With the approach of spring comes the annual spring buying season, when home buyers flock to desirable neighborhoods and sellers experience the added benefits of a competitive market. With 2013 housing inventory continuously shrinking, sales are expected to be unusually strong during the upcoming spring season.
Between January and February, the average age of housing inventory fell almost 10 percent, indicating that homes are already selling faster in anticipation of the busy spring buying season, reported Real Estate Economy Watch.
Home buyers should keep several important things in mind when shopping for a new home. Check out the five essential tips for home buyers listed below.
For sellers, the added boost of increased demand can be an intoxicating elixir that causes homeowners to overlook basic rules of selling. Keep these tips in mind in order to maximize your home’s appeal to potential first time home buyers:
Preparing your home so that potential buyers view it in its best light can lead to a faster sale and even a better sale price. Follow these simple tips to make the experience of selling the best it can be:
Clear the front yard and porch of any mess, including items such as recycle bins. Consider hiring a yard maintenance crew to spruce up the landscape. View your house from the street and consider making minor improvements. First impressions matter.
Clean the interior and exterior of the house thoroughly. Consider having the outside of the house pressure washed and hiring a maid service to clean the inside from top to bottom. Clear away clutter from the interior to allow potential buyers to imagine the space as their own.
Clean windows and bright light bulbs are an easy improvement to make rooms feel larger and airier.
Hide personal details such as toiletries in the bathroom and framed family photos that could prevent the buyer from imagining the space as their home.
Repairs matter. If tiles are cracked or faucets leak, consider having these details fixed before showing your home to potential buyers.
If your kitchen is in need of a remodel, update it inexpensively with fresh curtains, a neutral coat of paint and new cabinet drawer pulls.
In addition to making the most of their home’s physical attributes, sellers must quickly detach emotionally from their home. Learning not to take things personally is an important part of the real estate selling process.
“It is very important for sellers to keep in mind that a real estate transaction is most likely the single largest financial transaction they will ever undertake,” said Fiona Dogan, a New York realtor at Julia B. Fee Sotheby’s International Realty. “It should be viewed and handled primarily as a business transaction, with cold, hard decisions being made on a financial and investment basis.”
Emotional sellers often make quick, sometimes poor decisions.
Sellers should be cautious of overpricing their home for emotional reasons. Every seller wants to sell a home at top dollar, but expecting buyers to value features that matter only to you is a mistake that can leave a home languishing on the market.
Sellers who bought their home at the peak of the real estate boom may be faced with the unfortunate prospect of selling their home for less than they bought it for.
Although homeowners may want to be present during their home’s showing, professional realtors agree that this is usually a mistake.
When the seller is present at a first or second showing, buyers may feel self-conscious about expressing honest opinions. Sellers who hear negative feedback may mistake these comments for criticisms of how the home has been maintained and ultimately reject an offer for emotional reasons.
The buyer will undoubtedly point out minor flaws to your home. Instead of taking this personally, the seller should consider this a good sign because it means the buyer is serious about buying the home. Negotiation often means the buyer will criticize certain features in order to negotiate a lower price.
Once a property is listed, experts say it will receive the most attention during the first two weeks. The longer the property remains on the market, the worse offers are likely to get.
A smart seller knows that if a home has been priced correctly, an educated buyer who has been in the market for some time will put a serious foot forward almost immediately.
An early bid is not a reason to question if the property is underpriced. You will know a property is priced correctly if an early offer is near the asking price, as long as the asking price is similar to market value.
“Waiting for a better offer is counterproductive and can result in a property languishing,” said Nick Jabbour, a New York City real estate agent and VP of Nest Seekers International.
For first time home buyers (or repeat buyers), the spring home shopping season is an exciting time. Combined with affordable home prices and low mortgage rates, taking the plunge into home ownership can feel like a swan dive towards a better future. If you are considering purchasing a home, save yourself some stress by reviewing the following five tips to help home buyers:
Over the next few years, little to no appreciation is expected in most housing markets. However, experts say home buyers who are planning to stay put for more than 10 years are still making a smart choice to buy now. To plan for the long term, be sure the home you purchase can evolve with potential lifestyle changes including a new job in a different location or a growing family.
It’s oh-so-easy to get distracted by the fun parts of planning your move to a new home, such as paint color choices, while forgetting about big issues like affordability. It can be hard to wrap your head around how a six-figure purchase will impact your monthly budget. Before falling in love with a house that’s a bit out of your price range, calculate how much you can afford, as well as how much income you’ll have left over after paying a mortgage and taxes. Many websites offer mortgage affordability calculators.
Research the different types of mortgages available to you and remember to factor in down payment and closing costs.
Remember to include the extra costs associated with home purchase and ownership. A general rule of thumb is to add 1 to 3 percent for annual repairs and maintenance.
Loving your new neighborhood is just as important as loving your new home. Many buyers focus on affordability, school districts and commute times. But this can miss important pros and cons associated with a neighborhood. Spend time in your potential neighborhood, including visiting during the day, weekends, and nights to get a true feel for the area, including noise level and traffic. Talk to neighbors and check online for reviews of the area you plan to buy a home in.
Finding a really great lender and real estate agent will make your life easier. Ask acquaintances for recommendations, but don’t forget to read online reviews as well. Interview several agents to make sure you are choosing someone you can trust and communicate well with.
Financing is one of the least fun aspects of shopping for a home, but it’s also the most important. The average borrower spends fewer than 2 hours researching a home loan, compared to 10 hours of research prior to a car purchase and 5 hours for a vacation. Keep in mind that reducing your mortgage rate by just half a percentage point will save you thousands of dollars over the life of the loan. Get more than one quote and take the time to familiarize yourself with the ins and outs of the mortgage loan process.
Gather the following information about your current property:
If you are salaried, employed full time or regular part time:
If you are self employed, on contract or need to show additional income such as bonuses, profit sharing, overtime or tips:
Gather the following information:
Note: This is a partial list of typical items you may be expected to present when purchasing / selling a home. Other documentation will also be required.
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