’s disclosure is the primary way for a seller to communicate with a buyer about all the material information, home owner’s knowledge and details about the home that can only assist in the buyer’s decision to purchase.

The seller must sign many forms to officially initiate the process of a listing. On disclosures, the seller is attesting that all the information held within is accurate to the best of their knowledge. Disclose disclose disclose.

Lawsuits stemming from nondisclosure of a property's problems are becoming a bigger issue, according to respondents in the National Association of Realtors 2011 Legal Scan survey. Of the agents who responded, about 75% ranked this issue among their "top three current and future issues."

With every detail, a seller is protecting him/herself more and preventing future lawsuits that may be brought against them if a buyer retroactively finds defects in the home. That is why we give sellers weeks to hold onto their seller’s disclosures so have time to think of major and minor repairs alike, environmental hazards, defects etc. Being upfront about anything and everything is best. It provides a seller’s representing agent to have negotiation power and not be blindsided by something that comes up.

This is just one way to make the selling process more seamless for sellers. If you are interested in potentially selling in the Gallatin Valley, give me a call today (406) 570-5730 with any questions or inquires you may have.

http://www.realtor.com/blogs/2013/06/10/use-a-seller-disclosure-to-protect-yourself-as-you-sell/

http://realestate.msn.com/sellers-6-disclosures-you-must-make-or-it-could-cost-you

 

Real Estate Recovery: Good and Misunderstood

by Tim Hart

Misunderstood News:

April saw a sharp fall in housing starts primarily due to apartment and condominium declines. The Census Bureau reported a 17% reduction for the month with a 38% drop in multi-family units. This emphasizes the volatility of the market since each livable unit with such buildings counts as an individual statistic. New building starts boasted gains of 14%--much coming from the building of large apartment buildings.

 

Straight–Forward Good News:

The two more stable measurements, single-family home starts, fell only 2% allowing the overall stat to remain 21% above last year’s levels. In addition, near-record low mortgage rates in combination with the drop in foreclosures and by extension a constricting of the new home supplies available for sale have all been positive strengthening influences on the housing market and national economic growth.

Take the good news with the bad but don’t get too carried away by either side!

http://money.cnn.com/2013/04/30/real_estate/home-lotteries/index.html?iid=EL

http://money.cnn.com/2013/05/16/news/economy/home-building/index.html

 ATHOMEINBOZEMAN

Stalling Sellers May Miss The Boat

by Tim Hart

Real Estate Opprotunity People, especially those who are thinking of selling, are eying the market with calculated hesitancy.  They are waiting to see by how much home prices will appreciate before they commit to the decision and plunging into the market for themselves.

Oddly enough, the time to decide may be based on when they purchased their home rather than watching the current market like a hawk. If your home was purchased during the sluggish market in the last few years, moving up in 2013 is their prime opportunity.

"Because they bought near the bottom, these home owners should have built up some good equity that can go toward the purchase of a new home, and waiting longer to build more equity likely won’t provide much advantage given that other homes that they might want to move up to will also be appreciating at roughly the same pace," Blomquist, vice president of RealtyTrac, told HousingWire.

Home owners who wait much longer may miss their chance by being overly cautious. If you are looking to sell and then buy, waiting for prices to rise because there is no ultimate benefit. They will get more out of their home, but turn around and spend more too. In addition, the costs of financing your next home may increase in the months to come since mortgage rates are anticipated to rise from their current 3.5% to 4.4%... The time to sell may be now or else you may miss the boat...

Read more:http://realtormag.realtor.org/daily-news/2013/03/25/home-owners-who-are-delaying-selling-may-miss-out?om_rid=AACuz5&om_mid=_BRUHT7B8xiPzNw&om_ntype=RMODaily

 “The Time to Sell Is a Waiting Game for Some,” HousingWire (March 21, 2013)

Home Owners Reluctant to Sell; Inventories Fall
 

 ATHOMEINBOZEMAN

Market on the Mend

by Tim Hart

 

Overall, recent housing reports have shown that the housing market is picking up across the country.

"Excluding distressed sales, home prices in March and April are improving at a rate not seen since late 2006 and appreciating at a faster rate than during the tax-credit boomlet in 2010," says Mark Fleming, chief economist for CoreLogic. "Nationally, the supply of homes in current inventory is down to 6.5 months, a level not seen in more than five years, in part driven by the ‘locked in’ position of so many home owners in negative equity."

Source: “CoreLogic: Phoenix Leads the Nation in Home Value Gains,” Phoenix Business Journal Online (June 5, 2012)’

 

 

Market Stabilizing? Home Inventories Fall by Nearly 20%

by Tim Hart

 

Home inventories of for-sale listings continue to fall, which may help raise overall housing prices as demand picks up.

Inventory of for-sale single-family homes, condos, townhouses, and co-ops dropped by 18.85 percent in April compared to a year ago, according to housing data of 146 metro markets tracked byREALTOR.com

“These key indicators continue to suggest the housing market may be at a turning point and headed towards a broad-based recovery,” REALTOR.com notes in a release on its April housing data. “Lower inventories, combined with faster moving markets and relatively stable median listing prices are indicative of the kind of balanced housing market that has not been seen in many years.”

On a national basis, the median age of inventory dropped nearly 12 percent year-over-year. 

 

NOW: Time to Take Action If You Are Looking to Buy

by Tim Hart

 

 

“Buying a home cannot get any cheaper than it is right now.” Headlines like this will not be as frequent in the year to come according to predictions made by housing experts. Housing prices are down 34% nationally since 2006. Chief economist for PNC Financial Services expects these historical rates to flatten by the third quarter of this year.

REASONS:

  • Decline in Foreclosures: The process is being streamlined and buyers are getting less trigger shy with snagging foreclosures up. 
  • Job Growth: Rising unemployment rates increase the confidence in the economic market as well as the housing market. This translated as more aggressive and determined buyers are looking to buy.
  • Better Access to Mortgages: Costco is even into the mortgage game!
  • Basic Supply/Demand: Buying is cheaper than renting. Listings are not staying on the market. Demand is spiking and the supply is dwindling. 

 

Home Buyer Turn Offs

by Tim Hart

 

Dirt: "The No. 1 biggest mistake is not getting the home in the best possible condition. That's huge," says Goldwasser. "I won't even represent sellers at this point unless they are fully aware of how important it is to get their home in the absolute best condition that they've ever had it in." Steam cleaning, carpet cleaning or even replacement, and attention to detail will change the first impression. (BOZEMAN AREA CLEANING)

Old Fixtures: Updates on fixtures are not too pricey but newer lighting will bring a world of difference to your rooms.

Odors: The old trick is to bake cookies on the day of a showing and this comes from the need to have the home smell welcoming when buyers-to-be walk in.  Pets are a biggie in the scent department (READ MORE DOGSCATSOTHER). Smokers ought to be similarly handled.

"Interestingly, next to the kitchen, the smelliest room in the house is actually the living room," Dana says. "That's typically the room that has the most fabric, so that is where odors get absorbed."

Popcorn Acoustic Ceilings: This trend is long past and dates a house so much that it can be lethal to the selling vitality. Even in the 60’s and 70’s, this style was a hit or miss with home buyers. They are a pain to remove, but it has to be done. Most buyers will not want to stomach the expense.

Neighbors: If you are in a residential area, be sure to schedule showings at a time that best represents the surrounding neighborhood. Snoopy neighbors, music blasters, and even new construction in the area all add or detract from the ambiance so try to use it to your benefit.

READ MORE

 

 

BUY REAL ESTATE NOW

by Tim Hart

Despite the doom and gloom of the past few years, there is a silver lining in the housing market! The good news is that today’s market offers unprecedented opportunities for homebuyers—if you understand today’s market and the new rules. After the explosion of bad decisions, overspending, and badly structured mortgage programs, the smoke has cleared to reveal a new market of real estate standards and practices that provides a safer, more secure and healthier climate for homebuyers and homeowners.

So why should you consider buying now? Let's go over my list of five great reasons:

‚ÄčCLICK HERE TO READ MORE

FIRST TIME HOME BUYERS! HOMEBUYER EDUCATION CLASSES

by Tim Hart

 

Dates and Times: Locations:

March 6th, 13th & 20th 6 pm – 9 pm First Interstate Bank, Main & Grand, Bozeman

April 10th, 17th & 24th 6 pm – 9 pm Stockman Bank, Kagy & 19th Branch

Saturday, May 19th 9 am – 6 pm Bozeman Public Library, Main Street, Bozeman

June 12th, 19th & 26th 6 pm – 9 pm First Interstate Bank, Main & Grand, Bozeman

Almost 80% of all home searches today begin on the Internet. When you are considering buying your first home, surfing gets you far enough to feel like you are ready to take that next step—commitment. But what do you do then? How do you know what you can afford/what investment will be the most profitable for you? These are questions just a few clicks of the mouse won’t answer. Prepare yourself the best you can by attending one of these seminars.

 

Displaying blog entries 1-10 of 13