Mortgage News • September 24, 2024

The Down Payment Assistance You Didn’t Know About

by Steve Vavrek

Believe it or not, almost 80% of first-time homebuyers qualify for down payment assistance, but only 13% actually use it. And if you’re hoping to buy a home, this is a mission-critical gap to close – fast (see graph below):

Here’s what you need to know to make the most of your down payment in today’s housing market.

Amplify Your Down Payment Potential

For first-time buyers, the name of the game with down payments is making sure you’re taking advantage of all the resources out there designed to help you. And a bunch of them can get you to your goal faster than you may have thought possible.

For example, there are loan options that require as little as 3% down, or even 0% for certain qualified borrowers, like Veterans. And let’s not forget down payment assistance, like grants and other opportunities, that help you cover the upfront cost of your down payment.

If you’re interested in exploring those options and what you may be able to use to your advantage, connect with a trusted lender. Because if you don’t at least see what’s available, you could be leaving money on the table and missing your chance at buying a home. These resources can boost your down payment. And a higher down payment could help lower your eventual monthly mortgage payment, and even avoid or reduce your fees like private mortgage insurance.

Don’t Let News Headlines About Down Payments Scare You

There’s one more thing to address. News coverage has been talking about how the typical down payment is rising. A report from Redfin states:

“The typical down payment for U.S. homebuyers hit a record high of $67,500 in June, up 14.8% from $58,788 a year earlier . . . This was the 12th consecutive month the median down payment rose year over year.”

But don’t let those high dollars scare you. Just because the average down payment is rising doesn’t mean down payment requirements are going up. That’s a key piece of the puzzle to understand. It’s really just because people are choosing to put more down to try to offset higher mortgage rates, and current homeowners who are putting their equity to work are using that to increase their down payment on their next home. As HousingWire explains:

“. . . buyers are putting down a higher percentage of the purchase price to lower their monthly mortgage payment. And buyers also had more equity from their home sales, which gives them more cushion.”

Let’s break those two reasons down a bit:

1. A bigger down payment helps lower your monthly mortgage payment. Affordability has been a challenge for many buyers recently, which is why those who have the ability to make a bigger down payment are going to do so in an effort to lower their future housing costs.

2. Buyers who already own a home have a record amount of equity to leverage. Someone who bought a home a few years ago has gained a significant amount of value in their house, thanks to home price appreciation. These people can put down much more than the average first-time buyer who hasn’t owned a home yet.

Bottom Line

What’s the best thing to do? Talk with a trusted lender about your options. They’ll help you figure out where you stand today and how to access the resources you may qualify for. Because help is out there, you just need to work with a pro to take advantage of it.

Mortgage News • September 23, 2024

Fed Rate Cuts Explained: What It Means for Your Next Move in Real Estate

by Steve Vavrek

By now, you’ve probably heard about the news: the Federal Reserve recently cut interest rates for the first time in four years.

But what does that really mean for home buyers and sellers? You might be wondering how this impacts mortgage rates, home prices, or your ability to make a move in today’s market. Understanding these changes could be your key to making smart real estate decisions—so let’s break it down.

A Closer Look at the Fed’s Decision

On September 18, 2024, Fed Chair Jerome Powell announced during his press conference that “We have in fact begun the cutting cycle now.”

The Fed began its rate-cutting cycle with a half percentage point (50 basis points) reduction. This decision was expected, and experts believe more cuts could be made before the end of the year.

Keep in mind that the Fed doesn’t directly control mortgage rates. However, its decisions influence the financial markets, which is why mortgage rates started to drop this summer. Over the past year, we saw mortgage rates as high as 7.79% (October 2023), but they’ve recently fallen to around 6.20% (September 2024).

For you, this could mean better affordability when buying a home or more opportunities if you’re planning to sell.

How do mortgage rates impact purchasing power?

The recent decline in mortgage rates works in favor of buyers.

Lower mortgage rates mean you can afford more house for the same monthly payment. In fact, a 1% drop-in mortgage rates can significantly boost your buying power. According to Realtor.com, “a buyer who budgeted to buy the typical home in 2023 now has an extra $70,000 in home purchasing power for the same monthly cost.”

Those sticking to a house at the same price point can see significant month-to-month savings. Mortgage rate shifts have led to $300 monthly savings compared to May 2024 and $340 savings compared to October 2023, assuming a 20% down payment on a typical home purchase.

That’s a big deal for buyers.

Will mortgage rates continue to decline?

No one expects mortgage rates to take a nosedive. In fact, after Powell’s press conference, mortgage rates actually increased slightly—from 6.15% to 6.17%, according to Mortgage News Daily.

Zelman & Associates’ managing director Alan Ratner explained why in a recent interview, which took place before the Fed’s rate cut. He stated that the early September drop-in rates was due to the “mortgage market already pricing in a Fed easing cycle.”

“We’ve seen mortgage rates already pull back roughly 100 basis points from the high, so the Fed simply announcing this week…that shouldn’t have too much of an impact on the mortgage market,” Ratner said.

However, that doesn’t mean rates will go up, either. Ratner continued, “Over time, we do expect to see rates gradually decline as inflation remains tame.”

While there may be some fluctuation in rates, other experts agree that rates will likely continue a downward trend over time. Mark Zandi, chief economist at Moody’s, believes that “the 30-year fixed mortgage rate will be closing in on 6.0% by the end of the year and settle in near 5.5% by the end of 2025.”

In addition, Fannie Mae revised its mortgage rate forecast and now expects mortgage rates to decline to 5.7% by the end of 2025.

Will the lock-in effect finally break?

One of the biggest challenges for the housing market over the past two years has been the so-called “lock-in effect.” Homeowners who locked in ultra-low mortgage rates during the pandemic have been reluctant to sell, knowing they’d have to take a new mortgage at a higher rate. But with mortgage rates now trending downward, this effect might start to ease.

As Powell pointed out during the press conference, “As rates come down, people will start to move more, and that is probably beginning to happen already.”

This shift could lead to more inventory hitting the market, but Powell was careful to note that this wouldn’t necessarily create a surge in demand. “When that happens, you’ve got a seller, but you’ve also got a new buyer in many cases. So, it is not obvious how much additional demand that would make,” he said.

Will home prices go up or down?

The question everyone wants an answer to is whether home prices will rise if more buyers take advantage of lower mortgage rates. Powell addressed this concern, saying, “The housing market, it’s hard to game that out… The real issue with housing is that we have had, and are on track to continue to have, not enough housing.”

In other words, even as nationwide inventory has seen an increase, supply constraints are still a major issue. The supply of homes plays a huge role in determining prices. So, while more buyers may enter the market if mortgage rates decline, the overall impact on prices will depend on how much inventory is available.

Final Thoughts

The Fed’s recent rate cut is a big deal for the housing market. While it’s hard to predict exactly how things will unfold, one thing is clear: lower mortgage rates are creating opportunities. If you want to dive into local data or are interested in what today’s mortgage rates mean for you, email to me here to schedule an appointment.

Rightsizing • September 12, 2024

Is it time to Rightsize?

by Steve Vavrek

Rightsize your home…what does that even mean?

Living in Connecticut, we are blessed to find a variety of property styles to suit every stage of life and need. Does your family feel cramped in your home? Or maybe you’ve outgrown the home you purchased a few years back and need something bigger? Do you no longer need the big yard or extra rooms? Either way, transitioning to a smaller or larger home can be overwhelming but necessary.

To help you out, here are some helpful advice for tackling the process. Whether you’re preparing to sell or buy, read on for tips that can help set you up for a successful transition.

Selling Your Home –

The following tips can help you get your home ready to sell so you can sell it quickly and for the most money possible:

Work with a real estate agent: A real estate agent will have the knowledge and resources to help you price and market your home to buyers in your area.
Stage your home: Staging your home can make it more attractive to buyers and help them see its potential.
Make needed repairs: Fixing any damage or making improvements can help your home sell faster and for more money.
Declutter: packing up personal items and decluttering your home can make it feel more spacious and welcoming to buyers.

Buying a New Home –

When you’re ready to start looking for a new home, keep the following in mind:

Determine your budget: Knowing how much you can afford will help you narrow down your search to homes that fit your price range.
Consider your needs: Think about the must-haves for your new home as well as any amenities that would be nice to have.
Location, location, location: The location of your new home is just as important as the home itself. Consider factors like the neighborhood, commute, schools, and more when choosing a location.
Work with a real estate agent: A real estate agent will be able to help you find homes that meet your criteria and guide you through the home-buying process

Making the transition to a new home doesn’t have to be stressful. With a little planning and preparation, you can make the process as smooth as possible.

When you’re ready to move, keep the following tips in mind to help make the transition as seamless as possible:

Pack early and pack smart: Start packing up non-essential items well in advance of your move. This will help make the packing process less daunting and allow you to focus on essentials closer to the move date.
Don’t forget the little things: Change your address, transfer utilities, and cancel any services you won’t need in your new home.
Hire professional movers: Unless you have a lot of family and friends who are willing to help, professional movers can help make the moving process much easier.
Give yourself time to settle in: unpacking and getting settled into your new home can take some time. Don’t try to do everything at once – take your time and enjoy your new space.

As your chosen REALTOR ®, I look forward to learning about your needs. Let’s rightsize your home, together!

Use a Realtor • September 12, 2024

What To Know About Closing Costs

by Steve Vavrek

Now that you’ve decided to buy a home and are ready to make it happen, it’s a good idea to plan ahead for the costs that are a typical part of the homebuying process. And while your down payment is probably the number one expense on your mind, don’t forget about closing costs. Here’s what you need to know.

What Are Closing Costs?

Simply put, your closing costs are the additional fees and payments you have to make at closing. And while they’ll vary based on the price of the home and how it’s being financed, every buyer has these, so they shouldn’t be a surprise. It’s just that some people forget to budget for them. According to Freddie Mac, this part of the homebuying process typically includes:

Application fees
Credit report fees
Loan origination fees
Appraisal fees
Home inspection fees
Title insurance
Homeowners insurance
Survey fees
Attorney fees

Some of these are one-time expenses that are baked into your closing costs. Others, like homeowners’ insurance, are initial installment payments for ongoing responsibilities you’ll have once you take possession of the home.

How Much Are Closing Costs?

The same Freddie Mac article goes on to say:

“Closing costs vary greatly depending on your location and the price of your home. Typically, you should be prepared to pay between 2% and 5% of the home purchase price in closing fees.”

With that in mind, here’s how you can get an idea of what you’ll need to budget. Let’s say you find a home you want to purchase at today’s median price of $422,600. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $8,452 and $21,130.

But keep in mind, if you’re in the market for a home above or below this price range, your numbers will be higher or lower.

Tips To Reduce Your Closing Costs

If you’re wondering if there’s any way to inch that down a little bit, NerdWallet lists a few things that could help:

Negotiate with the Seller: Some sellers are willing to cover part or all of these expenses — especially since homes are staying on the market a bit longer now. Sellers may be more motivated to compromise, and you’ll find you have a bit more negotiation power. So don’t hesitate to ask them for concessions like paying for the home inspection or giving you a credit toward closing costs.
Shop Around for Home Insurance: Since rising home insurance is a challenge in many areas of the country right now, take the time to get a clear picture of all your options. Each insurance company offers their own policies and coverage, so get multiple quotes and see how they compare. Choosing a policy that provides reliable coverage at a competitive rate can make a difference.
Look into Closing Cost Assistance: Just like there are programs out there to help with your down payment, options exist to get support with closing costs too. While they’ll vary by area, there are programs for various income levels, certain professions, and specific towns or neighborhoods too. If you want to learn more, Experian says:

“Your real estate professional should be able to steer you toward applicable programs, and the U.S. Department of Housing and Urban Development (HUD) maintains a helpful resource for finding homebuying assistance programs in every state.”

Bottom Line

Planning for the fees and payments you’ll need to cover when you’re closing on your home is important – and it doesn’t have to be a big surprise. For more tips and expert advice, partner with me and my team of trusted real estate professionals at Gaetano Marra Homes.

First Time Buyers • September 10, 2024

Why Pre-Approval Should Be at the Top of Your Homebuying To-Do List

by Steve Vavrek

Since the supply of homes for sale is growing and mortgage rates are coming down, you may be thinking it’s finally your moment to jump into the market. To make sure you’re ready, you need to get pre-approved for a mortgage.

That’s when a lender looks at your finances, including things like your W-2, tax returns, credit score, and bank statements, to figure out what they’re willing to loan you. After that process, you’ll get a pre-approval letter to show what you can borrow. Here are two reasons why this is essential in today’s market.

Pre-Approval Helps You Know Your Numbers

While home affordability is finally starting to show signs of improving, it’s still tight. So, it’s a good idea to talk to a lender about your loan options and how today’s changing mortgage rates will impact your monthly payment. The pre-approval process is the perfect time for that. In addition to determining the maximum amount you can borrow, pre-approval also helps you understand this piece of the puzzle. As Investopedia says:

“Consulting with a lender and obtaining a pre-approval letter allows you to discuss loan options and budgeting with the lender; this step can clarify your total house-hunting budget and the monthly mortgage payment you can afford.”

You should use this information to tailor your home search to what you’re actually comfortable with budget-wise. Since mortgage rates have inched down some lately, you may find you’re able to afford a bit more than you’d expect for your monthly payment, but you still want to avoid overextending. As CNET explains:

“In many cases, a lender may preapprove you for more than you need to spend on a home. And while it can be tempting to look at houses outside your budget, it won’t help you in the long run. Before you start touring homes, figure out how much you can realistically afford and stick to your budget.”

Pre-Approval Makes Your Offer More Appealing

And once you do find a home you want in your budget, pre-approval has another big perk. It not only makes your offer stronger, it also shows sellers you’ve already undergone a credit and financial check. When a seller sees you as a serious buyer, they may be more attracted to your offer because it seems more likely to go through. As Greg McBride, Chief Financial Analyst at Bankrate, says:

“Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns and bank statements. A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount.”

As mortgage rates trend down, more buyers are going to be ready to jump back into the market. And while demand is still limited right now, there’s the potential for competition to pick back up, especially in hot markets. So, why not stack the deck in your favor and make sure you’re putting yourself in the best position possible when you find a home you love?

Bottom Line

If you’re planning on buying a home, don’t forget to get pre-approved early in the process. It can help you get a more in-depth understanding of what you can borrow and shows sellers you mean business.

Rightsizing • September 3, 2024

Should You Sell Now? The Lifestyle Factors That Could Tip the Scale

by Steve Vavrek

Are you on the fence about whether to sell your house now or hold off? It’s a common dilemma, but here’s a key point to consider: your lifestyle might be the biggest factor in your decision. While financial aspects are important, sometimes the personal motivations for moving are reason enough to make the leap sooner rather than later.

An annual report from the National Association of Realtors (NAR) offers insight into why homeowners like you chose to sell. All of the top reasons are related to life changes. As the graph below highlights:

As the visual shows, the biggest motivators were the desire to be closer to friends or family, outgrowing their current house, or experiencing a significant life change like getting married or having a baby. The need to downsize or relocate for work also made the list.

If you, like the homeowners in this report, find yourself needing features, space, or amenities your current home just can’t provide, it may be time to consider talking to a me today about selling your house. Your needs matter. I will listen to your needs and will walk you through your options and what you can expect from today’s market, so you can make a confident decision based on what matters most to you and your loved ones.

I will also be able to help you understand how much equity you have and how it can make moving to meet your changing needs that much easier. As Danielle Hale, Chief Economist at Realtor.com, explains:

“A consideration today’s homeowners should review is what their home equity picture looks like. With the typical home listing price up 40% from just five years ago, many home sellers are sitting on a healthy equity cushion. This means they are likely to walk away from a home sale with proceeds that they can use to offset the amount of borrowing needed for their next home purchase.”

Bottom Line

Your lifestyle needs may be enough to motivate you to make a change. If you want help weighing the pros and cons of selling your house, connect with me today.

Use a Realtor • August 30, 2024

What are reasons to sell your home

by Steve Vavrek

Selling a home is a significant decision, often driven by various personal, financial, and lifestyle factors. Here are some common reasons people choose to sell their homes:

Upgrading or Downsizing:
- Upgrading: Your current home might no longer meet your needs, such as needing more space due to a growing family or desiring a larger or more luxurious property.
- Downsizing: Conversely, if your children have moved out or you want a simpler lifestyle, downsizing to a smaller, more manageable home might be appealing.
Relocation:
- A new job, job transfer, or a desire to live in a different area (city, state, or country) often necessitates selling a home. Relocating for better career opportunities or lifestyle preferences, such as moving closer to family or seeking a better climate, are common reasons.
Financial Reasons:
- Equity Realization: If your home has significantly appreciated in value, you might want to sell to cash in on the equity.
- Debt Reduction: Selling a home can help pay off debts or alleviate financial stress.
- Affordability: If the cost of maintaining your home has become too high, selling can relieve the financial burden.
Changing Life Circumstances:
- Life events such as marriage, divorce, or the death of a spouse can lead to the decision to sell a home.
- Retirement might prompt a move to a more suitable location or a retirement community.
Market Conditions:
- Favorable market conditions, such as a seller’s market where home prices are high and demand is strong, can be a good reason to sell.
- Conversely, avoiding a potential downturn in the market could motivate a sale.
Maintenance and Repairs:
- If your home requires significant repairs or ongoing maintenance that you’re unwilling or unable to handle, selling might be the best option.
Neighborhood Changes:
- Changes in the neighborhood, such as increased crime rates, new developments, or shifts in the community’s demographics, can prompt homeowners to sell.
Desire for a Different Lifestyle:
- Some people sell their homes to pursue a different lifestyle, such as moving to the countryside, the city, or even an entirely different country.
Investment Opportunities:
- Selling a home to invest in other properties or financial opportunities can be a strategic decision.
Health Reasons:
- Health issues may require moving to a more accessible home, such as a single-story house or one closer to medical facilities.

Understanding your motivations for selling can help you plan and execute the sale more effectively. I will always listen to your needs and will always be there to assist you in any situation.

Why Use a Realtor? • August 27, 2024

What’s the Impact of Presidential Elections on the Housing Market?

by Steve Vavrek

It’s no surprise that the upcoming Presidential election might have you speculating about what’s ahead. And those unanswered thoughts can quickly spiral, causing fear and uncertainty to swirl through your mind. So, if you’ve been considering buying or selling a home this year, you’re probably curious about what the election might mean for the housing market – and if it’s still a good time to make your move.

Here’s the good news that may surprise you: typically, Presidential elections have only had a small, temporary impact on the housing market. But your questions are definitely worth answering, so you don’t have to pause your plans in the meantime.

Here’s a look at decades of data that shows exactly what’s happened to home sales, prices, and mortgage rates in previous Presidential election cycles, so you can move forward with the facts as you weigh the pros and cons of your homeownership decision.

Home Sales

In the month leading up to a Presidential election, from October to November, there’s typically a slight slowdown in home sales (see graph below):

Some consumers will simply wait it out before they make their purchase decision. However, it’s important to know this slowdown is small and temporary.

Historically, home sales bounce right back and continue to rise the following year.

In fact, data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows after 9 of the last 11 Presidential elections, home sales went up the year after the election, and it’s been happening consistently since the early 1990s (see chart below):

Home Prices

You may also be wondering about home prices. Do prices come down during election years? Not typically. As residential appraiser and housing analyst Ryan Lundquist notes:

“An election year doesn’t alter the price trend that is already happening in the market.”

Home prices generally rise over time, regardless of an election cycle. So, based on what history shows, you can expect the current pricing trend in your local market to likely continue, barring any unusual market or economic circumstances.

The latest data from NAR reveals that after 7 of the last 8 Presidential elections, home prices increased the following year (see chart below):

The one outlier was from 2008 to 2009, which was during the height of the housing market crash. That was certainly not a typical year. Today’s market, however, is much more resilient. And while prices are moderating nationally, they aren’t on an overall decline.

Mortgage Rates

And the third thing that’s likely on your mind is mortgage rates, since they impact your monthly payment if you’re financing a home. Looking at the last 11 Presidential election years, data from Freddie Mac shows mortgage rates decreased from July to November in 8 of them (see chart below):

And this year, we’ve already started to see that happen. Most experts also forecast mortgage rates will ease slightly throughout the rest of 2024. If that happens – and all signs right now indicate it should – this year will continue to follow the trend of declining rates. So, if you’re looking to buy a home in the coming months, this could be great news for your purchasing power.

What This Means for You

What’s the big takeaway? While Presidential elections do have some impact on the housing market, the effects are usually minimal. As Lisa Sturtevant, Chief Economist at Bright MLS, says:

“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”

For most buyers and sellers, elections don’t have a major impact on their plans.

Bottom Line

While it’s natural to feel a bit uncertain during an election year, history shows the housing market remains strong and resilient. And this means you don’t have to pause your plans in the meantime. For help navigating the market during this election cycle, reach out to me to listen to your questions and work with you for the best options and results for you and your family.

Why Use a Realtor? • August 26, 2024

Going Solo vs. Hiring a Real Estate Agent: What You Should Know

by Steve Vavrek

Do you have to use a real estate agent when buying or selling a home?

The answer, of course, is no. You can absolutely go it alone, and there are people who opt to do so every year.

After all, with the internet at your fingertips, you can search for homes, look up property values, and even negotiate deals on your own.

Yet, even with all that info, 89% of people choose to work with a professional, according to a report from the National Association of Realtors.

There’s been a lot of attention on real estate industry changes lately. But today, I want to go back to the basics and discuss the difference between a buyer’s agent and a seller’s agent—and what each can do for you during your real estate transaction.

Buyer’s Agents

Sites like Zillow can help you find your dream home by browsing listings online, and they even alert you to open house schedules. These sites can also connect you with a local real estate professional if you are not already working with one.

A buyer’s agent goes beyond the vast amount of information online and acts as your personal guide throughout the entire home buying process. Think of them as your real estate advocate, someone who is entirely focused on your needs and interests.

Realtor.com compiled 111 things buyer’s agents do throughout the real estate transaction, but here, we’ll just focus on some of the key elements of their work:

Finding the Perfect Home

Like I noted above, you can search for homes online, but can you really spot the difference between a house that’s priced to sell and one that’s hiding a laundry list of issues?

According to the 2023 Profile of Home Buyers and Sellers, 89% of buyers used an agent to purchase their home, with 50% citing that the most valuable service was helping them find the right property. Your agent will use their knowledge of the local market to help you find properties that match your criteria. They’ll schedule showings, provide insights, and help you weigh the pros and cons of each home.

Negotiating Price and Terms

You might think you can haggle your way to a better deal, but without an agent, you’re missing out on the subtle art of negotiation. Keep in mind that negotiations can happen at different points throughout the transaction, such as getting an offer accepted and after inspection and appraisals are complete.

The NAR report highlights that agents are essential in negotiating better contract terms and handling the complexities of the sale. A good buyer’s agent knows how to sweeten the deal in ways you might not even consider—like securing repairs or getting the seller to cover closing costs.

Navigating Paperwork

The paperwork involved in buying a home can be a maze of legalese. This can be overwhelming for many. That’s why 90% of buyers found their agent to be a useful information source throughout the process, ensuring every “i” is dotted and every “t” is crossed.

Seller’s Agents

On the other side of the deal, a seller’s agent (also known as a listing agent) is dedicated to helping homeowners sell their property quickly and at the best price possible. They’re the ones who market your home, negotiate with buyers and handle the logistics of the sale.

Let’s take a look at some of the key responsibilities of a listing agent.

Pricing the Home Correctly

Pricing your home is part data and part art. Get it wrong, and you could scare off buyers or leave money on the table. The right price attracts serious buyers and maximizes your profit.

Over the past few years, properties were flying off the market in a matter of days. Yet, even then, for sale by owner (FSBO) homes sold for significantly less than agent-assisted homes. In 2022, FSBOs sold for a median price of $310,000 compared to a median price $405,000 of agent-assisted homes, according to NAR.

Seller’s agents use data, experience, and market insight to price your home strategically—something an online calculator just can’t replicate.

Marketing the Property

A seller’s agent will create a comprehensive marketing plan to showcase your home to attract serious buyers, not just window shoppers. This includes professional photos, videos, an online social plan, open houses, and sometimes even staging the home to make it more appealing to buyers.

Interested in learning about our marketing plan? Let’s talk today.

Handling Offers and Negotiations

Without an agent, you’re the one fielding offers, counter-offers, and everything in between. It sounds empowering until you’re faced with a buyer who’s playing hardball. That’s why 87% of sellers said they would definitely or probably recommend their agent for future services. A seller’s agent handles the back-and-forth, ensuring you don’t cave under pressure or get taken for a ride.

In addition, they manage the entire sale process beyond getting an offer accepted—from coordination of inspectors and appraisers to getting to the closing table on time.

Final Thoughts

It’s tempting to think you can save money on commissions without an agent. But when buying or selling a property, the stakes are high. A skilled real estate agent isn’t just another expense; they bring a level of expertise and market knowledge that can save you time, stress, and money.

And that’s an investment that can make all the difference.

Contact me for more information. Thank you

Use a Realtor • August 21, 2024

The Number One Mistake Sellers Are Making: Overpricing Their House

by Steve Vavrek

In today’s housing market, many sellers are making a critical mistake: overpricing their houses. This common error can lead to a home sitting on the market for a long time without any offers. And when that happens, the homeowner may have to drop their asking price to try to re-ignite buyer interest.

Data from Realtor.com shows the number of homeowners realizing this mistake and doing a price reduction is climbing (see graph below):

If you’re thinking about making a move yourself, here’s what you need to know. The best way to avoid making a costly mistake is to work with me as your trusted real estate agent to find the right price. Here’s a look at what’s at stake if you don’t.

Not Paying Attention To Current Market Conditions

Understanding current market conditions is key to accurate pricing. You don’t want to set your asking price based on what happened during the pandemic. The market has moderated a lot since then, so it’s far better to align your price with today’s reality.

We as Real estate agents stay updated on market trends and how they impact the pricing strategy for your house.

Pricing It Based on What You Want To Make (Not What It’s Worth)

Another misstep is pricing it based on what you want to make on the sale, and not necessarily current market value. You may see other homes in your neighborhood selling for top dollar and assume yours can do the same. But you may not be considering differences in size, condition, and features. For example, maybe that other house is waterfront or has a finished basement. To sum it up, Bankrate explains:

“How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth and how much you might reasonably expect to get for it in the current market.”

As a realtor we will do a comparative market analysis (CMA) to make sure your house is compared with truly similar properties to get an accurate look at how it should be priced.

Pricing High to Leave Room for Negotiation

Another common, yet misguided strategy is to price your house high on purpose, so you have more room to negotiate down during the sale. But this can backfire. A price that seems too high often deters potential buyers from even considering the home. So rather than leaving room for negotiation, what you’ll actually be doing is turning buyers away. U.S. News Real Estate explains:

“You want to sell your house for top dollar, but be realistic about the value of the property and how buyers will see it. If you’ve overpriced your home, chances are you’ll eventually need to lower the number, but the peak period of activity that a new listing experiences is already gone.”

We will help you set a fair price that attracts buyers and encourages more competitive offers.

Bottom Line

Overpricing your home can have serious consequences. A knowledgeable real estate agent brings an objective perspective, in-depth market knowledge, and a strategic approach to pricing.

Connect with me as your trusted Realtor to avoid making a pricing mistake that’ll cost you.