Feb 11, 2014 | Home Selling Tips
Let’s face it, selling your home can be an emotionally difficult process – especially if you have lived there for a long time. When you make a house your home, it holds many of your memories and it becomes a part of your identity.
How can you sell the house in which your child took their first steps, where you held many dinner parties and where your family celebrated so many birthdays and holidays together?
You will go through a period of transition when moving house, which can be mentally and emotionally tiring.
It might be hard to sell your home, but time marches on and eventually it is time to move to a different location or simply downsize or up-size to suit your changing family situation.
The problem with being too emotionally attached to your home is that it makes it difficult to sell. When you have a sentimental attachment to your home you will estimate its value as higher than it really is and you will have trouble accepting counter offers.
Which could mean that your home is on the market for a long time when it could possibly have been sold for a reasonable price.
Here are some tips for emotionally detaching from your home so that it is easier to sell:
Remove Your Personal Items
Taking any of your personal items out of the house will make it a lot easier to sell, because the buyer will be able to imagine a blank slate filled with their items instead. Also, it will make the process easier on you if you can remove your family photos, keepsakes and personal items – because it will make the house feel less like yours.
Think About Your New Home
Whether or not you have already bought your next property, it’s time to start thinking about it as your new home. It will take some time, but you can transfer that emotional connection to the new place where you will live.
Start to focus on all of the things that you are looking forward to about living in your new home.
Preserve A Record Of Your Old Home
Take photos and even make a video tour of your old home before you move – so that you can always remember where you used to live.
Get An Outside Opinion
Ask your real estate agent or a professional home stager to take a look at your home with unbiased eyes to let you know what you should change to help it sell faster.
They might tell you to eliminate the jungle wallpaper in your son’s bedroom that you love – but they are probably correct in a way that you can’t see because your emotions cloud your judgement.
With these tips, you should be able to emotionally detach from your old home, so that it is easier to sell. For more information contact your real estate professional.
Feb 10, 2014 | Mortgage Rates
Residential Construction Spending Up
Last week’s mortgage and housing-related reports began with Construction Spending for December, with a reading of 0.10 percent or a seasonally adjusted $930.5 billion. December’s reading fell short of an expected increase of 0.40 percent.
Spending for private sector projects rose by 1.00 percent; of this amount, residential construction spending increased by 2.60 percent and private sector spending for non-residential construction fell by -0.70 percent.
Although construction spending posted a fractional gain, the good news is that construction spending is currently dominated by residential construction and that due to inclement winter weather, any gain in construction spending during December could be considered positive.
Jobs and Unemployment Data Mixed
Employment related reports dominated the week’s economic reports. The ADP employment report for January indicated that only 175,000 new private sector jobs were added for the lowest reading in five months.
December saw 227,000 new jobs. Severe weather conditions were the cause of lower than expected jobs growth. Month-to-month job reports can be unpredictable, but quarterly results provided positive information as the three month period ended in January 2014 saw average monthly job growth of 230,000 jobs as compared to an average reading of 220,000 jobs added during the same period a year ago.
New Jobless Claims came in at 331,000, significantly less than the prior week’s reading of 351,000 new jobless claims, and also lower than the forecasted reading of 337,000 new jobless claims. Analysts said that these readings supported gradual improvement in the economy.
The Bureau of Labor Statistics (BLS) released its Non-Farm Payrolls report for January, which indicated that 113,000 new jobs were added during the first month of 2014.
This reading was better than December’s reported 75,000 jobs added, and suggested to economists that bad weather was not the underlying cause of the dip in jobs growth. Healthcare and government sectors cut jobs in January.
With lower job growth, a higher unemployment rate would seem likely, but the national unemployment rate dropped to 6.60 percent from last week’s reading of 6.70 percent.
The Federal Reserve’s FOMC Committee has established a benchmark reading of 6.50 percent as one of the economic indicators it uses in decisions concerning federal stimulus programs.
Readings for labor and unemployment are important for the overall economy and housing markets; consumers worried about jobs that they might lose or jobs they cannot find likely won’t be buying homes in the near term.
Mortgage Rates Drop
According to last week’s Freddie Mac’s Primary Mortgage Market Survey, average mortgage rates dropped across the board. The reported rate for a 30-year fixed rate mortgage was 3.23 percent, down from the prior week’s 3.32 percent. Discount points were unchanged at 0.70 percent.
The rate for a 15-year fixed rate mortgage fell by seven basis points to 3.33 percent. Discount points ticked upward from 0.60 to 0.70 percent. The rate for a 5/1 adjustable rate mortgage fell by four basis points to 3.08 percent with discount points unchanged.
What‘s Coming Up This Week
This week’s scheduled economic news includes Weekly Jobless claims, Freddie Mac’s report on average mortgage rates, along with retail sales and retail sales except automotive sales.
The University of Michigan Consumer Sentiment report will be released Friday.
Feb 7, 2014 | Around The Home
If your monthly energy bill has started to make you cringe, then it might be time to conduct an energy audit on your home. Hiring a professional can cost you a pretty penny. So save the dough and examine your home yourself.
With a few tools and the tips below, you can identify problem areas that could be costing you every month.
Energy Bills
Analyze last year’s energy bills. Each statement should itemize the energy you use each month in kilowatts. Note any spikes that could indicate problems with one of your appliances or the structure of your home.
Call your energy provider and ask what the average cost is for a home of your size in your area. Then determine how extensively you need to conduct your energy audit.
Air Leakage
Warm or cool air escaping from your home can cost you more money and overstress your appliances. To search for cracks that air might be seeping through, light an incense stick and walk into each room of your home on a windy day. The smoke from the incense stick will highlight problem areas and you can mark them with painters’ tape.
Heating And Cooling System
Thoroughly inspect your heating and cooling equipment. Most homeowners neglect to follow appliance manufacturers’ recommendations of doing this once a year. Make sure your system is working properly.
Change filters and examine ductwork. If your appliances are older than 15 years, consider replacing it with a newer, more energy-efficient model.
Insulation
Go up into your attic and check for insulation. If the insulation covers the joists, then there is probably enough to protect your home. Remove light sockets and use a flashlight to see if your walls have been insulated.
If not, you might want to have insulation blown in. Look for any stained or damaged insulation. This could be a sign of exterior leaks that need to be fixed.
Lighting
According to Energy.gov, lighting accounts for around 10% of energy usage. As part of your energy audit, reduce your use by replacing inefficient bulbs with incandescent or light-emitting diode (LED) bulbs.
Consider using lower-wattage bulbs in rooms that get a lot of sunlight and only turning on table lamps instead of overhead lighting at night.
Feb 6, 2014 | Uncategorized
The Mortgage Bankers Association forecasts $1.2 trillion in mortgage originations during 2014, a 32 percent decline from 2013. Here’s a look at more key stats projected for 2014.
- Originations: Purchase originations are projected to increase to $723 billion in 2014, up from $661 billion in 2013. In contrast, refinances are expected to drop to $463 billion, which will result in total originations of around $1.2 billion. For 2015, MBA is forecasting purchase originations of $796 billion and refinance originations of $433 billion as total volume holds steady. The MBA expects a decline in the share of sales paid for with cash, and higher average LTVs on purchase mortgages, due to the rise in home prices.
- Mortgage Rates: The MBA estimates mortgage rates will increase above 5 percent in 2014 and then increase further to 5.5 percent by the end of 2015. As a result, mortgage refinancing will continue to drop, and borrowers seeking to tap the equity in their homes will be more likely to rely on home equity seconds rather than cash-out refinances. The market will potentially see a small increase in refinances toward the end of 2015 as the Home Affordable Refinance Program 2.0 expires.
- Existing Home Sales: Sales are forecasted to hold fairly even with 2013— which should finish around 5.13 million—at about 5.12 million in 2014. The average median existing-home price is projected to be about $209,000, up 6 percent from 2013 year-end estimates.
- New Home Sales: Likely to grow to 508,000 in 2014, housing starts are forecast to reach 1.13 million in 2014 compared to an estimated 917,000 in 2013.
- Real GDP: Growth will remain relatively weak through early 2014, at around 2 percent, due to a variety of uncertainties, particularly over U.S. spending and tax policies linked to the debt limit debate. The MBA expects the economy will grow somewhat faster in the second half of 2014 as some of these issues are resolved.
- 10-Year Treasury Rate: The 10-year Treasury rate is expected to stay below 3 percent into early 2014, but then increase more rapidly in the second half of 2014 as the Fed tapers its asset purchases and subsequently phases out the third round of quantitative easing (QE3). The MBA expects the Fed to begin tapering its asset purchases in early 2014, and ending QE3 in September 2014. The Fed funds rate will be kept near zero until mid 2015.
- Unemployment: The unemployment rate is expected to continue on a downward path due to falling labor force participation and job growth in the range of 150,000 to 170,000 jobs per month. The MBA expects the unemployment rate will decrease to 6.9 percent in 2014 and 6.5 in 2015.
Source: Mortgage Bankers Association, National Association of Realtors and American Land Title Association.
Feb 6, 2014 | Home Selling Tips
Oh, the dreaded/happy DOM question: “How long has this house been up for sale?” If it’s your home for sale we’re talking about, you’re probably wondering about the split “dreaded/happy” bit. For that matter, whether you’re a buyer or a seller, you’re probably asking, “what the heck is ‘DOM’?”
Days On Market
“DOM” is the shortened industry term for Days On Market, used by the multiple listing services. It’s exactly what it sounds like: the number of days your home for sale has been on the market. This metric covers the time it actually goes on sale to the time the deal is closed.
Why Is DOM Important?
Remember the “dreaded/happy” part at the beginning of this article? As a buyer’s agent, I might gleefully answer, “Fifty days.” I say “gleefully,” because a house that has sat on the market for a long time is a good thing for my client.
The seller is probably more eager to sell than a month before, and is most likely willing to work a deal. An eager seller makes a happy buyer in most cases.
On the other hand, as a seller’s agent, I might not be so happy about it, and for the same reason. My seller is now an eager seller. I want to get the best deal for my client, but I know the buyer has the upper hand. It is then up to me to help my client get the home sold without giving away the barn, the pool, the tool shed and the tools.
Already, you may be beginning to understand how the DOM metric can affect the sale of your home.
The problem with the DOM metric is that it causes buyers and agents to build false assumptions. If a home has been on the market for an above-average length of time, we start to wonder, “what’s the matter with that listing?” Even though I know there are other reasons for a home to go static and not sell, many people automatically think there’s something wrong.
Reasons For An Extended DOM Metric:
- The Home May Be Overpriced – Nothing is wrong with the property itself; it’s just priced too high.
- Testing The Market – Although it’s a big mistake and agents will tell you so, some sellers test the market by throwing a high price on a home they don’t care if they sell – just to see if somebody is foolish enough to take it.
- Sticking To Your Guns – Often, sellers get fixed on a price and won’t budge, come hell or high water. They figure they can wait around until the market can meet their price, not the other way around.
- Renovations – Sometimes, a home will go on the market in the middle of renovations. The sellers aren’t ready to let the home be seen, so it just sits there.
- Availability – A growing problem is the lack of access to a home for sale. Sadly, agents and FSBOs alike seem to be unavailable when a buyer wants to view the home. Obviously, no viewing means no sale.
Don’t let your DOM get high because of simple mistakes. If you’re serious about selling your home, remember the five reasons above and make sure you aren’t doing them.
If you’re ready to sell your home with a professional who understands how to keep the DOM to a minimum, contact your real estate professional today.
