It’s a new year and a great time to sell your home and purchase a new one or to buy a first home. In my humble opinion, any time is a good time! However, this time of year, before Spring, is an excellent time to get that house on the market. Especially now as we enter 2017 when interest rates and inflation will be on the rise, inventories are at historic lows, and the market will be driven by millennials and baby boomers who are the largest two generations in history so say realtor.com, Kiplingers, and 24/7 Wall St. Those factors make it a seller’s market. One, by building urgency with buyers who cannot stretch their debt-to-income ratio any further so they are ready to buy now. Two, because only serious buyers are willing to brave the winter elements to house search. Three, because it keeps prices competitive, houses priced right are moving fast, houses priced high are sitting longer. The national average days on market is around 50. Some areas are seeing things go even faster. The Midwest is a very hot market right now especially in Columbus, Ohio; Madison, Wisconsin; and Omaha, Nebraska.
OK so now that I have you on board with a hot market, now what?
Be patient! You may not get multiple offers the first day like in Columbus, Ohio but you will get offers. As I previously mentioned, the national average is around 50 days on market. The average for Kansas City, in December 2016, was a mere 8 days. So never fear, it may take a day or two but those offers will be rolling in. Some areas of town that have low level of inventory are getting multiple offers in one day as if it were Columbus, Ohio.
Next step to getting your house sold fast is to keep it lean and clean! Sounds simple but it can be hard. Over the years we accumulate stuff and that stuff piles up in our closets, garages, basements, and backyards. Time to down size! Have a garage sale and get out all that stuff you’re no longer using. Some stuff cannot be parted with and that’s understandable, get a storage unit for those items while your house is on the market. Your closets need to be all but empty. Your counters all but bare. Take down all the family pictures, clean out the garage, mow the lawn, and hire a maid. A good cleaning service will have your home sparkling in about 2 hours for about $300. Well worth it! (Being a neat freak myself I highly recommend The Maids! They do an amazing job.) Buyer’s want to imagine themselves in your house, not see all your souvenirs from your honeymoon. Believe it or not bad smells, bright colors, and clutter can cost you a potential buyer. Take a look at the biggest offenders. (Click on image to view larger.)
That leads us to upgrades. So the bathroom is a little outdated and you want to improve it. Perfect! That is a great upgrade to invest in before you sell your home. In the Kansas City area you can recoup about 62% of your cost. What to avoid is improving your house in a way that only suits you. Over personalization can be a big downside to a potential buyer. You may love that walk-in humidor, but finding a plethora of potential buyers who will love it too can be slim. Upgrading kitchens and baths are your best bet to getting your home sold for top dollar and even recouping most of the renovation costs as well. In the Kansas City area you can recoup almost 71% of your cost on a major kitchen remodel and almost 82% on a minor one. (If you click on the link, the chart is on page 6.) Across the nation these percentages vary a lot. In San Fransisco for example, it costs more to remodel your kitchen but you also garner a much higher return on your investment, a whopping 146.6%(!) for a minor kitchen remodel.
OK so you got your house on the market, the offers are rolling in, uh-oh, now we need to move! Or perhaps you’re tired of renting and are ready for your first home.
The first step in buying a home is getting approved for a loan. And that starts with shopping around for the best loan. According to the Consumer Financial Protection Bureau, 77% of Americans only apply with one lender and almost 50% only consider one offer. That sounds crazy to me! People will shop around for the best home but not the best home loan?! Why? Largely due to the old stigma that if you apply for multiple loans it will bring down your credit score. Not true! Well not since the late 80’s anyway. According to mortgage expert Dan Green in his article, Shop For Rates Without Lowering Your Score, he states that, “There’s no need to worry — consumer protection laws have your back. Different from the 1980s, when lenders could harm your FICO, today’s credit score rules specifically protect mortgage applicants who are shopping for today’s best mortgage rates. The credit bureaus say it plainly on their sites: Your credit scores does not drop when a mortgage lender pulls your credit. As a consumer, you have the right to shop for the lowest available mortgage rate, and you can do it without fear of harming your score.”
OK, we got a loan, now what?
Now you’ve shopped for the best loan. Next go shopping for the best real estate agent. Set up multiple meet and greets and find one that you really like. Ask them questions like, “What can you do to sell my home that I can’t do for myself?” You can take pictures of your home. You can advertise it on Zillow and social media. Find out what that agent can do for you that is above and beyond what you can do for yourself. Do they have a network of cooperating agents and potential buyers/sellers? Do they have a solid marketing plan? Do they have a good knowledge of the market? Are they a good negotiator? Have they presented you with excellent comparables so you have a very clear idea how much the market will bear for your home? Do they have access to specialty programs and search engines not available to the public? Are they confident? Composed? Or dying for your business? Ask questions. Compare notes. Then hire me! Just kidding. Seriously though, it’s important to find an agent that you really click with and that will go the extra mile for you.
Last, but never least, LISTEN TO YOUR REAL ESTATE AGENT’S ADVICE! Hate to get all caps on you, but this is vitally important. Once you find that agent that you click with, that you trust, go ahead and put your trust in them. You are coming to your real estate agent for advice, please take it! This is their area of expertise! Let them earn that commission! I now it can be hard to let go of the reigns, especially when dealing with large sums of money and emotional ties. Selling and/or buying a home may be the largest financial transaction in a person’s life. That is a big deal and a good real estate agent will treat it that way. Selling and/or buying a home is also an emotional experience, sometimes we can’t pinpoint exactly why do or don’t like something, we just do, and that’s OK. Just remember you have hired a great real estate agent and they will do great things for you!