Uncategorized • April 17, 2024

Buyers – You need Your Own Agent who has your Best Interests in Mind

by Debbie Marett

When you are purchasing a home, you want a seasonal professional to guide you through the process. I work with buyers providing advocacy, support, and expertise. As your Accredited Buyer’s Agent – ABR®, I will guide you through one of life’s most significant and impactful transactions—providing invaluable advocacy, support, and expertise.

My commitment is to find my represented buyers what they are looking for, in the time frame they want and for the best price. It’s a process I take seriously. My buyers who are committed to my services are on my priority and I work tirelessly every day for them. Many other professional agents work the same way. What can you expect from me?

Here are some reasons a buyer’s agent is essential when navigating your home search and purchase:

As your buyer’s agent, I’m here to protect your interests, provide you with local market insights and advice, negotiate the best price, and navigate the complexities that come with real estate transactions.

If you are not represented and go check out homes on your own without a buyer agent, remember that the listing broker has a fiduciary duty to the seller. Listing agents work in the best interest of the seller, looking for viable offers to consider and marketing the property at a reasonable price.

Buyers agents work in the best interest of the buyer, looking for the best properties and negotiating to ensure the best price.

Reach out and let’s set up a time to see if we are a good fit, I’d welcome the opportunity to work with you!

In the News • April 5, 2024

Beyond the Headlines: Understanding How the Proposed Changes in Real Estate Commissions Will Actually Impact You As A Buyer or Seller.

by Debbie Marett

The Takeaway:

While the headlines about changing real estate commission structures might sound exciting and like a potential game-changer for you as a home seller or buyer, they are misleading, because nobody knows exactly how things are going to play out. While it’s true that commissions may shift, the details remain uncertain.

If the proposed settlement is accepted by the courts, sellers won’t be able to advertise agent commissions, however they will still be allowed to offer them, just not within their listing. In many cases this will still benefit the seller to do so in order to get the most exposure for their house, and sell it for the most money possible.

Buyers will be given the option to not work with a buyers agent, however that could come with some unexpected downsides and difficulties, and may not produce the savings they anticipate. Fortunately, you will still be able to hire your own representation, and have an agent looking out for your interests and helping you through the process.

Beyond the Headlines: Understanding How the Proposed Changes in Real Estate Commissions Will Actually Impact You As A Buyer or Seller.

You’ve probably heard the news that there are changes coming in terms of how real estate commissions are paid.

This might sound exciting and like a potential game-changer for you as a home seller or buyer, with headlines proclaiming things like:

“Real estate commissions are being slashed!”
“Selling your house will now be less expensive!”
“No more paying 6% to real estate agents!”

But you’re also probably not sure exactly what it all means, how it will work, or how you’ll benefit from the changes.

Unfortunately, even if you ask the most informed agents on the planet, you probably aren’t going to get many answers. It isn’t because agents don’t want to answer your questions; it’s because they don’t even know exactly how the changes are going to work.

The settlement happened seemingly overnight. There was no advance warning or discussion with agents. They found out by reading a bunch of headlines you probably saw at the same time they did.

On top of that, most of the headlines are misleading, because nobody knows exactly how things are going to play out. Any claims that the media makes that commissions will be cut in half, or any specific number of dollars will be saved by consumers, remains to be seen. The changes might reduce commissions. On the other hand, they could increase them. As with many things the government or court system touches, there’s always the possibility that it could create more issues than it solves.

But, for the time being, as much as you might want or expect your local agent to be able to give you specifics, please understand that they can’t. For starters, it’s a proposed settlement, not yet accepted by the courts, and if it’s approved, the changes won’t start until July.

Here’s What Matters to Buyers and Sellers in a Nutshell

Unless you’re in the business, you probably have no desire to read through all of the court documents or proposed settlement. You just want to know what changes will possibly impact you. So here’s an excerpt from a National Association of REALTORS® press release, highlighting the changes that will most likely affect you:

“In addition to the financial payment, NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS. This would mean that offers of broker compensation could not be communicated via the MLS, but they could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. Offers of compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers. They are also consistent with the real estate laws in the many states that expressly authorize them.

Further, NAR has agreed to enact a new rule that would require MLS participants working with buyers to enter into written agreements with their buyers. NAR continues, as it has done for years, to encourage its members to use buyer brokerage agreements that help consumers understand exactly what services and value will be provided, and for how much. These changes will go into effect in mid-July 2024.”

Again, unless you’re in the business, that may not even be all that clear of an explanation. So to put it in simpler terms:

Sellers and their agents won’t be allowed to offer a commission to buyers’ agents within their listing.
However, that doesn’t mean that a seller isn’t allowed to pay buyers’ agents a commission. It just can’t be published in the listing.
And buyers will now be required to sign a written agreement with an agent in order to work with them, which will likely require them to agree to a certain amount of compensation. That doesn’t necessarily mean the compensation has to be paid out of the buyers’ pocket; it could be an agreed upon amount that will be negotiated into the purchase price paid for through the proceeds of the sale.

Basically, it allows sellers to choose to not offer or agree to pay a commission to buyers’ agents when they list their house for sale, and allows buyers to choose to not work with a buyers’ agent when they buy, in hopes of saving money. But before you do that, there are some things you should keep in mind.

Here Are Some Things to Keep in Mind if You’re Selling a House…

It doesn’t mean that you can’t offer a commission to buyers’ agents.
Although you can’t publish how much you’re willing to offer or agree to on your listing, in most cases, it will still benefit sellers to offer and be willing to offer commissions to buyers’ agents in order to get the most exposure for their home, and ultimately the best offers possible.
There’s a good chance that buyer agent commissions will likely still be paid through the proceeds of the sale, as they have been for many years.
If you’re selling to a buyer who doesn’t have an agent representing them, they’ll likely expect you to drop your price accordingly since you’re not paying another agent. In other words, if your house was worth $300,000, and buyers perceive that a buyers’ agent commission would have been 3% — even though it rarely was in reality… but that’s what the public and media have often perceived it to be — then the buyer will want a $9,000 reduction on your price below what they already want to negotiate as the fair market value.
It could cause more risk and lawsuits that may directly involve you and your property. Dual agency, which is when an agent represents both the buyer and the seller, is one of the leading causes of lawsuits in the industry. This new way of doing business could create a lot more situations where consumers don’t have their own independent representation, which could lead to either the buyer or seller feeling like their interests weren’t entirely represented.

Here Are Some Things to Keep in Mind if You’re Buying a House…

The way buyers’ agents have been paid is a result of originally trying to protect buyers decades ago. Years ago buyers didn’t have an agent dedicated to representing their interests, and were often unaware that the seller’s agent didn’t actually represent their interests as well. So rules and laws were passed to change that, and listing agents were compelled to offer buyers agents a percentage of the commission if they represented a buyer on a house they were listing. This gave buyers more choice in who represented them, and the ability to compensate their agent without having to pay out of pocket. So, for many buyers, this isn’t that great of a change for you unless you cherish the idea of representing yourself and figuring out how to do everything that needs to get done.
You will now have to choose a buyer’s agent and sign an agreement with them. This has always been an option, and it could be argued that it should always have been required, but most buyers’ agents didn’t want to seem too pushy or aggressive, so they never asked for one. Now you’ll need to sign a contract to work with them.
Don’t expect agents to be willing or able to work for a much lower commission than they’ve been working for in the past. According to recent data from the National Association of REALTORS®, the average agent earns between $44,951 and $58,528. And they work long and hard to even earn that much. There is rarely a day off, let alone a vacation, and they easily work more than 40 hours per week. Will you be able to find an agent who will work for lower rates? Perhaps. But as is the case in any industry, sometimes going with the lowest cost option ends up costing you more in the end.
While you may expect sellers to drop their price because they don’t have to pay a buyers’ agent, don’t be surprised if they dig in their heels and expect to get as much or more than similar houses have recently sold for. They will still be basing the market value of their house off of data that had buyer agent commissions factored in.
If you go it alone, go in knowing that finding the right house, understanding market values, negotiating the best deals, and handling everything involved throughout the process from contract to closing isn’t as easy as it may sound. There is more to buying a house than just finding it online, making an offer, and then going to a closing. You will have to do the work your agent would have done, and know what needs to be done in the first place. The sellers’ agent won’t be doing the work of the non-existent buyers’ agent.

While it’s impossible to predict exactly how everything will play out, those are a few things to keep in mind whether you’re buying or selling.

The best thing to do if you’re curious or concerned about the coming changes is to reach out to your local agent and ask them for their perspective, insights, advice, and to keep you in the loop as the changes get finalized.

Market Info • April 1, 2024

The Best Week To List Your House Is Almost Here

by Debbie Marett

Are you thinking about making a move? If so, now may be the perfect time to start the process. That’s because experts say the best week to list your house is just around the corner.

A recent Realtor.com study looked at housing market trends over the past several years (with the exception of 2020, since it was an unusual year), and found the best week to put your house on the market this year is April 14-20:

“Every year, one week stands out from the rest as that perfect stretch of time when it’s great to be a home seller. This year, the week of April 14–20 is the best time to sell—that is, if sellers want to see lots of interest in their homes, sell quickly, and pocket some extra cash, according to Realtor.com® data.”

Here’s why this matters for you. While the spring market is a great time to sell no matter the week, this may be the peak sweet spot. And if you’ve been putting your plans on the back burner and waiting for the right time to act, this could be the nudge you need to make your move happen. As Hannah Jones, Senior Economic Research Analyst at Realtor.com explains:

“The third week of April brings the best combination of housing market factors for sellers. The best week offers higher buyer demand, lower competition [from other sellers], and fewer price reductions than the typical week of the year.”

But, if you want to get in on the action, you’ll need to move quickly and lean on the pros. Your local real estate agent is the perfect go-to when it comes to figuring out a plan to prep your house and get it on the market.

They’ll be able to offer advice to balance your target listing date with what you need to do from a repair and renovation standpoint. And they can walk you through exactly how to prioritize your list so you know what to tackle first.

For example, if your house is already in good shape, you’ll be able to really focus in on the smaller things that are easy to do and make a big impact. As an article from Investopedia says:

“You won’t have time for any major renovations, so focus on quick repairs to address things that could deter potential buyers.”

Here are some specific examples from that article:

Just remember, even if you’re not ready to list within the next couple of weeks, that’s okay. The window of opportunity doesn’t close when this week ends. Spring is the peak homebuying season and it’s still a seller’s market, so you’ll be in the driver’s seat all season long.

Bottom Line

Ready to get the ball rolling? Let’s Connect and schedule a time to go over your next steps.

Uncategorized • February 8, 2024

Good Information on Flood Insurance

by Debbie Marett

Understanding Flood Insurance Requirement vs Rating

Neither IFPR nor Freeboard change or affect how the mandatory purchase requirement for flood insurance works. Mandatory requirements for flood insurance will still be dictated using FEMA Flood Insurance Rate Maps (FIRMs) and assessing whether the exact location of a habitable structure secured with a federally-backed loan comes into contact with one of the high-risk flood zones known as Special Flood Hazard Areas (SFHAs).

Flood insurance rates, on the other hand, could be positively affected by these variables. For example, the higher a structure is built, the lower the risk of flooding.

To confirm the flood insurance requirements of any property nationwide, simply order a MyFloodStatus flood zone determination report.

Buying • Uncategorized • February 3, 2024

Will 2024 be a better year for homebuyers? Here’s what experts think.

by Debbie Marett

Following months of cooling inflation, higher rent and food prices pushed the inflation report to a 3.4% annual rate, according to the latest Consumer Price Index report. The rise indicates the Fed’s ongoing challenge to achieve a 2% target inflation rate may experience some fluctuations along the way.

In December, the Fed set the housing market abuzz with hints of interest rate cuts in 2024. Given inflation’s bumpy ride, borrowers may need to wait until later in the year for rate cuts, if they come at all.

Although the Fed doesn’t set mortgage rates, it does set the federal funds rate—the rate at which banks lend money to each other overnight. Mortgage rates indirectly tend to rise and fall in anticipation of the Fed’s interest rate moves.

Inflation, interest rates and other economic factors will undoubtedly impact U.S. homebuyers, who are trying to read the tea leaves and game plan for buying a house. Will 2024 be a better or worse year for homebuyers? We asked several real estate experts and professionals to provide their expert opinions on buying a home in 2024.

If you’re considering buying a home then lets connect you with a lender and start by seeing what mortgage rate you could qualify for here.

“2024 is bound to be a better year for homebuyers, if only because of how terrible 2023 was,” says John Graff, CEO at Ashby & Graff Real Estate.

Graff anticipates falling interest rates and increasing inventory could result in more opportunities for homebuyers in the months ahead. “As rates slowly come down from highs not previously seen in decades, more and more housing inventory will open up as on-the-fence sellers start to list their homes—giving buyers some more options in an otherwise tight market,” he notes.

“Even though interest rates aren’t back at the historic lows they once were at during and after the pandemic, the fact they have pulled back from recent highs will surely entice new entries to the market,” Graff says.

Even if the Fed does follow through on promises of rate cuts, they likely won’t bottom out to the historically low rates of 2020 and 2021 anytime soon. That’s a probability many experts like Lisa Simonsen, a Douglas Elliman Real Estate broker, are reminding borrowers of.

“2024 will be the year buyers begin to adjust to the new realities of the market,” Simonsen notes. “Mortgage rates may feel high, but 6% or higher has been the general average mortgage rate in every decade aside from the years following the 2008 recession. Rates of 3% to 4% are the exception, not the rule.”

Still, Simonsen anticipates more homebuying activity if mortgage rates fall. “The housing market is currently constrained by a lack of inventory. Lower rates will spur home sales and add much-needed inventory, leading to more transactions.”

Why 2024 may not be a better year for homebuyers

Of course, homebuyers waiting for lower home prices and better financing options may find complications in 2024. Lower rates could lead to more competition and higher prices.

Michelle Mumoli, a broker-salesperson with New Jersey-based Compass, recently shared her insights on the evolving housing market and pointed to insufficient inventory and anticipated rate declines as factors continuing to drive up housing prices. “The lower interest rates have already brought buyers back into the market and have created much higher competition on homes, essentially raising home sale prices.”

Low inventory is the bottleneck stifling a favorable market for homebuyers, which, as Simonsen notes, could take time to overcome. “Housing sales are expected to increase a bit this year, but inventory will remain comparatively low. Overall, we will continue to see a seller’s market, particularly for homes that need little or no renovation work. These market trends will take some time to develop—rates never decline in a straight line—with incremental decreases over the next several years.”

The bottom line

In some scenarios, it may make sense to buy a home now despite elevated mortgage rates. As the saying goes, “date the rate, marry the house.” In other words, if you have the means to purchase a home now, it may be worth it since home prices generally rise over time, and you can refinance your home loan when mortgage rates drop in the future.

Regardless of what’s going on with home prices and interest rates, buying a home is one of the most important decisions most Americans make. As such, it’s essential to carefully consider your budget compared with the ongoing costs of owning a home, including your mortgage, taxes and maintenance costs. Calculate your monthly income and expenses to determine what you can afford. It’s also wise to get pre-approved for a mortgage to help you understand your financial limits before you begin house hunting.

Buying • December 23, 2023

Pre-Qualified vs Pre-Approved: What’s the Difference?

by Debbie Marett

Pre-qualification and pre-approval are two terms you may hear used interchangeably when shopping for a mortgage, but they are actually two optional steps you can take to start the loan approval process. A mortgage pre-qualification is usually a much shorter process that requires you to honestly report your own financial information, while a mortgage pre-approval typically requires you to submit more documentation like W-2s to verify your financials — making it a lengthier process.

Neither pre-qualification nor pre-approval will guarantee you a loan, but getting pre-qualified or pre-approved before you start searching for a home can help you more easily find a home you love within your budget. A pre-approval may also make the process of completing a full loan application much easier and faster, because you’ll already have submitted a lot of necessary information to the lender.

While both pre-qualification and pre-approval from a lender help identify your price range, a pre-approval letter can signal to your real estate agent and sellers that you’re serious about buying a home. Agents often require a pre-approval letter, because it is a strong indication that you are a qualified buyer and can make a competitive offer.

What does pre-qualified mean?

Pre-qualification means you may satisfy a lender’s general criteria for a mortgage, based on your self-reported financial information like income, assets, credit and debt. Pre-qualification can be as simple as a short phone conversation with a lender. Afterward, the lender may or may not provide you with a letter detailing the types of loans you may qualify for and the loan amount you may be able to borrow.

Pre-qualification is just a starting point. According to a Zillow survey, about a quarter of prospective buyers who have not yet started working with an agent reported getting pre-qualified (27%).

If you’re unsure where to begin in your home buying journey, or aren’t even sure what homes you can afford, start the pre-qualification process to learn more about your loan eligibility.

Keep in mind, a mortgage pre-qualification is only as accurate as the information you provide the lender. That’s why those who are ready to buy in the near future often go straight to pre-approval, which is a more comprehensive verification process.

What does pre-approved mean?

A mortgage pre-approval means you have a conditional commitment from a lender to approve you for a loan as long as you continue to meet their conditions by the time you close on the home. You’ll need to provide the lender with documents like bank statements, W2s and pay stubs. The lender will also run a credit check, which will show as a hard inquiry on your credit report.

Once pre-approved, you’ll receive a pre-approval letter detailing the loan amount, types of loan programs you may qualify for (e.g., conventional, FHA, VA), an estimated interest rate and annual percentage rate. Assuming you continue to meet the lender’s financial loan qualifications during the underwriting process, your lender will be able to issue a final loan approval. You will still have to complete a loan application before being fully approved for a specific loan program.

A pre-approval letter accompanying your purchase offer suggests to the seller that if they were to accept your offer, financing is more likely to go through than without one. Your offer becomes more compelling. According to Zillow’s Consumer Housing Trends Report 2022, 85% of sellers say that they prefer to accept an offer from a buyer that is pre-approved.

Difference between pre-approved and pre-qualified

A pre-qualification can help you prepare to take the next steps towards buying a home and give you a sense of a reasonable budget to stay within when shopping for home. A pre-approval gives you a more concrete understanding of your budget, so you can start making offers and can signal to the seller that you are a serious buyer. Here are a few more key comparisons between pre-approval and pre-qualification.

Pre-qualification	Pre-approval
You provide self reported financial information to the lender and are accountable for its accuracy	You complete a pre-approval application and the lender may or may not verify your financial information
Estimate of how much money you can borrow	Conditional commitment to lend you a specific amount of money
No interest rate provided	Estimated interest rate provided
Either a soft credit check or no check is required	Hard credit check is required
Less official than a pre-approval	Speeds up loan approval process
Not a guarantee of a loan approval	Not a guarantee of a loan approval

FAQs about pre-qualification vs pre-approval

Why should I get pre-qualified vs pre-approved?

Getting pre-qualified for a mortgage can be a good starting point if you’re a first-time home buyer or if you’re in the very early stages of considering a home purchase. Most pre-qualifications don’t require a hard credit inquiry, so your credit score won’t take a hit if you decide to press pause on buying. And when you decide to move forward with a pre-approval, you’ll already have a good idea of which lender you’ll want to work with.

Either way, if you choose to get pre-qualified vs pre-approved or vice versa, you’ll still need to have an offer accepted, a loan application completed and a purchase contract in place before your lender can fully underwrite and approve your loan.

Why wait to get pre-approved?

Buyers may want to get pre-qualified to get a ballpark for their budget and get pre-approved when they’re ready to seriously shop and make offers. This is because pre-approval letters only last for an average of 45 days. After this period, a new pre-approval is typically required since your financial circumstances could change. For example, you may make new purchases that increase your debt and tighten your house affordability, or you may get a new credit card that causes a hard inquiry on your credit report and lowers your credit score.

With each new pre-approval, a hard inquiry is made on your credit report which can affect your credit score over time. Keep in mind that during that 45 day period (from the date of your first mortgage credit check), all hard inquiries are consolidated and won’t individually impact your credit. If your pre-approval expires and you’re still actively shopping, reach out to your lender to discuss timing for your next pre-approval.

Are pre-qualification and pre-approval the same thing?

A mortgage pre-approval is not the same as a pre-qualification, but they serve many similar purposes. Both help you estimate the loan amount you’re likely to qualify for. Both can help show real estate agents and sellers you’re a serious buyer.

Which is better pre-approval or pre-qualification?

A pre-approval letter typically carries more weight than a pre-qualification, since the pre-approval is a conditional commitment from a lender to approve your loan. If you’re uncertain which is the best option for you, your moving timeline can be a good indicator of whether you should choose a pre-approval or pre-qualification. If you’re fully committed to buying a home, starting the pre-approval process first might be the right option for you. If you’re curious about whether or not you qualify for a loan and how much you may be eligible to borrow, mortgage pre-qualification will provide you with helpful information you can use to find a home within your budget.

Do I have to use all the money I’m pre-approved to borrow?

You don’t have to search for homes at your maximum pre-approved amount, but it is a good idea to search for homes that don’t exceed that budget. Take into account your own monthly spending habits and priorities when deciding how much of your pre-approved amount to borrow.

Do I need a pre-qualification letter to look at houses or work with an agent?

You don’t need to be pre-qualified to start looking at houses, but many real estate agents like to see at least a pre-qualification letter before committing a lot of time and effort to showing you homes. Also, getting pre-qualified can help solidify your budget and prevent you from touring properties that may end up being above your price range.

Do I need a pre-approval letter to make an offer?

You don’t need a pre-approval letter to start making offers, but your offer will be more desirable to sellers if it comes alongside a pre-approval letter — especially in a competitive market.

Article shared from Zillow.com

Buying • Selling • December 23, 2023

What Are Contingencies in Real Estate?

by Debbie Marett

How Contingent Offers Are Used in Real Estate

Contingencies offer a way to protect both the buyer and seller in a real estate transaction. The homebuying process requires a series of steps and at any time in that journey, unexpected issues may arise that neither party was prepared for. Contingent offers act as a guide for when these problems present themselves and instruct either party on what they can expect next. Sometimes, the issues can be remedied through re-negotiation. Other times, deals fall apart when they fail to follow the contingency guidelines.

Most Common Contingencies Found in Real Estate

In real estate, there are distinct types of contingencies and, as a buyer, you decide which ones apply to your situation while also taking the condition of the real estate market into account. You should also consider your real estate agent’s expertise when drafting your contract. Here are the five most common contingencies you may use during your homebuying process.

Home Inspection Contingency

Home inspection contingencies predicate the sale or sale price of the home on the findings of a licensed home inspector. The inspector will visit the property and examine the more important parts of the home such as safety features, foundation and roofing, major systems (i.e., electrical and plumbing), and even the facade. Many buyers either can’t see or don’t think about these things during the process.

If the inspection uncovers problems or flaws that are in the contract, the buyer can either rescind their offer or negotiate with the seller to remediate the problems. Sometimes, the seller will agree to make the repairs before the property is turned over to the buyer. Financial credits are another way that sellers and buyers work out a less than stellar inspection report. Either way, you don’t necessarily have to walk away from a home you like due to reparable flaws.

Mortgage Contingency

A mortgage contingency is often used when the buyer needs time to get financing to buy the property. The process of getting a mortgage can be a tumultuous journey, and it is not uncommon for buyers to believe they are on track for approval only to find at the last minute there was problem preventing them from securing financing.

One of the ways to avoid this hiccup is to make sure that you are preapproved for the mortgage and not just prequalified. Being “prequalified” requires little information to determine whether or not you’ll qualify for a mortgage. Being “preapproved,” on the other hand, requires a thorough evaluation of your financial status, including a credit check.

Keep in mind that although a preapproval is a positive step in obtaining a mortgage, life changes, such as a new job or a credit-based purchase such as a new car, can cause the metrics you were initially evaluated on to change and can cause a delay in finalizing the mortgage process.

Appraisal Contingency

Lenders do not offer home loans on properties that cost more than their appraised value. This is where an appraisal contingency factors into the mortgage process. Although you may feel that the home is worth the price the seller is asking, that home’s actual value could be drastically different. For the lender, it doesn’t matter if you and the seller come to terms on the price; after all, it’s their investment as well. The bank will require a third-party appraisal to determine the appropriate loan amount.

However, if you find yourself pining over a property that has appraised for more than the bank will lend, you still have options. You can offer to put down more of your own cash up front to close the gap between the mortgage amount and the purchase price of the home. You may also consider renegotiating the price with the seller based on the appraisal amount.

Title Contingency

Similar to used car purchases, homes need to have a “clean” title for the sale to go through. The title discloses who currently owns the home and ownership history. Some sellers may have had issues in the past with liens or other encumbrances that limit what they can do with their homes, including selling it. Buying a home that has claims against the title poses a substantial risk.

A title contingency protects the buyer because it requires that any claims or other title issues be cleared up before the sale of the property is completed. Even after the title is clear, buyers should get title insurance in case another title claim issue arises in the future.

Home Sale Contingency

A home sale contingency is put in place when the sale of the property is dependent upon the buyers selling their current home first. In a seller’s market, this type of contingency will likely be rejected because it’s basically asking the seller to risk an unknown when they could easily accept one of the other offers.

However, if you’re a buyer who needs to offload your current home before buying a new home, hope is not lost. Your lender may be willing to offer you a bridge loan. You can also try to ask for a closing date that will give you more time to sell your current home. It’s important to note that sellers who have their own timeline may not accept your proposed closing date. However, if the seller is in a similar situation where they are looking for a new home before selling their own, they may be more amenable to waiting.

What if a Real Estate Contingency is Not Met?

The homebuying process is based on contracts, and contingencies are a part of those contracts. So, when a contingency is not met, the contract may be considered void. Of course, before buyer and seller decide to go their separate ways, there could be room for more negotiating. For example, if a buyer fails to fulfill a mortgage contingency, the seller can dissolve the deal. But the seller and buyer may also agree to extend the buyer’s time to secure financing.

What Are the Pros & Cons of Contingent Offers?

Adding a contingency to your offer, if you choose to add one at all, is a personal decision. The market, type of property, and your personal situation can all be factors that drive your choice to add contingencies into your contract. Whether you add them or exclude them, the fact remains that they are in place to protect the parties’ interest. Let’s look at some of the pros and cons of either decision.

Cons: Some Things to Consider About Contingencies in Real Estate Offers

Seller Might Prefer an Offer with No Contingencies in Place

Contingencies are often put in place to protect the buyer from incurring certain financial losses, namely earnest money. Because of this, sellers may reject offers that come with contingencies. Keep in mind that sellers also consider the profit potential, and a list of contingencies could be more of a financial hit to their bottom line than they are willing to take.

In a seller’s market, adding contingencies is an even more risky proposition because sellers have myriad offers to consider and may decide to accept an offer that is more straightforward and requires no additional financial investment on their side (i.e., a request to repair a roof or repave a driveway). While you should never be afraid to ask for what you want in your contract, you should be aware that the longer the list of contingencies, the less likely it is your offer will be accepted by the seller.

Your Options Might Be Limited While Under a Contingency Clause

Placing a home sale contingency or any other contingency that causes the seller to wait on you can limit your homebuying options. A seller who is looking to offload their property in a certain time frame probably will not want to base the sale of their home on whether your current home sells due to unpredictability. If you must include this type of contingency, make sure you craft a stronger offer that may make the seller feel that the wait is worth it.

Might Overly Complicate the Entire Transaction

Contingencies are conditions that must be met before a transaction can be finalized. Therefore, adding these conditions inherently makes a straightforward process more complex. One contingency may be doable. But when multiple contingencies come into play, that means more people become involved in the transaction which can cause a lot of added stress to both buyer and seller.

Pros: Reasons Why You Might Want Contingencies in Your Offer

They Can Protect You & Your Real Estate Transaction

Contingencies protect you and the real estate transaction. Not setting certain conditions of the deal can open you to significant financial risks such as losing your earnest money or having to produce extra cash to remedy problems that could be covered by contingencies.

Buyers & Sellers Can Protect Their Investments Easier

While buyers and sellers are the stars of the homebuying show, each of the parties make other investments into the process; namely their time and assets. For sellers, contingencies may mean they lose out on the profit potential of their home. For buyers, contingencies can help avoid spending too much money and other resources on a home that may not live up to their expectations.

Ensures You’re Getting What You Want Out of the Deal

Although there is some give and take during the negotiation process, ideally, both the buyer and seller should walk away from the transaction satisfied and feeling as if they received a fair deal. Contingencies are a good way to make sure that nobody feels taken advantage of and that the investment, be it time or money, is protected.

Article shared from The CE Shop Team December 2, 2024

Selling • December 16, 2023

If Your House Hasn’t Sold Yet, It May Be Overpriced

by Debbie Marett

I have this conversation often when I meet with sellers prior to listing their home.

I take the time to prepare an in depth market analysis on their property, analyze comparable homes and recent sales in their area. Sometimes there is data that “the public” cannot see on the actual final sold price of a home in their neighborhood.

Has the seller offered closing costs to the buyer?
Did the sellers have costs in repairs and if so, how much?
Did the property make the lenders appraisal value and if not, did the seller have to adjust the sales price to move forward on the contract and get to the closing table?

Once the home is presented/listed to the market, over pricing is a big mistake.

The offer price needs to be in line with what the market says the home is worth.

Overpricing for the sake of “negotiating room” is one of the biggest mistakes sellers make. The percentage of buyers who will look at your home at market value is about 60%. As the price versus market value goes up this percentage drops considerably. Getting traffic is the prerequisite to getting offers!

Has your house been sitting on the market a while without selling? If so, you should know that’s pretty unusual, especially right now. That’s because the supply of homes available for sale is still far lower than what we’d see in a normal year. That means buyers have fewer options than they usually would, so your house should be an oasis in an inventory desert.

So, if homebuyers have limited choices and your house still hasn’t sold, there’s a reason why. Let’s break one potential sticking point that may be turning buyers away: your asking price.

Especially with today’s higher mortgage rates already putting a stretch on their budget, buyers are being a bit more sensitive about price. As a recent article from the Wall Street Journal (WSJ) says:

“If you are serious about selling your home now, don’t get greedy with the asking price. This is still a seller’s home market as there simply aren’t enough affordable homes for sale in many parts of the country. But with average 30-year mortgage rates above 6%, buyers are much more price-sensitive than they were a year ago.”

Why Setting the Right Price Matters

While you want to maximize the return on your investment when you sell your house, you also need to be realistic based on current market conditions. The simple truth is your house is only going to sell for what people are willing to pay right now.

This can be a hard thing to accept. Especially since emotions can run high during the selling process, which only complicates matters more. After all, you may have lived in this house for years, so it’s only natural you’re emotionally tied to it – and those heartstrings can make it harder to be objective.

But it’s important to acknowledge that a bigger-than-expected price tag deters buyers and may make them dismiss your house as a possibility before even seeing it. And if no one’s looking at it, how will it sell?

If you want to get your house sold, you’ll need to do something to spark interest in your home again. That’s where a local real estate agent comes in. They’ll help use data to find out if it’s priced too high for your local market. They balance the value of homes in your neighborhood, current market trends and buyer demand, the condition of your house, and more to find the right price for your house, so you can close this chapter and start your next one.

Bottom Line

While it’s true there aren’t that many homes available for sale right now, your home’s asking price still matters. And, if it’s not selling, it may be priced too high.

Building a Home • December 9, 2023

The Expert Guide of Home Building Terminology

by Debbie Marett

Great Article Shared from a Local builder – David Weekley

Learn about the home building process with this list of home construction terms and definitions written to be easy to understand.

Home Building Glossary

The field of home building is often where skilled craftsmanship meets specialized knowledge. With the specialized knowledge comes a lot of specialized language and terms used in the day-to-day work of Builders. Homebuyers are often curious about what the jargon means, so we’ve created a helpful guide to offer more clarity.

This glossary provides clear definitions and detailed descriptions of common home building terms, allowing you to confidently know and understand terms used in home building.

A/C Condenser

What is an A/C Condenser?

The Condenser is the big metal air conditioning cabinet on the outside of your home. Metal coils inside the condenser fill with heated coolant so the heat can be dispersed outside the home by the fan. The chilled coolant then returns to the indoor part of the air conditioning system to keep your home at just the right temperature.

Acre

How Big is an Acre?

An acre is a standard measurement for tracts of land. One acre is equal to 43,560 square feet, or 4,840 square yards. An American football field, including the end zones, covers 1.32 acres.

Aggregate

What is Aggregate in Construction?

The gravel, sand, stone and other materials combined with cement and water are used to form concrete. The admixture of aggregates changes depending on the intended purpose of the resulting concrete.

Air Space

What is Air Space in Home Building?

Air space is the gap between the interior architectural structure of your home and the exterior surface of your home.

Alcove

What is an Alcove?

An alcove is a recessed portion of a wall, creating a partial addition to a room. One of the most common types of alcoves is the Bay Window, which typically bumps out a living or dining space wall to allow additional natural light and cozy seating.

Anchor Bolt

What is an Anchor Bolt Used For?

An anchor bolt is a heavy-duty metal rod used to secure a home’s foundation to the sill plate, thus “anchoring” the home to the foundation.

Attic

What is an Attic?

An attic is the space directly below the roof in homes with a pitched roof.

Backing

How is Backing Used in Home Building?

Backing refers to frame lumber used between structural studs of the home. This backing lumber adds extra support for hanging drywall and can be used for sturdier hardware installation.

The Coleton in Colorado Springs - Staircase

Balusters

What are Balusters?

The balusters are vertical posts supporting the handrail (banister) along a stairway.

Banister

What is a Banister?

A banister is the handrail build alongside a stairway, typically supported by Balusters.

Board Foot

What is a Board Foot?

A board foot is the basic unit of measurement for lumber. One board foot is 1’ thick, 12” wide and 12” long. A 3-foot-long piece of 2×6 lumber would be 3 board feet.

Cathedral Ceiling

What is a Cathedral Ceiling?

A cathedral ceiling is a high, double-sloped ceiling with its highest point at the center. This arched shape is inspired by cathedral architecture and is especially popular in open floor plans where the ceiling can run the full length of a living space. The angle of a cathedral ceiling matches the slope of the roof.

Caulking

How is Caulking used in home building?

Caulking is used to seal gaps between various home building materials and features. This helps prevent water, dust and insects from intruding into the home and improves a home’s energy-efficiency.

Dimension Lumber

What is Dimension Lumber?

Dimension lumber refers to the sturdy wood planks used to finish and shape a home’s frame. 2-inch by 4-inch lumber is the most common type. Advanced framing techniques typically use 2-inch by 6-inch dimension lumber.

Door Jamb

Which Part of the Door is the Jamb?

The door jamb is the inner portion of the door frame that the door hangs from and fits into when closed.

Easement

What Does an “Easement” Mean for My Home?

An easement is a portion of a private property that other parties are legally allowed to access for various purposes. A common type of easement allows utility service workers to access parts of properties to work on electrical and telecom lines.

Eaves

What Are the Eaves of a House?

The eaves are horizontal portions of the roof that extends out beyond the outer wall of the house. Eaves direct water away from the foundation, extend the lifespan of the home’s siding and helps prevent water intrusion.

The Providence in Portland, OR - Front and Side Exterior

Façade

What Is a Façade on a House?

The façade refers to the front, public-facing exterior of a home. Façade is a term more commonly used in non-residential buildings. In home building, the front exterior is often referred to as the elevation.

Flashing

What Does Flashing do?

Flashing is the weather-proofing sheet metal applied to a variety of seams and joints to help prevent water from seeping into the structure of a house. There are several applications of flashing you may hear referenced, such as base flashing, cap flashing, counter flashing, drip caps, pitch flashing, step flashing, valley flashing, J flashing, l flashing and z-bar flashing.

Gain

What Is a Hinge Gain?

A gain is a notch cut into a door frame to fit a hinge, thus allowing the door to close flush.

GFCI

What Is a GFCI Outlet?

GFCI stands for “Ground Fault Circuit Interrupter.” These are electric outlets that are purposefully designed to be extra-sensitive to power surges and to shut off at the hint of one. They include reset buttons on the front of the outlet to easily return to operation after the shut-off mechanism has been tripped. You’ll often find these installed in kitchens, bathrooms and outdoor outlets.

Hardware

What Does “Hardware” Mean in Home Building?

In home construction, hardware refers to the metal fittings installed during the final stages of building a home. These include things like door knobs, locks and towel bars.

Hose Bib

What Are Hose Bibs Called?

A hose bib is a water faucet located on the exterior of a home. Hose bibs are also called, perhaps more commonly, spigots. They may also be called sillcocks, though a sillcock is technically a different type of spigot than a hose bib.

Hot Wire

What Is the Hot Wire in a House?

Hot wires are black or red electric lines running through the walls of a house. These lines carry an electric current, as opposed to neutral wires, which are usually white.

Infiltration

What Is Infiltration in a House?

Infiltration is an HVAC term that refers to the unwelcome entry of external air and escape of conditioned interior air via unsealed gaps in the home’s envelope. Infiltration decreases energy efficiency and allows dust to enter the home.

Irrigation

What Is an Irrigation System in a House?

Home irrigation refers to the sprinkler or other watering system installed to maintain a home’s landscaping in times of inadequate rainfall.

Joist

What Is a Joist in a House?

Joists are the oversized pieces of lumber laid horizontally as part of the structure of ceilings and some floors. Joists transfer the weight of the structure above to load-bearing vertical beams.

Keeper

What Part of the Door Is the Keeper?

The keeper is the metal plate attached to the door frame. The door knob plunger fits into the keeper when the door is closed.

King Stud

What Does the King Stud Do?

King studs support the top plate on either side of openings, including windows and doors, where the regular interval of wall studs may be interrupted.

nee Wall

What Is the Purpose of Knee Walls?

A knee wall is a short, vertical wall that supports the rafters and closes off the small, unusable portions of an attic. Knee walls are typically between 2 and 3 feet in height.

Landing

What Is the Landing in a House?

The landing is a larger section of a staircase, typically where one flight of stairs ends and a new flight begins in a different direction or where the staircase ends.

Lap Siding

What Is Lap Siding?

Lap siding refers to overlapping wedge-shaped siding installed horizontally. The overlapping slats, when installed correctly, direct water away from the home.

Lot Line

What Is a Lot Line in Real Estate?

The lot line refers to where one piece of property ends, and another abutting piece of property begins. For a home, the lot line (also known as property line) is the boundary between your homesite and those of your neighbors. Fences are typically built along these lines, though not always exactly.

Masonry

What Is Masonry on a House?

The stone or brick-and-mortar structure of a home is commonly known as masonry. There are other substances, such as concrete blocks or clay tiles, that may also be referred to as masonry, especially when discussing historical or non-residential building techniques.

Mastic

What Is Mastic Used For?

Mastic is an adhesive substance used in bonding a variety of building materials, including its use as a sealant to connect HVAC ducts. It is very similar to the type of plaster you might think of as being used by hospitals to make casts.

Moisture Barrier

What Does a Moisture Barrier do?

Moisture barriers are specially treated materials designed to keep outside moisture where it belongs: outside your home. The exact type of material and how it is applied will vary by climate and region.

Newel

What Is a Newel?

The newel is the structural post at the top and bottom of a staircase’s handrail. There may be additional newel posts at landings or where a stairwell turns.

Nonbearing Wall

What Is a Nonbearing Wall?

Nonbearing walls serve to separate spaces but do bear the load of the home’s structure. If you watch home renovation TV shows, you’ve likely seen one or two Nonbearing Walls get demolished with little more than a sledgehammer and an abundance of gusto.

Plat

What Does a Plat Mean on a Map?

A plat map shows the layout of a new community in development. More specifically, it shows the location and boundaries of the individual homesites (or “lots”) throughout the community. A Plat Map is usually most important to Homebuyers when purchasing a to-be-built home and taking homesite selection into account.

Plumbing Rough-in

What Does Plumbing Rough-in Mean?

When a home builder talks about plumbing rough-in, they’re describing the installation of the pipes and water lines that will connect the home to water utilities. Later in the process, this rough-in plumbing will be finished with fixtures to become functional. In some instances, such as an unfinished basement, the rough-in plumbing is left unfinished and ready for future living space expansion.

R-Value

What Do the R-Values Mean?

The R-value of a building material is the measurement of its ability to resist heat escaping or intruding through it. The higher the R-value, the better the material acts as insulation. For example, steel has a very low R-value because it allows a lot of heat to transfer through it (which is why steel makes good cooking pans). Lumber and drywall have higher R-values than steel, but even these values are much lower compared to purpose-made insulation, such as fiberglass or polystyrene.

Rake

What Is the Rake of a Roof?

The rake is the angled overhang of a roof. Essentially, they’re the non-horizontal eaves of a gabled portion of the roof. They typically extend from an eave at the bottom to the roof ridge at the top. The rake siding and rake fascia refer to pieces of the rake that redirect water down and away from the home, helping protect against water intrusion and deterioration of the home’s siding.

Riser

What Is a Stair Riser?

The riser is the vertical portion of a stair step underneath the tread. When discussing the “rise and run” of a staircase, the “rise” refers to the height of the risers, which determines the vertical distance between one tread and the next.

Setback

What Is a Home Building Setback?

A setback dictates how far in from the property lines a home or related structure can be built. Setbacks vary by local restrictions, HOA rules, and developer preferences.

Slab Foundation

What Is a Slab Foundation?

A slab foundation involves pouring concrete onto a space prepared for the home. This will typically include a sand drainage pad, steel reinforcement, and a wooden frame. Once the concrete is dry, the home can be built on top of it. Homes built on a slab foundation do not have a crawl space.

Soffit

What Is the Soffit on a House?

The soffit is the protective material covering the underside of an eave that finishes the enclosure of the attic. Soffits are sometimes part of the attic’s ventilation system. The type of soffit used to finish an attic depends on the length of the eave, as well as the ventilation needs of the particular attic.

Top Plate

What Is a Top Plate?

The top plate is the top-most piece of lumber of a home’s wall frame. The rafters of the roof rest on the top plate, which supports and helps distribute the weight of the rafters evenly to the frame lumber below.

The Bridges in Charleston, SC - Front Exterior

Transom Window

What is the Window Above the Front Door Called?

Transom windows are smaller windows situated above doors and other windows to add decorative interest and allow more natural light into the home. Half-moon transom windows are sometimes referred to as fanlights.

Tread

What Is the Tread in a Stair?

The tread is the top, horizontal part of a stair step. It’s the piece you step on to climb up or down a staircase. The “nose” is the portion of the tread that overhangs the riser (the vertical surface of a stair step). When discussing the “rise and run” of a staircase, the “run” refers to the depth of the treads.

Vaulted Ceiling

What Is a Vaulted Ceiling?

Vaulted ceilings extend upward from the walls and typically peak at the center. They create more vertical space in a room. Vaulted may or may not meet at the same height at the center. There are non-parallel types of vaulted ceilings, such as shed ceilings, that allow the room’s vertical space to be offset.

Weep Hole

What Does a Weep Hole do?

Weep holes are small gaps in the mortar of a brick wall that allows water from within to evaporate and exit the structure.

Market Info • November 16, 2023

The Good News for Real Estate Investments in 2024

by Debbie Marett

The 2023 housing market has seen many ups and downs, leaving investors wondering what to expect in 2024. The good news is that regardless of interest rate increases and lower than average inventory, real estate investments remain one of the most lucrative areas to invest in as we head into the new year.

High Demand Means High Return

One of the central trends that defines the market today is low inventory and high demand. According to Lawrence Yun, Chief Economist for the National Association of REALTORS®, “Lack of supply is behind ongoing multiple offer scenarios on moderate- to mid-priced homes.” This demand is also fueling rising home prices, which NAR predicts will increase from an average of $384,900 in 2023 to $395,000 in 2024. This “seller’s market” can work in favor of the investor. Those who purchase, upgrade and list a property could see a quick sale and solid return. For investors waiting to list a property they already own, now is the time.

Mortgage Rates Expected to Stabilize

Although interest rates have been nearing 7% recently, Fannie Mae predicts an average rate of 6.5% in 2024. This could lead to more buyers entering the market in late 2024 and into 2025. Strong job growth may also contribute to buyer demand. The Federal Open Market Committee forecasts the unemployment rate to average a “healthy” 4.1%, an important factor that should positively impact the real estate market as a whole.

Consumer Confidence is Growing

Investors will be happy to learn that consumer confidence is rising, a positive sign of good things to come. According to the Coldwell Banker® 2023 International Consumer Survey, a significant number of respondents say they are optimistic about the state of the U.S. real estate market. In fact, 80% of luxury consumers believe purchasing real estate in the United States is a safe investment, and 76% rate the current market conditions to purchase a home as “excellent” and/or “good.”

New Construction on the Rise

To answer the housing demand, new builds are expected to increase next year. The National Association of Home Builders predicts that single-family production will rise from an average of 744,000 units in 2023 to 925,000 in 2024. Newly constructed homes could not only be a promising investment opportunity – they are also expected to lessen demand and help stabilize home prices.

Rental Property Remains a Reliable Investment

Although most experts predict that rent growth to decelerate in 2024, rental property is still a reliable real estate investment. People who take advantage of the market by selling their current home often need to move into a rental unit as they transition, ensuring investors have plenty of potential lessees. Rental income also helps offset higher mortgage rates for the investor, and rental property offers owners the benefits of long-term appreciation and various tax breaks.

Buyers are Motivated

Regardless of market trends, life goes on, and housing needs evolve. Retirees, growing families and divorcing couples don’t often have the luxury of waiting for the perfect time to move. Investors should also consider the increased mobility that comes with work-from-home buyers. Many are heading to more affordable regions, leading to pockets of growth that investors can take advantage of.

Whether the market is trending up or down, smart investors pay close attention to current trends and adjust their strategy accordingly. Once you understand the real estate landscape, you can confidently plan your next move.

Shared via Coldwell Blue Matter : https://blog.coldwellbanker.com/the-good-news-for-real-estate-investments-in-2024/?fbclid=IwAR2OAc7ySLzTn-cMl78Pi_0jU7CDuP3lt6fao9WlwIWHgkNYD9rsibIvctQ