Ten AWESOME Reasons Why You Should List Your Home During the Winter

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Traditional school of thought dictates that selling a home during the holidays is a bad idea.  People are busy celebrating with their families and will hardly go shopping for a home, right?  Not so!  There are numerous advantages to listing a home during this season and below are ten great reasons to put a home on the market now. 

More serious buyers – Less time wasted

These are people who are interested in buying so there is a far greater chance of actually selling the property.  Nothing is more promising to a seller than a motivated and qualified buyer that knows what they want and is actively seeking to get it.

Fewer Homes On the Market

The less competition there is, the higher the chance there is for homes on the market to sell. Where during the peak season sellers might be dealing with some interest from buyers on their home, nonetheless there is more selection for buyers to choose from and they can stray to another property.

In January Inventory Increases – Chances of Selling Decreases

With so many homeowners assuming the holidays is a taboo time to sell there is a plethora of new listings in January, resulting in a diminished chance of your home selling.  Also, there is a risk that the price you may receive on the home can be less.

Decked Halls Look Great!

Homes are very appealing to prospective buyers when they are decorated for the holidays.  With all the festive d├ęcor, lights, greenery and added beauty of the season – the home shows very well and attracts buyers faster than if shown during other times of the year.

More Time To Browse Homes

Buyers have extra time off from work and are on vacation, which translates to a more aggressive buying pattern and more chances of your home being viewed.

Tax Advantages That Benefit the Buyer

Some buyers need to buy a property before the year ends so that they are able to claim a particular credit or exemption on their tax return.  The biggest tax benefit is filing for homestead. This requirement means that they are going to seek out a home and definitely purchase it prior to the New Year. 

Show The Home With Flexibility

Sellers that have their home listed prior to the holidays have the added advantage to be able to “pause” the process so they can celebrate the holidays, essentially not showing the home during a period of time during the break.  When the festivities die down, things can pick up again and the seller has not only managed to save potentially lost time but can also jump right back into the market.

Sell Now For More Money Then Delay Closing

Extended occupancy can be negotiated, leaving both parties the leniency to get through the holiday season and past the New Year so that all sides can rest assured the deal is done but it can follow through at a more convenient time.  For sellers this option is great because they are able to secure a higher selling price on the property before the market is inundated with new listings come January when the selling values drop.

Enjoy Non-Contingent Buyer Freedom

With the home sold, sellers can enjoy non-contingent buyer status during the rest of the slow season and take advantage of the market when there is a flood of new listings upon the New Year. 

Fewer Foreclosures On the Market

Many banks will suspend foreclosure listing during this time of year, especially on properties where there are still families occupying the home.  As a result of this, some of the competition that arises for sellers from low-priced foreclosures can be avoided during the holidays.
Keep in mind that the idea of your home’s value increasing significantly over the next several months is a myth.  The truth is that housing values likely only go up when consumer income rises.  Pay rates increase at a rate of three to five percent each year and that is about the maximum yearly increase we can expect to see in a home as well.  So if you are wondering whether or not to put your home on the selling market now, or to wait – one important factor is that waiting will not provide much benefit.

A Look at Buying Now vs. Buying Then; Why You Can’t Afford to Wait

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It is widely known around the world that real estate in the US is at the best point it has been in decades – especially from the standpoint of a buyer.  But when you look at how the numbers work out – it REALLY looks good and it is a great way to see just why buying now is the best it has been for the past five to ten years. 

Here are the facts.  We know that interest rates are so low that buyers are walking away with practically free mortgages.  We know that housing values have declined to a point that buying a home now is a surefire investment that will come back later and mature very nicely once the market bounces back.  We know that housing inventory is largely overstuffed because of the plethora of foreclosures on record the past few years plus other factors contributing to the fact as well.  But how does all this look when you plug in actual selling prices, interest rates, down payments and monthly payments? 

To help show you why buying now will yield the best ever deal quite possibly in your entire lifetime, we have put together a comparison of a home that was sold in 2002.  Considering the market environment in both 2006 and 2011, we see how the owners got very different results on each respective selling date.  The numbers are staggering! 

Home Bought in 2002
Price of home when originally bought in 2002: $285,000
Interest rate: 6.5%
Conventional loan 20% down payment amount: $57,000
Monthly payment: $1,441 (principal and interest)
Loan payout for the life of the loan: $575,803

Sold to Another Owner in 2006
Selling price: $580,000
Interest rate: 6.5%
Significant remodeling changes made to the home
Conventional loan 20% down payment amount: $116,000
Monthly payment: $2,932 (principal and interest)
Loan payout for the life of the loan: $1, 171,800

Sold Again in 2011
Selling price: $245,000
Interest rate: 5%
Conventional loan 20% down payment amount: $49,000
Monthly payment: $1, 052 (principal and interest)
Loan payout for the life of the loan: $427,782

The savings are astronomical when comparing market conditions then to now.
If you bought this house ten years ago, the savings add up to over $148,000!
And if you bought the house while it was at the top of the market, the savings are an unbelievable $750,000.  That’s three quarters of a million dollars in savings alone.

This is the same home.  When you realize how much the prices, payments and payouts fluctuate – it makes you wonder why you haven’t gone out and grabbed the opportunity to buy now, doesn’t it? Either way you look at it, buying now will end up in a fantastic return on your investment.  What’s more is that there is no telling how long this phase in our real estate industry will last.  We are starting to see some upward changes in the housing market, with prices coming back up very slowly and the depreciation cycle beginning to level off.

Four Essential Components to a Successful Mortgage Pre-Approval

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Slowly but surely the real estate market is inching toward some sort of normalcy.  Still we are experiencing a soft market where there is plenty of inventory and some eager buyers who want to avail the amazing interest rates and other concessions being offered to buyers these days.

While interest rates remain the number one motivation for many buyers who are buying their first home, moving up into something better or investing in a property – the fact remains that the mortgage industry is tight.  Lenders are being faced with myriad regulations both in-house and through the government agencies that are largely insuring many of the loans today.

It is critical that you, as a prospective buyer, obtain prior approval for a mortgage.  Not only will this give you an extra edge over other buyers who many not have done so, but it will also provide you with a snapshot of exactly what you can afford.  Sellers like nothing more than to see a pre-approval letter along with an offer.  It demonstrates that the buyer is serious and it also shows that a lender has offered them a preliminary amount with which to work.

Credit Really Does Matter Most
At one point more than a few years ago there was a plethora of advertisements claiming to provide anyone and everyone with a home loan – regardless of bad credit.  Gone are those days, in fact, credit is the very first thing considered before a loan officer will even process a loan application.  The minimum FICO score for an FHA loan is now 620, with a preference of course to a higher score.  It also goes without saying that the higher a score is the better an interest rate or other terms one will likely enjoy.

Be sure to view your credit report before you embark on a home buying journey. Know exactly what items are on the report, dispute any errors well before you apply for a mortgage so that your chances of getting an approval are greater and rectify any bad credit concerns you may see on the report.

Past Income History Weighs In Heavy

Right up there with credit health is your financial health.  Lenders will require two years of income tax statements along with W2s and any other attached schedules if you are a self-employed borrower.  Your mortgage loan officer will carefully review all aspects of your income and whether you write off any specific expenses.  To help avoid the risk of mortgage fraud, more and more lenders are requiring the 4506t process to be completed, to verify income tax filing accuracy directly with the IRS.  Anything that goes against your income will be carefully weighed in making their decision.

Be Sure You Can Prove The Source of Cash
Large deposits are a major issue that many prospective homeowners do not realize comes up in mortgage loan applications.  Each and every dime must be accounted for when it comes to incoming cash and deposits that are larger than $1000. What this means is that you cannot dip into your secret stash of cash and suddenly present a down payment to your lender.  You must be able to prove the source of all large deposits – both those that appear in the two previous bank statements that will be provided as part of the application and also in case of any new deposits. 

Since cash gifts are allowed for down payments and closing costs, this same scrutiny will be applied to those who are providing the cash gift to the buyer.  This means that if friends or family members are helping you with your closing costs, there is a chance each and every one will be required to show the source of their funds.

Job History Shows Responsibility

Lenders need to know that you are reliable and that your income is stable.  The standard method is through an analysis and confirmation/verification of your work history.  It is essential that any and all gaps be accurately reported though lenders prefer to see at least two years on the same job.  Unknowingly to many home loan applicants, things like overtime, shift differentials and self-employment or business income are things that affect the income calculation used to determine eligibility and approval.
It is not as easy as pie to get a mortgage loan anymore but these days there are still many buyers that are successfully getting into new homes and at historic rates.  It’s more important than ever to be fully prepared going into the process, providing your loan officer with anything they need – in a timely and efficient manner.  This will ensure a smooth transaction for the seller, Realtor – and most importantly, the buyer.