Category Archives: homebuyers

More sellers tried to negotiate agent’s commissions last year

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More than half of sellers in 2016 attempted to lower their listing agent’s commission.

According to a recent survey from SurveyGizmo and Redfin, 57 percent of sellers tried to negotiate, an increase of 5 percent from June. And millennials are the generation most likely asking for a break. Nearly two-thirds report they asked their agent for a lower commission rate. Fifty-eight percent of Generation X members and 39 percent of baby boomers so tried to negotiate.

For buyers, 49 percent reported receiving a refund, a contribution toward closing costs or something else worth at least $100. This is an increase of 3 percent from June.

The survey also found that political opinions continue to be a hot issue these days. Nearly half of respondents (42 percent) reported they would hesitate to buy in an area that had differing political views. Millennials (47 percent) were the highest generation with qualms.

Online statistics continue to increase in popularity. Ninety-five percent of sellers checked their home estimates online, while 72 percent of sellers said they checked the estimates of their home value, on sites like realtor.com®, at least once a week before they put their home on the market. Twenty-two percent checked daily, or close to. Not surprisingly, millennials were the most likely to check the most often, as 78 percent checked at least once a week, and 28 percent checked daily or close to.

Home estimates impacted buyers too, as 84 percent checked estimates online, and said it affected their buying plans.

However, Americans are more worried about the income gap, as well as affordable housing in the country. Forty-two percent reported that the income gap is their biggest concern, while 41 percent said they are concerned about affordable housing. Thirty-five percent are worried about the federal budget deficit.

Homebuying, mortgage process stressful for many consumers

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Forty-two percent of homebuyers reported that the homebuying process was stressful, according to NerdWallet’s Home Buyer Reality Report.

Nearly one-third said it was complicated, while 21 percent reported it was intimidating. However, 30 percent described the experience as rewarding, while 41 percent it was manageable. Yet, 49 percent reported they would do something differently if they were homebuying again.

Mortgage applications are still confusing many homebuyers, as 58 percent of homebuyers applied for one. Forty-one percent of homebuyers who did apply said they were not sure of all the options available to them. And 28 percent said they did not feel like a priority to their mortgage professional during the loan process. Overall, 89 percent of applicants were approved for a loan to buy their house.

Among generations, 27 percent of millennials believed their mortgage rate was affordable when they purchased, and 39 percent said the mortgage process was positive. Eighty-nine percent of millennials who applied were approved. However, 11 percent of millennials said that after purchasing their home, they didn’t feel financially secure anymore. More than half (57 percent) said they had regrets in their homebuying experience.

Only a quarter of Generation X members reported a positive experience with the mortgage process, but 91 percent of Gen Xers were approved for one. Twelve percent reported not feeling financially secure after homebuying. Sixty-one percent reported that they would do something differently when homebuying again.

As for baby boomers, 25 percent found the mortgage process stressful, but 42 percent said it was manageable. Sixty-five percent said they believed they were aware of all their options for mortgages during the process. Only 6 percent said they did not feel financially secure after they bought their house, but 38 percent of baby boomers would act differently when homebuying again.

Existing-home sales kick off 2017 hitting decade high

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Existing-home sales increased 3.3 percent, and reached a 10-year high in January, according to the National Association of Realtors® recent release.

Sales hit 5.69 million, the strongest sales pace since February 2007. The sales pace is 3.8 percent higher than January 2016, but the median home price rose 7.1 percent year-to-year to $228,900. This is the 59th consecutive month representing year-to-year price increases.

Nearly every region, excluding the Midwest, saw increases. In the Northeast, sales rose 5.3 percent, increasing to an annual rate of 800,000, 6.7 percent higher than January 2016. The median home price was $253,800, up 2.5 percent from this time last year.

“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” he said. “Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability condition,” said Dr. Lawrence Yun, chief economist at NAR.

First-time homebuyers represented a third (33 percent) of purchasers, an increase of 1 percent from December and last January.

Housing inventory saw an increase of 2.4 percent, rising to 1.69 million existing homes for sale. However, it is still 7.1 percent below January 2016’s housing inventory, which was 1.82 million. Time on the market has also dropped from 52 days in December to 50 days in January.

All-cash sales represented 23 percent of purchases, a 2 percent increase from December, but a 3 percent decrease from January 2016.

“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range,” said Yun. “The combination of higher rates and prices led to households in over half of all states last month being able to afford less of all active inventory on the market based on their income.”

 

Real estate pro offers advice on those hard-to-sell homes

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If you have that house on the market that just isn’t selling, Matt Parker, real estate professional and author of three real estate books, is here to help.

First, if your homeowners are staying in the home they are trying to sell, Parker suggested if they can afford to get out first, they should. If they can’t, make sure personal touches, such as photos, are not displayed, and keep the family pet out of the house during showings, he advised.

“Approach the condition of the home as a hotel would be, neutral,” said Parker. “It is tempting to get personal with the sellers, assuaging their love of their decor and tastes. But, the process is about buyers feeling comfortable in a potential space, not sellers enjoying their lifestyle. If you do it correctly, it doesn’t take long.”

While preparing to put their home on the market, some owners grow frustrated or tired, Parker said. “They just throw their hands up and say ‘I am not cleaning those gutters.’ Sellers have to remember, it doesn’t matter how tired they are, it matters how buyers feel in their home. Take the time to prepare your home correctly for the market, it will make the difference financially, and, from a stress standpoint.”

As for sprucing up homes, Parker said, in his experience, some sellers try to give buyers a “paint allowance.”

“This has never worked in the history of real estate,” he said jokingly. “Really, it doesn’t work. Buyers want move-in ready, not ‘I think this would be fun to prep, paint and then move in.’ It’s very easy and fast to modernize your home with gray and white paints and trim. It can add a real classy touch to your home. Don’t ever use atypical colors, or, colors that lend themselves to preferential taste, like pink.”

And what are Parker’s top tips? “Use professional photos, make sure the listing is listed on all MLS sites and all relevant non-MLS sites,” he said.

 

Winter months are when buyers are more likely to find deals

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Winter is a good time for homebuyers.

NerdWallet researched two years of homes for sale on realtor.com® in 50 metro areas and found that home prices in January and February were, on average, 8.45 percent lower than homes listed in the summer months, June through August.

However, Jonathan Smoke, realtor.com®’s chief economist said that sales in October and November 2016 were stronger than usual, due to the lack of inventory on the market, so January and February may not see as low of prices as they have in the past. But NerdWallet reported that January is still a good time to buy because, on average, less people are searching for a home, instead waiting for the spring and summer, so there will be less competition. Last year, NerdWallet found there was a decrease of 47 percent in sales in January compared to June. There is also a decrease in inventory. In 2016, there were 21 percent less homes on the market in the summer compared to the winter.

“Prices are likely to increase even more than you typically see in spring because of low levels of inventory and because we didn’t see the normal weakness we see in fall,” Smoke said. “You basically face almost half of the competition with almost the same amount of inventory in the market. This potentially means fewer homes with multiple bidders and more room for negotiating with sellers.”

In the past two Januarys, the median home on the market sold for more than $7,000 under the listing price- making winter a pretty good time for buyers.