Are you thinking of selling your house? Are you dreading having to deal with strangers walking through the house? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of selling. A great agent is always worth more than the commission they charge just like a great doctor or great accountant.
Do you really need an agent to sell your house in today’s market? Here’s what Fannie Mae suggests to sellers on the Know Your Options section of their website:
“Select how you’ll market and list the home (e.g., with a real estate agent or for sale by owner). There are pros and cons to each, but unless you are experienced at selling homes, it usually makes financial sense to get professional help—homes sold by agents typically sell at a higher price and spend less time on the market. An agent will also help you determine the best pricing for the house, they’ll market the home, and they’ll be your advocate throughout the process.”
Let’s go over the points they made:
- Homes sold by agents typically sell at a higher price
- Homes sold by agents typically spend less time on the market
- An agent will help you determine the best pricing for the house
- An agent will market the home
- An agent will be your advocate throughout the process
If Fannie Mae says using an agent probably makes sense, perhaps you should interview an agent before putting your house up for sale.
Discover Home Loans conducted an interesting survey that revealed how prepared homebuyers are for the actual mortgage process.
The survey reported that 94% of prospective buyers believe they are making a good investment decision if they buy a home. The survey also explained that 66% of buyers reach out to real estate agents to help determine whether buying a certain home would be a good investment.
However, there is less certainty regarding the mortgage process.
Most buyers overwhelmed
The majority of potential buyers are actually overwhelmed with the plethora of information available about the home financing process. Here are some interesting highlights from the report:
- Nearly 66% feel overwhelmed with the amount of information available
- 76% of those under the age of 30 feel overwhelmed
- 76% of first time buyers feel the same way
- 54% of those buyers who have previously owned also were overwhelmed
- 59% of buyers turn to mortgage bankers to help evaluate mortgage terms and comparing offers
- 49% of buyers turn to real estate agents to help evaluate mortgage terms and comparing offers
There is help available…use it!
Cameron Findlay, chief economist at Discover Home Loans, gives great advice:
“The industry is becoming more transparent in an effort to help homebuyers become informed about changes that may affect their process. The sheer amount of information can lead to confusion and stress. Those looking to purchase should work closely with their lender and realtor to make sure they are comfortable with mortgage terms and understand the impact a loan will have on their finances.”
Purchasing a home can put great pressure on a family. Reach out to the best mortgage and real estate professionals in your market for assistance throughout the process.
In real estate there is a difference between COST and PRICE. As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first time or repeat buyer, you must not be concerned about price but instead about the ‘long term cost’ of the home.
Let us explain.
Recently, we reported that a nationwide panel of over one hundred economists, real estate experts and investment & market strategists projected that home values would appreciate by approximately 4% from now to the end of 2015.
Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30 year fixed mortgage rate will be 5.0% by the end of next year.
What Does This Mean to a Buyer?
Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:
Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still below 5%.
However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease.
Here is a chart detailing this point:
For the last several years, home sellers had to compete with huge inventories of distressed properties (foreclosures and short sales). The great news is that the supply of these properties is falling like a rock in the vast majority of housing markets (only 8% of homes sold in August). Many homeowners are now thinking of selling as the impact of this substantially discounted competition has disappeared.
However, every seller of an existing residential property must realize that there is a new form of competition hitting the market: newly constructed homes.
According to the National Association of Home Builders (NAHB), new-home sales topped 500,000, in August, for the first time since 2008.
“This jump in sales activity is in line with our latest surveys, which indicate builders are seeing increased traffic and more serious buyers in the market for single-family homes,” said Kevin Kelly, chairman of the NAHB.
Broken down regionally, new home sales rose:
- 50% in the West
- 29.2% in the Northeast
- 7.8% in the South
- and were unchanged in the Midwest
If you are thinking of selling, perhaps you should do it now to avoid additional competition coming to the market.