Don't Sell on Your Own Just Because Its a Sellers Market

In a sellers market, some homeowners might be tempted to try to sell their house on their own (known as For Sale By Owner, or FSBO) instead of working with a trusted real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see todays market as an opportunity to FSBO. Lets unpack why that's a big mistake and may actually cost you more in the long run.

According to the Profile of Home Buyers and Sellers published by the National Association of Realtors (NAR), 41% of homeowners who tried to sell their house as a FSBO did so to avoid paying a commission or fee. In reality, even in a sellers market, selling on your own likely means you'll net a lower profit than when you sell with the help of an agent.

The NAR report explains:

FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of 217,900 in 2020 (up from 200,000 in 2019), and still far lower than the median selling price of all homes at 242,300. Agent-assisted homes sold for a median of 295,000…Sellers who began as a FSBO, then ended up working with an agent, received 98 percent of the asking price, but had to reduce their price the most before arriving at a final listing price.

When the seller knew the buyer, that amount was even lower, coming in at 176,700 (See graph below):That's a lot of money to risk losing when you FSBO far more than what you'd save on commission or other fees. Despite the advantages sellers have in todays market, its still crucial to have the support of an expert to guide you through the process. Real estate professionals are trained negotiators with a ton of housing market insights that average homeowners may never have. An agents expertise can alleviate much of the stress of selling your house and help you close the best possible deal when you do.

Bottom Line

If you're ready to sell your house this year and you're considering doing so on your own, be sure to think through that decision carefully. Odds are, you stand to gain the most by working with a knowledgeable and experienced real estate agent. Lets connect to discuss how a trusted advisor can help you, especially in todays market.

Latest Jobs Report: What Does It Mean for You & the Housing Market?

Last Friday, the Bureau of Labor Statistics released a very encouraging jobs report. The economy gained 916,000 jobs in March well above expert projections of 650,000 to 675,000. The unemployment rate fell again and is now at 6%.

What does this mean for you?

Our lives are deeply impacted by our nations economy. The better the economy is doing overall, the better most individuals in the country will do as well. Here's a look at what four experts told the Wall Street Journal after reviewing last weeks report.

Michael Feroli, JPMorgan Chase:

“The powerful tailwind of the reopening of economic activity appears to be gathering force; while the level of employment last month was still 8.4 million positions below that which prevailed before the pandemic, it is reasonable to expect that a majority of those lost jobs will be recouped in coming months.”

Mike Fratantoni, Mortgage Bankers Association:

“We fully expect that this pace of job gains will continue for months, and anticipate that the unemployment rate, now at 6%, will be well below 5% by the end of the year.”

Paul Ashworth, Capital Economics:

“With the vaccination program likely to reach critical mass within the next couple of months and the next round of fiscal stimulus providing a big boost, there is finally real light at the end of the tunnel.”

Jason Schenker, Prestige Economics:

“People are getting back to work and the vaccine isn’t just inoculating the population, it’s clearly inoculating the economy.”

What does this mean for residential real estate?

Today, the biggest challenge for homebuyers is the lack of homes currently for sale. With listing inventory down 52% from a year ago, bidding wars are skyrocketing. As a result, home prices are climbing.

One answer to this challenge is to build more homes to satisfy the demand. The latest jobs report gives hope for new housing construction, and therefore brings hope to buyers as well. Here's what three industry economists said about the increase in construction jobs revealed in the report:

Lawrence Yun, Chief Economist, National Association of Realtors:

“Construction jobs boomed in March, one of the largest monthly gains ever. This raises the prospect for more home building and more inventory reaching the market in the upcoming months. The housing market has been hot with fast rising home prices but has been constrained by a lack of supply. By hiring more workers and building more homes, home prices will move to a manageable level to give more Americans a shot at ownership.

Odeta Kushi, Deputy Chief Economist, First American:

Great jobs report for a housing market in an inventory crisis. Residential construction building jobs increased 3.9% from pre-2020 recession peak in Feb. 2020. The construction industry remains a labor-intensive industry. We need more hammers at work to build more homes.

Robert Dietz, Chief Economist, National Association of Home Builders:

Good job numbers in March for residential construction. 37,000 gain from Feb to March. 3.03 million total employment for home builders and remodelers, and up 49,100 from Jan 2020.

Bottom Line

An improving economy with a falling unemployment rate will benefit households across the country, as well as the overall housing market.

 

 

3 Ways to Make Your Attic Reno Unique

The word “attic” conjures up images of dark, dusty relic storerooms that just happen to be hidden in plain sight. For plenty of homeowners, their attics are full of treasure, just not the kind you might think. Their treasure comes in the form of square footage.

Renovating an attic into living space can be a complicated process, but it adds real living space to a home that may already be perfect in every other way.

What’s This About Hidden Treasure?

Your unfinished attic has a secret that it’s never been able to really own up to. It’s hiding treasure — lots of it, too. Most people look to remodel their attics simply for the added convenience and elbow room that more space provides families with growing needs. What they don’t realize in the moment is that an attic remodel can increase the value of the house, too. According to Remodeling Magazine, in 2015 a newly constructed midrange attic bedroom returned 77.2 percent of its cost in value.

If you’ve never set foot inside your attic, it’s probably nothing like you might imagine. There’s not going to be a lot to work with, expect your remodel to be a big deal. But anything worth doing is worth doing big, right? One of these days that big budget attic project will be your game room or the kids’ bedrooms or even just a quiet place to get away from the world for a while. And those are things you can’t really put a price tag on, though your appraiser and your bank may try.

Attic Renos: Before and After

Knowing what you’re facing, it’s worth showing you what the reward can be. Your attic won’t necessarily yield identical results, but to give you a general sense of how much you can do with an attic space, take a look at the photos below. On the left, you’ll see an attic space that’s probably much like yours: unfinished, sparse and dark. On the right is what could be an after photo: a beautifully designed, well lit, interesting and funky space.

Making That Attic Your Own

Obviously, you already own the attic, so technically it’s already your own, but semantics aside, an attic remodel is a really good opportunity to create something beautiful. Many attics are so divorced from the rest of the house that you can pretty much get away with anything without messing with the flow of the main house.

When you’re planning your attic remodel, consider these three ways to make that space unique, inviting and, most importantly, yours:

Include striking elements. You can look at the angles and cutouts in your attic as obstacles or you can take them and use them as opportunities. Framing repeating design elements that mirror the more difficult to work with parts of your attic can make it really shine. Old, unused flues standing between you and success? Rather than wall them in or remove them entirely, design with them! Add some similar-looking pillars with false brick to create a more industrial loft feel.

Build in custom furniture. Nothing says “unique” like something that is actually unique. Attics can be tricky to find furniture for. Either it’s too tall, too deep or too heavy and ultimately you just abandon the space all together. Don’t let your attic become a really fancy place to store the Christmas tree: have custom furniture built (or DIY it!). Your furniture needs to fit the space and do the job it was intended for, nothing more unless you want more. Window boxes, built-in storage, daybeds and so much more can make great additions!

Don’t Skimp on the Project. You know what it’s going to cost to remodel that attic space, take that number very seriously. No pressure, but you basically only have this one chance to get this right. You’re essentially designer-in-chief of the attic space for generations of buyers to come, so it’s pretty important that you bring your vision to life in full 3D.

Trying to decide if a bathroom makes sense in your attic space? The answer should be yes. Always yes. Although it can be a headache to put a bathroom in an attic, there are lots of creative ways to make it work. You’ll seriously regret not having added that bathroom when you have guests next and they keep running up and down the stairs to use the bath in the main hallway.

You’ll probably also regret it if you were going to install incredible skylights (like the ones in the bathroom images in this article) and then backed off because it just seemed like too much work and time to invest. This is your canvas, you get to pick the new structural elements that will forever change your home.

Ready for That Attic Remodel? I Know a Contractor…

A lot of people are probably saying that very thing to you right now. After all, they want to help their friends, it’s only natural. But you need a professional that is just that: a pro, not someone’s long lost cousin or brother’s neighbor’s kid. Join us at HomeKeepr and see how the power of hard work and great service pay off day after day.

All you need to do is log in, ask your real estate agent for a recommendation for your project and you’ll be supplied with a list of contractors that they trust enough to stake their reputation on. That’s serious business. No matter what kind of pro you may need for your attic job, you can find them in the HomeKeepr community, ready and willing to get you on your way to your very special attic space.

Homeownership Is Full of Financial Benefits

A Fannie Mae survey recently revealed some of the most highly-rated benefits of homeownership, which continue to be key drivers in todays power-packed housing market. Here are the top four financial benefits of owning a home according to consumer respondents:

• 88% – a better chance of saving for retirement
• 87% – the best investment plan
• 85% – the chance to be better off financially
• 85% – the chance to build up wealth

Additional financial advantages of homeownership included in the survey are having the best overall tax situation and being able to live within your budget.

Does homeownership actually give you a better chance to build wealth?

No one can question a persons unique feelings about the importance of homeownership. However, its fair to ask if the numbers justify homeownership as a financial asset.

Last fall, the Federal Reserve released the Survey of Consumer Finances, a report done every three years, with the latest edition covering through 2019. Their findings confirmed that homeownership is a clear financial benefit. The survey found that homeowners have forty times higher net worth than renters (255,000 for homeowners compared to 6,300 for renters).

The difference in net worth between homeowners and renters has continued to grow. Here's a graph showing the results of the last four Fed surveys:The above graph only includes data through 2019, but according to CoreLogic, the equity held by homeowners grew by 26,300 over the last twelve months alone. That means the gap between the net worth of homeowners and renters has probably widened even further over the last year.

Some might argue the difference in net worth may be due to homeowners normally having larger incomes than renters and therefore the ability to save more money. However, a study by First American shows homeowners have greater net worth than renters regardless of their income level. Here are the findings:Others may think homeowners are older and that's why they have a greater net worth. However, a Joint Center for Housing Studies of Harvard University report on homeowners and renters over the age of 65 reveals:

The ability to build equity puts homeowners far ahead of renters in terms of household wealth the median owner age 65 and over had home equity of 143,500 and net wealth of 319,200. By comparison, the net wealth of the same-age renter was just 6,700.

Homeowners 65 and older have 47.6 times greater net worth than renters.

Bottom Line

The idea of homeownership as a direct way to build your net worth has met the test of time. Lets connect if you're ready to take steps toward becoming a homeowner.

 

Multigenerational Housing Is Gaining Momentum

Some Highlights

• If your house is feeling a little cramped with the addition of adult children or aging parents, it might be time to consider a move-up into a multigenerational home that better suits your changing needs.
• With benefits that include a combined homebuying budget and shared caregiving duties, an increasing number of households are discovering the value of a multigenerational home.
• With such high demand for houses today, now is a great time to sell so you can upgrade to a multigenerational home that may better suit your evolving needs.

 

How Much Leverage Do Today’s House Sellers Have?

How Much Leverage Do Today’s House Sellers Have?

The housing market has been scorching hot over the last twelve months. Buyers and their high demand have far outnumbered sellers and a short supply of houses. According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), sales are up 23.7% from the same time last year while the inventory of homes available for sale is down 25.7%. There are 360,000 fewer single-family homes for sale today than there were at this time last year. This increase in demand coupled with such limited supply is leading to more bidding wars throughout the country.

Rose Quint, Assistant Vice President for Survey Research with the National Association of Home Builders (NAHB), recently reported:

“The number one reason long-time searchers haven’t made a home purchase is not because of their inability to find an affordably-priced home, but because they continue to get outbid by other offers.”

A survey in the NAHB report showed that 40% of buyers have been outbid for a home they wanted to purchase. This is more than twice the percentage in 2019, which was 19%.

What does this mean for sellers today?

It means sellers have tremendous leverage when negotiating with buyers.

In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on its ability to award benefits or eliminate costs on the other side.

In today’s market, a buyer wants three things:

1. To buy a home
2. To buy now before prices continue to appreciate
3. To buy now and take advantage of historically low mortgage rates while they last

These three buyer needs give the homeowner tremendous leverage when selling their house. Most realize this leverage enables the seller to sell at a good price. However, there may be another need the seller has that can be satisfied by using this leverage.

Here’s an example:

Odeta Kushi, Deputy Chief Economist at First American, recently identified a situation in which many sellers are finding themselves today:

“As mortgage rates are expected to remain near 3%, millennials continue to form households and more existing homeowners tap their equity for the purchase of a better home…Many homeowners may want to upgrade, but do not for fear that they will be unable to find a home to buy.”

She then offers a possible solution:

“While the fear of not being able to find something to buy will not disappear in a limited supply environment, new housing supply can incentivize existing homeowners to move.”

There’s no doubt many sellers would love to build a new home to perfectly fit their changing wants and needs. However, most builders require that they sell their house first. If the seller sells their home, where would they live while their new home is being constructed?

Going back to the concept of leverage:

As mentioned, buyers have compelling reasons to purchase a home now, and many homeowners have challenges to address if they want to sell. Perhaps they can make a deal to satisfy each party’s needs. But how?

The seller may decide to sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller’s new home is being built. A true win-win negotiation.

Not every buyer will agree to such a deal – but you only need one.

That’s just one example of how a seller might be able to overcome a challenge because of the leverage they have in today’s market. Maybe you feel a need to make certain repairs before selling. Perhaps you need time to get permits or approvals for certain upgrades you made to the house. Whatever the challenge, you may be able to work it out.

Bottom Line

If you’re considering selling your house now but worry a huge obstacle stands in your way, let’s connect. Maybe with the leverage you currently have, you can negotiate a deal that will allow you to make the move of your dreams.

 

Better Garbage Disposal Care Tips

A garbage disposal can be a great addition to your kitchen. If it isn’t taken care of correctly, though, the blades can dull or rust over time, and the overall effectiveness of the disposal will drop significantly. With proper care and maintenance, you can add years to the effective life of your garbage disposal. Perhaps more importantly, the care that you put into your disposal now will pay off in the long term by helping to prevent costly repairs and the premature replacement of your disposal unit.

Proper Garbage Disposal Use

One of the best things that you can do for your garbage disposal is to learn how to use it properly. This may seem like a no-brainer as most garbage disposals simply require you to put your scraps in and flip a switch; in reality, though, there’s a bit more to it than that. If you’re sending the wrong items down your disposal you can dull the blades, clog it, or even damage your unit, which can lead to costly repairs.

Ideally, you should use your garbage disposal to dispose of softer food items and things like ice that will melt anyway. Avoid disposing of bones, shells, fibrous vegetables such as celery or asparagus, hard seeds or pits, and nuts. You should also watch out for overly starchy food items like potato skins, as well as items that can continue to soak up water or become kind of a gloppy mess like cooked pasta or coffee grounds. Fats and oils should also be avoided, though that’s in part because of what they can do to your plumbing.

One other tip to keep in mind when using your garbage disposal: Run cold water before and after using the disposal to make sure that food is properly moistened and washed away. This not only helps the garbage disposal to work properly, but it will also help prevent food buildup that can lead to bad smells in your kitchen.

Caring for Your Garbage Disposal

In addition to keeping an eye on what goes down your garbage disposal, putting some time into periodic maintenance will go a long way toward avoiding significant problems with your unit. Before doing any work with your garbage disposal that requires you to be anywhere near the blades, make sure that the disposal is unplugged so that it can’t accidentally come on while you’re working on it. This is one of the most important things you can know about working on your disposal!

Some garbage disposal maintenance is pretty simple to do. If you don’t use your disposal very often, make a point of running some water and turning the disposal on every 2-3 days. This ensures that the blades and other components won’t start to rust as a result of sitting there unused in a moist environment for too long, and keeps certain components from drying out. You should also give a whiff to check for unpleasant smells around the sink every few days. If you do start to smell something, either cut up some lemon or orange peels and feed them to the disposal, or mix some ice cubes with rock salt and baking soda and use that. Either solution should take care of your odor problems.

If the disposal isn’t working or seems to be struggling, cut off the power and shine a light down the sink so you can see if anything is tangled around the blades or otherwise obstructing them. Using pliers, a wrench, or specialized tools that might have come with your disposal (and NEVER your hands), untangle or otherwise remove any debris before plugging the unit back in, then see if that took care of the problem.

Garbage Disposal Repair and Replacement

Proper care and maintenance can add years to the life of your garbage disposal, but there will come times when you need professional repairs done or simply need to replace the disposal with a newer unit. Fortunately, HomeKeepr can help you with this. Sign up for a free account today and connect with pros who can give your disposal the attention it needs, or install a brand new unit if you need one.