YES!! The best time to put your home on the market is when YOU are READY!
It is important to have a good game plan for time and preparation. You certainly don’t want to put your home on before its looking perfect and ready for buyers. But I know it can be confusing with market conditions and timing, so here are some hints to help!
I hear spring is the best time – is that true?
The Real Estate market is definitely seasonal. In the spring is when most people list their home, thus when most buyers are out looking.
Summer – Many people are traveling during this time, so it could be slower, but your home WILL sell and buyers are DEFINITELY still looking.
Fall – Families are back in school, so inventory starts to slow down, but this is when many buyers who had no success in the Spring/Summer, find exactly what they are looking for. There is less competition and they can often take more time to look and decide.
Holidays – This is by far the slowest time of year. No one wants to move during this time. However, the buyers and sellers who have listed their home and are looking to move, are doing so because they HAVE to. Typically a job change, or other life event is propelling this move, so in turn they are serious buyers.
In the Seattle area, we typically see the market start to pick up mid-Jan/early February. Buyers are out there and ready to go!
But I want to make sure my house is ready.
Absolutely. 100%. No question about that. I, personally, would never advise a client to hurry and get their home on the market before it was ready, just to catch a certain month or week. As the saying goes, “You never get a second chance to make a first impression,” so make it count! Photos, marketing, and that first week of showings is crucial in the Seattle area.
Last Spring, the average house was on the market only 20 days before selling. However, you’ve all heard the stories about homes selling in just a weekend. In the last two months, the market has shifted a bit and we’re looking at roughly 50 days on market on average.
While this seems like a lot, the homes that are “market ready” and priced right, are still flying off the shelves. Just this week I had a buyer put in an offer on a home that had been on the market less than 24 hours. We were the 4th offer and luckily got it! But the house was ready and priced right – and buyers recognize that!
(Above chart is the average days on market (orange), by month since Nov 2017. The green line is how much % of the asking price, the house sold for. For example – in January of 2019, the average home sold for 95% of the list price)
How do I know if my house is ready?
- Together with your agent, take the time to go through each room and make sure your home is tidy and staged to perfection.
- Start packing now! You’re going to move eventually, so why not box up half your belongings and put them in storage while you’re on the market?
- Have your Septic System tested and inspected before going on the market. Time and time again, I’ve run into septic issues that could have easily been resolved and not wasted buyer/seller time if they had been addressed before going on the market.
- Gather any reports for furnace inspections, pest inspections, and other ongoing maintenance services. These records put buyers at ease that the home has been well maintained.
My house is ready, now what?
- PROFESSIONAL PHOTOGRAPHY! When your home looks perfect, have a professional take the photos. Most agents pay for this as part of their services (as they should). If your agent does not hire a professional, request they do or recommend a professional to you. Keep in mind that by professional, I don’t mean someone with a nice camera who takes family photos of their friends on weekends. Your photographer should be experienced in capturing all the tricky angles and lighting in a home.
- Your agent will prepare quality marketing materials and put it on the market!
Through this process, work closely with your agent. Ask their opinion on what things you could upgrade to make your home sell for more. Paint, carpet, lighting, staging….it all plays a part!
A recent post by the National Association of Realtors (NAR) revealed that in the months of December 2014 through February 2015, there was an increase in the number of first-time buyers making a down payment of 6% or less as compared to last year:
- 2014: 61% of first time home buyers
- 2015: 66% of first time home buyers
While the number of small down payments is lower than it was in 2009 when 77% of down payments were 6% or less, it does show the recent decisions by both Fannie Mae and Freddie Mac to offer 3% down payment options to certain buyers is impacting the market. FHFA Director Mel Watt recently explained why Freddie and Fannie made this decision:
“The new lending guidelines by Fannie Mae and Freddie Mac will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3% down. These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices.”
This is great news to millions of purchasers that have been denied the opportunity to own their own home because of the almost impossible burden of saving for a 20% down payment.
Will these programs create future challenges?
Certain pundits fear that low down payment programs will create a wave of foreclosures down the road. Mr. Watt also addressed this concern:
“To mitigate risk, Fannie Mae and Freddie Mac will use their automated underwriting systems, which include compensating factors to evaluate a borrower’s creditworthiness. In addition, the new offerings will also include homeownership counseling, which improves borrower performance. FHFA will monitor the ongoing performance of these loans.”
Also, the Urban Institute revealed data showing what impact substantially lower down payments would have on default rates in today’s mortgage environment. Their study revealed:
“Those who have criticized low-down payment lending as excessively risky should know that if the past is a guide, only a narrow group of borrowers will receive these loans, and the overall impact on default rates is likely to be negligible. This low down payment lending was never more than 3.5 percent of the Fannie Mae book of business, and in recent years, had been even less. If executed carefully, this constitutes a small step forward in opening the credit box—one that safely, but only incrementally, expands the pool of who can qualify for a mortgage.”
Here are the direct links to the guidelines for each program:
Remember, as with any new program, there will be some confusion. Contact your mortgage professional for a deeper understanding.
You've probably heard it from everyone…the market is getting better. While it's nice to hear, it is even better to SEE and UNDERSTAND. I'm going to show you a few graphs that show you exactly WHY the market is better and why you may reconsider jumping in to buy or sell.
Please keep in mind that all of the data I will be highlighting below is for Federal Way area codes 98023 and 98003.
1. The chart below is the number of homes "For Sale" vs. "Sold" for the last 5 years. As you can see, from 2009-2011 to , during any given month, there were more than 300 homes on the market. However, only around 50 sold each month. Imagine how hard it would be to sell your home if you had a 16% chance each month….and that is if your house is priced right. To entice buyers, homes had to sell for cheep.
2. Chart #2 is the same as above, only focusing on the last three years. What we see here is a cycle of low inventory and a better chance to sell your home. Clearly, during the winder months, there are less "For Sale" and therefore "Less Pending". In Nov-Feb, sellers had a 40% chance of selling their home. During the summer months, an average of roughly 45%.
3. With the exact same data from chart #2, we can see the "average sold price per square foot" for homes in area codes 98023 and 98003. From Jan 2012 to Jan 2014, we've seen an increase in Price Per SqFt of 23.4%. From Dec 2013 to Dec 2013, there was an 8.3% increase.
In conclusion, the Federal Way housing market is alive and kicking. It's growing rapidly each month. With inventory in short supply, sellers are getting top dollar for their home – no matter what time of year it is. If you are considering selling or buying, now is a good time. For those who are buying, values will continue to rise and so will your payment.
If you have questions on this or other area codes, please let me know and I would be happy to pull similar statistics!
Through the NHF Down Payment Assistance Program, you can basically get FREE MONEY through a GRANT! You don't have to pay it back, and it's not hard to qualify!
Last week I met with some clients and a Mortgage Lender whom I've worked with on several occasions. As I heard him explain this program to them, my jaw basically hit the floor. The monthly payment does end a little higher, but because you are getting the 3%-5% downpayment for free, it takes years (8 in my clients case) to make up the difference!
Here is what Andy Fernando from Alpine Mortgage said about this program:
"For many people today, the number one challenge to buying a home is putting together the down payment. With Alpine Mortgage Planning has solved that problem with the NHF Down Payment Assistance Program.
NHF is a down payment GRANT, not a loan. The grant available is either 3% or 5% of the homes price, and works in conjunction with a 3.5% down FHA fixed rate home loan. If you meet the qualifications and criteria for the loan program, NHF is GIVING you the money for the down payment. Here are the basic criteria:
- 30 year fixed rate mortgage
- Rates determined by amount of grant you request, 3% or 5% of loan amount
- Maximum debt to income qualifying ratio of 45%
- Income limits apply by county (King – $101,430, Pierce – $82,110)
- Regular FHA underwriting standards apply
To find out if you qualify for Alpine Mortgage Plannings NHF Down Payment Assistance Program, get in touch with your Alpine lender today. By providing your current income, asset, and credit information, along with a short interview for an application, we can get a preliminary credit determination very quickly, sometimes in a matter of hours. "
I am seriously completely in awe of this program. If you have been thinking about buying a house, but are simply waiting to save up a down payment, I urge you to look into this program to see if you qualify. Home prices are on the rise, so by the time you save up the down payment, you will be spending more on the house you want. And dont forget this is a GRANT! They basically gift you the down payment.
If you have any questions about this program, let me know, or reach out to Andy Fernando. I highly reccomend him. His contact info is below!
Andy Fernando | Mortgage Advisor
Alpine Mortgage Planning
C 206.498.5355 | f 855.718.4221
I am sad that they are being dragged around for months with no end in sight.
I am sad that we have little control in a tough situation.
I am sad that through everyone else's garbage, they are doing the right things and just trying to buy a great house for their family. But despite them being prepared, saving up, staying on top of the ball, they are the ones suffering.
With all of this, you would think I'm a lawyer and my clients are going through a long legal battle. I suppose you could say there is somewhat of a legal battle, but this is different.
This is a short sale.
When buying a home, a short sale can look like a great bargain on paper. All you have to do is wait a few months to get that price, right? Wrong. BEST CASE scenario….the lien holder (who really has all the power in these situations) only haggles you up in price a little, and you only spend 2-3 months waiting. This is not typically the case.
We've been working on this going on 10 months now, and it's been a nightmare for all parties. Without going into specifics, we've been in negotiations twice, it took a month to schedule an inspection with a very non-cooperative tenant, after waiting months, the bank decided they wanted almost $100,000 more for the home. That gap was way too large to fill (and over valued), so they put the home back on the market, and after dropping it a few times, we got back in there. Since then, we've waited 5 months.
The problem is, there are a bunch of
morons people doing their job at the banks. Each file passes through numerous hands, it gets stacked in the corner, and they simply don't care that there are real people – who have put their lives on hold – on the other end.
If you (as a buyer) break contract or are late on a deadline, they take notice and could even cancel the file! However if they are late, or they don't carry though on things that were promised…it's your fault. You are SOL. That is a tough pill to swallow, but it's true.
Don't they just want to get the house sold? We find ourselves asking. Yes, in theory. But some button pusher at the bank probably has a quota to fill and must try his darndest to get the most money for the house…even if it means putting it back on the market and waiting for a new buyer. So this is why if you don't bend over backwards at times, they can take it away. And that's not fair, or right, but that's the way it is.
There are times that short sales can go smoother. But if you are considering buying a short sale, think hard about not only the time its going to take and the deals and homes you might miss out on while waiting, but the enormous emotional struggle you may face.
Another sad part about short sales is while they are a great way for people under water to get out of their home, the banks are stringing them along as well. They simply want to get out of the home with as little damage on their credit, and with the most ease possible, but the banks are making this process long and arduous for them as well.
As a Realtor, I am glad to pursue short sales for my clients. In this case, it is 100% the right house for this family, no questions about that. And because of that, the struggles may be worth it. But ask your Realtor to talk to you about their experience with a short sale and decide if that really is a route you want to take.
Questions? Have your own experiences to add? Please do comment below.
Lets face it, morgage rates continue to blow my mind. Early 2014 projections saw rates slowly increasing as the government started "tapering." By 2015, rates were projected to be mid 5%. However, buyers and refinancers alike have been blessed with the continuation of low interest rates.
If you are waiting for interest rates to drop before jumping into the market, STOP. They are low! You may see week to week highs and lows, but current rates are the lowest they have been in decades.
Projections of 2015 mortgage rates and availability [/caption]
Since the real estate crash, the market has been slowly gaining momentum. Homeowners are feeling more confident as their equity is starting to increase. From 2013 to 2014, the average sales price in King/Pierce County has risen 8.3%.
On the other side of the coin, mass amounts of 1st time homebuyers entered the market. Recent graduates now have a steady income and mortgage rates have remained low – a healty incentive for any potential home buyer. So many homebuyers have entered the market, in fact, that the demand for homes rose increadibly and the supply couldnt keep up.
What this high demand created was craziness. In places close to Seattle and Bellevue, it was common to recieve multiple offers by day 3. I've heard as many as 18 offers! People would offer above list price by $50,000 or more, they would wave the inspection contingency (keep in mind many Seattle homes are older and it is likely they have aging issues), $100,000 earnest money and more!
In the South Sound area, we did see above list price offers, multiple offers, and many within a week of the home being put on the market.
ENTER LATE AUGUST/SEPTEMBER
Across the board, things have slowed. People took their last minute vacations and are getting kids ready for school again. I've spoken with many agents who have agreed that showings on their listings have all slowed WAY down. I have seen this slowing on my listings as well, and the further out from the Seattle epicenter, the slower they get.
So what does this mean? For sellers, it means sticking it out, or making some agressive moves before the holiday season hits. There are simply less buyers in the market, so you need to make your home stand out and attract one of those few buyers.
For buyers, this means there is somewhat limited inventory, but you may not be competing with 10 other buyers. You may negotiate significant price drops and for the seller to pay closing costs.
It's amazing how it all goes back to supply and demand. The market will bear what the market will bear.
How has housing looked in your area?
As a seller, you dream of seeing those Benjamin's on the table. They are simple, easy, and close quickly. However, if you are a buyer trying to compete for investment properties or even owner-occupant homes, cash buyers may easily beat you out if you don't know what you are up against.
What are cash offers?
Cash offers are just that….cash. The buyer is planning on paying for the property in cash. At the time they submit the offer, they must prove they have the cash in hand. It can't be "on its way" or promised, without proof.
Cash offers also mean there is no financing contingency. Financing contingencies include a bank who needs to make sure their pending loan is secured with a correctly-priced property. This means there will be an appraisal, underwriting, and possible time delays. Cash is valuable when the property has significant defects that might make the home un-financable.
Who is offering cash?
For lower-priced properties, cash buyers are typically investors. They are looking to purchase a property, fix it up with decent repairs, then flip the house to sell or rent out.
We also see cash buyers in the high price range – people who have sufficient funds to purchase their dream home outright. These people have typically done their share of looking at available homes and when they find "the one" they are willing to pay for it.
How to combat cash offers?
To make it simple, you have to make your offer more sexy. Offer a higher price and wave contingencies. I typically don't recommend waving inspection or financing contingency because you never know what will happen. However, if you are in a hot and competitive market, like we are in Seattle/Bellevue, you MUST put your best foot forward. I've even heard of people offering a non-refundable deposit of $100,000 if they back out for any reason. These buyers were so confident that they wanted this house, they put their money where their mouth is. The $100,000 would be applied to the sales price at closing, but should they walk away for ANY reason, the sellers would get to keep the 100k. That prospect is extremely enticing.
If you can't offer 100k nonrefundable deposit, consider including a personal letter with your strong offer. Express to the sellers why you want this house. This especially works if you plan on occupying this house. If I am selling a home and have a cash offer from investors that I know will rent out my beloved home, verses an equally good offer (with financing) from people who will cherish and enjoy the work I've put into my home, I'm taking the owner-occupant letter.
In the end, cash might win out, but it never hurts to try. Put your best offer on the table when you know you are up against cash, and may the best offer win!