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Buying a Home, on a Serious Tip

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | January 30th, 2019

Housing specialists say the homebuying market -- which slowed down in recent weeks due to political and economic volatility -- should regain some velocity by this spring.

In December -- the latest month for which numbers are available, home sales took a steep 6.4 percent fall. But Cheryl Young, a senior economist for Trulia, a real estate data company, predicts that more of the potential purchasers now on the sidelines should return to the trail within a few months.

“There will be a little bit of a pop come spring, the traditional buying season, but not a complete comeback,” Young says.

Through to the end of 2018, there was a significant shortage of starter-level properties available in many popular neighborhoods. That led to extreme frustration for numerous would-be homeowners who dropped out temporarily rather than deal with intense competitive pressure from rival bidders.

But as Young notes, inventory levels are gradually rising once again, and that means more potential purchasers are expected to resume their property searches.

“There’s still a lot of pent-up demand for homebuying, especially among young people under 35 who’ve been waiting to get their foot in the door, so to speak,” she says.

With more properties available for sale, springtime buyers should have more time to research their choices before committing to any given home. That way they stand a better chance of making a solid decision.

Home staging -- the art of making properties appear enticing to buyers -- is on the rise in many neighborhoods. But Young urges buyers to look beyond the superficial to discover the “bones” of the property, with the aim of determining if it’s structurally strong and in good repair.

In particular, she urges buyers to retain the right to hire a professional home inspector prior to finalizing a deal rather than waiving that right in an attempt to strengthen their bid.

“A house is a massive purchase, and you don’t want to go into it blindly,” Young says.

Here are a few other pointers for buyers:

-- Look beyond the obvious even during your first visit to a place.

Obviously, a buyer can learn much more from visiting a home than simply seeing it on the internet. And resourceful purchasers take full advantage of the opportunity.

Reid Guthrie, an inspector affiliated with the American Society of Home Inspectors (ashi.org), urges buyers to investigate when they see furniture or carpets positioned in unusual ways.

“Sometimes, the seller will use throw rugs or pieces of furniture to try to conceal problems or defects,” Guthrie says.

-- Carry your own measuring devices to check room sizes.

Sid Davis, a longtime real estate broker and author of “A Survival Guide for Buying a Home,” says that to make a property look spacious, stagers sometimes clear away all but a few key pieces of furniture per room. And when creating a model home for a builder, they may even bring in scaled-down furniture to give the illusion of enhanced size. To guard against such practices, he encourages buyers to bring along measuring devices when touring properties.

“For a fairly nominal price, you can buy high-tech laser sensors that make it easy to measure anything around a house,” he says.

He also suggests you bring to your house tour the measurements of your largest pieces of furniture. This will provide you with a further sense of the scale of a home relative to your belongings.

-- Don’t get carried away with flowering glitz.

During the warmer seasons of the year, home sellers have an easy time showing off the colorful annuals they’ve planted outside. But all year long they can place impressive potted plants near the front door or throughout a home’s interior.

Color is a natural magnet for buyer interest, and many are swayed by blooming plants. Even so, Davis says would-be buyers should recognize that many of the plants displayed by home sellers will be short-lived.

“It’s almost a cliche in real estate that people buy a house for the garden in the spring. Then within a year, the flowerbeds have gone to pot -- all because the buyers didn’t replace the annuals that were planted for show,” he says.

-- Choose a highly qualified home inspector.

Guthrie, a veteran of the home inspection business, allows that some in his field are more interested in packing many inspections into a day than doing in-depth checks.

“You’ve got to wonder about any inspector who doesn’t want his clients there when he’s going through the house because it will slow him down,” Guthrie says.

According to Davis, a top-notch home inspector is enthusiastic about discovering the inner workings of a home and can prove invaluable to the savvy buyer.

“You’re looking for an inspector who can translate the fluff into reality,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Long-lead Buyers Need Not Beware

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | January 23rd, 2019

Calling all homebuyers: Economists have a message for you. They say time is on your side as you prepare for your first property purchase. That’s because the supply of homes, once tighter than a drum, is gradually increasing.

“Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home price appreciation,” says Lawrence Yun, the chief economist for the National Association of Realtors (realtor.org).

At Zillow, the housing data company, senior economist Aaron Terrazas says that buyers intent on purchasing a brand-new home are in a particularly advantageous position.

“More newly built homes are seeing their list prices drop,” he says.

What’s behind the shift to a more balanced market for buyers? For one thing, economic uncertainty has led to an overall decline in sales of existing homes, which plummeted 6.4 percent in December. This translates to fewer purchasers competing for the same properties.

Another factor easing pressure on would-be buyers is that mortgage rates, widely expected to soar early this year, have recently moderated, bringing them back within the range of historic lows.

What all this means for those seeking to gain a foothold on the first step of the housing ladder is that they can proceed at a reasonable pace and still find a desirable and fairly priced property. Except in the hottest markets, they have less reason to fear losing out in multiple bidding situations.

Eric Tyson, a personal finance expert and co-author of “Home Buying for Dummies,” says a slowdown in the frantic market is a positive for many young buyers who are saddled with student debt and credit card payments and need time to save for their down payment and closing costs.

But he says that even buyers who are debt-free are often better off moving cautiously toward a first-home purchase.

“Making a major housing move is analogous to a big career change. Because both can have consequences for years to come, there’s no reason for rushing into any decision you could regret later,” Tyson says.

Here are a few pointers for long lead-time buyers:

-- Locate an experienced real estate agent to guide you.

People who are moving to a new metro area are well advised to search for an agent who has years of experience selling homes in any community they’re considering, says Tom Early, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org).

Before you start looking at specific properties, a strong agent will help you navigate the new locale, supplying you with data on home prices and valuation trends, relative school performance statistics and information on nearby amenities.

-- Play reporter in your quest for a desirable neighborhood.

The area where you choose to live is a major factor determining your lifestyle -- and that’s why neighborhood choice matters greatly.

“Homebuyers should always take the time they need to compare neighborhood alternatives before moving,” Tyson says.

As you develop a short list of neighborhood options, some of the most useful sources for reality-based information are people who live and work in the areas you’re considering.

What’s the best way to approach neighborhood residents? Early recommends you walk through the community on a weekend afternoon when many people are likely to be out in their yards. Tell them you admire their neighborhood and are considering a move there. Then feel free to politely pose a few questions.

“If people start giving you the cold shoulder, you can bet that neighborhood is unfriendly. For that reason alone, you may want to drop it from your list,” Early says.

Those considering a condo-apartment may find it harder to chat with a building’s residents, though some may talk to you as they enter or exit the complex. Also, an agent who lists property in that building may line up contacts for you.

-- Supplement your search with visits to open houses.

If you’re a long lead-time buyer planning a major move, you needn’t rely solely on your agent to help you sort through your choices.

“By visiting a lot of open houses, you can narrow down what you do and don’t like in a home. Eliminating options can be extremely useful in narrowing your search,” Early says.

Many open houses are heavily advertised with street signs posted by the listing agents for the properties. If you’re considering condo-apartments, however, Early suggests you consult local newspaper or online ads for open-house details.

-- Drop any agent who attempts to pressure you to buy prematurely.

Although agents are compensated on commission -- and therefore don’t make any money until a sale goes through -- a reputable one won’t try to hurry you into a purchase before you’re ready.

“It’s a big red flag if an agent starts pushing you,” Tyson says.

Of course, it’s not fair to ask the agent to spend multiple weekends over months showing you property unless you’re progressing toward your ultimate goal. Every veteran agent has had to cut ties with clients who looked continuously without any serious intention of buying.

Still, as Tyson says, it’s not unreasonable to spend up to six months doing intermittent (yet focused) outings with an agent before committing to a property purchase in an area that’s new to you.

“A reputable agent will be patient with homebuyers who are heading in the right direction and just need time,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Selling Tips in a Cooling Market

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | January 16th, 2019

There was a period lasting until a few months ago when there was sweat on the brows of many millennial homebuyers seeking their first property. Buying a first house was a competitive sport -- often involving multiple offers and escalation clauses -- because inventory was in such short supply, particularly in the starter home category.

But much has changed in a very short period of time. Granted, there are still too few starter homes available in popular neighborhoods, and prices are definitely not plummeting. Yet many aspiring homeowners from the millennial generation -- born between 1981 and 1996 -- are in much less of a rush than before, according to Steve Israel, a longtime broker who heads his own realty firm.

Israel works solely with buyers and takes no sellers’ listings. In doing so, he’s constantly assessing the moods and attitudes of his purchasing clients. And that puts him in a position to give homeowners advice on selling tactics.

“If I were a seller, I’d be much more nervous about going into this upcoming spring market than if I’d been selling last year,” he says.

What’s causing the slight diminution of buyer enthusiasm? According to Israel, wannabe buyers are feeling unsure about the strength of the U.S. economy and also worry they’ll face rising mortgage rates.

Israel says sellers seeking to appeal to millennial buyers must make sure they present their property in a way that brings comfort to young purchasers, who favor light, bright and clutter-free living.

“It’s always a downer if a house isn’t cleaned up or painted or has dirty floors and carpets. It’s also a negative if your front door and entryway are in bad shape,” says Israel, who’s affiliated with the National Association of Exclusive Buyer Agents (naeba.org).

Moreover, he stresses that millennials -- who now represent about 36 percent of the buyer population -- are uncomfortable about the idea of acquiring a place that needs substantial repairs and fix-ups.

“They’re not lazy, but they grew up at a time when they were heavily scheduled by their parents and didn’t have chores around the house. They’re incredibly price-conscious, but lack confidence in their ability to do even cosmetic home improvements,” Israel says.

Here are a few pointers for sellers aiming for the millennial market:

-- Think about hiring a professional “stager” to help make your place show-worthy.

Staging is the art of transforming a property so potential buyers can visualize themselves living there. Properly done, staging accentuates a home’s attractive features and minimizes its negatives.

Many real estate agents are convinced that hiring a talented stager can increase the odds of selling a property promptly. Working under a full-service contract, most stagers will provide an array of services. They’ll remove excess furniture and personal items and rearrange the remaining pieces. Often, they also supplement the owners’ furnishings with alluring accessories of their own.

Unfortunately, the cost of hiring a professional stager for a full menu of services can exceed $500 or more, says Michelle Minch, the owner of a staging company called Moving Mountains Design.

But Minch says cash-constrained sellers don’t necessarily need the full range of services available through a stager. For a much lower price, perhaps around $100, they can obtain an abbreviated consultation and receive pointers they can execute themselves.

“Tell the stager you just want the 10 top tips for making your house look better. For just an hour or so of consultation time, a good stager can tell you about furniture arrangement, and also recommend mild, pleasing paint colors for your walls,” she says.

How can you find a competent stager to work on an “a la carte” basis? Minch suggests you visit the website of the Real Estate Staging Association, realestatestagingassociation.com. Look for stagers in your area and make sure to check their websites for examples of their work before you give them a call.

-- Invite friends and family members to a home-selling fest.

Lisa Atkinson, a real estate agent affiliated with the Residential Real Estate Council (crs.com), says traditional open houses rarely lead to a sale. Most serious buyers see homes on an appointment basis -- during a tour led by their agent, she says.

A better way to ignite renewed interest in your place is to throw a “home-selling party,” inviting your close friends and relatives. Such a party is more likely to lead ultimately to a sale. That’s because those close to you will be more motivated to promote the sale of your home than are strangers.

“In any case, the party can help revive your excitement about your home-selling goal,” Atkinson says.

-- Ask your listing agent to promote your sale by contacting other local pros.

Until a few months back, well-priced properties in coveted neighborhoods practically sold themselves, and listing agents had relatively fewer marketing responsibilities. But in the current market, buyers are gradually gaining power. These days, the well-honed marketing skills of an experienced listing agent are as important as ever.

One key marketing skill your listing agent can use is to “talk up” your place to other real estate agents who have home-buying clients of their own.

“Strong agents will respond to your request to step up informal marketing of your place by spreading the word. They’ll make personal phone calls to other agents. They’ll also take fliers about your house to their professional meetings and hand them out,” Atkinson says.

Your listing agent may have done this sort of one-on-one marketing for your property when it was first listed. But if your house has been sitting unsold for longer than you’d like, it might be time to ask your agent to do another round of this informal promotion.

“By alerting other agents to your property, your listing agent will enhance your chances of finding a buyer,” Atkinson says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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