10 Tips To Navigate 2017 Housing Market Conditions
There are many uncertain changes with our new president in office but there is something that is certain the housing industry still has standard processes and procedures that we go through on a daily basis. It's like riding a bike, right? 🙂
If you are someone that is looking to either rent, buy or sell here are 10 tips that might help you to adapt to the current market conditions or if anything it might change your mind.
Here are 10 tips to navigate the 2017 market conditions
First-time homebuyers: Get that starter home now!
Well, you'd best get into action. And we mean now! More than half of the home sales (52 percent) in 2017 are expected to be to first-time buyers, and mostly to the millennial set (19 to 34 years old), many moving from urban rentals, research by the National Association of Realtors shows. That means competition -- and bidding wars -- could become fierce in the spring for such "starters" in desirable areas.
Yes there is a sense of urgency here if you are really looking to buy only because it's inevitable for the interest to continue to rise and the constant changes in lending guidelines. However if you are not ready then continue to save and research the area you would like to live in.
Sellers: Hire the right agent!
The best investment a seller can make is time spent researching agents. A bad hire can cost sellers tens of thousands of dollars and months of worried waiting.
First, look at an agent's' online marketing material and listings. Is there good photography or video? Does it "pop"? Are descriptions accurate and complimentary without seeming exaggerated? Look at profiles of the agents on LinkedIn, Facebook and other social media; and be sure to read web reviews. What kind of vibe is an agent sending out?
Overall you might find an agent that you like but might not be aggressive enough for you or he/she might rub you the wrong one. You always have a choice of firing the agent and getting someone that fits more with your style. There are over 17,000 agents in the Chicagoland area so you have plenty to choice from. Selling a home is a big investment of your time and money so make sure you get the right person for the job.
You also want to ask a couple of questions once you get to the point of hiring someone.
Here are 3 that come to mind:
- Do you have internet strategy and how will you market my home online?
- How much real estate did you sell last year?
- How long have you been in the business?
Buyers: There's more loan money out there – LOOK!
Those who couldn't get mortgages during the downturn because they didn't have 20 percent to put down can find affordable financing again.
Borrowers with FICO scores as low as 690 are now getting conforming mortgage loans (those under $417,000).
One telling sign: About two-thirds of mortgage refinancing were getting approved in the fourth quarter of 2016 compared to just one-half of those at the end of 2014.
However, borrowers without a 20 percent down payment will still likely pay private mortgage insurance, or PMI, until they hit the 20 percent to 25 percent equity mark.
The best rates go to those with 800-plus credit scores, though 750-plussers are getting virtually the same terms.
Make sure you speak with a lender and find out ALL options.
Here are a couple questions to ask your loan officer:
- What fees do I have to pay?
- Does the loan have any prepayment penalties?
- Are they any downpayment programs available, if so how will this affect my interest rate?
Sellers: It may be a seller's market BUT …
This DOESN’T ensure a sale. Home sellers can do several simple things to enhance appearance, increase buyer interest and boost their home's profile:
- Renew selectively: Instead of wholesale renovations from which sellers recoup maybe 60 percent on investment, do light makeovers everywhere, with an eye on the kitchen and bathrooms. They're far more cost-effective.
- Clean, clean and clean some more: It's hard for buyers to picture themselves living in a dirty house. Scrub floors, baths, kitchens, windows and walls, and be sure to clean, vacuum and deodorize rugs. This is simple but effective.
- Depersonalize, declutter: Show the space, not the contents. Box up family photos, kids' school papers and excess art, and store bulky and worn furniture. Organize your closets to make them look half empty.
- Illuminate: Think bright and cheery. Open drapes and add brighter light bulbs in dark areas. Repaint where needed but use neutral colors.
Renters: It might be time to buy!
In many cases, rents are rising faster than home values, yet mortgage rates remain low. That, and the fact that renters now account for 37 percent of households (the highest level in 50 years), seem to indicate an imminent coming-out party for renters-turned-buyers, especially if they plan to stay put for five to 10 years after buying.
I had a client tell me "I have been renting for 20 years", all the money I could have saved but all that is gone. I told him it's never to late." 🙂
There are limitless buy-versus-rent calculators for renters to compare affordability. But no gauge accounts for human behavior, such as reluctance of renters to re-invest what they've saved from not paying property tax, insurance, upkeep, etc. Home buying basically enforces that discipline.
If you're a buyer, don't believe the house is yours!
Don't bank on a done deal or other verbal promises from listing agents until you sign a contract.
Strategies such as pre approval (versus pre qualification), proof of funding, closing flexibility and the always-risky practice of waiving inspection and repair contingencies can help sway buyers.
Remember you also have to compete with CASH buyers and other buyers that are willing to go over list price.
Sellers: The grass is always greener ...in yards with a "sold" sign.
Surveys show that strong curb appeal can increase prices by 10 percent or more. Greener grass, whether derived from new sod or fertilizer and water, is a must.
Another form of green, sustainable landscaping has become a value-add for buyers. Native plants, native grasses and perennials that require less water and attention fill that bill.
Even in the winter time there are ways you can make your landscaping look descent. You can tidy up your lawn, get some outdoor lighting for the porch or for the area around your front door, get some cold weather plants like witch hazel or pansies.
Sellers and buyers: Know the state of your market!
When inventory remains below equilibrium, sellers enjoy more control over prices and terms, and the area becomes a seller's market.
Right now in the Chicagoland area it's a seller's market and properties don't tend to last if priced well and the location is great. Know your areas when researching the neighborhoods look at how quickly the properties are selling.
Sellers: House going on sale in the spring?
Do some prep work now! First, grab your camera or smartphone and do an exterior autumn photo shoot, with the leaves changing colors.
Take a preliminary inventory, too. Look through your attic, closets, basement and garage to see what stored items you'll want to keep, give away or sell in the spring. This will help you determine whether you'll need a storage unit when your home is on the market and if there are any problem areas that need repairs or attention.
The worst is when I walk through a home with the buyer and there is so much clutter. It is a complete turn off.
Buyers: Relocating near a waterfront?
You'd best consider weather and insurance realities. FEMA flood-map changes are aggressively expanding flood zones, especially along the East Coast and Gulf Coast, forcing hundreds of thousands of homeowners to buy flood insurance for the first time and others to pay thousands more annually.
Some home sellers and their agents are conveniently not disclosing these realities, so buyers will have to ask pointed questions and do their own research. Go to FEMA.gov for more info.
If you need more information feel free to text me at 773.308.5505 or email me at [email protected]