The Home Seller?s To-Do List for 2020
As the new year takes its first steps, the real estate business is closely analyzing 2019 to see what 2020 will bring. There were some pretty exciting developments last year, and they?ll definitely play a major role in the future. In fact, some trends, like those that SpendMeNot?s real estate market research noted, will be pivotal for anyone looking to sell this year.
So what will it take to turn the real estate market in your advantage as a property seller in 2020? Here?s a useful and to-the-point guide to tell you exactly that.
Prepare for Slow Growth of Home Prices
In line with the growth we?ve seen thus far, house prices should be increasing somewhat in the current year. This growth probably won?t be all that radical, measured at 2.8% by some estimations, but it will nevertheless impact the way you go about your job.
One consequence that you can look forward to is the fact that you?ll probably be making more of a profit. Though not an amazing rate, a bit shy of 3% is nothing to scoff at.
That said, you won?t be overjoyed when you hear that you probably won?t see as many offers as you could have in 2019. An increased price will unavoidably narrow down the amount of people that can afford to make an offer you?ll be satisfied with.
Overall, it?s a bit of a give-and-take situation where you need to take advantage of both the good and the bad. The best way to do that, in this case, would be to make your house stand out as much as you can. In the highly discriminating market we?re looking at right now, a property with more to offer will get a lot more attention from buyers.
Facts About?Housing Data
- 50% of buyers?found their home on the internet
- 5.34 million existing homes were sold in 2019
- The US housing market was worth?$33.3 trillion?in 2018
- Sales of existing homes will fall?1.8% from 2019
- The cost of renting has gone up by?66%
- 6% of younger millennials were first-time homebuyers
Cater to Today?s Main Buyers: MIllennials
Millennials (people born roughly between the 1980s and 2000s) currently represent the majority of home buyers. How large a majority? As many as 67% of all buyers come from this generation.
What does this mean for you? Well, it means that, if you want results, you will need to adjust the way you sell. Here are a few pointers to help you do that.
Highlight certain features that they?re on the lookout for. Garage storage, patio, laundry room, and hardwood front exteriors are among the popular home features for millennials, but there are plenty more, so don?t worry if your property doesn?t have those. Highlight the ones that it does have, though, and you?ll quickly see more interested parties.
Make sure that your online listings are high-quality. Practically everyone (especially millennials) relies on the internet to find whatever they need, and homes for sale are no exception. Therefore, anything you have about your property online should be updated and looking sharp - high-quality photos and a video recording of the place will get you a long way.
Emphasize qualities other than square footage. Nine times out of ten, given a choice between a large house and one that?s near good schools or has a good commute, millennials will choose the latter. As long as you make these perks a priority to emphasize, you?ll do great.
Expect Low Mortgage Interest Rates, but Don?t Count on Them
Last year, mortgage interest rates fell under 4% for common kinds of loans. For 2020, the trend will likely remain the same, and this rate shouldn?t go anywhere above 3.7%. That said, interest rates can fluctuate depending on economy shifts, so it isn?t a prophecy set in stone.
For you, a low interest rate will translate into more interest from people. It?s only logical, after all, since they will have to pay less overall in these conditions. But there?s little guarantee that the rate will stay as is, so be prepared for the opposite.
Should the interest rate rise, you?ll see plenty of prospects beginning to hesitate, so you?ll likely be in a bit of a bind if you?re pressed for time to sell that house of yours. It could theoretically swing either way, but the chances are that the rates will stick to their current estimates.
Why Credit is Your Secret Weapon in Getting a Mortgage
Do you know how important your credit is in obtaining a mortgage? It is the secret weapon that will put you at the top of the lender?s list to approve your mortgage. But you have to do some work to ensure that your credit is ready to take on a mortgage. Before you start the house-hunting process you need to have your ?Credit House? in order.????
There are three critical aspects of obtaining a mortgage; your credit report, the money you have allotted for the down payment as well as closing costs, and your income. Lenders want to paint a picture that encompasses all these aspects to make sure they minimize their risk and ensuring they are setting you up for success.
According to the American Bankers Association, less than half of all U.S. consumers know their credit score is or have reviewed their report in the last 30 days. Your credit score is the first thing a lender reviews and it determines if you get to go to the next step of the application process. TIP: Your credit score will determine your interest rate on your mortgage and what type of loan you will be offered.??
The next item is your down payment and monies you have saved for closing costs on your mortgage.? The more money you have saved towards both these will make the lenders? decision much easier to approve you. Yes, there are loans, such as FHA loans that only require 3.5% as a down payment. Closing costs typically run between 2% and 4% of the loan amount. For example, on a loan of $100,000, there could be between $2,000 and $4,000 in closing costs. On that $100,000 loan, you would have to have $3,500 saved for your down payment. TIP: There are down payment assistance programs available for first-time homebuyers.
The last but not least important item in obtaining a mortgage is your J-O-B. The lender is looking for the following: how long have you worked at your current employer, do you earn enough to pay the mortgage and your bills on a monthly basis, lastly are you able to save money after all your bills are paid. These are basic items lenders look at, but the lender could ask for additional financial documents. TIP: The more you can save the better your application looks to the lender and the better your loan terms could be.?
Once you have all these items to your lender they will then produce a pre-approval letter that you can use to find a home. The pre-approval letter will explain all the terms of your loan and the all-important dollar amount you are approved for your home purchase.? At this point, you are ready to go out and start looking for a home. TIP: Your pre-approval has a 90 to 120-day expiration, meaning if you do not purchase a home during that time the lender will have to pull your credit again.??
If you are ready to be a homeowner the first thing you need to arm yourself with is your credit score. Get your free annual credit report and know where you stand with your credit. If you need assistance or have questions feel free to reach out to us by email or call us at (812) 777-5850.??