Are the bidding wars over?

Let’s face it, it’s fun to have a home listing during a seller’s market. When inventory is tight, even less-than-perfect homes invite the frantic bidding wars seen over the past few years. But as the economy slows down and interest rates increase, sellers are wondering if the bidding wars are over, and what that means for them.

First of all, bidding wars have occurred in every kind of real estate market. Well-positioned homes have always garnered attention and offers. What’s different in a seller’s market is that buyers are so desperate to find a home, that multiple offers seem to be normal on every listing. As the pace slows down, sellers need to adjust their expectations and avoid costly mistakes.

Seller Mistakes to Avoid in a “Normal” Market

· Bad Curb Appeal – Curb Appeal is once again important to making a good impression.

· Delayed Response – Don’t wait to respond to a buyer’s offer because you hope to have a bidding war.

· Unreasonable Demands – Buyers have choices now, be reasonable with the counter and contingencies. · Highest Offer – Don’t assume that the highest offer is the best offer.

· Priced too Low or too High – Price the home correctly. Don’t play games with the price.

Finally, be patient. In a typical market, an average home is on the market 30-45 days. This is a change from the past few years, but a healthy real estate market benefits all parties.

Inflation is Rising – Should I Still Buy a Home?

World events and government spending has led to soaring inflation. The Federal Reserve has only one tool in its arsenal to curb and reduce this trend – raising interest rates. While contemporary home buyers are accustomed to interest rates in the 2-4%, older homeowners remember being excited to get one as low as 8%. As yet, we have no indication such a drastic increase is necessary, home mortgage interest rates are creeping up and potential home buyers may be asking if they should still try to buy a home.

One of the first things to consider is affordability. A higher interest rate will impact the amount of the loan each buyer can qualify for, potentially reducing their spending power. Yet, home prices are also beginning to soften, so it’s possible that this correction will reduce any possible impact from rising rates.

Secondly, home ownership has been a strong hedge against inflation historically. Buying a home locks in the cost of the largest budgetary portion of your expenses – your housing cost. As the cost of living continues to increase, rents will also rise, continuing to add pressure to an already strained household budget.

Finally, things change. Recessions do not last, home prices eventually rise, and home mortgages can be refinanced. Most homeowners move every 5-7 years and so potential home buyers should plan for this timeframe when making decisions.

Is this still the right time to buy a home? Inflation does have an effect, but it does not necessarily mean that one needs to hold off on a good home purchase

How to Price Your Home to Sell in a Softening Market

The summer selling season has come. Unfortunately, those home sellers who were looking forward to sky-high prices and multiple offers may be disappointed to find the market softening. In a declining market, pricing a home becomes critical to success.

Pricing your home in a softening market

The first step is to realize the market has changed. Buyers will not overpay for a home in an uncertain market. Whereas just a few months ago it might have made sense to “test the market” and set an aggressive price, sellers who try that strategy today will lose valuable time, risking an even slower market when the home sells.

Home Value Truths

• What you paid for your home doesn’t affect its value.

• Your asking price does not affect its value.

• What it might have sold for 2 months ago does not affect its value.

• What your agent tells you about price does not affect its value.

The value of your home is determined by what a qualified buyer in today’s market is willing to pay for it, comparing it to others on the market for sale.

Pricing Strategy in a Softening Market

Your pricing strategy should be the same, regardless of whether you are in an accelerating or declining market – to price the home ahead of the market. In a declining market, that means you should price your home slightly below the most recent comp.

The Home Inspection – What’s Really Important?

An important part of the home buying process is having a professional home inspection. Even homes listed “as is” should have an inspection if only to understand what “as is” means. A comprehensive home inspection will examine all major systems, such as heating, cooling, electrical, and plumbing. The inspector will also look for signs of water intrusion and check the roof for leads or wear and tear.

Once the inspection is complete, the home buyer will receive a copy of the findings for review. Often buyers are shocked at the number of issues uncovered and may even wonder if they should walk away. Most of the time, this is unnecessary; even the best maintained home will have plenty of things to review, most of which are more a “honey do” list than a deal breaker.

So, what are the deal breakers? For anyone considering a major remodel, there may not be any deal breakers on the list. Those who have stretched to buy the house, may not have the available resources to make any significant repairs and will want to negotiate as much as possible.

Most agents agree that the main thing to focus on is the fire, health, and safety sections, missing fire flues or smoke detectors, and unsafe electrical hazards or firewall breaches. Also check for evidence of foundation cracks, water intrusion, and roof leaks. Before accepting any cash credit, one should get a few estimates from repair contractors to ensure the dollar figure offered is sufficient.

Most home inspections create a list of deferred maintenance and minor repairs. Working with their agent, a home buyer can narrow the list of requests to the essentials and tackle the others once they move in.

Building Equity With a Home Improvement Plan

Your home is typically the largest financial investment you’ll ever make. Over time, we expect the equity to increase through increasing property values and a decreasing mortgage balance. While homeowners recognize the need to maintain the home in good condition, one of the best ways to maximize your home equity is to create a plan for ongoing improvements and updates.

Often the interest in a remodeling project results from either an unexpected windfall or financing for a specific project but by planning for ongoing improvements, any homeowner can engage in updates to stay current with market trends.

As tastes change, homebuyers are attracted to new features. Outdoor kitchens, great room configurations, and home offices are just a few of the trends from the past few years. More timeless desires include more square feet, chef’s kitchens, and spacious bathrooms. To stay ahead of trends and build equity, smart homeowners should build a plan for continuous improvements.

In addition to developing a fund, build a road map for upgrades and enhancements. Consider the life span of major systems, such as the roof or HVAC systems; is end-of-life a good time to switch to solar energy? Kitchen styles change dramatically every 10 years on average. Start saving for a kitchen style change on the same schedule. Can be a complete remodel or simply a new countertop.

You may not plan to sell your home for years, but things change. No one wants to consider listing a home that is outdated, taking the financial hit that comes with it. Now is the time to plan for regular updates to build equity, and you’ll enjoy the benefits of the changes too

Affordable Style Updates To Do This Weekend

Just because your budget is feeling the pinch with rising food and energy costs doesn’t mean your style has to suffer. Ditch the big investment purchase ideas and try some simple updates that will change the look and feel of any room quickly and for a lot less than a new couch.

Five Affordable Updates to do this Weekend

1. DIY Pastel Art – Freshen up your room with pastels without the big investment. Take a simple canvas from the craft store, prime it with white paint and add color. Simple and sleek.

2. Industrial Retro Lighting – New light fixtures are a simple way to update a room. A local big box retailer will offer cost-effective versions of the latest trends.

3. White Sofa – No need to buy a new sofa when a fresh slipcover will do; bright, clean, and easy to change when the cooler months come.

4. Boho Accents – Mix up your style with some boho accents, such as a Turkish rug runner or kilim pillow.

5. Add Metallic Elements – Bold accents, such as a brass side table or shiny silver vase, can perk up a room and modernize your look. Watch for unusual shapes as well to add visual interest.

Soaring inflation has put many home improvement plans on hold but your style doesn’t need to stagnate. A few simple changes will give your spirits and your home a nice lift.

Selling a Property with Tenants in Place

The strong seller’s market has prompted homeowners across the country to consider selling their homes. What if your property is a rental unit with tenants in place? Can you still sell and take advantage of the rising home values? Yes, by understanding the steps and following a few tips, you maximize your profit in this strong market.

The first step in selling your home with tenants in place is to understand your rights and responsibilities. The kind of lease you hold will determine if you can simply give notice to the tenants or if the new owners will buy the home with a lease in place. Only month-to-month leases can be terminated unilaterally with proper notice.

Next, meet with the tenants and discuss the situation. Explain your reasons for selling and assure them that you wish to make it as easy as possible. Offer to sell the home to the renters first, and then discuss any future plans they may have. If they can’t or don’t want to buy the property, you may be able to offer them money to move. Your goal must be to have the cooperation of your tenants so they will help facilitate showings and maintain the home.

When you have tenants, who will remain in the home after the close due to their lease, then you must disclose the lease terms to the buyer. The new owner will be legally obligated by the lease. In a strong market, you may find a buyer willing to wait for the expiration of the lease, even if they intend to occupy the home.

Selling with tenants in place doesn’t have to be difficult. Do your homework, understand your obligations and be transparent with the renters and potential buyers. This way, you make it easy on all parties and can reap the reward of high home values.

Homeownership Is A Great Hedge Against Inflation

Over the past couple of months, the news of rising inflation is fueling concern across the country. Currently, inflation is at a 40-year high. This is impacting household budgets the most as families try to make ends meet with less buying power. For potential home buyers, rising interest rates may cause worry that you will not be able to afford the home you want.

While these are all valid concerns, for those who are still able to finance a home, homeownership is one of the best hedges against inflation and may be worth stretching your budget to do.

The biggest advantage of owning a home in an inflationary period is a fixed-rate mortgage stabilizes your largest household expense. Most people budget 25-45% of their monthly income for housing. As costs continue to rise, rental rates will rise right along with them. These costs can far outpace salaries and increase the burden on families.

The second advantage is that home values historically outperform other assets in appreciation. Owning a home builds equity for the future that is based on a tangible asset. Even if the home loses value short-term, some studies show that over 7-years, homeowners should gain more equity than other investments.

The bottom line is that if you’ve been thinking about buying a home this year, it makes sense to act, even if interest rates are rising. This allows you to stabilize your monthly housing expense while potentially building equity for the future

The Benefits of Owning a Second Home

As the world emerges from the pandemic era and begins to look for a new normal, we’ve all changed the way we look at homeownership and lifestyle. More and more, families are forgoing exotic vacations and using the savings to enhance their home for staycations. In addition to the home improvement boom, the second home market has also exploded. Owning a second home was once a privilege for the rich and famous, but now even those with a modest income can purchase a second home.

There are some great benefits to owning a second home. The first is enjoyment. Many people buy a second home to get a change of scenery. With more companies offering a work-from-home option, spending winter in a warmer climate has become feasible for the average person.

There are financial advantages to buying a vacation home. A second home can help you save money on your taxes. The mortgage and property taxes of a second home can be deducted from your income in the same way a primary home is. The property can also be rented out while not in use to provide extra income or pay for the costs of the home.

Owning a second home can enhance the lifestyle of the family. Building equity in two properties will build wealth more quickly while providing an alternate location for work or fun.

What is the most important aspect of listing a home for sale?

An unexpected byproduct of the pandemic has been a booming housing market. As Covid-19 hit the country, the housing supply was already low, and the lockdown depressed the volume even more. As more homebuyers began looking for new homes, fueled by the ability to work-from-home and low interest rates, sellers have been experiencing a strong seller’s market.

Interest rates are starting to rise, and the higher home prices have discouraged potential buyers from purchasing. So, what does this mean for a seller? Amidst concern over the slowing market, sellers already in the market or considering listing their home should plan for a potential slowdown. No one likes to leave money on the table, but it’s more important than ever to have a real conversation about list price with a professional real estate agent. Whereas just a few months ago, a new home would sell the first weekend for an over-asking price, new listings should now consider that it could take longer. Listing the property slightly below what might have been appropriate last spring, could help generate quick interest and result in a contract.

Pricing strategy is the single most important aspect of listing a home for sale. Price dictates how quickly a home attracts attention and offers. If the market is showing signs of slowing, savvy buyers will wait. Sellers need to consider their listing price carefully to avoid price reductions later for a home that is sitting on the market.

Two Ways Homebuyers Can Win in Today’s Market

It’s no secret that many prospective homebuyers are finding the current real estate market challenging. One of the more unexpected consequences of the Covid pandemic was the hyper-focus on one’s home. This has resulted in a robust market where sellers are seeing advancing home sales prices and multiple offers.

While competition is fierce, clearly for sellers to sell, they need buyers. If your goal is to find a new home this year, there are a couple ways you can maximize your ability to have your offer accepted.

Two Ways Homebuyers Can Win in Today’s Market

1. Act Early - There are a couple reasons why home buyers should start early this year. With rising inflation, interest rates are likely to rise this year. While conventional wisdom may suggest lower real estate prices with an increase in mortgage rates, this is a gamble. Lower interest rates can not only save homeowners thousands of dollars over a 30-year term, but also provides better buying power with lenders, providing more choices.

2. Buy Now and Move Later - The rapid pace of the current market affects not only buyers but sellers as well. In a typical market, sellers often have weeks or months to find their replacement property. Buyers can sweeten their offer by asking about the sellers needs and allowing them extra time to move, offering to close quickly but renting to the sellers for 2-3 months to allow them time to find their new home. The bottom line is that home loan rates and home prices will likely continue to advance throughout 2022. Potential homebuyers who move quickly can maximize their buying power and ability to win the home.

Home Improvements During Labor Shortage

Tight labor markets are affecting industries across the country. Skilled and unskilled jobs remain unfilled as employers struggle to find prospective employees. For anyone ready to hire a contractor or handyman to perform home improvement projects, this shortage is causing frustration. As more people embrace the “staycation” and seek ways to upgrade their homes, many are finding few tradesmen to even come to provide estimates, much less schedule the work.

If you are trying to find good people to help with home improvement projects, there are still a few ways to achieve your goals.

Here are a few tips to help you find a professional to help with your project.

• Social Media – One great way to find reputable laborers is to ask for help from local social media groups. Apps like Facebook and Next Door have local groups where you can ask for help. Make sure to mention where you got the referral; the tradesmen will want to live up to the referral and are more likely to provide good, timely service.

• Big Box Stores – Home improvement stores like Lowes and Home Depot offer a wide variety of in-home services. They also have referral services for projects outside their scope and these contractors keep the stores happy by providing good service to homeowners.

• Online Service – There are sites like Angie’s List and Home Advisor where professionals pay for leads. Because they have paid for the contact, they tend to be more likely to follow through on the project.

The labor shortage is affecting all aspects of life right now. If you have a home improvement or upgrade project, there is no reason to put off the work. Try these tips for finding qualified and vetted help.

Can an Expensive Home Still be Affordable?

Real estate prices across the country have increased dramatically in the past year. With increases in the 10-12% range, many potential homebuyers have given up and decided that homes are just too expensive to consider. While homes have become more expensive, it does not mean they are unaffordable.

Would you believe that we are experiencing a historically favorable market for buyers when it comes to affordability? Why? This is because affordability involves more than just the purchase price of the home. When considering whether you can afford a home, you must include wage growth and interest rates.

Interest rates are among the lowest we’ve seen in decades. In addition, wages are increasing at a staggering 7% rate year-over-year. For example, a median household income of $68,000/year with a 7% wage growth, will see an extra $400/month.

The median home price is about $325,000. If we add a 10% growth factor to this, that same home would sell for $357,500. At a 3.5% interest rate, the monthly payment would increase from $1313/month to $1444/month, an increase of only $131/month. In terms of affordability, today’s market offers homebuyers more for their money.

Many homebuyers indeed have sticker shock; homes are getting more expensive. But for many homebuyers, other economic factors combine to make homes more affordable than ever before.

Stay Focused on Your Goal

Buying or selling a home can be stressful, even in normal times. Right now, when the housing market is moving at a frenetic pace, both buyers and sellers are making quick decisions and are feeling extreme pressure. As the tension rises, it can be easy to overlook the end goal; right-sized home, relocation, dream home, etc. Try not to lose focus!

Buyer Challenges

Facing a very tight inventory of available properties, buyers have limited time to arrange to tour homes and knowing they must make a quick decision once they have. Buyers do not have the luxury of a second look or hesitation and often are competing against multiple offers, adding to the pressure.

Seller Challenges

Sellers are also feeling the challenge of the frantic pace. While it is nice to have multiple offers from which to choose, the fact that the offers are at times being made sight-unseen means that some of the offers may not be the buyer’s first choice and they could lose a “real” offer by choosing to work with the wrong one. In addition, if the seller intends to buy another home, then they will be in the same position as the buyers once they enter that side of the competitive market. The bottom line in each case, however, is to stay focused on the end goal. Why are you looking to buy or sell? Working with your agent, and relying on their experience, keep your eye on the prize and recognize that the goal will be worth the effort.

Don't Get Represented by a “Yes-Agent”!

We all know the type. The person who just says “yes” to anything, never challenging or questioning an opinion or strategy. These people-pleasers agree with anything suggested; while they may be nice friends, in real estate a yes-man or yes-woman can actually cost you money. Often a lot of money. No one likes to leave money on the table, but having an agent who doesn’t challenge unrealistic expectations is not serving the client. So, how can you spot these yes-agents? These yes-agents can take many forms. On the seller side, they could be the agent that lists a home at an unrealistic price. Well-priced homes are selling quickly, but that does not mean that a seller can add 10% or more to recent sales and expect to sell the home. Over-pricing a home can cost precious time as potential buyers forgo viewing the property in favor of well-priced options. As the home lingers on the market, the seller must eventually lower their price to market value. Buyers often assume the seller is desperate to sell and offer lower prices than they might have at the beginning of the listing. Buyers represented by a yes-agent could find themselves writing unrealistic offers as well. There is danger in writing a low-ball offer just to “see if it sticks.” The yes agent might be willing to send over the offer, but the seller is just as likely to assume the buyer isn’t serious and move to more realistic offers. The yes-agent just cost the buyer the home. Spotting a yes-agent, and avoiding them, can save real estate clients time and money, and ensure they achieve their real estate goals.

Landlord Deductions from Security Deposits

A rental deposit against damage is a standard part of all housing rental agreements. The purpose of the security deposit is to protect the landlord from loss in the event the tenant does not take proper care of the property. Most renters don’t even think about it when they sign a new lease, assuming they will get their entire deposit back when they move out. So, it often comes as a surprise when the refund amount is lower than they paid when they signed the agreement. Many renters are surprised to find out what the landlord can deduct from their deposit.

Here are some common items that the landlord can charge to renters when they leave:

• Non-Payment of Rent – This should seem obvious; if the tenant leaves before the lease is up or simply owes back rent, the landlord can deduct or keep the deposit to compensate.

• Unpaid Utilities – Utility companies will hold the landlord responsible for unpaid bills, so if the water or electric bill has been unpaid, they will deduct this from the security deposit.

• Unusual or Excessive Cleaning – While normal wear and tear are not deductible, excessive cleaning can be charged to the renter.

• Damage – This also should be obvious. This was the main purpose of the deposit.

• Trash and Other Items Left Behind – Renters should think twice about leaving that old patio furniture behind. Any cost to remove and dispose of anything left in the property can be charged against the deposit.

Finally, breaking the lease for any reason could put your deposit at risk. Renters need to educate themselves about the risks to their deposit and read the lease carefully for any specific terms included by the landlord. This can help renters avoid the shock of a smaller-than-expected refund check.

10 Ways to Make a Small Bathroom Look Bigger

Small bathrooms don’t have to be dark and dank. Contrary to popular belief, making a small bathroom appear larger is not as hard as it seems.

Here are 10 easy ways to quickly make a small bathroom look bigger.

1. Mirrors – Add larger mirrors to reflect light and provide the illusion of space.

2. Lighten Up – Lighting doesn’t have to be harsh, but adequate lighting is a must.

3. Remove Barriers – Open up the room with clear glass shower doors or shelves.

4. Monotone Decorating – Use the same light colors on walls, countertops, floors and cabinetry to allow for the eyes to flow through the space.

5. Negative Space – Consider using a pedestal sink which takes less space than traditional cabinets.

6. Declutter – Find locations out of sight for toiletry items.

7. Heads Up – Use the vertical space in the room too, tall cabinets provide storage and add interest to the room.

8. Store Mats and Towels – Keep towels and floor mats out of sight unless in use. A simple hand towel in a complementary color tone is all most guests need.

9. Pocket Doors – Where you have room, use pocket doors or popular barn sliding doors to add extra space inside the bathroom.

10.Glass – Clear glass shower doors is a great way to remove a visual barrier and make the room seem larger.

Home Issues That Shouldn’t Be Deal-Breakers – and a Few That Are!

Finding the right home can sometimes feel like hunting for a needle in a haystack. Unless you’re buying brand-new construction, every home has some drawbacks, whether it’s style or real maintenance issues. If you’re looking for your next home, understanding the difference between minor issues and true deal-breakers can help you evaluate your options and make the best possible choice.

Manageable Annoyances

• Cosmetic – All aesthetic concerns can be fixed – for a cost. The key is to understand the difficulty and level of effort or money involved. A dying lawn can be addressed with new sod. Is the kitchen dated? A new backsplash is relatively inexpensive. With some fresh paint and new lighting fixtures, you can easily brighten a room and make a small space seem more expansive.

• Healthy Homes – Many homes have older carpet, drapes, and other elements that can irritate allergies. Home air filtration systems are affordable and very effective in clearing the particulates out of the air. Replacing the attic insulation and cleaning the vents are easy and inexpensive ways to correct these situations.

Deal-Breakers

• Foundation Problems – Foundation cracks and other issues can be expensive or impossible to correct.

• Mold – While treatments for mold are available, they normally involve major demolition to open walls and flooring for access. Unless the sellers will correct the mold issue before closing, it’s better to reconsider on this one.

• Water Leaks – Signs of water damage or existing leaks could be a reason to search for a different home. Leaks and water issues will most likely bring you to the mold issue above. Classification: Public Classification: Public Buying a resale home almost always involves some kind of preexisting issue, but not all should be reasons to walk away. If the home you like has problems, before you move on, consider the costs involved to remedy the challenge.

Can You Sell an Outdated House?

It seems that everywhere you turn there are companies who advertise buying ugly houses. These messages offer to quickly buy any house, regardless of the condition. The problem is that their offers are often significantly below market value. If you’re a seller whose home needs some attention, you might think these companies are your only option. Some of the offers sound attractive; quick sale, all cash, no commissions, and no fees. But before you do anything, it’s worth your time to call a local real estate agent for a second opinion.

3 Reasons to Call a Real Estate Agent Now

1. Free Advice – The real estate agent will not charge you anything to simply come look at your home. 2. Your House Might Not Be that Ugly – You may be surprised to find that your home is quite marketable. A few years ago, a 1950s mid-century modern home would have been considered a tear-down. Now, these ranch homes command top dollar and are in very short supply.

3. A Path Forward – If your home does have some issues, the agent can offer some ideas about moving forward. They can suggest local contractors provide repair/upgrade services or market to investors that might still offer significantly higher prices than the quick-sale guys.

Even outdated houses sell. We are in a seller’s market in almost every part of the country. Selling your home has a large financial impact on you and your family. Don’t make assumptions about value, reach out to a real estate agent, and make sure you understand all your options so you can get the best offer possible.

Top Home Improvements with the Best ROI

You already know that your home does not look like the pictures in the home magazines. If you’re ready to list your home, you might be wondering if you should do some home improvements or upgrades before listing. The truth is not all changes will bring the best Return on Investment (ROI). Before you plan a big, or small, improvement project, here are the top home improvements which have been shown to bring the best “bang for the buck.”

• Yard clean-up and landscaping

• Complete home cleaning and de-cluttering

• Replacing the front door

• New siding, exterior repairs and/or fresh paint

• Kitchen and/or bath upgrades. New countertops, fixtures, cabinetry

• Deck and patio additions, outdoor kitchens and/or BBQs

• Addition of living space; bonus rooms, extra bathrooms

First and foremost, home buyers search for properties with good bones. Ensure there is no deferred maintenance, and then consider a few updates to give your home a fresh appeal.