Sept. 11, 2017

Online Values And The Price Of Your Home

Plenty of sellers have visited online home valuation sites such as Zillow, Trulia, and others only to be shocked at the published value of their homes. Most sellers are pleased when the values appear higher than they expected, but many online valuations come in far lower. So should you use these values to price your home for sale?

Estimating a home's market value is far from an exact science. What these sites attempt to do is provide greater transparency to homebuyers and sellers by making data derived from public records more accessible. They publish what you paid for your home and how much you pay in taxes. Many have satellite views so accurate they can spot your cat laying on the front walk.

But few consumers realize that two homes right next door to each other could have been purchased at different times and have vastly different tax bases which in turn skews values. The property tax base resets for each home every time it's sold. Then the taxes can go higher every year, remain the same, or go down according to market conditions. Most communities impose ceilings so that your taxes don't escalate to an unaffordable level in a single year.

If you've only owned your home for five years, you are likely paying much more in property taxes than your retired neighbors who bought their home 30 years ago. Yet your home may not be "worth" more unless you've done some substantial updates and/or additions.

Then how do these sites come up with valuations? All property is registered with the city and county for property taxing purposes. Home valuation sites contract with major title companies such as First American to obtain county tax roll data. They also find ways to become members of local multiple listing services, which are either subsidiaries of real estate associations or owned by local real estate brokers. That way, they have access to current listing data and recent solds.

Between tax roll data and listing data, home valuation sites apply their own secret sauce, or algorithm to come up with "zestimates" or approximate values of what homes in a given area are worth. Sometimes the results are spot on, but they can also be inaccurate.

First, transaction data has to be recorded with the county, which could take weeks. But, what alters the algorithm most is that properties not currently on the market are included in the data. These homes have not been tested by the current marketplace and cannot possibly contribute to recent market values.

In addition, the algorithms may include whether or not a home has been updated, but there's no way to quantify subjective information such as how well the home is maintained, curb appeal, interior design, window and yard views, and neighborhood popularity. For these reasons, online valuations should be used only as one of many tools to estimate a home's value.

Your best approach to choosing a listing price is to ask your real estate professional for a comparative market analysis, or CMA. He or she can show you the most recent listing asking prices and sold comparables in your neighborhood. These results are accurate up to the hour in most cases. Realtor.com updates listings from MLSs every half hour.

If your home is estimated for far less on a home valuation site than current comparables, be prepared to argue pricing with buyers who take these numbers as gospel. If they have a real estate agent representing them, the agent can confirm the comparables you show them to help them understand the market a little better.

By the same token, don't expect to get more for your home if home valuation sites put your home in a higher price bracket. Recent comparables tell the true story of the current market as long as buyers and sellers are using the same search parameters.

Remember, a set of comparables is only a guide to pricing your home, so you can sell your home quickly and for the most money possible in the current market. 


Written by Blanche Evans

March 8, 2017

How Will A 0.5% Change In Interest Rate Affect You?

One of our lenders came into our morning sales meeting this week.  He shared with us that the Federal Reserve is expected to raise rates next week.  On top of that, they are planning for 2 more increases before the end of 2017.  In the past few months, mortgage rates have increased 0.5%.  Let's do some quick math, shall we?

.5% increase means if you were qualified to purchase a $220,000 home a couple months ago, your current approval price would now be closer to $210,000. Interest rates REALLY matter!

In addition, Utah's housing market is predicted to continue rising for the next few years because we currently have way more buyers than homes available. Yes, homes are expensive but it also means that they are not predicted to get any cheaper in the foreseeable future. Now is an excellent time to buy your first home or to upgrade your existing home before the rates rise! Call me today and let's chat about what the Utah market means for you.

Feb. 27, 2017

Where Are Home Prices Headed In The Next Five Years?

Where Are the Home Prices Heading in the Next 5 Years? | Keeping Current Matters

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 4.4% over the course of 2017, 3.4% in 2018, 2.8% in 2019, 2.7% in 2020, and 2.8% in 2021. That means the average annual appreciation will be 3.22% over the next 5 years. Where Are the Home Prices Heading in the Next 5 Years? | Keeping Current MattersThe prediction for cumulative appreciation fell from 21.4% to 17.3% by 2021. The experts making up the most bearish quartile of the survey are projecting a cumulative appreciation of 6.3%. Where Are the Home Prices Heading in the Next 5 Years? | Keeping Current Matters

Bottom Line

Individual opinions make headlines. We believe this survey is a fairer depiction of future values.
Feb. 23, 2017

Attention Sellers: Remodeling Projects To Increase Your Sales Price

The results are in! NAR surveyed thousands of consumers, real estate agents, and industry professionals on interior and exterior home remodeling projects. The projects listed below are the best interior remodeling projects that can get you the biggest bang for your buck when it comes time to list on the market.

Interior Remodeling Projects

If you are looking to remodel your home with the intent of selling at a higher price, you should consider these projects for their overall cost to the owner and their potential boost in selling price. We’ve ranked these interior projects based on the most value and cost recovery a homeowner can receive based on NAR’s 2015 Remodeling Impact Report.

The following five projects received the best overall value for sellers:

(1) Refinishing a home’s hardwood floors received the highest money-back value. Refinishing the floor can boost the home’s beauty and aesthetics and upgrade worn-out features. Remodelers from the National Association of the Remodeling Industry (NARI) estimate that refinishing hardwood floors cost $2,500. NAR REALTORS® estimate that the increased value for sellers is also $2,500 and thus a homeowner can recovery 100 percent of the costs.

(2) Completing an insulation upgrade is the second most cost effective project. NARI Remodelers estimate that upgrading a home’s insulation will cost $2,100. NAR REALTORS® estimate that sellers can increase the value of their home by $2,000 for an insulation upgrade, and thus recover 95 percent of their costs.

(3) If your home does not currently have wood floors to refinish, adding new wood flooring can recover 91 percent of costs at the time of sale. NARI Remodelers estimate the cost of new wood flooring to be $5,500. NAR REALTORS® estimate that the increased value for sellers is $5,000.

(4) Replacing the HVAC system can improve energy efficiency and update worn-out features in the home. NARI Remodelers estimate that the cost of replacing an HVAC system is $7,000. NAR REALTORS® estimate that the increased value for sellers is $5,000. The cost recovery is 71 percent.

(5) Finally, converting a basement into a living area improves livability for potential new buyers. NARI Remodelers estimate that a basement overhaul will cost $36,000. NAR REALTORS® estimate that the increased value for sellers is $25,000. The cost recovery for a new living room in the basement area is 69 percent.

hardwood

The most expensive remodeling projects include:

  • Completing a new master suite at a cost estimate of $112,500 (estimated cost recovery at 53 percent),
  • Converting an attic into a living area at $65,000 (estimated cost recovery at 61 percent),
  • Complete kitchen renovation at $60,000 (estimated cost recovery at 67 percent), and
  • Adding a new bathroom at $50,000 (estimated cost recovery at 52 percent).

The least expensive remodeling projects include:

  • Upgrading insulation at a cost estimate of $2,100 (estimated cost recovery at 95 percent),
  • Refinishing hardwood floors at $2,500 (estimated cost recovery at 100 percent), and
  • Renovating a closet at $3,500 (estimated cost recovery at 57 percent).

For a complete list of home remodeling projects, the level of homeowner satisfaction, cost estimates and seller value, read more in the 2015 Remodeling Impact Report.

*Disclaimer: The report provides a cost recovery estimate for representative remodeling projects. The actual cost of each remodeling projects and cost recovery are influenced by many factors including project design, quality of materials, location, age and condition of the home and homeowner preferences.

Feb. 13, 2017

Listing in the Winter Attracts More Serious Buyers

Listing in the Winter Attracts More Serious Buyers | Keeping Current Matters

A recent study of more than 7 million home sales over the past four years revealed that the season in which a home is listed may be able to shed some light on the likelihood that the home will sell for more than asking price, as well as how quickly the sale will close. It’s no surprise that listing a home for sale during the spring saw the largest return, as the spring is traditionally the busiest season for real estate. What is surprising, though, is that listing during the winter came in second!

“Among spring listings, 18.7 percent of homes fetched above asking, with winter listings not far behind at 17.5 percent. While 48.0 percent of homes listed in spring sold within 30 days, 46.2 percent of homes in winter did the same.”
The study goes on to say that:
“Buyers [in the winter] often need to move, so they’re much less likely to make a lowball offer and they’ll often want to close quickly — two things that can make the sale much smoother.”

Bottom Line

If you are debating listing your home for sale in 2017, keep in mind that the spring is when most other homeowners will decide to list their homes as well. Listing your home this winter will ensure that you have the best exposure to the serious buyers who are out looking now! The study used the astronomical seasons to determine which season the listing date fell into (Winter: Dec. 21 – Mar. 20; Spring: Mar. 21 – June 20; Summer: June 21 – Sept 21; Autumn: Sept 21 – Dec. 20).
Feb. 9, 2017

Buyers Are Searching For Your House!

Buyers Are Searching For Your House | Keeping Current Matters

The most recent Pending Homes Sales Index from the National Association of Realtors revealed a slight bump in contracts with an increase of 1.6% in December. This news comes as existing home sales are also forecasted to be on pace for 5.54 million in 2017, a 1.7% increase over 2016, which was the best year for sales in a decade. The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed. According to NAR’s Chief Economist, Lawrence Yun,

Pending sales bounded last month as enough buyers fended off rising mortgage rates and alarmingly low inventory levels to sign a contract.

So, what’s the problem?

Buyers are searching for existing homes, but supply is not keeping up with their demand! Yun went on to explain,
The main storyline in the early months of 2017 will be if supply can meaningfully increase to keep price growth at a moderate enough level for households to absorb higher borrowing cost. Sales will struggle to build on last year’s strong pace if inventory conditions don’t improve.” (emphasis added)

Bottom Line

Buyers are out in force right now! If you are considering selling your home this year, the early months of 2017 will be your best option. Contact The SuperHooper Real Estate Group TODAY to capitalize on current market conditions.
Jan. 30, 2017

Two Myths That Might Be Holding You Back From Buying A Home

2 Myths That May Be Holding Back Buyers | Keeping Current Matters

Fannie Mae’s article, “What Consumers (Don’t) Know About Mortgage Qualification Criteria, revealed that “only 5 to 16 percent of respondents know the correct ranges for key mortgage qualification criteria.

Myth #1: “I Need a 20% Down Payment”

Fannie Mae’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required.

Many believe that they need at least 20% down to buy their dream home, but many programs actually let buyers put down as little as 3%.

Below are the results of a Digital Risk survey of Millennials who recently purchased a home.

2 Myths That May Be Holding Back Buyers | Keeping Current Matters

As you can see, 64.2% were able to purchase their home by putting down less than 20%, with 43.8% putting down less than 10%!

Myth #2: “I need a 780 FICO Score or Higher to Buy”

The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary to qualify.

Many Americans believe a ‘good’ credit score is 780 or higher.

To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans. As you can see below, 54.7% of approved mortgages had a credit score of 600-749.

2 Myths That May Be Holding Back Buyers | Keeping Current Matters

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.

If you're ready to find out if you can buy your next home right now, please contact us to schedule a FREE, no-obligation consultation with our preferred lender.

Jan. 24, 2017

Tips For Preparing Your House For Sale

Highlights:

  • When listing your house for sale your top goal will be to get the home sold for the best price possible!
  • There are many small projects that you can do to ensure this happens!
  • Your real estate agent will have a list of specific suggestions for getting your house ready for market and is a great resource for finding local contractors who can help!
Posted in Home Sellers
Jan. 17, 2017

5 Myths About Real Estate Reality TV Explained

Have you ever been flipping through the channels, only to find yourself glued to the couch in an HGTV binge session? We’ve all been there… watching entire seasons of “Love it or List it,” “Fixer Upper,” “House Hunters,” “Property Brothers,” and so many more, just in one sitting.

When you’re in the middle of your real estate themed show marathon, you might start to think that everything you see on TV must be how it works in real life, but you may need a reality check.

Reality TV Show Myths vs. Real Life:

Myth #1: Buyers look at 3 homes and make a decision to purchase one of them.

Truth: There may be buyers who fall in love and buy the first home they see, but according to the National Association of Realtors the average homebuyer tours 10 homes as a part of their search. 

Myth #2: The houses the buyers are touring are still for sale.

Truth: The reality is being staged for TV. Many of the homes being shown are already sold and are off the market. 

Myth #3: The buyers haven’t made a purchase decision yet.

Truth: Since there is no way to show the entire buying process in a 30-minute show, TV producers often choose buyers who are further along in the process and have already chosen a home to buy. 

Myth #4: If you list your home for sale, it will ALWAYS sell at the Open House.

Truth: Of course this would be great! Open houses are important to guarantee the most exposure to buyers in your area, but are only a PIECE of the overall marketing of your home. Just realize that many homes are sold during regular listing appointments as well.

Myth #5: Homeowners make a decision about selling their home after a 5-minute conversation.

Truth: Similar to the buyers portrayed on the shows, many of the sellers have already spent hours deliberating the decision to list their homes and move on with their lives/goals.

Bottom Line

Having an experienced professional on your side while navigating the real estate market is the best way to guarantee that you can make the home of your dreams a reality!

Dec. 6, 2016

Coats For Kids

Posted in Utah Real Estate