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An Open Letter from an Agent to Anyone Considering Selling Their Home

So you’re thinking about selling your home? I realize you didn’t arrive at this decision lightly, and that you might be nervous or scared. There are so many things that are probably going through your head right now. I’d like to help you by offering some advice, and hopefully putting your mind at ease.

First, do some research.
It’s important for you to understand how much money you can expect to get for your home. We need to be realistic. Unfortunately, checking online sites like Zillow or Trulia isn’t going to give you the most accurate picture of your home’s value. This is why it’s important to sit down with a real estate agent that understands the market and will give you a realistic home value estimate by comparing similar properties that have recently sold in your area.

This meme is pretty funny (and rather sarcastic)… but at the same time, it illustrates a painful reality.

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Discuss your situation.
Discussing your situation with a real estate agent will also help you identify any other aspects of the transaction that you might be forgetting. For instance, there might be something glaringly obvious that could get in the way of a smooth home inspection that you might not be considering… or, on the other hand, a unique feature that your home might have which could help maximize its value. Also, discussing the process with an agent will help you understand how much money you can expect to walk away with after the closing.

Considering braving it alone?
If you’re considering selling your home without an agent, remember that you’re doing so at your own risk. There are quite a few things that can go wrong (many of them legal) which an agent is trained and perfectly set up to handle. Also, do you really want to deal with random strangers showing up at random times throughout the day, wondering whether they’re even qualified to buy a house or if they’re just bored and looking for something to do?

Or said a different way…

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Let an agent worry about these things; you’ll thank yourself later.

Pick the right agent.
Working with the right person can mean the difference between a smooth transaction and a less-than-memorable experience. How do you pick the right one?

First, make sure you feel comfortable with the person. You might spend a lot of time with them, so it’s important that you have a rapport.

Secondly, if the agent is giving you some inconvenient feedback or information, don’t dismiss them. The best agents will tell you the truth because they understand that setting the right expectations is more important than promising you the world.

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Remember, if it sounds too good to be true, it probably is. Lastly, ask as many questions as you need to until you feel comfortable with your level of understanding. The right agent will be patient with you and will understand just how big of a deal this is.

Don’t stress!
This might be easier said than done, but try to keep things in perspective. Your home is probably your most valuable asset and the most consequential transaction that you’ll ever work on. But people buy and sell their homes every day, and there’s a very comprehensive system in place that helps facilitate those transactions. Your agent will help guide you through the process and will help you feel at ease. Remember, you’re not the first and you won’t be the last person to feel the stress.

Expect the unexpected.
It would be lovely if I could promise you that everything will go perfectly smooth, but it rarely does. Obstacles almost always come up during a real estate transaction, but that doesn’t mean you should pull your hair out worrying. Agents know there will be bumps in the road, and they’ll also know how to get over them and get your home sold with as little stress for you as possible.

So don’t stress, be realistic, find the right agent to help, and remember that small hiccups are just part of the transaction.

And by the way, feel free to give me a call. 🙂

I’ve created a free guide to help my clients properly prepare their house for sale. If you’re thinking about selling your starter home in the near future (or ever…), grab a copy!  How To Prepare Your House For Sale

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Reasons You Should Sell Your Starter Home

When buyers are ready to purchase their first place, most are in the market for something relatively small and economical — in other words, a starter home. These diminutive dwellings are a smart first move for newbies because, ideally, they offer a chance to build equity without over-burdening the budget or requiring more maintenance than a novice homeowner is prepared to undertake.

But, as time passes, that once-sufficient space begins to feel a bit cramped and owners may find themselves pondering putting their starter home on the market.

If this feels like a scenario you can relate to, there’s no time like the present, as the old saying goes. “Why?” you ask. Read on!

Inventory is disappearing
Anyone who’s been shopping for a modest starter home lately knows it’s slim pickings out there. It’s not just your area that is suffering a shortage either; it’s nationwide. In fact, according to Trulia Inventory and Price Watch, the number of starter homes has dropped 8.7 percent in the last year.

One reason inventory is limited is that senior citizens who previously sold their houses and moved to assisted living facilities or nursing homes are embracing the aging-in-place trend.

That decision is making it difficult for millennials and first-time homebuyers to find affordable houses for sale. According to Trulia, those 55 and older own 53 percent of U.S. owner-occupied houses, which is the largest percentage since the government started collecting data in 1900.

Investors, too, are responsible for the shortage of starter homes available at attractive prices as after the 2008 recession many swooped in and scooped up lower-priced houses to improve and flip, upping property values exponentially.

Prices are soaring as bidding wars erupt
A decrease in supply means an increase in prices. New homebuyers are finding themselves forced to spend an average of 2.9 percent more of their annual income on a new home, particularly in popular markets.

With a limited number of properties available, being in possession of a starter home is a bit like owning Mickey Mantle’s 1952 Topps Baseball Card. In short, it’s more valuable than you might have initially realized.

In fact, starter-home owners might be shocked by the level of interest and the amount they could get for their abodes.

What starter homes lack in square footage they’re more than making up for in investment potential. According to Forbes.com, 55 percent of offers written by Redfin agents ranging from $200,000 to $400,000 faced competition earlier this year, while 60 percent of offers from $400,000 to $800,000 sparked bidding wars.

If you’d like to lock in a profit, this could be your chance.

Interest rates are low
According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 4.72 percent, which is near record lows in comparison to recent history.

Lower interest rates give buyers greater purchasing power. So, if you’ve been hoping to upsize, here’s your chance.

There’s no shortage of luxury homes
There appears to be a relative glut of premium homes available. While the market share of starter and trade-up homes both dropped to 22.1 percent, the share of premium homes rose 55.8 percent.

I’ve created a free guide to help my clients properly prepare their house for sale. If you’re thinking about selling your starter home in the near future (or ever…), grab a copy!  How To Prepare Your House For Sale

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What Or Who Are Fannie And Freddie, Anyway?

If you are a home buyer or seller or pay any attention whatsoever to the housing market, you have probably heard about “Fannie” and “Freddie.” Fannie stands for Fannie Mae but is really the acronym – FNMA – For Federal National Mortgage Association. Freddie is for Freddie Mac, or FHLMC, the Federal Home Loan Mortgage Corporation. These two companies keep the money for mortgages flowing. Here is how they do it and why they are important.

Both Fannie and Freddie are backed by the federal government, so the U.S. has a vested interest in helping them provide money. These two companies buy the mortgages that have already been made by banks, and are often referred to as “the secondary market.” Then, they pay themselves back by packaging big bunches of existing mortgages and selling them to big investors, such as pension funds, insurance companies, etc. who are looking to collect the interest. Fannie and Freddie have also created guidelines – and forms — that just about every lending institution uses for just about every loan.

You are probably wondering why banks cannot just fund loans, keep them, and earn the interest. If you live in a largely populated area, the big banks probably do have plenty of cash to lend. But let us say you live in a smaller area, such as Flagstaff, Arizona or Joplin, Missouri. Your local lending institutions may simply not have enough money to continually make home loans. So, they make you a loan according to certain common guidelines, and then they turn around and sell it to either Fannie or Freddie. Now, the local lending institutions have more cash to continue making more home loans. The truth is, without Fannie and Freddie, the mortgage market and housing market would dry up in many parts of the country. Not good. This is another reason why the government gets behind these two entities – homeownership is generally seen as good for the country.

Another thing that these entities have done is create the 30-year loan. If we had to pay off our homes in, say, five years, home ownership would be pretty unaffordable in large parts of the country. And the longer the loan term, the more interest is charged and the more profit is made by the large investors. Win-win, right?

Some economists and politicians want to privatize Fannie and Freddie and stop the government from backing them. They argue that there is too much risk if the government, and an endless flow of money from taxes, is involved. It is thought that this may have contributed to the 2008 economic crash. There are lots of views on this issue, but the majority agree that maintaining the status quo is a good thing. If you would like to know more, please check out the Fannie Mae and Freddie Mac websites.

Fannie Mae: http://www.fanniemae.com
Freddie Mac: http://www.freddiemac.com

Image courtesy of www.FutureAtlas.com.