Should I Sell My Home Now?
You may be considering selling your home this year – maybe it’s time to downsize, maybe you’re relocating, or you’ve heard that the real estate market benefits sellers in your area. Whatever your reason, 2018 is shaping up to be a great year to put your home on the market – with tight inventory, rising yet stable housing prices, and mortgage rates favorable to buyers, it’s little wonder that realtors report higher than normal home sales. If you’re on the fence about selling your home, it’s time to do a little research and ask yourself “Should I sell my home now?”
- Should I Sell My Home Now?
- ⬇️Low Inventory Leads To Eager Buyers
- 💲Interest Rates Are Low – For Now
- 💸Relocate To Find Cheaper Property Taxes
- 🛠️Consider Your Renovations Carefully
- 🚫Tight Inventory Means Buyers Are Willing To Sacrifice
- 🤑Cash Investors Are Making A Tight Market Tighter
- 🏡A New Generation Of Home Buyers
- 😱Buyer's Panic Can Lead To Fast Sales
- 🗓️Is Now The Best Time To Sell A Home In The Great Richmond, Va. Market?
- 🔎Search Homes Here
⬇️Low Inventory Leads To Eager Buyers
A combination of lower but stable mortgage rates and relaxed home loan requirements has produced a new crop of buyers over the past several years. Low inventory of available homes and increasing home values have made the market tight for those wishing to buy a home. Buyers are eager and competing for the few homes on the market. The home buying process is taking longer on average – although buyers are starting earlier in the “buying season” to ensure they aren’t missing any available homes, the competition is resulting in longer time between deciding to buy and closing.
Many real estate websites are reporting increased traffic to their sites from the beginning of the year. The “buying season” is generally highest between March and June, but many buyers are getting a jump on their competition. Real estate agents, too, are receiving more inquiries than usually in the first quarter – typically a slower time for home sales. As the number of potential buyers grows, the number of available homes has stayed the same, prompting some unconventional methods of finding homes, such as blind offers written by real estate agents to homeowners on behalf of clients.
💲Interest Rates Are Low – For Now
The current interest rates for home mortgages is a little over 4 percent for well-qualified buyers. Although mortgage rates aren’t expected to spike this year, they are expected to gradually increase over the course of 2018. According to the Mortgage Bankers Association, 30-year fixed-rate mortgages are likely to increase to 4.6 percent by the end of this year, with a further increase up to 5 percent in 2019 and 5.3 percent in 2020.
Lower interest rates now coupled with the prediction of their rise over the next 18 months have given buyers a sense of urgency to secure their home loans. And what is good for buyers is also good for you, as the home seller. Not only will you have buyers ready to sign, but your own next home purchase may be locked into a lower rate, as well. A difference of just one percent can make a substantial difference in your home price – making now a great time to be a seller and potential buyer.
💸Relocate To Find Cheaper Property Taxes
Low home interest rates and low property taxes allow those seeking to move in 2018 to afford much more house than they think. When the Tax Cuts and Jobs Act passed at the end of 2017, the practical effect on homeowners are a few significant home-related tax policy changes for the 2018 calendar year. As it stands now, home mortgage interest rates are only tax deductible up to $750,000 of your home debt, while property taxes are only deductible up to $10,000. For homeowners used to having a substantially higher tax deduction, these changes are affecting their wallets. Selling your home may be a better option to avoid higher taxes in the future.
Now may be the best time to sell your home and relocate to a county with lower property taxes – before your file for 2019. Areas on both coasts may be affected more, as well as those with highly ranked schools – these places tend to have higher property taxes no matter which part of the country they’re in. While parents of school-age children may see the higher property taxes as an acceptable cost, other homeowners may decide that without a personal vested interest in higher caliber schools, they don’t need to live in specific areas. Selling now might be more in your interest before the pricier neighborhoods on the coast are affected by the Tax Cuts and Jobs Act.
🛠️Consider Your Renovations Carefully
Although homeowners may not see a full return on investment for renovations made in 2018, buyers still have expectations about the overall condition of the house, especially curb appeal and general maintenance. Preparing your home for sale should at minimum mean that the house is in good repair, the yard – front and back – is well maintained, and the staging is clean, neat, and organized. Although most buyers may not expect a fully updated kitchen and bath, take the time to give your home a coat of fresh paint, and consider a few cosmetic improvements, such as new cabinet or interior doors, an updated sink in a powder room, or new carpeting.
Zillow is predicting that homeowners will focus on renovating their homes in 2018, versus selling. This follows the current trend of a tight housing market – but a renovated home still may not provide the profit that a seller anticipates. If you’re planning a renovation to your home, expect to see an increase in home value, but complete the design for yourself, not for a substantial return on investment. It is unlikely that you’ll realize a 100 percent return when it’s time to sell. Take the process seriously, however – although you’re designing for yourself, consider classic styles, versus cutting-edge trends, in order to keep your remodel from looking dated in a few years.
🚫Tight Inventory Means Buyers Are Willing To Sacrifice
In this market, it’s the home sellers who are setting the terms. In the past, buyers were able to command multiple contingencies prior to close – including full repairs both structural and cosmetic, updated landscaping and fences, and even new driveways or exterior lighting. Now, many sellers are in a position of strength. Tight markets have led to bidding wars, resulting in many sales over asking price. Buyers are also more willing to make major concessions to obtain a house, including forgoing repair requests or waiving appraisal contingencies.
At The Wilson Group, we always advise our buyer clients right now that in order to get your offer accepted, the offer needs to be as clean as possible with reduced contingencies.
While this doesn’t mean that every mutt of a house will find a buyer, it does take some of the onus off the seller to make the home immaculate prior to listing. In fact, although a full disclosure of the condition and history of the home is still advised, correcting some of the issues prior to listing may not be necessary. Even a home inspection that turns up some minor flaws may not be a deal breaker if the buyer has lost on previous offers
🤑Cash Investors Are Making A Tight Market Tighter
Buyers with the ability to make an all-cash offer – that is, one that doesn’t require financing from a home lender – are growing in number. In fact, according to the National Association of Realtors, cash buyers jumped to 22 percent in November of last year, increasing from barely 20 percent in October. And these numbers are continuing to rise, edging out first time home buyers. With their ability to quickly move on a property before first-time buyers have even stepped a toe in the waters, cash buyers are snapping up homes left and right.
If you’re a seller, accepting an all-cash offer is a no-brainer. You may see more of these come your way – and even if they’re a little below your listed home price, you can be assured that you’ll walk away with a guaranteed payday. Inventory is expected to gain in the fourth quarter of 2018 – the first time since 2015 – so as a seller be prepared now to take a quick offer.
🏡A New Generation Of Home Buyers
Millenials – the beleaguered, still living at home generation – are finally ready to commit. As the job market stabilizes and their incomes increase, millennials are in a better position to buy a home. This particular generation has been saddled with student loans, a questionable job market, and a lifestyle that isn’t geared toward settling down early. As older millennials begin marrying and having children, however, expect to see a surge in first home buyers from the under-thirty crowd.
Economic conditions are ripe for investment-wary millennials to take the plunge into homeownership. In fact, experts predict that millennials will make up a substantial piece of the buyers market this year – up to 43 percent! This is an increase of 3 percent over last year, a substantial addition to the buying market.
😱Buyer’s Panic Can Lead To Fast Sales
With interest rates so low, and the market in many areas very tight for buyers, a phenomenon called “buyers panic” may set in. This means that buyers are afraid that if they aren’t able to purchase a home now, they may not be able to. As a seller, you may see unprecedented offers for your home – substantially above market value, those with a higher down payment than the typical 20 percent, or even buyers who are close to purchasing sight-unseen as soon as your listing hits the market.
Be wary of the desperate buyer. While it could mean a quick sell on your part, with little effort needed for repairs and few contingencies, quick offers can also indicate a buyer with unstable financing – and your deal could fall apart at the closing table. While you may be tempted to take a quick, incredibly high offer, defer to your listing agent and follow their advice. If you want a quick snapshot of your home’ value, this instant home value calculator can give you an idea of where you stand.
🗓️Is Now The Best Time To Sell A Home In The Great Richmond, Va. Market?
We’ve talked about general home prices across the country, but how does the market look in Richmond and the surrounding area? While inventory is low, home values in the area have remained fairly stable – rising right around the national average of 4 percent. If you’re planning to downsize, now is your best time to do so, especially if you are seeking a county with lower property taxes. Inventory in the Richmond area is tight, so if you’re looking to sell yet still remain in the area, begin looking now.
More details about your specific neighborhood or district may be found here, courtesy of the The Wilson Group. Both Chesterfield and Henrico counties are included. With buyers beginning to look earlier in the year, we recommend that you list as soon as possible in order to have maximum exposure to eager buyers. Although your home value may have increased since you purchased it, a timely and accurate valuation will give you a much better indicator of just how much you can realize from the sale. A thorough professional evaluation of exactly what your home is worth places you in a better position when selling. The Wilson Group – real estate agents working for you – can help. Contact us for a custom home evaluation today!
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