Since the residential real estate market recovery began in earnest, buyers have had a more and more difficult time finding a good deal – or even finding a home at all. Multiple offers, bidding wars and a lack of inventory has kept some buyers from making the leap into home ownership. If you’re a buyer who has been daunted by the recent real estate market, there’s good news: this year’s spring market may bring a little relief!
It’s still a spring market, so you should expect to move quickly and pay a reasonable price for your home, but an increase in supply and slower growth in home sales makes this year’s spring market one of the most accessible times for buyers in the past 18 to 24 months.
Escalating Home Values are Spurring More Listings
Rising home values are a double-edged sword for potential homebuyers. Rising values have priced some buyers out of the market in the past few years, but those same rising values are now helping to improve the supply of available listings in the real estate market. As prices rise, more and more sellers are looking to take advantage of the increase in home values to sell their homes. This means more supply for potential buyers, up substantially from last year’s 12-year low leading into the spring season.
Gains are Slowing, Bringing Relief for Buyers
Last year’s real estate market posted some of the most substantial gains in years, but home values rose so quickly that they made it difficult for some buyers to find a good value. Fortunately, gains are slowing as the market shows signs of stabilizing – which is great news for buyers!
Home values are still poised to post growth, which is healthy for the economy and residential market, but the growth is modest enough that buyers should be able to keep up. Cooling demand means fewer bidding wars and less frequent instances of multiple offers, which means buyers should be able to find homes this spring without fighting over a specific property or dealing with unreasonably-escalating values.
All of these factors combine to mean that this spring is the best time to be a home buyer in recent memory!
Last year’s residential real estate market recovery was truly impressive. Homeowners recognized substantial gains in home values, and demand outstripped supply for most of the year, further driving bidding wars and multiple offers. While the real estate market is still generally improving, analysts predict that home sales will slow this year.
Groundbreaking on New Homes has Dropped
One factor that has led analysts to predict that home sales will slow this year is a dramatic drop in new home starts. Groundbreaking on new homes fell 16 percent last month, and this is the biggest percentage drop since February 2011. The seasonally adjusted annual rate is the lowest since September. Some people are blaming the harsh winter weather, but other analysts say that the increased seasonality is only part of the story.
The Winter has Been a Scapegoat – but Spring Will Tell the Story
Many people have blamed the slowing in home sales on the cold and harsh winter weather. Others, though, argue that housing starts in the Northeast – where weather was definitely bad this winter – jumped 62 percent seasonally adjusted. In contrast, housing starts dropped in the West, where weather wasn’t a driving factor. Some analysts are pointing to these statistics to argue that weather clearly wasn’t an issue. Spring is just around the corner, and with the improvement in weather will come a more conclusive answer about the state of the real estate market.
Last Year’s Growth Isn’t Sustainable This Year
One of the key reasons that analysts maintain that home sales will slow this year is that last year’s growth simply isn’t sustainable under this year’s market conditions. Last year was a perfect storm for the residential real estate market; confidence was high, interest rates were low and home values represented a good deal. As the year wore on, though, both interest rates and home values increased – in some markets, home values actually posted a double-digit percentage increase.
These rising home values, combined with the higher interest rates, means that a mortgage payment on a home this year will be substantially more than it would have been the same time last spring – which is why analysts say that growth will slow this year.
The spring market is nearly upon us. In some parts of the country, the spring housing market has already arrived! Spring is traditionally the time of year when sellers could expect a quick sale, but there are things you can do to make your home more appealing to buyers and speed up the process. These four tips can help you make a quick sale in this year’s spring market:
1. Curb Appeal is More Important than Ever
With today’s picky buyers, curb appeal is more important than ever. Some buyers will do a drive-by without ever stopping if they don’t like the look of your home from the street. You don’t have to spend a lot to make a good impression, though. Focus on pretty – make sure the lawn looks full and green, and consider edging the lawn and trimming the grass. A quick session with your local landscaping company can have your home looking its best. If you have a deck that’s warped or splintered, fix it. Try a new coat of sealant to freshen up the look. You don’t have to spend a ton – just make it look attractive.
2. De-Clutter and De-Personalize Your Home
Clutter eats equity. Remove at least 25 percent of your belongings from your home. Take down everything that’s personal, from family photos to fridge magnets. De-cluttering and de-personalizing your home opens up space, and makes it easier for buyers to envision themselves in your home. Bonus: it also helps to prep the home for moving out.
3. Deodorize to Enhance Appeal
Odors can make a big impression, so deodorize your home to enhance it’s appeal. When you deodorize, though, really freshen the air. Don’t just hide smells with too much potpourri or strong scents, as overpowering scents will put buyers off – or put them on alert looking for a deeper problem.
4. Consider an Inspection to Alert You to Potential Problems
Consider getting an inspection done to alert you to potential problems before you find out about them from buyers. One potential con of an inspection, though: if you uncover certain conditions, you’re legally required to disclose them to buyers. Ignorance can be bliss. On the other hand, though, an inspection can help you identify issues and prepare for them – either by fixing the problem, or pricing the home to deal with it during negotiation.
Keep these tips in mind when you’re preparing to sell your home. A little effort before you list your home can dramatically speed up your home sale in this year’s spring market!
In today’s digital age, buyers often form their first impression of your home before they ever see it – by looking at the photos that accompany your listing online. Some buyers decide your home isn’t for them before they ever set foot on your property. If you want to woo buyers and get the best price for your home, it all starts by taking good photographs for your online listing.
1. Stage the Home Properly
It should go without saying, but unfortunately so many people neglect the importance of staging the home properly. At the very least, you should remove clutter, dinner leftovers, garbage and other personal elements that will appear unattractive in your photos. Even better, though, is having your home professionally staged so it will appear inviting and draw in potential buyers.
2. Take Exterior Shots in the Middle of the Day
Exterior shots are most attractive if you take them in the middle of the day. The sun is shining, the sky is blue, the light is good, and your home will show to its best advantage. If possible, avoid shooting on overcast days where your home may look dull, bland or washed-out.
3. Highlight Your Residence’s Best Features
Do you have an amazing home theater, or a fabulous exercise room? Highlight your home’s best features in your shots. At the very least, you should make sure to include shots of the kitchen, bathrooms and all of the living space – but feel free to dwell on your home’s highlights to play up its most attractive amenities. If you’ve got a spectacular view, or you live in a community that has a pool, tennis court or gym, feel free to include those shots, too. You’re selling a lifestyle, so the more pictures, the better!
4. Don’t Be Afraid to Tweak the Photos
Editing your photos can help you adjust colors, tweak the brightness or contrast and crop out unnecessary background. Don’t be afraid to tweak your photos to show your home to best advantage.
Ultimately, taking good photos of your home can be the key to getting buyers in the door. Spend some extra time and effort to photograph your home in its best light – both metaphorically and literally.
One of the most important things you can do before you buy a home is to review your credit report. When you review your report, you should look for erroneous information, as well as check on the state of your credit. If you find any errors, you can file a dispute with the reporting agency to get them removed. Errors on your credit report can cost you thousands of dollars in higher interest rates, or can even prevent you from getting a loan approval. If you review your credit report annually, you can also keep an eye out for identity theft, and make a timely response if you notice someone else abusing your credit.
Check for Errors Before Buying
Before you ever contact a lender about getting a home loan, you should get a copy of your credit report – preferably from all three major reporting agencies: TransUnion, Equifax and Experian. Some lenders pull from one, two or all three agencies, so if you only get one report, you may miss important items with a different reporting agency.
When you review your credit report, look for errors, such as negative items that shouldn’t be there, errors with a name or address, or errors with accounts showing open or closed, the total amount due being incorrect, or the total credit limit being wrong. All of these things can affect your credit rating, and most are relatively easy to resolve.
Annual Review can Minimize the Damage of Identity Theft
Identity theft is a growing problem. People can gain your personal information in a variety of ways, and may open new credit cards in your name and run up thousands of dollars in debt, or may run up debt on existing cards without you noticing. Monthly credit report monitoring services are the most timely way to address identity theft, but annual review is a more practical option for most people.
If you notice incorrect items on your credit report, or charges or accounts that you haven’t made, dispute them immediately. In some states, you may also need to file a police report indicating that you’ve had your identity stolen. Quick action can help minimize the damage of identity theft, and mortgage lenders may be understanding if you can document poor credit as a result of identity theft during the home mortgage process.
If you’re thinking about buying a home, you probably already know that good credit can help you get better loan rates, make you more likely to get a loan approval and can help make your home ownership dreams come true. But with the challenging economy we’ve faced in the past few years, not everyone has perfect credit. People have been putting more of their debt on credit cards, which unsurprisingly affects your credit rating. There’s good news, though: if you’ve got sub-optimal credit, you can make it better with a little effort on paying down your cards.
Pay Down Line of Credit Balances
One common issue that many people face today is carrying high credit card balances. With the economic difficulties presented by the recession in the past few years, more and more people have relied on credit cards to help pay for basics like groceries, school supplies for the kids and gas for the car. Unfortunately, those costs can climb over time, and carrying high credit card balances can make a negative impact on your score.
Pay down your high credit balances. The total amount of debt that you carry is important, but also how much debt you carry relative to your total credit line. For example, if you’ve got a $1,000 credit card carrying an $800 balance, a lender may view you as financially over-extended. If you pay down your credit cards to carry no more than a 20 percent balance, your credit will shoot up and lenders will view you much more favorably. In fact, carrying a balance of 10 to 20 percent and making regular payments every month can be better for your credit than paying off the credit cards entirely.
Pay down line of credit balances with the highest interest rates first. Cards that carry a higher interest rate charge you more every month, so it’s important to pay these down faster. Once you make a dent in this debt, turn to cards with lower interest rates; it costs you less to carry that debt longer. Depending on your situation and finances, you could easily gain 30 or more points by just paying down line of credit balances to under 20 percent.
Not only is it important to check your credit report before you start shopping for a home, but you should give yourself months to fix items on your credit report. Some people assume that if they find an error on their credit report, they can fix it in a matter of days. This simply isn’t true. In most cases, it takes anywhere between three to six months to fix or clean up your credit report. Nothing on your credit report is an overnight fix, so give yourself time to clean things up.
The Dispute Process is Slow
Most people don’t realize it until they do it, but the dispute process is slow. In the best case scenario, you may be able to contact the creditor directly to resolve an issue, and get them to agree to contact the credit reporting agency. In theory, with some reporting agencies, this type of correction can show up within a few days. In most cases, however, creditors repopulate their data with the reporting agency once a month, so any changes may not even go to the reporting agency for a month or more. And that’s if the lender cooperates and agrees with you.
If you file a dispute with a reporting agency, a lender has 30 or 45 days to respond to the dispute. Reporting agencies are required to send you written notification about the result of the dispute within five days, but it may not be the result you want. The Federal Trade Commission says that consumer complaints about credit reporting allege that it takes an average of six months to resolve credit disputes.
Also, keep in mind that a change to your credit report may not make an immediate impact on scores. In most cases, correcting erroneous information or removing a negative item may result in an immediate boost, but some fixes require a few months or more to make a positive impact on your credit rating. So give yourself time to make the changes and improvements you want to your credit score before you begin shopping for a home.