The RE/MAX Associates Louisville Real Estate Blog

Pros and Cons Of Buying During Real Estate’s Peak Season

Despite all the data that suggests when you should buy/sell during certain seasons; there are major benefits and disadvantages to buy/sell during peak seasons. Spring is the season in which real estate markets tend to heat up, unless you’re living in the northern most part of the United States. Some markets even begin to heat up for buyers during the end of winter.

Let’s take a look at spring and see the pros and cons of buying during the prime season.

Pro: Much more inventory

Once April arrives the property listings start showing up all over the place. The reason is that homes show better in the spring, as opposed to having fall debris, and snow covering them. Spring brings blooming flowers and sunshine to add to the curb appeal. Sellers psyche tells them they can get out of the house now that the weather is warm out and they become motivated to sell. Success breeds success (usually), and soon-to-be sellers hear about all the bidding wars, and what the house down the street sold for, and decide to get in on the action.

Cons: More competition

As many homes are there are to select from, there are way more buyers out searching for their dream home. Spring will bring a plethora of potential bidders who sat out the previous season, and are ready to jump in the market. Having all these buyers will beget bidding wars, which drives up prices. Having so much demand allows sellers to price their homes higher than what they would if they listed in fall.

Pro: Perfect time for family shopping

Moving the family around is always stressful, but at least in the summer you won’t have to worry about moving in the middle of the school year. In order to move in the summer, you need to start house hunting immediately. Most families prefer to be in their new house before school starts, and a typical home transaction takes anywhere from 60 – 90 days. Get on the trail and find that house!

Con: Stress can lead...

The Troubles with Moving

Moving is always the worst part about selling or buying a home and it can be a nightmare if you don’t have a strategy to tackle it effectively. Problems can happen at any moment, and at any stage in the process, so it’s best to know the possibilities and how to prepare for them. Here are the top three most common moving hassles, and how they play out.

Bad movers

Movers are late or don’t show up – You have agreed upon a specific date and time for the moving company to help you load and haul away your belongings, but no truck ever comes. Right when you get on the phone to complain here they come. They’ll probably tell you a list of excuses (traffic, broken down, lost etc.) but it doesn’t help your added anxiety and lost time. Sometimes you are sold to fake moving companies and they are long gone with your deposit money.

Movers are careless and inexperienced – If they arrive in a tiny truck and without the tools needed to move large items you could be in trouble. This can turn into a nightmare rather quickly as they won’t have the know-how to handle such large items, and only create more problems for you. They have the potential to destroy items without the right moving equipment.

Movers are scam artists – There are moving scam artists out there, and it’s up to you to spot them before they spot you. They will demand more money than originally agreed upon due to extra services, and could hold on to your stuff until you pay them.

The way to avoid these nightmare movers is to do your research and hire credible movers. Having insurance on some of your belongings isn’t a bad idea either.

Traffic problems...

What Type of Fixer-Upper Are You Buying?

Taking on a fixer-upper is a task that isn’t for everyone, but it can be worth it in the end if it is done right. If you are a handy person and are willing to put some sweat into the home, you can get a great return on the home. Not every fixer-upper is alike though, so finding the one that best fits your skills is crucial. The first step is always to decide which homes are goldmines, and which are endless money pits.

There are three types of fixer-uppers: a cosmetic fixer-upper, a plain ugly fixer, and a demolition. Knowing the difference between each will help you make the best decision on which one to undertake.  

Cosmetic Fixer-upper

This house needs a facelift and probably hasn’t had one for a while. The sellers may not have ever kept up with it, or didn’t want to spend the time and money to get it up-to-date. Commonly these upgrades include new paint, floors, lighting, landscaping, minor repairs, and maybe appliances. For a handy homeowner this wouldn’t be a nightmare. A couple trips to the home improvement store will get you on the right track.

A plain ugly one

This house is ugly, but you may not think it’s that bad. This ugly duckling has a bit more wrong with it, but it’s not a disaster. The home is in good shape, but it will require a bit more remodeling and wide-ranging repairs. If you are a person who sees their vision clearly and can execute like a boss, this is the house for you. Not to mention will you get a better deal, and will probably make that little bit extra when it comes time to sell. It will be worth it in the end if you do it right.

Common traits of ugly fixers are:

Small rooms and a choppy layout – Look for nonloadbearing walls...

Weirdest Requests From Buyers

You can always count on a short list of requests buyers have once you are selling your home. When they pull this card, be expecting to see numbers in this game.

The numbers often come out to the number of square feet, the number of bedrooms, the number of bathrooms, and the number of bucks in the budget. There are some rather unusual requirements occasionally. Here are a few of them:

  • There must have a formal and distinct dining room.
  • There must be a place for the green chairs
  • There must be enough wall space for 32 framed and decently sized pieces of modern art.
  • There must be an open for plan with the kitchen stretching into the family room.
  • There must be a private spot for the kitty litter box.
  • There must be room in the garage for a golf cart.
  • There must not be a home owners association.
  • There must be a perfect place for the Christmas tree, and a big enough spot around it for a sizable train.
  • There must not be kids playing outside, or being kids at all for that matter. And if there are, they cannot be having fun.
  • There must be a place for a 70-inch flat screen tv without window glare, and a good sport for an L-shaped couch.
  • There must be a shower and a tub (separate) in the master bath.
  • There must be traffic noise when all the windows and doors are open.
  • If you have anything like this please feel free to share!
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What to Know Before Selling Your First House

Hindsight is always 20-20, so be sure you know what you are doing before you assume you know it all and sell your home. Having your second home in sight is often a great feeling until you realize you must sell your current home in order to afford this home. Just because you’ve bought your first home and been through the process, doesn’t mean you don’t need help selling your home.

Below are the most common things sellers wish they had known before they listed their home.

How much is my home really worth?

A lot of buyers have glossy eyes and think their home is much more valuable than it really is. They don’t do their homework and have an unrealistic price they want to sell it for. It’s easy to get super excited about selling your home and putting all this money into the equity of your next home. The worst thing you can do to yourself is come up with a false number that it is worth. You will only be disappointed in the end.

Do your homework and find out what your home is truly worth by looking into local comparisons, nearby home sales in the last six months, and look at the properties that most closely resemble your home. If you have a gut feeling your home is troubled by termites, or foundation issues, get that fixed now rather than later. You will have to get it fixed before it sells anyway.

How important is my listing agent?

You will want to look into more than one listing agency. Going with just one agent might hinder your sale in the end, as they may not have your best interest and cost you money. If you’ve never hired and agent before this can be tricky. Interview several agents and do it before you want to list your home. This will leave you plenty of time to make a decision. Look for their knowledge on the local markets, and watch out for their promises of “too-good-to-be-true”....

Fannie Mae's Report Shows Little Confidence

Sweet old Fannie Mae released a new survey that says consumers haven’t felt this bad about the housing market in a year and a half. The current interest rate fell to its lowest point since February of 2015, and it’s bothering consumers.

Fannie Mae has a Home Purchase Sentiment Index (HPSI), which measures consumers’ moods and views and expectations of the housing market, and when it fell by 2.5 points in March, it was the lowest reading in the past 18 months.

According to the HPSI report, 2/3’s of the components fell when consumers’ outlooks fell on the economy. The largest component of the net share that fell was the sector of consumers who believe now is a good time to sell a home. This group fell by 8 percentage points, which is currently at negative one percent.  Overall they believe now is a bad time to sell a home.

Another dropping sector of the report showed that consumers felt less confident about their job security, which fell from an all-time high. HPSI also reported that household income fell by four percentage points and fewer consumers claimed their income rose.

Doubt has been growing in the past three months about the direction of our economy, and it’s transitioning over into the housing market. People who believe the economy is headed the right way are standing farther across the alley than those who believe it is headed the wrong way more so than ever before.

The report saw dips in income growth perceptions, attitudes regarding home selling, and job confidence, all which created the lowest HPSO reading in the last year and a half. As a whole, the report showed mix signs despite the biggest declines in the most important areas. Here’s what Fannie Mae’s report concluded:

  • The net share of consumers say it’s a good time to buy a house fell by 2 points, leaving it at a 33%, with more claiming it is a bad time to buy a house.
  • The net share of consumers saying it’s...

First-Time Home Buyers Want to Skip on Starter Homes

According to Bank of America, 75% of first time home buyers would prefer to skip buying a starter home, and buy one that’s a better long-term fit. They would much rather buy a home that they can grow into, even if they don’t necessarily fit into it now. 69% said they would prefer to save more money and move into a nicer home in the future than settle for a home now.

Of those surveyed, 35% said they want to retire in their first home. 31% said they would like to move into a starter home now. The rest are willing to wait for a better home.

A good portion of the market shows buyers who have a plan are willing to buy a starter home, as opposed to those who want to be a homeowner eventually. Of those with a plan, 41% want a starter home, and 23% without a plan would buy a starter home.

Over 50% said they don’t think they could afford a home due to debt, and another portion says they just don’t want one. They must be content living with their parents, or renting.

An interesting statistic about this survey conveyed that Gen Xer’s put off buying a home more so than Millennials due to debt. 43% of Gen Xer’s put off buying a home as opposed to 32% of Millennials.

Starter homes are good for everyone. You don’t have to stay there for long, and you own your own home, instead of paying rent, which is money you will never see again. If you put a little sweat equity into the home, you can even turn a profit when you decide to upgrade. 

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What to Consider When Getting A Reverse Mortgage

To be eligible for a reverse mortgage you need to be 62 years or older, and have more than 50% equity in your home. A reverse mortgage is also known as a Home Equity Conversion Mortgage. Those aren’t the only stipulations; you will also need to prove you are financially stable to pay property taxes, upkeep, and homeowners insurance policies while attending a mandated third-party credit counseling session. Not so easy anymore right?

For a sizeable portion of older Americans, their home equity is a good representation of their wealth. They know they have this money at their disposal if they run into a major speed bump in their later years. It’s a good feeling to have once retirement grows nearer.

Be sure to consider the following:

Reverse mortgage laws require homeowners to live in and occupy the home they are taking loans out on.  So if you plan on moving to a new residence, you will need to sell the home and pay off the balance of the loan.

Are you planning on deferring your social security benefits? If yes, you can plan on getting a higher payout by waiting to collect them. Before you make a move, make sure you compare this against the interest rate you’d be paying for the reverse mortgage first, just making sure this is in your best move financially.

You may think a reverse mortgage can improve the quality of your life, and I very well could. You are allowed to use the funds as you wish; whether it is for vacation, medical bills, home renovations, or daily expenses.

If you are thinking about a reverse mortgage you best consult your financial adviser. They will tell you how this type of loan works. Do some homework yourself and figure out the pros and cons of them. You may find a new lifestyle ahead of you. 

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Survey: Buying Online is Becoming A Trend

An online brokerage firm called Owners.com surveyed 1,000 future home buyers and c determined they are becoming more familiar, and quite comfortable with the home buying process. Another conclusion was they are becoming more self-reliant with buying homes.

The findings of the report stated that 80% of the buyers believe that the market will be just as good, or better, than it was give years ago; and that mortgage interests rates are “somewhat to very important” in their decision when to buy.

Exactly 69% of the buyers graded themselves with an “A” or “B” in terms of understanding the home-buying process. It’s fair to say they are confident in navigating themselves through the real estate market.

Here’s another fun number: 73% said they would search for homes online, and 53% would book online home tours. 43% said they might go for online financing products and 27% would send a purchase offer online.

There are a lot of positive feelings towards this spring season. One area buyers are willing to explore a bit more is the online real estate market. They get to learn the process themselves all while saving time and money. This trend is expected to only go up.

For the fancy buyers, 29% had a dream of a full smart kitchen, and 19% wanted a spa bathroom.

33 of buyers said they would surely upgrade to a better home, 25% would invest in real estate, and 24% would relocate to a totally new area.

And let’s not forget, 80% think this year will be the same, if not better than the past 5 years. Let’s hope they are right!

 

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