Selling Your Home? The Importance of Using a Real Estate Professional

When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold. In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. For the past three years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ most recent Profile of Home Buyers & Sellers. However, the report also revealed that 95% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know. Buyers search for a home online but then depend on an agent to find the actual home they will buy (53%) or negotiate the terms of the sale & price (48%) or understand the process (60%). The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious, as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Millennials: What FICO Score is Needed to Buy a Home?

In a recent article by the Wharton School of Business at the University of Pennsylvania, it was revealed that some Millennials are not looking to purchase a home simply because they don’t believe they can qualify for a mortgage. The article quoted Jessica Lautz, the National Association of Realtors’ Managing Director of Survey Research, as saying that there is a significant population that does not think they will be approved for a mortgage and doesn’t even try. The article also quoted Fannie Mae CEO Tim Mayopoulos :

“I do think that there’s a sense out there in the marketplace among borrowers that credit may not be available, especially for people with lower credit scores.”

So what credit score is necessary?

A recent survey reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actually, the FICO score on closed loans (as reported by Ellie Mae) is much lower and has been dropping over the last several months.

Bottom Line

Millennials who are considering a home purchase should get advice from a local real estate or mortgage professional now. They may be surprised how much the requirements for a mortgage have eased.

Should I Pay a Mortgage Interest Rate over 4%?

Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Along with Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors are all calling for mortgage rates to continue to rise over the next four quarters. This has caused some purchasers to lament the fact they may no longer be able to get a rate less than 4%. However, we must realize that current rates are still at historic lows. Here is a chart showing the average mortgage interest rate over the last several decades.

Bottom Line

Though you may have missed getting the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or sister did ten years ago; a lower rate than your parents did twenty years ago and a better rate than your grandparents did forty years ago.

Getting The Most $$'s For Your Home

Every homeowner wants to make sure they maximize the financial reward when selling their home. But, how do you guarantee that you receive maximum value for your house? Here are two keys to insuring you get the highest price possible.

1. Price it a LITTLE LOW

This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In actually, this just dramatically lessens the demand for your house. (see chart)Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so demand for the home is maximized. In that way, the seller will not be fighting with a buyer over the price but instead will have multiple buyers fighting with each other over the house. In a recent article on realtor.com, they gave this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

2. Use a Real Estate Professional

This too may seem counterintuitive. The seller may think they would net more money if they didn’t have to pay a real estate commission. Yet, studies have shown that typically homes sell for more money when handled by a real estate professional. Recent research posted by the Economists’ Outlook Blog revealed:

“The median selling price for all FSBO homes was $210,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $151,900. However, homes that were sold with the assistance of an agent had a median selling price of $249,000 – nearly $40,000 more for the typical home sale.”

Bottom Line

Price it at or slightly below the current market value and hire a professional. That will guarantee you maximize the price you get for your house.

Budget Bathroom Makeovers

If a major bathroom remodel isn't in your budget, simply updating a smaller aspect of your bathroom can make a significant impact. New tile, cabinets, lighting or plumbing fixtures can give the room a whole new style. Update the walls with a fresh coat of paint or use drywall to provide texture for a faux look. To keep up with recent trends, some people are even updating their electrical systems to accommodate in-bathroom TVs, stereos and towel warmers.

To get the most out of your makeover, keep in mind how you use your bathroom and choose projects that will positively affect your daily routine. The key to a small bathroom makeover is to pick one or two projects and focus all of your creativity and budget on those.

1. Add colorful tile for personality

Boost a neutral bathroom with brightly colored tile. If tiling your entire bathroom is out of the question, mix and match tile colors above the sink or bathtub to create your own mosaic. Consider choosing a colorful grout to further customize your creation.

2. Revilatize your cabinetry

Bring old cabinets back to life by restaining, painting or refacing them. Or, replace them altogether with new cabinets. While bathroom cabinets can help set the tone of the room, they also need to be functional. Choose cabinets that provide adequate storage or add additional shelving to your current cabinets.

3. Change your light fixtures

Swap out your old light fixtures for fixtures that will allow for softer light for relaxing evenings in the tub and brighter light for getting ready in the morning.

4. Replace your plumbing fixtures

Nothing dates a bathroom like a dingy, basic 1970s chrome faucet. Today's faucets have become the inspiration for the entire bathroom. From elegant waterfall to traditional fixtures, chrome to brass, there are more options to choose from than ever before.

5. Try a new wall treatment

The simplest—and most inexpensive—way to update any room is to tackle those walls. The small space is the perfect place to try a bold color or bright shade that might elsewhere overwhelm your home.

6. Upgrade your electrical to enjoy entertaining and relaxing benefits

People are spending more and more time in their bathrooms these days—relaxing, rejuvenating and just hiding away. And now there are many bathroom uses for an electrical outlet. Consider upgrading your electrical system to allow for entertainment (TVs and stereos) and relaxation (jetted foot tubs and facial saunas).

Lighting design is the planning of a lighting system to achieve an optimal lighting effect in a given space. The process may include landscape lighting, exterior architectural lighting, improving the lighting in a specific room or area, or designing the lighting for an entire home remodel or new home build.

A competent lighting designer will be able to determine your lighting needs based on your tastes, décor, personal habits, use of space and budget. And he or she will be able to provide you with a custom, personalized lighting plan to meet those needs. Even if you only want to add a couple of lights as do-it-yourself project, you can still benefit from the specialized knowledge and advice of an expert.

First Talk to a Lighting Designer About Major Projects

If you're undertaking a major home remodel or a new home build, then it is wise to search out a lighting designer that you're comfortable with during the early planning stages. Lighting is one of the most important aspects of a home, inside and out, and a good lighting specialist will be able to offer you valuable, and innovative, ideas that may be incorporated into the structural design of your home. The other reason you want to incorporate a lighting designer into your plans early on is that every aspect of design, from electrical wiring to installing fixtures, is easier to do in the early stages of construction. Waiting to do your lighting until after the major building is finished will mean a lot more extensive work later on, and from a budgetary perspective, it will have a much bigger impact on your wallet too.

Lighting Design Basics

When it comes to designing lighting, there are several things that you, as a homeowner, should keep in mind before you hire out any major projects. Those include:

- The use of natural light

Natural light should be utilized whenever possible for a number of reasons. It's more economical and generally more pleasant. And, if you're in the middle of a major remodel or designing a new home, there are some stunning uses of natural light that can easily be incorporated into your overall architectural design.

- Study up on the major uses of lighting in a home

Consider task lighting, accent lighting and ambient light. Task lighting focuses on specific work areas, such as countertops and tables. Accent lighting lights up areas of your home that you want to draw special attention to, such as architectural areas, artwork, and stairways. Ambient light refers to general lighting, such as lighting you'd find in general living areas and kitchens.

- Think about different types of lighting and where they
will work best in your home

Recessed lighting is all the rage, and it works for just about any application you can think of. It can also be used as task, accent or ambient lighting, depending on the specific needs of the area. Track lighting is also popular these days, and it's especially effective when used to accent and bring focus to certain areas, architectural designs or artwork.

Some More General Lighting Design Tips

Look around and start paying attention to lighting solutions that you like and appreciate. Also, take note of lighting that you're not so keen on. When you sit down with your designer, you will be able to discuss what you like and what you don't. Finally, above all else, make sure your lighting plan is functional. Good lighting design isn't worth the money spent if it's more of a hassle to operate than it is to enjoy. A sound lighting plan is an investment that will pay off in satisfaction and convenience for years to come.

Baby Boomers Finding Freedom In Retirement

Within the next five years, Baby Boomers are projected to have the largest household growth of any other generation during that same time period, according to the Joint Center for Housing Studies of Harvard. Let’s take a look at why… In a recent Merrill Lynch study, “Home in Retirement: More Freedom, New Choices” they surveyed nearly 6,000 adults ages 21 and older about housing. 

Crossing the “Freedom Threshold”

Throughout our lives, there are often responsibilities that dictate where we live. Whether being in the best school district for our children, being close to our jobs, or some other factor is preventing a move, the study found that there is a substantial shift that takes place at age 61. The study refers to this change as “Crossing the Freedom Threshold”. When where you live is no longer determined by responsibilities, but rather a freedom to live wherever you like. (see the chart below)As one participant in the study stated:

“In retirement, you have the chance to live anywhere you want. Or you can just stay where you are. There hasn’t been another time in life when we’ve had that kind of freedom.”

On the Move

According to the study, “an estimated 4.2 million retirees moved into a new home last year alone.” Two-thirds of retirees say that they are likely to move at least once during retirement. The top reason to relocate cited was “wanting to be closer to family” at 29%, a close second was “wanting to reduce home expenses”. See the chart below for the top 6 reasons broken down.

Not Every Baby Boomer Downsizes

There is a common misconception that as retirees find themselves with fewer children at home, they will instantly desire a smaller home to maintain. While that may be the case for half of those surveyed, the study found that three in ten decide to actually upsize to a larger home. Some choose to buy a home in a desirable destination with extra space for large family vacations, reunions, extended visits, or to allow other family members to move in with them.

"Retirees often find their homes become places for family to come together and reconnect, particularly during holidays or summer vacations."

Bottom Line

If your housing needs have changed or are about to change, meet with a local real estate professional in your area who can help with deciding your next step.