Lorraine Ryall
As we head into the new year, predictions are for another great year as far as the housing market goes, although we do expect things to slow just a little this year especially around the election.
Interest rates remain low and the concession is rates for 2020 to remain the same or even slightly lower.
Refinancing
Homeowners who love their home, but it’s outdated or in need of repairs are taking advantage of the lower interest rates and the equity that has built up with the increased home values. They can refinance and take out extra to do the needed repairs, remodeling or building a pool in their existing home.
Depending on your current mortgage rate, it can be worth refinancing at the lower interest rate just to reduce your monthly mortgage payment even if you don’t plan on taking out any equity. Before you do, make sure you get all the fees and out-of-pocket expenses from the lender before you pull the trigger. Depending on the difference in your monthly payment, how long you intend to stay in your home and the fees, the lower rate may not be worth the out-of-pocket expense.
Refinancing to Sell
Another option when you have equity in your home and are planning on selling is to refinance and take out extra cash to do the remodeling and upgrades to increase your home’s value.
In some markets, such as a slow or buyer’s market, this may not be the best choice. However, in today’s market, buyers are looking for homes that have already been remodeled and they are prepared to pay a premium for that move-in ready home.
It’s much easier for a buyer to pay a higher purchase price for a remodeled home versus coming up with the cash afterward to do the remodel themselves.
I am currently working with a client who has a rental property. We looked at the value of his home in its current condition and the value once remodeled. After getting bids on the remodel, it was obvious that was the way to go and my client is going to net an additional $35K above the cost of the remodel.
If you are thinking of selling and you know your home needs updating, make sure you do your homework. Meet with a contractor and a local Realtor to get bids and find out which upgrades will give you the best return and increase the home’s value.
Check with the lender you are going to use to do the refinance and cash out, check on the fees and closing costs and make sure there is no minimum time frame or penalty if you pay the loan off within a certain period of time.
Selling
Everyone always asks when the best time is to sell, but that can be a loaded question.
It depends on your home and what pool of buyers are more likely to purchase your home — first-time home buyers, local residents, retired or second-home buyers. Then there are the current market conditions, and in today’s market there really isn’t a time not to list your home.
With such low inventory, if your home is priced where it should be, and not overpriced, chances are there is always a buyer ready to buy your home. Selling now in January and February means less competition as many sellers will choose to list in March, April and May.
If your home may not be up to par with others in your neighborhood, selling now while few of your neighbors’ homes are listed will give you a better chance to sell with less competition.
Spring is still the strongest selling market, so if that is when you plan to list, start getting all the repairs and sprucing your home up now. Even in a sellers’ market, there are inexpensive things you can do that will make your home show better and sell faster, from refreshing your home to small updates, and of course the No. 1 improvement all sellers should do, STAGE your home to sell. This is as simple as rearranging what you have or having your Realtor bring staging items to help your home show better. If you would like more information on what upgrades you should do before you list, and free staging, please call me to set up an appointment.
Buying
If you have been thinking of buying but sitting on the fence, waiting could cost you more.
With low interest rates and home prices continuing to increase, the sooner you purchase the better. There are fewer buyers between January and March, so now is a good time to be looking for your perfect home with less competition from other buyers.
If you are purchasing below the $400K price point, you may have already experienced competing with multiple offers. To be in the best position and beat out other buyers, make sure you have sent all the documentation to the lender and get pre-approved not just pre-qualified, so you have the strongest pre-qualification to present to the seller.
There are other tricks in the book to help your offer stand out above others other than just increasing the purchase price. Make sure you have an experienced Realtor working with you and discuss your options up front so you will know what you need to do to win the bid if you are in a multiple offer situation.
If you would like more information on buying a home and winning the bid, or a list of homes that match your criteria, please contact me directly.
For more information on current market conditions, buying or selling a home, or a free home valuation, please feel free to contact me directly. Call (602) 571-6799, or visit my website at www.Homes2SellAZ.com.