Planning to retire? It could be time to make the move.
You may be planning your next steps if the thoughts of retirement have crossed your mind lately. One of your goals could be selling your house and finding a home that more closely fits your needs.
Fortunately, you may be in a better position to make a move than you realize. Here are a few things to think about when making that decision.
Consider How Long You’ve Been in Your Home
From 1985 to 2008, the average length of time homeowners typically stayed in their homes was only six years. But according to the National Association of Realtors (NAR), that number is rising today, meaning many homeowners are living in their houses even longer (see graph below):
When you live in a home for a significant period of time, it’s natural for you to experience a number of changes in your life while you’re in that house. As those life changes and milestones happen, your needs may change. And if your current home no longer meets them, you may have better options waiting for you.
Consider the Equity You’ve Gained
Additionally, if you’ve been in your home for more than a few years, you’ve likely built up significant equity that can fuel your next move. That’s because the longer you’ve been in your home, the more likely it’s grown in value due to home price appreciation. Data from the Federal Housing Finance Agency (FHFA) illustrates that point (see graph below):
While home price growth varies by state and local area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by over 50%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time.
Consider Your Retirement Goals
Whether you’re looking to downsize, relocate to a dream destination, or move so you live closer to loved ones, that equity can help you achieve your homeownership goals. NAR shares that for recent home sellers, the primary reason to move was to be closer to loved ones. Plus, retirement played a large role for those moving greater distances.
Whatever your home goals are, a trusted real estate advisor can work with you to find the best option. They’ll help you sell your current house and guide you as you buy the home that’s right for you and your lifestyle today.
Retirement can bring about major changes in your life, including what you need from your home. Connect with a trusted real estate advisor to explore the opportunities in your local market.
Buyers may have more power than they realize right now
If you dig into the data, you’ll find that many homebuyers might actually be in the driver’s seat right now, even with the rising cost of homes.
In October, home prices continued to drop from the record-high prices we saw in the summer, according to a recent report from Realtor.com®. Plus, the number of houses on the market is up nationally 33.5% year over year, according to our data. Houses are lingering on the market, too, for 51 days on average—which is 6 more days than last year. That shift means that sellers are more likely to price homes competitively.
My advice for new agents is to first pick the best brokerage that fits your goals. Do they offer any training or coaching to help set you up for success?
Some brokerages may only offer a certain level of training so another good tip is to reach out and find additional training opportunities.
From my personal experience, having a schedule to stick with is important. It’s always a busy time and things come up all the time, so sticking to a schedule has helped me.
Another tip that I’ve noticed is creating marketing materials for yourself. Whether it’s business cards, direct mail materials, or automated emails to new leads.
You don’t have to do everything by yourself either. I’ve hired assistants and marketers to help me gain transactions and generate leads to further help my success efforts.
Mentoring is another big one for new agents to reach out to and learn the business from an experienced agent like myself, who can take time to share insights on starting a career in real estate.
Things to avoid after applying for a home loan
Once you’ve applied for a mortgage to buy a home, there are some key things to keep in mind. While it’s exciting to start thinking about moving in and decorating, be careful when it comes to making any big purchases. Here are a few things you may not realize you need to avoid after applying for your home loan.
Don’t deposit large sums of cash
Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
Don’t make any large purchases
It’s not just home-related purchases that could disqualify you from your loan. Any large purchases can be red flags for lenders. People with new debt have higher debt-to-income ratios (how much debt you have compared to your monthly income). Since higher ratios make for riskier loans, borrowers may no longer qualify for their mortgages. Resist the temptation to make any large purchases, even for furniture or appliances.
Don’t co-sign loans for anyone
When you co-sign for a loan, you’re making yourself accountable for that loan’s success and repayment. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.
Don’t switch bank accounts
Lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.
Don’t Apply for new credit
It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), it will have an impact on your FICO® score. Lower credit scores can determine your mortgage interest rate and possibly even your eligibility for approval.
Don’t close any accounts
Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those aspects of your score.
In short, consult an expert
To sum it up, be upfront about any changes when talking with your lender. Blips in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. Ultimately, it’s best to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.
Bottom line is you want your home purchase to go as smoothly as possible. Remember, before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.
Are There More Homes Coming to the Market?
One of the top challenges buyers face in today’s housing market is finding a home that meets their needs, according to a recent survey from the National Association of Realtors. That’s largely because the inventory of homes for sale is so low today.
If you’re looking to buy a home, you may have noticed yourself. There is good news! Recent data shows more sellers are listing their houses this season, which may give you more options for your home search.
Early signs inventory may be growing
The latest data shows the number of listings coming onto the market, known in the industry as “new listings,” has increased since the start of the year (realtor.com).
This indicates more sellers are listing their home for sale each month this year and this growth is expected to continue, according to realtor.com. Their research finds the majority of potential sellers plan to list their homes over the next six months.
Home are still selling quickly
But while new listings are increasing, it is important to know they are also selling quickly. The latest Realtors Confidence Index from NAR shows the median days on market for recently sold homes since the beginning of the year. The time on market has decreased month-over-month. That means homes are selling even faster than they did the previous month.
Key Terms in Real Estate
- Knowing key housing terms and how they relate to today’s market is important. For example, when mortgage rates and home prices rise, it impacts how much home you can afford.
- Terms like appraisal (what lenders rely on to validate a home’s value) and the inspection contingency (which gives buyers essential information on a home’s condition) directly impact the transaction.
- Buying a home can be intimidating if you’re not familiar with the terms used throughout the process. Lean on a trusted advisor so you have an expert guide and advice for any questions that may come up.
PRICING YOUR HOME MATTERS
It is obvious, when you make a move, you want to sell your home for the highest price possible. That might be why many homeowners are eager to list in today’s sellers’ market. After all, with record-low inventory and high buyer demand, many homes are selling for more than asking price. Data from the National Association of Realtors (NAR) shows 46% of homes are selling above list price today. But even in a market like we have now, working with an agent to set the right asking price is critical, as pricing it too high or too low could have a negative impact on your final sale.
In a Sellers’ Market, pricing your House right is Crucial
The price you set for your home sends a message to potential buyers. Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with the property. Not to mention, you could leave money on the table, which decreases your future buying power if you undervalue your home. On the other hand, price it too high and you run the risk of deterring buyers. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.
In other words, think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value. Pricing
your home fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see a bidding war, too. And when a bidding war happens, you’ll likely get an even higher final sale price. Plus, when homes are priced right, they tend to sell quickly.
To get a look into the potential downsides of over or underpricing your home and the perks that come with pricing it at market value, see the chart below:
To price your house right, lean on a professional’s expertise
It is important to lean on an expert real estate advisor when you’re ready to move because they are several factors that go into pricing your home and balancing them is key.
A local real estate advisor is knowledgeable about:
- The value of homes in your neighborhood and nearby
- The current demand for homes in today’s market
- The condition of your home and how it affects the value
- What you should do to your home before listing
A real estate professional will balance these factors to make sure the price of your home makes the best first impression and gives you the greatest return on your investment in the end.
The Bottom Line
Even in a sellers’ market, pricing your home right is critical. Don’t rely on guesswork. Work with a trusted real estate advisor
to make sure your home is perfectly priced, like us, Broker Direct Realty Group.