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4 Ways to Tell How Fast Your Home Will Sell

by Judy Reed

for sale

It’s not just location, location, location — although location is certainly important. Lots of other factors make one house hot and another one not.

Here are data-driven pointers from Zillow Research that help identify which homes are likely to fly off the market (in 60 days or less):

  • Keep calm and price it right. The housing market is improving, but take care not to overheat your listing price. Homes priced more than 12 percent above their Zestimate® home values are almost half as likely to sell in 60 days as those priced closer to their estimated values. The sweet spot is between the Zestimate and six percent above it — a range where homes sell about as quickly as those priced below their Zestimates.
  • Take a picture, but not too many. The optimal number of listing photos is 16 to 21, but it’s better to have too many than too few. Having fewer than nine photos lowers your chances of selling in 60 days by two percentage points.
  • Size matters. As a rule, smaller homes (under 1,100 square feet nationally) sell the fastest — about nine percentage points faster than the largest homes in a 60-day window — but that doesn’t hold true for all markets. In San Francisco and Indianapolis, for example, small homes take the longest to sell.
  • Get the word out. Page views on Zillow are a strong indicator of how quickly a home will sell. Listings with 280 or more page views in the first week were three times as likely to sell in 60 days as those with fewer than 100 views. That’s powerful incentive to make sure your agent spreads the word early by posting your listing online.

How to Refinance a Jumbo Mortgage for Less

by Judy Reed

If you’re completing a refinance on a home that you owned for less than 12 months, some jumbo financing investors may also require you to refinance using a different loan, such as a loan issued by Fannie Mae or Freddie Mac. Furthermore, some jumbo investors have a requirement that specifically states if you’re refinancing a home that you’ve owned for less than 12 months, the original purchase price needs to be used as consideration for the value no matter what the current market supports.

Still if you plan to refinance this year, you would be well served to ask your mortgage company to qualify you on their jumbo programs, if they offer any, as well as the traditional Fannie Mae/Freddie Mac loan so you can determine which mortgage loan program will align with your payment, cash flow, and equity objectives.

If rising mortgage rates have spooked you into refinancing but your loan size is more than $417,000, pay particularly close attention. Traditionally, these loans cost homeowners more, but there are new investors in the marketplace offering better rates and deals on larger mortgages.

The big question to ask

It doesn’t matter where you apply to refinance a mortgage—whether it’s a bank, credit union, mortgage broker, or even a direct lender—the investor determines whether your loan will cost more or not.

Fannie Mae and Freddie Mac purchase loans up to the maximum conforming loan limit, designated by county—it’s often $417,000 but can be as high as $625,000 in high-cost markets. For example, in Sonoma County, Calif., it’s $520,950.

In terms of pricing, Fannie Mae and Freddie Mac loans are ideal if your loan is $417,000 or lower. However, any loan of $417,001 or more that goes to Fannie Mae or Freddie Mac will likely cost more than if it were going through a different investor. So make sure to ask your lender: “Where’s my loan going?”

Up until recently, Fannie and Freddie have been the main players for loans above the maximum loan limit. Just this year additional jumbo investors have entered the market—including Wells Fargo, Chase, and many others, and they’re buying loans made by banks, credit unions, brokers, and direct lenders.

Jumbo investors offering an alternative

Ask your mortgage company about its “jumbo” mortgage offering. This would be especially beneficial if you’re trying to refinance a loan size bigger than $417,000, because jumbo investors specifically cater to this market.

This means that jumbos may even be lower-priced than loans $417,000 or under—which are the ones that are normally considered the best-priced mortgages in the marketplace. Working with a jumbo investor may help you avoid being subject to the pricing adjustments (a big driver of cost on mortgages) that Fannie and Freddie impose, which could help you refinance for a lower interest rate and payment.

Let’s compare Fannie/Freddie to a jumbo investor:

Other times the jumbo option may make sense

There are some other potential advantages to working with a jumbo investor. Let’s say you have a first mortgage on your home at $400,000 and an $80,000 home equity line of credit that you would like to consolidate into one. Fannie Mae and Freddie Mac would consider this scenario to be a “cash out refinance” because the added HELOC debt wasn’t used to acquire the home, and your mortgage company will charge you more for the loan being over $417,000 and for “cash out.” You could expect as high as .5% of the loan amount being absorbed either in the interest rate or paid for by you (based on whatever interest rate you choose) at close of escrow or paying in cold hard cash at closing.

A jumbo investor, however, will likely consider the loan in this scenario to be “rate and term,” which offers better pricing.

It’s important to remember that some jumbo investors recognize a jumbo mortgage loanto be anything bigger than $417,000. Other jumbo investors characterize a jumbo mortgage to be anything bigger than the maximum county conforming loan limit. So be sure to talk to your mortgage company when discussing jumbo loans.

Jumbo credit still tight

While pursuing a jumbo mortgage refinance, credit requirements for these loan types are still relatively tight. These programs want strong borrowers with good credit, a low debt-to-income ratio and equity in the home. For example, if you’re trying to roll HELOC debt into the refinance, there can be no draws on the home equity line of credit in the past 12 months. (Before you begin your refinancing process, it helps to have an idea of your credit standing—you can get a free credit report summary on Credit.com to see where you stand.)

 

Here are some strategies you can use to get offers fast.

The theory of under-pricing

Under-pricing means that you go to market with a list price that is just below what the comparable sales in your area support.

You can’t pinpoint the exact market value of a home until it sells. But before you list, there’s always a range. If you price your house at or below the bottom of the value range, you are under-pricing the home.

In many West Coast markets this strategy will work effectively. Take this San Francisco home, for example: priced at $1.1 million, it received 10 offers and sold for $1.425 million in less than a week.

Risk alert: If you price your home low, this plan could backfire — big time. If you don’t know your market and this strategy doesn’t work, you’d better be ready to accept that list price.

Staging and market presentation

Well-priced homes that also show well sell quickly. If you want a quick sale, you need to invest some serious time in getting the house ready.

Prepping the home means taking out large pieces of furniture and personal items, painting, replacing carpets, finishing floors and even doing some minor renovations.

Enlist the help of a home stager and take their advice, and you can be assured a quicker sale. The investment of time and money will pay itself back.

Risk alert: If you go overboard on staging or you don’t spend the time and money in the right places, it could be a waste. Don’t make staging decisions in a vacuum. Focus on kitchens and bathrooms, de-cluttering and cleaning. When in doubt, ask for help.

Disclose and inspect upfront

In most of the country, sellers complete real estate transfer disclosures and present them to the buyer, and the buyer simultaneously inspects the home — all once they are in escrow.

What often happens is that buyers discover things they don’t like, or uncover issues. When this happens, they may lose confidence in the home or the deal.

By presenting disclosures upfront, and even providing buyers with a copy of a recent inspection report, you can help them get more comfortable with the home. If you price the home to account for whatever work needs to be completed or for disclosure red flags, buyers will feel more confident, and may make an offer much more quickly.

Risk alert: There is little risk in disclosing and inspecting. If you try to hide something and the buyer discovers it later, you can expect the deal to fall apart — or maybe even face a lawsuit down the road.

Selling your home is a major undertaking. Spend time strategizing and preparing the home for the market. Pricing, staging, presentation and disclosure go hand in hand. If you want a quick sale, price it right, present it in its best possible light, and go out of your way to make buyers feel comfortable with all aspects of the home.

Should I Buy a Home Now?

by Judy Reed

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Thank You!

by Judy Reed

Moving? Get Exactly What You Want!

by Judy Reed

Ready For An Empty Nest?

by Judy Reed

Many homeowners today face a serious housing dilemma. They love their home, its location, and even their neighbors. But they’ve outgrown the space. Do they trade up to a bigger or better house, thus entering a busy real estate market, or stay put and renovate?

Most homeowners have never sold and bought at the same time, nor have they lived through a renovation. Both experiences are incredibly stressful, and many people don’t know what to expect. Here are some tips for making an informed decision.

Know what you’re getting into

It’s helpful to know that it is cheaper to stay in your current home and renovate than it is to sell your home and buy a bigger one. And renovating isn’t as big a deal as one may think.

If you go into it with an open mind and full awareness, it’s not so bad. However, some people are just not cut out for living with dust, disruption, and a little bit of chaos.

Living through a renovation means a constant stress is hanging over you. If you can’t take that in your life, don’t fool yourself.

Check your finances

The most important thing you need to do is understand your home financial situation. Do you have equity in your home? If so, how much, and would you need those funds to either renovate or purchase the new home?

Is a home equity line of credit available to you? Using that money provides the mortgage tax benefit for the interest, which makes an equity line a no-brainer.

What would you need to spend on a new home in your desired location? Just like when you first got pre-approved to purchase the original home, you need to get pre-approved and run the numbers. You may find that the house you can get isn’t much bigger than where you are, or that you have to change areas to get more space.

Define your renovation requirements

What exactly is it that you need? An extra bedroom or bath, more family or community space, a larger kitchen or a master bath? Put it all out there and prioritize.

Can these changes be made within the envelope of your current home, or would you have to expand outside your walls? Renovating inside might mean that you need to leave the home for some time, while an expansion might allow you to stay in the home during the renovation.

Research zoning and building codes

Learn how building and zoning laws will affect your plan to renovate. Find out if expansion is even a possibility.

Many people think that finishing the basement is as easy as putting up some walls and carpet and moving the TV downstairs. But did you know that you likely need two forms of egress or certain height and insulation to make a finished basement meet code? A few hours of an architect’s time can help get you the information you need.

If you want to add on, make sure that your lot is big enough. Town zoning laws only allow a certain percentage of the lot to be covered. If you’re at your max, you’re out of luck.

Set-back laws might mean that you can only expand in the front or on one side of the property. You may find out immediately that what you want to do simply isn’t possible, and the decision is made for you.

Don’t over-do for the neighborhood

You need a master bathroom and family room or some extra square footage, but will the neighborhood support it? You don’t want to be the biggest or best house on the block when you go to sell. A big master suite or designer kitchen may be just what you want, but will future buyers pay for it?

Do some research, talk to a The Judy Reed Team and attend open houses in your neighborhood. If you don’t know, ask. But do not embark on a large renovation project if you can’t get your money back when it’s time to sell.

A different kind of stress if you move

Purchasing a new home and selling your existing one simultaneously means instant stress that is intense and compacted in a short period. The stress may come in the form of carrying two mortgages, getting a bridge loan or waiting for your home to get an offer.

Remember how you felt when you purchased your first home? Now double or even triple that.

Expect the expenses

When you sell your home, you need to pay the real estate commission and transfer tax on the sale, and you may be taxed on any gain. When you get a mortgage for the new home, expect more loan and title fees upfront.

While many closing costs and transfer fees are tax deductible, you don’t realize anything from these expenses. The $10,000 in fees might be better spent toward a new bathroom. Before you decide to explore this path, gather some information about costs.

Deciding whether to trade up or sell and buy is incredibly personal. The most obvious thing to do is to check your finances, and see what is out there on the purchase market. Learn what’s happening and understand how you would fare. And even if it’s intimidating, seriously consider renovating. It is incredibly rewarding to be able to make your home even more custom to you.

How Does the Color of Your Home Affect Buyers?

by Judy Reed

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It’s no secret that color is crucial when marketing a product. In fact, consumers come to a subconscious conclusion about a product within 90 seconds of viewing, and much of that judgment (62-90 percent) is based solely on color, according to the Institute for Color Research. Retailers apply these findings every day (think red sale signs) to encourage consumers to purchase their products. Can the same be said in real estate?
 

Consider this: If color influences product marketing strategies, the color of a home can be a decisive factor when selling.


“Your home’s exterior color is literally the first thing a buyer will see and comment on,” says Suzanne Otto, home stager and owner of Six Twenty Designs in Montgomery County, Pa. When preparing a home for the market, Otto recommends shades within the white, tan or gray color families. These colors resonate beyond pure aesthetics – according to e-commerce giant eBay, white indicates safety. For a homebuyer, a home with a white exterior can translate to concepts like “shelter” or “safe haven.”


Similarly, understated browns (including the aforementioned tan) signal security. Homes painted in sandy or mushroom hues read comfort and warmth. Colors like taupe, which falls somewhere between brown and gray, call to mind traditional values, homeownership included. Earthy tones like laurel green or artichoke can not only highlight a verdant landscape, but also evoke a sense of tranquility.
 

Per eBay’s assessment, blue is ideal to move product because it transcends culture. Homes outfitted with a dusty blue or blue-gray exterior may not bridge the gap between your everyday seller and an international homebuyer, but a universally regarded color can help widen the net for buyers on the home front.
 

If red signs boost retail sales, it seems likely a red home would be ideal for a speedy sale. Not necessarily – red in small doses, such as sale stickers or tags, encourages action. Red on a grander scale can cause adverse reactions. An alizarin crimson door, for instance, might be well-received by buyers, but a house in the same shade could potentially limit offers.
 

Homes in other colors can sell successfully – our retinas tend to register yellow before any other color, so a buttery yellow exterior could be an attractive option for buyers – but non-traditional colors, like oranges and purples, appeal to very specific personalities and can significantly shrink the pool of interested buyers.

It’s important for sellers to consider the home in relation to the neighborhood before swapping out the exterior color or refreshing an existing paint job. Do nearby homes share a distinct color scheme? Is each home uniquely colored? Evaluating the home’s surroundings can help sellers determine what’s most popular in their market.

 
 

RE/MAX vs The Industry

by Judy Reed

Displaying blog entries 1-10 of 30

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