Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

July 22, 2021

What is Comparative Market Analysis and What Is It Important?

For real estate investors, pricing is critical. If you're on the buying end of a transaction, you'll want to avoid paying too much for the property, and if you're on the selling end, you'll want to price the property reasonably so you can find a buyer quickly. 

 

If people notice that your pricing is too high, they won't bother to visit since they'll assume that the vendor is unreasonable. Even if the house is stunning, they'll go somewhere else. 

 

Top-view Photography of City

 

To that end, a comparative market analysis (CMA) for real estate is a must-have tool for any real estate investor.

 

So how do you find that perfect asking price? Enter the comparative market analysis.

 

What Exactly is a Comparative Market Analysis (CMA)?

 

A comparative market analysis (CMA) is a tool used by real estate brokers to assist sellers in determining the list price of their property and, less frequently, to assist purchasers or investors in making competitive offers. A comparative market analysis examines similar properties that have previously sold in the region to see how the property in question compares to the competitors.

 

To determine an appropriate initial asking price, your real estate agent will compile a CMA by reviewing approximately 10 houses that are comparable to your own home in location and size. Obtaining a CMA from your agent is frequently one of the first stages in the process of listing your home.

 

 

What Makes A Good Comparative Market Analysis?

 

All the Data About the Subject Property

The most crucial stage in a CMA is describing your neighborhood precisely. 

 

You're looking for properties that are as close as possible to your own. To do so, one will need to know everything there is to know about their property. The comparative market study will be more accurate if there are more characteristics about your subject property (the property you wish to appraise).

 

 Agents gather these data points:

  • Location (street, neighborhood, municipality, county)
  • Total square footage
  • Number of bedrooms and bathrooms
  • Acreage (if privately owned)
  • Year built
  • Recent renovations
  • Interior finishes of note
  • Any extraordinary features (swimming pool, pole barn, and so forth)

 

Comparable Sales Currently on the Market

There could be a significant discrepancy between the price you list your house for and the price you sell it. When preparing a CMA, avoid using a home's "list" or "asking" price as a comparison point. While reviewing your CMA report, make sure that the majority of the houses identified as comparables were "sold" not merely put on the market.

 

Size Is a Factor When Comparing Your Home to Others

A decent CMA will compare your house to others in the same size range of 100 to 200 square feet. In higher-value markets, however, the number of bedrooms and bathrooms is less significant.

 

Can I Just Perform a Comparative Market Analysis Myself?

 

You could, but an agent would almost certainly do a better job. You can get some rough comps by looking at property prices in your neighborhood, but some of the data used in a CMA may not be as readily available to you as it is to a real estate agent.

 

A real estate agent can also perform a CMA far faster than a non-real estate professional.

 

 

July 12, 2021

Thinking of Refinancing Your Mortgage in 2021?

Homeowners are chasing the next chapter of their homeownership adventure, thanks to historically low interests rates. The hot seller's market is pushing some to take advantage of low inventory and bidding battles throughout the country to sell their property for more money than they could previously. Others, however, are not quite ready to take that step and are instead looking to refinance. Both choices have advantages and disadvantages to consider when deciding which is best for your unique financial position.

White and Gray Wooden House Near Grass Field and Trees

However, if you are considering refinancing your mortgage, here is a to-do list to get you started. 

 

Set a refinancing goal

Different loan types offer different advantages.

To lock in a lower rate for the long term, you may wish to transfer from an adjustable-rate mortgage to a fixed-rate mortgage. To pay off your mortgage faster, you might wish to go from a 30-year to a 15-year loan. If you have enough equity in your house, a cash-out refinance will allow you to not only refinance your loan but also take out more funds.

Knowing what you want to achieve with a refinance will help you choose the right mortgage plan.

 

Check your home equity

Most lenders prefer you have at least 20% equity when you apply for a refinance. 

Because lenders view borrowers with high equity as less of lending risk, you may qualify for a reduced interest rate and costs if you have more home equity. If home values decline, having greater equity implies you're less likely to owe more than the house is worth.

Subtract your current mortgage loan total from the current market value of your house to get an approximation of your equity. To acquire an estimate of your home's value, speak with a professional local real estate agent.

Prepare your home for an official appraisal, which will be required as part of the refinancing application process. Keep records of any renovations you've done to the house on hand.

 

Check your credit score

It's critical to examine your credit score as well as your credit report before making any financial decisions.

A lender's willingness to offer you a favorable rate is mostly determined by your credit score. The better your credit score, the lower your interest rate will be and the lower your monthly payments will be. The information on which your credit score is based can be found in your credit report. It's where you can see if your credit report contains any inaccuracies that could harm your credit score.

 

Compute if refinancing will pay off

Make sure you understand the charges of a new loan before applying for a refinance. Closing expenses for refinances typically range from 2% to 5% of the entire loan amount. You must be able to recoup these closing costs while still saving money in the long run for a refi to make sense.

You'll need to calculate your break-even point to see if it's worthwhile. This is the time it will take for the new loan's savings to outweigh its cost. The break-even point can be calculated by dividing the loan's closing expenses by the amount you save each month.

 

July 6, 2021

Dealing With Low Appraisals

You've styled your property, decluttered it, and worked with a realtor to determine the ideal asking price. Now all of your hard work has paid off: you've accepted an offer from a possible buyer. Isn't there anything that can prevent you from selling your house right now?

 

Possibly not. The evaluation is still a possible stumbling block.

 

Crop unrecognizable coworkers in formal wear standing at table with laptop and documents while greeting each other before meeting

 

In any market, whether hot, cold, or neutral, low assessments can happen. An appraisal is required to finalize the deal for any potential home buyer seeking a mortgage. Before approving a mortgage, a bank must ensure that the loan amount does not exceed the home's fair market value. 

 

If your appraisal is low, don't get worked up about it. There are options for reversing the situation.

 

What To Do If Your Appraisal Comes in Low

 

Reduce Your Asking Price

You can lower your asking price to the appraised value as a seller. Often, the best answer is for the seller to lower the home's price. Most of the time, it makes the buyer happy and the lender happy.

 

If the first buyer backs out, there's no guarantee you won't get another low appraisal. Furthermore, the duration of validity of an assessment can range from 120 to 180 days, so you may be stuck with a low appraisal for a while unless the property market improves.

 

Compromise On The Appraised Value

If you have enough funds, you can make up the difference between the appraised value and the sales price. The appraisal is only important to the lender in regards to how much of the home's value is taken up by the mortgage. A low appraisal does not rule out the possibility of a loan; it simply means that the lender will make a loan based on the contract's agreed-upon ratio at the appraised value.

 

Provide a List of Comparable Sales

Request that the agents involved compile a list of recent comparable sales that support the agreed-upon sale price, then present the list to the underwriter and request that the appraisal is reviewed. Use analogies that are more similar to the subject property than the ones used by the appraiser.

 

Contact Your Listing Agents of Pending Sales

You'll have to entrust this task to your agents, but they can try to find out the actual sales prices of homes that are pending but have yet to close. This can be used to compare sales and re-evaluate your price.

 

Hold Off the Transaction

Waiting to sell your house could result in a higher appraised value and market value in the future. By relisting the home and seeking a new buyer, you may be able to get a higher price. 

 

A low appraisal can undoubtedly add stress to the process of selling your house, but you are getting close to the finish line.

 

 

If you plan ahead of time and engage with a top local real estate agent to smooth the way, you'll be prepared to manage whatever the appraisal process throws at you—hopefully at or above the price you want.

June 29, 2021

What are Factors that Determine Real Estate Appreciation?

Real estate has long been seen as a profitable asset in one's investment portfolio, both in the short and long term. Property is one of the few assets that may provide you with returns that outperform inflation.

 

Do you intend to make a real estate investment this year? Here's all you need to know about real estate appreciation, including what it implies for your objectives and bottom line.

 

White Blue and Gray Concrete Building

 

What is Fair Market Value?

 

The fair market value of a property is the amount that it would sell for if it were sold on the open market. Comparative market analysis is the most common method for assessing fair market value. It considers market prices of comparable properties or prices of homes that are currently for sale.

 

What is real estate appreciation?

 

Appreciation in real estate refers to the worth of your property or, more specifically, how much it improves in value over time.

 

You acquire a few advantages as your property rises in value. For starters, you'll make more money if you sell the property. As long as demand in your market is robust, you should charge a higher sales price and so make more money.

 

Factors that determine Real Estate Appreciation

 

When real estate investors know that a property will rise in value in a few years, they are always inclined to buy it. It has the potential to be a source of financial stability in the future. Price appreciation also allows them to sell their present home for a higher price than they paid for it, and then use the money to buy a larger home to suit their growing family. The following are the primary factors that drive real estate value appreciation:

 

Demand and supply

When the demand for homes in a certain geographic location increases, property values in the area will rise as well if the supply of new residential houses does not keep pace with the demand.

 

The rising demand for houses in a specific place tends to draw the attention of investors who buy or construct residential houses to resell them when supply falls and prices rise. The price appreciation of a property is the extra profit that investors makeover what they paid for it when they first bought it.

 

Location

The location of a real estate property is an important component in determining its price appreciation. Property buyers frequently seek appealing and desirable sites near cities or markets, as well as more prosperous economies, improved amenities, and infrastructure.

 

Property market drivers

Any developments that have a beneficial impact on the attractiveness and desirability of living in a certain location might affect the price appreciation of real estate assets. Development of public transportation facilities such as rail, road, or airport; new office complexes; construction of a retail mall or hypermarket; and closeness to schools, universities, hospitals, and restaurants, among other things, are all potential property drivers.

 

Cost of borrowing

The cost of borrowing at any one time has a direct impact on the housing market and real estate appreciation. When borrowing costs are high, such as high-interest rates, demand for homes decreases because fewer people can afford high-interest loans.

June 22, 2021

What’s the Best Day to Put Your Home on the Market?

When it comes to selling a home, timing is everything. The season in which you choose to list your home, down to the month and even the day, can all have an impact on how quickly and for how much your home sells. 

 

Agents have long debated which day of the week is best for announcing their most recent property for sale. Even in a market with almost nothing for sale, timing is everything for home sellers. Listing your home on a specific day — and even at a specific time — may help it sell faster and for more money.

 

Laptop and Calendar on Wooden Table

Homes listed in the middle of the week sell for more money

Homes listed on a Tuesday, Wednesday, or Thursday sell for more than those listed on the weekend, and they sell almost as quickly. Although the market is extremely competitive right now, homes will receive many views regardless of when they are listed, but sellers can increase their potential sale value or reduce the number of days their home sits on the market by listing midweek. When homes are listed in the middle of the week, potential buyers have time to view the listing online, speak with their agent, and schedule a weekend tour. Home sellers can then typically review offers the following week on Monday or Tuesday.

 

Thursday is the most popular day for agents to debut new listings, while Sunday is the least popular. According to the theory, most people tour listings over the weekend and start planning their weekends on Thursday.

 

While listing the home later in the weekend may create more urgency, listing it slightly earlier, during the week, may result in a higher price.

 

Zillow’s research also shows that Thursday listings are 1.5% more likely to sell above their asking price, while homes listed on either Saturday or Sunday were 1.3% less likely to sell above the list.

 

Other factors to consider before selling your home 

The local housing market

Bidding wars between buyers are more intense than ever before due to the current inventory shortage. Investigate your local housing market and speak with your agent to learn more about how many homes are listing for in your area and how to accurately price yours to attract the most offers and possibly spark a bidding war.

 

Your financial situation: 

Before deciding whether now is the best time to sell a home, it is critical to examine your financial situation. Buying a home is a significant investment, and in our current market, getting pre-approved for a mortgage and ensuring you have enough money for a downpayment on your next home are critical. Before deciding to sell, keep up with current market conditions to determine whether the market value of your current home is greater or less than the remaining balance on your mortgage.

 

Hiring a home inspector: 

Consider hiring a home inspector once you've determined the best time to list your home for sale. Home inspections can be deal-breakers, so get ahead of the buyer and schedule a pre-listing home inspection. Before you put your house on the market, make sure that all of the repairs are completed.

June 16, 2021

Real Estate Markets: Hot, Cold and Neutral

Far too few people who decide to sell or buy a home take the time to assess the market. They have no idea whether the market is conducive to their objectives. This is because most people regard their home as a place to live rather than an investment.

 

White Printer Paper on Brown Wooden Table

 

Real estate is, in reality, an investment. There are good and bad times to sell, just like any other investment. It's usually a good time to buy when it's a bad time to sell. That is why phrases like "buyer's market" or "seller's market" are used.

 

The "temperature of a real estate market" is defined by supply and demand, which determines whether it is a cold (buyers') market, a hot (sellers') market, or a neutral (normal) market.

 

Demand is commonly judged by months of inventory based on closed sales:

  • Buyers Market: 6 or more months of inventory
  • Seller’s Market: Less than 3 months of inventory 
  • Neutral Market: 3-6 months of inventory

What is a Seller's Market?

 

A "hot" market is extremely competitive - and therefore most advantageous to sellers. Because there are more buyers than available houses to buy, it is the best financial market to sell in.

 

In a seller's market, serious buyers are frequently willing to pay more than the list price. This means you can probably sell your house quickly and for a higher price than you asked for it. If your market is hot, you may be able to demand that buyers waive appraisals and inspections, though allowing a buyer to have a home inspection is always a good idea.

 

Signs of a seller’s market:

 

  • Homes are selling for high prices.
  • Sale prices are higher than listing prices.
  • When compared to previous months/years, inventory is extremely low.
  • The percentage of successful sales and the auction clearance rate are both higher than usual.
  • The median sale price is rising.
  • The economy is improving.
  • Low market days – Properties are selling quickly, and sold stickers are being quickly added to signboards.

 

If it is a seller's market and properties are selling quickly, it may be best to make your best offer first. This is where your market research comes into play. Knowing how much you should pay for the property based on market data and discussions with your real estate agent is critical to having your offer accepted.

 

What is a Buyer's Market?

 

The term buyer's market refers to when the conditions are more favorable to buyers. When there are more homes on the market than there are buyers, the market is considered cold. Buyers have more homes to choose from, increasing the likelihood that they will find their dream home.

 

Signs of a buyer’s market:

  • In comparison to previous months/years, there is a lot of inventory.
  • Properties consistently sell for less than expected. Properties remain on the market for longer than average.
  • The current asking price is less than the previous purchase price.
  • Property asking prices are beginning to fall.
  • Sellers begin to offer 'extras' as part of the sale, such as a longer settlement period.

What is a Neutral Market?

 

These markets are in equilibrium. Typically, interest rates are low, and the number of buyers and sellers in the market is balanced. The scales do not tip in either direction, indicating that the market is normal and does not experience volatile swings.

 

Negotiation opportunities are greater in a neutral market than in a hot market. Buyers can expect to make offers at or below the asking price and to negotiate a price that is at least slightly lower than what the sellers are asking.

 

Signs of a neutral market:

  • When compared to previous normal months/years, inventory is normal.
  • There is three to six months' worth of inventory on the market.
  • Comparable sale prices are nearly identical to active listing prices.
  • The sales figures have leveled off.
  • The median sales price has been flattened.
  • Within 30 to 45 days, For Sale signs are replaced with Pending/Sold signs.

 

Understanding and recognizing the signs of the various real estate markets is essential when buying and selling.

June 7, 2021

Pricing Your House Right In An Extreme Market

What can a seller be their best strategy for a successful home sale—and avoid pitfalls—when inventory is low and hungry bidders are driving prices up?

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A "hot" market may lead house sellers to believe that their homes will sell quickly and easily. After all, a strong market means low inventory and a slew of buyers are on the hunt for the ideal home. In many cases, a hot market means a quicker sale at or over the asking price. However, before watching the money come in, a house seller in a hot market must be mindful of potential risks. 

Even in a buyer's market, the price you set for your property can make or break your plans. These methods will assist you in obtaining an accurate list price!

Protect Against Low Appraisals

The National Association of Realtors stated in the first quarter of 2021 that appraisal issues were the leading reason for contract terminations. Mortgage lenders often protect themselves by only lending up to the value of the home, as assessed by an appraisal.

Low appraisals are also common when prices are rapidly rising. Appraisers employ three "comps," or sales of properties that are close to and similar to the one being evaluated. 

Sellers can avoid a poor appraisal by choosing purchasers who are willing to put down 20% or more. Bigger down payment lowers the lender's risk, increasing the odds of a successful transaction.

 

Calculate an Accurate Home Value

Knowing the current worth of your home gives you a benchmark against which to evaluate offers. Use similar home sales in your neighborhood to help you determine an accurate price for your house.

You can ask for assistance from your real estate agent to obtain information from the local MLS and create a Comparative Market Analysis (CMA) for you. Your agent can then help you determine a current value for your home based on the information you've gathered and the CMA.

 

Set the right price from the start

When it comes to selling your house, first impressions are everything. Your listing will be exposed to the greatest pool of buyers in the first two weeks after it goes on the market, creating the most interest in that time frame. When it comes to pricing your property, it's critical to make sure it reflects the true value you've worked so hard to develop to attract — and encourage — interested buyers.

If your home is expensive when it first hits the market, many buyers will pass it over because it is out of their price range. Many potential purchasers will have already found something else by the time you decrease the price to fair market value, leaving others to wonder what was so wrong with your property that you had to decrease your price in the middle of a boom.

 

June 3, 2021

Time to improve you curb appeal

First impressions are crucial, especially in the real estate industry: It's known as curb appeal. If the outside of a house is decrepit or unsightly, or the porch decor is lacking, buyers may be less likely to look inside. Even if the inside is gorgeous, a home with poor curb appeal will make guests and potential buyers feel unwelcome.

Free stock photo of architecture, building, entrance

 

You need color and contrast, balance, and good old-fashioned TLC.

Paint your front door

The front door should invite a buyer in. A fresh coat of paint on your front door isn't required, but it can make the exterior look bright and clean. Allow your front door to reflect the style of your home.

 

Ask your neighborhood if there are rules regarding colors. Make sure to also check in with your real estate agent if there are any restrictions and what might be the best color for your front door.

 

Improve pathways and steps

Pathways and steps play a significant role in the aesthetic and safety of your home. Cracked or uneven pavement, missing brick pavers, broken steps, steep stairs, and missing or damaged railings are the main issues to watch out for.

 

Broken pavement and stairwells are two of the most visible signs of degradation. You'll want to get this taken care of as soon as possible.

 

Uplight parts of your front yard

Lighting is an essential component of any outdoor living environment. Guests are greeted with good lighting. Lighting is also important for a home's security. It helps to deter theft by illuminating the landscaping and pathways at night.

 

Replace any outdated light bulbs, wipe up any cobwebs, and replace any broken lights.

 

Add potted plants

Plants can provide life to a room and make it appear more lived-in and well-maintained.

 

Give garage door a lift

Garage doors are generally the most prominent feature of the street, yet they lack the detail and depth of the rest of the house. Temporary or magnetic decorative hardware, such as handles, hasps, and false window panels, is a quick fix that takes no commitment (and nearly no effort).

 

Garage doors can also be painted, and a change from the standard white can make a big difference. If you want your garage to fit in with your siding, paint it the same color as your front door.

 

Replace mailbox and update your street number

 

May 21, 2021

Get Multiple Offers For Your Home and Start a Bidding War

Home prices are skyrocketing as the availability of homes falls to record lows across the country, and homes are being snapped up as soon as they become available. Home sellers are in a great place right now to get several offers and maybe even a bidding war. But the market doesn't guarantee sellers a fast sale, or a good price. One should still play their cards right and be on top of other sellers. 

Four People Sitting Beside Wooden Table

 

How do you position your home to appeal to as many potential buyers as possible? Continue reading to learn more. 

 

Hire a real estate agent that understands your needs

You'll need the assistance of an experienced real estate agent to direct you through the home sale process and the current housing market to put your bidding war plan into action. Managing a bidding war is a complex task, and getting a real estate agent on your side can help you create the requisite excitement to attract buyers.

 

An agent will help you with pricing, marketing plans, and determining the best time to list your home by bringing data and information about your neighborhood.

 

Build up buyer interest before listing

Premarketing is a good way to plant excitement before you list your home in the market. This can tap serious homebuyers that are already searching for their potential homes. You can enlist your real estate agent's assistance by informing their social media followers, sending out email blasts to their contacts, or approaching potential buyers about your property. 

 

Plan your scheduled showings

Fear-of-missing-out can be an important part of your bidding war strategy, particularly when it comes to scheduling showing requests after your home is listed. Ensure that your agent is attempting to arrange as many back-to-back display requests as possible to maximize visibility. Buyers may be enticed to make an offer if they see other potential buyers walking in and out of your house.

 

Set deadlines for offer

This sends a message to potential buyers that you're serious about putting the house under contract. Having a deadline can also encourage buyers and agents to consider their deals strategically to make them stand out. Your real estate agent can help you review these offers and relay them to potential homebuyers and their agents. 

May 19, 2021

The Buyer’s Guide To The Basics of Home Financing

Getting a mortgage is an important step in buying your first home, and there are many factors to consider when selecting the best one. Although the plethora of financing options available to first-time homebuyers can seem daunting, researching the fundamentals of property financing will save you time and money.

 

Understanding the market in which the property is located, as well as whether it provides financial incentives to lenders, can result in additional financial benefits for you. You can also ensure that you get the mortgage that best fits your needs by taking a close look at your finances.

 

Person Holding Bank Card

 

To begin, a mortgage is a form of loan that can be used to buy a house. It differs from other types of loans in that it is backed by the property itself. Since the mortgage is backed by the land, the lender may take possession of it if the borrower breaks the terms of the loan.

 

How do mortgages work?

When you decide to purchase a home and need to borrow money, the lender will assess your financial condition to determine how much money you qualify to borrow, and you will then repay the money over time. Until the mortgage loan is paid off, the lender will charge you interest on the loan.

 

The Mortgage Process, simplified

 

Choose a lender

You'll want to get prequalified for a mortgage if you want to know what price range you can start looking at. When you go to a lender and self-report your wages, debts, and credit score, the lender will give you an estimation of how much house you can afford, assuming you qualify.

 

Your lender will pull your credit report and go through your loan options with you at this stage. If you're ready to talk to a real estate agent, you'll need a loan preapproval. A preapproval conversation with a lender would be close to a prequalification conversation. In some markets, a preapproval letter can be sufficient to encourage you to make a bid.

 

Choose the right real estate agent for you

To find the right agent for you, search for someone who is a good fit for your personality as well as someone who knows your unique needs and the region of the country where you want to buy a house.

 

Looking at a person's experience is the most accurate way to find a successful agent. You can check for reviews at Realtor.com or Zillow.

 

Start touring homes

You'll start going to open houses and showings, as well as looking at houses online.

 

Your agent will assist you in finding the ideal home by weeding out any homes that do not suit your budget or precise search criteria.

 

Make an offer to the seller

If you've found your future dream house, your real estate agent will assist you in weighing all aspects of the transaction and drafting an offer that impresses the seller. Your agent will assist you in creating a strong bid that includes:

 

  • The proposed price 
  • Any contingencies that might arise as a result of the funding, inspections, or valuation values
  • A deadline for the seller — typically 24 to 48 hours.
  • A timetable for the deal's completion

 

Discussing the contract

Your representative will write a final offer letter after you and the seller have settled on all of the terms of the agreement, and you will be legally under contract.

 

You and your representative will continue with the home inspection and valuation when your offer is under contract.

 

Closing and finalizing the mortgage

The lender will examine all of your documents, including tax returns, credit reports, bank account statements, and so on, to ensure that you are financially capable of taking on this debt.

 

The lender will look at an assessment of the property you're purchasing in addition to the underwriting process to ensure that the home's worth supports the cost of the loan you've applied for.