You might be wondering if the housing market will crash given the high demand, record prices, and bidding wars. The short answer is “there is no bubble.” It would be natural to assume the same thing is happening that led up to the economic crash in 2008. However, the influences are very different. Below are 3 reasons why you can still sleep at night.
- The limited supply of homes for sale is driving up prices. It is simple economics of supply & demand. Inventory has been declining for years yet buyer interest is increasing.
- Demand has risen as millennials, currently the largest generation in the US, are entering the housing market. Throw in historic low interest rates, the ability to work remotely, and rethinking of housing requirements due to COVID, and now the need exceeds supply.
- Poor lending practices was a big contributor to the housing implosion. If you could breathe you got a loan. Also homeowners used the equity in their homes like an ATM machine and ended up owing more than what their house was worth. As a result, foreclosures & short sales depreciated home values nationwide. Lending guidelines today are much stricter and refinancing over the last 3 years is 1/3 of what it was 3 years before the crash.
Here is a quote in late January from Laurie Goodman, director of Urban Institute’s Housing Finance Policy Center, “I’m feeling very optimistic about the health of the US housing market.” Whether buying or selling, contact me to take advantage of today’s great market!
Donna Forest ~ donna@donnaforest.com ~ 603-731-5151
In this market where multiple offers are common, buyers are pulling out all the stops to try and successfully compete. Some buyers are resorting to the use of an escalation clause. This works by offering the seller $1000 (for example) more than the highest bid the seller receives from other buyers. The clause may contain a cap to limit the buyer’s price exposure. Below are just some of the reasons why this is not a good idea.
- An accepted offer with an escalation clause may not be an enforceable contract since it does not contain definite terms. Potentially either buyer or seller could later change their mind and claim no legal contract was formed.
- If the escalation clause contains a cap, it basically tells the seller the top price this buyer is willing to pay. A smart seller could reject all offers and counter back to every buyer with a request for new offers not less than the cap.
- Escalation clauses create exposure for buyers since they don’t know what they will actually be paying for the property. Will they qualify? Will the house appraise?
- What if several offers come in with an escalation clause? Who wins the bid?
- If a legal escalation clause were to be written by an attorney, it would probably be a page long of legalese in order to protect the buyers. Not exactly enticing to a seller.
There are many ways to write a compelling offer without an escalation clause. Whether selling or buying, contact me if you want to effectively navigate this complex market. 603-731-5151; donna@donnaforest.com
Today’s market is a bit on the crazy side right now as we don’t have many homes for sale and buyer demand is high. Sellers receiving multiple offers seems to be the new normal. Here is some advice for sellers when they are considering more than one offer.
- With multiple offers, sellers can ask for “best and final” from all buyers, accept one offer if it is outstanding, or pick one offer to negotiate with and set the others aside.
- Be sure to note all the terms of the offers. Closing dates, down payments, financing, inspections, and type of loan can be impactful.
- Be aware if an offer is significantly over asking; there is an increased risk the house will not appraise if the buyer is getting financing. Which means the buyer can’t get the amount needed to purchase.
- Cash is king. Even if the offer is for a little less money, it might be worth accepting as you skip all the steps required with a loan.
- Offers should come with a pre-qualification or pre-approval letter from the buyers’ lenders or they are not worth considering.
Offers have many variables so discussion with your listing agent on how to choose the right one for you is vital. If you are thinking of selling, contact me and put my 26 yrs. of experience to work for you. 603-526-4116; www.DonnaForest.com; Donna @DonnaForest.com
Yes, the real estate market is still alive and people are moving. Buyers are out looking and interest rates are historically low. Houses are being listed for sale and most seem to be going under contract fairly quickly. While the market is not as robust as it typically would be for this time of year, it is fairly active given current conditions. True, some sellers have temporarily pulled their homes off the market and some buyers are delaying their search for a month or so. However, the housing inventory faced a shortage before the pandemic and this is still the case. Which means home prices remain strong and it is still a sellers’ market.
The process has changed but the results are the same. Virtual tours, Zoom meetings, FaceTime, protocols requiring masks & gloves for actual showings, remote closings, etc. The industry has adapted to ensure properties can still be safely sold. If you are thinking about buying or selling, contact me for help in creating a safe and effective plan for success in today’s market. 603-526-4116; www.DonnaForest.com; Donna@DonnaForest.com
The answer is a definite “yes.” Realtors have adapted to our new reality and almost everything has shifted to a virtual platform. Below are some of the changes we are seeing.
- Agents and clients meet via video chats vs. in person.
- Virtual tours of homes have become an even more important marketing feature.
- Documents are filled out & signed electronically using electronic signature programs like Dot Loop or DocuSign.
- There are safety procedures in place for showings. Buyers remove shoes, sanitize their hands and don’t touch anything in the house, viewing times are limited, only people essential to the purchase are allowed in, and agents will ask both sellers and buyers if they have traveled in the last 14 days, been around anyone who is sick, or are sick themselves. Masks may be required as well.
- Closings can still occur. Paperwork can be sent out ahead of time for signatures or even done in a parking lot in your own car; monies can be wired.
- Home inspectors limit who can be in the house during the inspection. Exterior only appraisals may be accepted by some lenders.
- Buyers and sellers need to be aware the loan processing could take longer. There could be delays beyond our control so set your expectations accordingly.
Some sellers will pull their house off the market and some buyers will put their search on hold until we are through this health crisis. While it is not business as usual, adjustments are made so buying and selling can still be a reality. Give me a call for any real estate needs you may have. 603-526-4116; www.DonnaForest.com; Donna@DonnaForest.com
While we are in the season of giving thanks, it serves as a good reminder why we should be thankful to be homeowners. It’s not just about having a roof over your head – a home provides shelter, wealth, stability & pride. Below are just some of the many financial and non-financial benefits.
- The average homeowner’s net worth is 44x greater than a renter’s. (Federal Reserve’s survey of Consumer Finances 2013-2016)
- Rent prices increase 3-4% annually. A fixed mortgage provides the stability of knowing your payments won’t go up.
- You can build home equity which can then later be used to start a business, pay college tuition, or help buy a vacation property.
- Homeowners tend to be more involved in their community.
- Home ownership provides a sense of accomplishment & control over your environment. This also impacts children as studies show they have less behavioral problems and perform better in school.
If owning a home is part of your American dream, then contact me to help you start the process! 603-526-4116; Donna@DonnaForest.com; www.DonnaForest.com
An appraisal is a licensed appraiser’s opinion of value of a property usually based on comparable sales. When buyers get a mortgage, the lender requests an appraiser to conduct a written valuation of the house. The lender will compare the appraisal price to the selling price to make sure the buyer is not borrowing more than the house is worth. An appraisal is subjective and is more of an art than science. Some appraisers are more generous in their adjustments and some are more conservative, all following lending guidelines. In quickly appreciating markets such as this one, it does happen where a home will appraise lower than the agreed upon sales price. The lack of similar sales and higher prices due to bidding wars make it challenging for appraisers. If the appraisal comes in low, it does not mean the seller must sell it to you at the appraised value. It can become a point of renegotiation or buyers may have to pay out of pocket for the difference. Obviously the goal is to make the sale work for both parties. Remaining calm and working with an experienced agent is the key to a successful sale. Give me a call if you'd like professional service in buying or selling a home. 603-526-4116; www.DonnaForest.com; Donna@DonnaForest.com.
In this area there definitely is. Usually it’s our first sign of spring when For Sale signs start popping up like dandelions in the lawn and our multiple listings change daily with new homes and land on the market. Data from the National Association of REALTORS show that May through August are the busiest months for volume of sales. Buying stays steady through the summer and early fall. It usually drops off right after Labor Day for a couple of weeks and then picks up again in October through early November. Two of the more obvious factors for this “seasonal” market include the fact that school has ended and families prefer to move before the next school year starts as well as the weather is much nicer in the spring-summer to be out looking at properties. This is not to say that properties will not sell any other time of year. It just means in this area there may be fewer buyers out there looking. With proper pricing and enhancing your home for maximum effect, a house will sell regardless of the month. Give me a call to get the Better Homes & Gardens advantage any time of year. 603-526-4116; www.DonnaForest.com; Donna@DonnaForest.com.
Teamwork from the Team that works –Better Homes & Gardens Real Estate - The Milestone Team
- The NATIONAL ASSOCIATION of REALTORS® (NAR) was formed in 1908 in response to the misuse and disorder of the real estate industry at that time.
- The NAR adopted a Code of Ethics in 1913 to establish professional standards of conduct.
- The Code ensures that consumers are served by requiring REALTORS® to cooperate with each other in furthering clients’ best interests.
- REALTORS® are subject to disciplinary action and sanctions if they violate the Code of Ethics.
- REALTORS® are required to complete ethics training every 2 years.
What does this mean to you? When you work with a REALTOR®, you are working with someone who abides by a written Code of Ethics, based on professionalism and protection of the public. Contact me to see why it pays to work with a REALTOR®! 603-526-4116, www.DonnaForest.com, Donna@DonnaForest.com
When considering the purchase of a fixer upper home, it’s important to evaluate how much time and money you will have to spend on renovations. It’s often the case that houses needing a lot of TLC are available at rock bottom prices. However, this can mean excessive costs when it’s time for renovations. Here are a few things to consider before taking the leap.
How much work can you do?
Determine how much of the work you are willing and able to do. If you’re a master at hanging drywall and your significant other has a knack for plumbing, it’s very possible to save big. This could be the difference between an inexpensive property that needs a great deal of work, but is ultimately within your budget after renovations, and one that is not.
Keep in mind when deciding which work you’ll do yourself that safety is key. Anything that you don’t truly know how to do, especially things like electrical work, plumbing or jobs involving power equipment, should be left to a professional.
Consider how much time you realistically have. If you work, take care of your family or otherwise have engagements that occupy most of the day, don’t take on huge DIY renovations.
Choose contractors wisely
Before closing on your fixer upper, speak with a few contractors to get an estimate of the work you plan on handing off to a professional. Without knowing how much you’ll need to spend to make the house look the way you want, you can’t know what the real cost of ownership will be. Once you have quotes from several contractors, work with your real estate agent to come up with an offer that considers how much you’ll be spending to get your new home in top shape. Your agent might suggest putting a clause in the contract to have some of the worst problems repaired by the current owners before the closing.
Before settling on a specific contractor, talk to friends, family and neighbors to get a sense of the quality of work you can expect from each candidate. Reviews go a long way when choosing the best company for specific needs.
Hire a home inspector
In most situations that involve a mortgage or other loan from a bank, you will be required to have the house inspected before the loan is approved. Even if this isn’t the case, hiring a qualified home inspector is a critical aspect of ensuring you know what you’re getting yourself into with a fixer upper. For instance, you might be able to tell that the floors in the kitchen will need to be replaced, but only a skilled professional can say for certain whether the foundation is solid or if asbestos is in the attic.
When it comes to real estate, knowledge is power. Take any information provided by a home inspector and consult your agent about how to proceed. They might recommend working part of the cost into negotiations.
Add a cushion
After you’ve decided which portion of the fixer upper’s remodeling you’ll be able to complete, consulted several contractors and had the home inspected, you may be anxious to close. However, there’s another critical step to ensure you’ll be able to afford the renovations.
Unforeseen circumstances often arise during the process of remodeling. It is essential to account for these when determining what you can afford. A general rule of thumb is to add between five and 10 percent to the anticipated costs, just in case your contractor discovers pipes that need to be moved or if the price of the materials you choose increases. By adding a cushion to your financial projections, you should be in a great position to realistically determine whether a fixer upper home will truly be worthwhile.