Top 6 Home Design Trends To Watch in 2023
Over the past few years, many of us have spent extra time at home—and that means we appreciate the personal design touches that make a house cozy and comfortable more than ever. Some of us have adapted our dwellings in new ways, from creating functional home offices to upgrading the appliances we use most.
But while it’s important to make your home your own, it’s also smart to think about the long-term impact your renovations could have on its value. Choosing highly-personalized fixtures and finishes can make it harder for future homebuyers to envision themselves in the space. Even if you don’t plan to sell your home soon, investing in popular design choices that are likely to stand the test of time will make things easier down the road.
And if you’re in the market for a new home, it’s wise to keep an eye out for features that might need to be updated soon so you can factor renovation costs into your budget.
We’ve rounded up six trends that we think will influence interior design in 2023, as well as ideas for how you might incorporate them in your own home. Remember, before taking action, it’s always wise to consult with a real estate professional to understand how specific updates and upgrades will affect your property’s value in your local market.
For years, home design has been dominated by open-concept floor plans, particularly for kitchen, dining, and living areas. However, as the pandemic forced families to work and study from home, many struggled to find the privacy and separation they needed. As a result, designers report that more families are choosing to bring back kitchen and dining room walls to break up the space and create quieter areas.1
That doesn’t mean that we’re returning to an era of dark and cramped spaces, however. Even as walls make a return, it’s important to take care to retain a sense of flow and openness within the home and to prioritize natural light.
If you’re buying or building a new home, consider how you will use the space and whether or not an open floor plan will suit your needs. If you already live in a home with an open floor plan and it isn’t working for you, try rearranging furniture and strategically placing pieces like bookshelves, room dividers, or rugs to create distinct areas within the home and reduce noise.
In the past few years, we’ve seen the “biophilia” trend explode, and there are no signs that it will be any less popular in 2023.2 This trend is all about bringing the outside in by adding natural touches throughout your home.
This year, design experts predict that natural, sustainable materials like bamboo, cork, and live-edge wood will lend character without being overwhelming. Wooden kitchen cabinets and islands will become more common in 2023, with white oak and walnut among the most popular choices.3,4 Wood will also appear in bathroom vanities and shelving and furniture throughout the home.
Colors inspired by nature (think mossy greens and desert tones) will also play into this trend and will blend seamlessly with wood tones. We’re also seeing a return to natural stone countertop materials like quartzite, marble, dark leathered granite, and soapstone.4,5
If you’re planning to add new shelving or redo your kitchen, consider turning to these materials to embrace the biophilic look. Or, incorporate elements of the trend by choosing nature-inspired paint colors and adding to your houseplant collection.
Spending more time at home has shown us the importance of having the right lighting for specific tasks and times of the day. As a result, many homeowners are reconsidering the ways they light their homes and using light fixtures to change the usability and mood of their spaces.5
In particular, homeowners are rejecting bright, flat overhead lighting and replacing it with lamps and task-specific options. A layered approach to lighting—such as using a combination of under-cabinet, task, and ambient lighting in a kitchen—enables homeowners to tweak the level of light they’re using based on the time of day and what they are doing.
In 2023, we expect to see more statement chandeliers, pendants, and wall sconces in a variety of shapes and materials.6 Thinking about switching up the lighting in your home? Start by adding floor or table lamps and swapping out fixtures before you invest in rewiring your space. Take note of what works and what doesn’t and watch how the light in your home changes throughout the day. You can then use that information to make lighting decisions that require a bigger investment.
After the long dominance of whites and grays, more vibrant colors are coming back as a way to add character and dimension to homes.
This year, warm and earthy neutrals, jewel tones, and shades of red and pink are particularly popular.7,8 If your style tends toward the subtle, consider options like light, calming greens, blues, and pastels.
Major paint brands have responded to these homeowner preferences with their newest releases. Benjamin Moore’s 2023 color of the year, Raspberry Blush, is a lively shade of pinkish coral, while Sherwin William is embracing warm neutrals with Redend Point, a blushing beige.9,10 Behr’s choice of the year, Blank Canvas, is a creamy off-white that’s a warmer version of the stark whites that have been trending over the past few years.11
If you’re planning to put your home on the market soon, it’s better to play on the safer side and avoid extremely bold or bright color choices when it comes to paint or fixed finishes like tile and countertops. Instead, try incorporating pops of color through throw pillows, art, and accessories.
Goodbye, sharp corners. In 2023, arches and curves lend a sleek feel that draws on classical design and retro trends while remaining modern.5,8 Rounded corners feel more relaxed and natural than sharp edges, lending more of a sense of flow and comfort to a home.
If you want to incorporate the trend into your new build or remodeling plans, curved kitchen islands and bars and arched alcoves are all good options—or you can take it a step further with arched windows and doorways. You can also carry this trend through to your light fixtures by incorporating a bubble chandelier or globe pendants.
It’s easy to embrace this look without renovations, too. Look for a softer feel in furniture, with sofas, chairs, and tables that showcase curved edges. Or, break up your space with an arched folding screen and a circular rug.
Art Deco, the architecture and design style that took hold in the 1920s and ’30s, is enjoying a resurgence.12
As a style, Art Deco is marked by bold geometry, textures, and colors, as well as an emphasis on art. But the 2023 interpretation of this style is likely to be a bit less splashy than its historical roots. Designers predict that instead of incorporating all of the elements of the style, which could feel overwhelming, homeowners will pick bursts of color or bold accessories to bring some whimsy to their space.
Keep an eye out for vintage mirrors, lamps, or vases that bring a touch of Art Deco glam to your home, or embrace bold colors and fabrics like velvet. Choose pillows and throw blankets in bright colors and geometric patterns to nod to the look without diving in all the way.
DESIGNED TO SELL
Are you thinking about remodeling or making significant design changes to your home? Wondering how those changes might impact your future resale value?
Buyer preferences vary significantly based on your home’s neighborhood and price range. We’re happy to share our insights on the upgrades that will make it easier (or more difficult!) to sell your home. Give us a call for a free consultation.
The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.
1. US News and World Report – https://realestate.usnews.com/real-estate/slideshows/interior-design-trends-for-2023?slide=2
2. Architectural Digest –
3. Insider –
4. Houzz –
5. The Spruce –
6. The Spruce –
7. The Spruce –
10. Sherwin Williams –
12. The Spruce –
Last year, one factor drove the real estate market more than any other: rising mortgage rates.
In March 2022, the Federal Reserve began a series of interest rate hikes in an effort to pump the brakes on inflation.1 And while some market sectors have been slow to respond, the housing market has reacted accordingly.
Both demand and price appreciation have tapered, as the primary challenge for homebuyers has shifted from availability to affordability. And although this higher-mortgage rate environment has been a painful adjustment for many buyers and sellers, it should ultimately lead to a more stable and balanced real estate market.
So what can we expect in 2023? Will mortgage rates continue to climb? Could home prices come crashing down? While this is one of the more challenging real estate periods to forecast, here’s what several industry experts predict will happen to the U.S. housing market in the coming year.
MORTGAGE RATES WILL FLUCTUATE LESS
In 2022, 30-year fixed mortgage rates surged from roughly 3% in January to around 7%. According to Rick Sharga of real estate data company ATTOM, “We’ve never seen rates double in so short a period.”2
This year, economists forecast a less dramatic shift.
In an interview with Bankrate, Nadia Evangelou, senior economist for the National Association of Realtors, shares her vision of three possible mortgage rate scenarios:3
Realtor.com forecasts something similar to scenario #2 above: “Mortgage rates will average 7.4% in 2023, trickling down to 7.1% by year’s end.”4 The Mortgage Bankers Association, however, projects something closer to Evangelou’s scenario #3, with the 30-year fixed rate declining steadily throughout the year, averaging 6.2% in Q1 and 5.2% by Q4.5
Economists at Fannie Mae fall somewhere in the middle. In a recent press release, they predicted that the U.S. economy will experience a “modest recession” this year.6 But in their December Housing Forecast, they project that 30-year fixed mortgage rates will only fall by half a point from an average of 6.5% in Q1 to 6.0% in Q4.7
“From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession,” said Fannie Mae Chief Economist Doug Duncan.6
What does it mean for you? Even the experts can’t say for certain where mortgage rates are headed. Instead of trying to ”time the market,” focus instead on buying or selling a home when the time is right for you. There are a variety of mortgage options available that can make a home purchase more affordable, including adjustable rates, points, and buydowns—and keep in mind you can always refinance down the road. We’d be happy to refer you to a trusted mortgage professional who can outline your best options.
SALES VOLUME WILL FALL AND INVENTORY WILL RISE
It looks like the home-buying frenzy we experienced in recent years is behind us. While the desire to own a home remains strong, higher mortgage rates have made it unaffordable for a large segment of would-be buyers.
Many economists expect the number of home sales to continue to decline this year, leading to an increase in listing inventory and days-on-market, or the time it takes to sell a home. But, there is a wide range when it comes to specifics.
Economists at Fannie Mae forecast that total home sales will fall by around 20% this year before rising again by nearly 15% in 2024.7 National Association of Realtors Chief Economist Lawrence Yun projects a less extreme dip of 7% in 2023 with a rebound of 10% next year.8
Realtor.com Chief Economist Danielle Hale foresees something in between. “The deceleration in home sales is likely to continue as high home prices and mortgage rates limit the pool of eligible home buyers. We anticipate that existing home sales will decline another 14.1% in 2023.” She expects this drop in sales to lead to a nearly 23% increase in inventory levels this year, offering more choices for buyers who have struggled to find a home in the past.9
However, given the severe lack of housing supply, even with a double-digit increase, the market is expected to remain relatively tight and below pre-pandemic levels. Hale points out: “It’s important to keep historical context in mind. The level of inventory in 2023 is expected to fall roughly 15% short of the 2019 average.”9
What does it mean for you? If you’ve been frustrated by a lack of inventory in the past, 2023 may bring new opportunities for you to find the perfect home. And today’s buyers have more negotiating power than they’ve had in years. Contact us to find out about current and future listings that meet your criteria.
If you’re hoping to sell, you may want to act fast; rising inventory levels will mean increased competition. We can help you chart the best course to maximize your profits, starting with a professional assessment of your home’s current market value. Reach out to schedule a free consultation.
HOME PRICES WILL REMAIN RELATIVELY STABLE
While some economists expect home prices to fall this year, many expect them to remain fairly stable. “For most parts of the country, home prices are holding steady since available inventory is extremely low,” said Yun at a November conference.8
Nationally, Yun expects the average median home price to tick up by 1% in 2023, with some markets experiencing greater appreciation and others experiencing declines.8 Economists at Fannie Mae offer a similar projection, forecasting a slight decrease in their Home Price Index of about 1.5%, year-over-year.7
Other experts foresee a larger fluctuation. Hale expects U.S. home prices to rise by 5.4% this year, while Morgan Stanley is forecasting a 7% drop from the peak in June 2022.9,10
Still, many economists agree that a housing market crash like the one we experienced in 2008 is highly unlikely. The factors that caused home prices to plunge during the Great Recession—specifically lax lending standards and a surplus of inventory—aren’t prevalent in our current market.10 Therefore, home values are expected to remain comparatively stable.
What does it mean for you? It can feel scary to buy a home when there’s uncertainty in the market. However, real estate is a long-term investment that has been shown to appreciate over time. And keep in mind that the best bargains are often found in a slower market, like the one we’re experiencing right now. Contact us to discuss your goals and budget. We can help you make an informed decision about the right time to buy.
And if you’re planning to sell this year, you’ll want to chart your path carefully to maximize your profits. Contact us for recommendations and to find out what your home could sell for in today’s market.
RENT PRICES WILL CONTINUE TO CLIMB
Affordability challenges for would-be buyers, inflationary pressures, and an overall lack of housing could continue to drive “above-average” rent price increases in much of the country.11 The Federal Reserve Bank of Dallas expects year-over-year rental price growth to tick up to 8.4% in May before moderating later in the year.12
According to Hale, “U.S. renters will continue to face challenges from limited supply and excess demand in the coming year that will keep upward pressure on rent growth. At a national level, we forecast rent growth of 6.3% in the next 12 months, somewhat ahead of home price growth and historical rent trends.”9
However, there are signs that the surge in rent prices could be tapering. According to Jay Parsons, head of economics for rental housing software company RealPage, there’s some evidence of a slowdown in demand. He predicts that market-rate rents will rise just 3.3% this year. Still, analysts agree that a return to lower pre-pandemic rental prices is unlikely.10
What does it mean for you? Rent prices are expected to keep climbing. But you can lock in a set mortgage payment and build long-term wealth by putting that money toward a home purchase instead. Reach out for a free consultation to discuss your options.
And if you’ve ever thought about purchasing a rental property, now may be a perfect time. Call today to get your investment property search started.
WE’RE HERE TO GUIDE YOU
While national real estate forecasts can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and drive home values in your particular neighborhood.
If you’re considering buying or selling a home in 2023, contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.
The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.
5. Mortgage Bankers Association –
Home for the Holidays:
How To Stretch Your Budget in a Season of Inflation
You don’t have to break the bank to celebrate the holidays in style—even in this season of inflation. Prices may be higher on everything from food to gifts to decorations, but there are still plenty of opportunities to eke out extra savings.
For example, according to the U.S. Environmental Protection Agency (EPA), you can save a couple of hundred dollars a year just by sealing your home and boosting its insulation.1 Other small fixes—such as swapping old light bulbs for LEDs and plugging electronics into a powerstrip—can boost your yearly savings enough to pay off some of your holiday budget.
And thanks to a pandemic-era boom in online shopping, it is easier than ever to find deals on new and pre-owned furniture, thrifted gifts, DIY decor, and more. Even secondhand stalwarts like Goodwill have joined the digital fray, making it a cinch to score gently-used treasures at extra-low prices.2
You won’t be the only one bargain-hunting your way to a more financially-stable New Year. Multiple surveys have found that inflation is not only chilling people’s spending, it’s also prompting shoppers to search for better deals and creative ways to reduce their bills.3
Here are some strategies you can use to boost your holiday budget by trimming household expenses:
If you’re finding it harder than it used to be to serve your family dinner on a budget, you’re not alone. With the U.S. food-at-home index (a measure of grocery price inflation) at a 43-year high, many families are struggling to control costs on food staples, such as meat, dairy, produce, and grains.4
That’s made pulling off holiday gatherings especially stressful lately. But don’t despair: Even with inflation, retailers are still giving motivated shoppers plenty of opportunities to whittle down their bills.
The key is to pay attention to the cost of each item on your shopping list—not just the most expensive—and look for easy swaps and discounts. For example, try buying non-perishable items in bulk, especially when they’re on sale, and only in-season produce. Or trade name-brand goods for less expensive options from a store’s private label. As you tap into your inner bargain hunter, you could be surprised by what you save when you’re more mindful of your selections.
And unlike in the old days, you no longer have to clip your way through paper flyers to snag a bargain. Instead, you can save both time and money by scouting for deals online, digitally clipping coupons, and earning cash back through special apps and browsers. For example, coupon aggregation sites, like Coupons.com, and shopping apps—such as Checkout 51 and Ibotta—make it easy to score discounts and cash back on a variety of purchases, including groceries.
Also, check to see if your neighborhood grocer posts their weekly flyers online. If you’re hosting a holiday party, the markdowns you find can help you narrow your food and recipe choices, based on what’s currently on sale.
You don’t have to sacrifice style for the sake of preserving your holiday budget either. If you’re expecting company this year and would like to add some festive flair to your home, you can do so inexpensively—especially if you’re willing to decorate with items that are secondhand.
Thrifting is back in vogue, with an increasing number of shoppers preferring pre-owned furniture and home goods. A recent study found that the “recommerce” market grew almost 15% last year, which was twice the pace of general retail.5 Plus, buying used isn’t just a great way to save money, it also helps the environment by keeping reusable items out of landfills.
Fortunately, it’s become easier to score secondhand deals online. For example, you can scout consumer marketplaces on Facebook, Craigslist, and OfferUp. Or you can take advantage of neighborhood freecycles and “Buy Nothing” groups. And a number of thrift shops now have e-commerce sites, including major chains, like Goodwill.
If you’re handy with a paintbrush or have some basic carpentry skills, you can also modernize some of your existing furniture by upcycling it yourself. Or, if you enjoy crafting, search through your own recycling or sewing bin for raw material to make one-of-a-kind decorations.
Don’t stress yourself out, though, if you don’t have the time or money to dress your home the way you hoped. “A house doesn’t have to be perfect or completely done for it to feel festive or inviting,” designer Justina Blakeney noted in an interview with the Washington Post. “These are family and friends, and they are not judging you.”6
Holidays are always a tricky time to undergo big renovations. But with ongoing worker and material shortages, now is an especially bad time to commit. Inflated costs can add thousands to your reno budget –—and unnecessary stress to your holiday.
Instead of suffering through an ill-timed remodel, you’re better off saving this time of year for simpler, less expensive projects you can do yourself.
One winter-perfect upgrade to consider: Build a DIY fire pit so that you and your guests can roast marshmallows and relax in the cozy comfort of your backyard. You can also add some extra ambiance by hanging energy-efficient LED outdoor string lights that change from white to colorful. These are festive enough for the holidays, but also versatile enough to use year-round.
Or, if you’d rather curl up by an indoor fire, channel your DIY energy into a fireplace upgrade. Adding a wooden beam to the top of your mantel can add an extra layer of coziness. Alternatively, re-tiling or painting your fireplace surround can lend contemporary flair.
Just be sure to stick to DIY projects that you know you can do a quality job on—especially if your changes will be difficult to reverse. Feel free to reach out for a free assessment to find out how your planned renovations could impact your home’s resale value.
You can save money by completing basic home maintenance tasks , such as swapping your furnace filter and updating your lightbulbs. But if you really want to lower your bills this winter, consider projects that make your home more energy efficient.
According to the EPA, 9 out of 10 homes in the U.S. are under-insulated, which wastes energy and money.7 Luckily, there are plenty of DIY insulation projects that you can complete in just a few days. For example, the EPA offers guides on how to:
● Insulate your attic or basement crawl space
● Weatherstrip doors and windows
● Seal areas around the house that may be leaking air, including electrical outlets and fireplaces
The savings you get from these projects can really add up. The EPA estimates that sealing and insulating your ducts can make your HVAC system up to 20% more efficient.8 And thanks to new provisions from the Inflation Reduction Act, you can also save a bundle this year by investing in certain energy-efficient upgrades and claiming a tax credit.9 Be sure to check with us about any local rebates and incentives that may be available, too, before getting started on a project.
To avoid overextending yourself during the holidays, one of the best things you can do is track your income and expenses. If your monthly budget is usually tight, you may need to make some adjustments to free up cash for holiday expenditures.
For example, here’s a sample budget worksheet that we created. Start by adding in your expenses: Under the “Typical” column, you can list your standard expenses, and under the “Adjusted” column, list any areas where you could cut back on spending.
Then consider how your standard wages may be adjusted this month by extra shifts, additional tips, or an end-of-year bonus. By decreasing your spending and/or increasing your income, you can build room in your budget for holiday gifts and gatherings.
HOUSEHOLD BUDGET WORKSHEET
Mortgage/taxes/insurance or Rent
Utilities (electricity, water, gas, trash)
Phone, internet, cable
Home maintenance and repairs
Gas, maintenance, repairs
Clothing and personal care
Savings, retirement, college fund
Bonus, tips, other
Total Adjusted Income
Total Adjusted Expenses
EXTRA SAVINGS FOR YOUR HOLIDAY BUDGET
Feel free to utilize this worksheet as a template that you can personalize to your needs, or ask us for a PDF copy that you can print out and use right away.
WE’RE HERE TO HELP
We would love to help you meet your financial goals now and in the year ahead. Whether you want to find lower-cost alternatives for home renovations, maintenance, or services, we are happy to provide our insights and referrals.
And if you’re saving up to buy a new home, we can help with that, too. This is the perfect time to score a great deal because only the most motivated homebuyers and sellers are active in the market right now. So reach out to schedule a free consultation. We can fill you in on some of the exciting programs and incentives we’re seeing that help make homeownership more affordable.
The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.
1. U.S. Environmental Protection Agency (EPA) – https://www.energystar.gov/campaign/waysToSave#!card0-GW91
6. Washington Post –
7. U.S. Environmental Protection Agency – https://www.energystar.gov/campaign/seal_insulate/why_seal_and_insulate
8. Energy Star –
9. The White House –
7 Tips to Maximize Your Home’s Sale Price
Over the past few years, a real estate buying frenzy bid up home prices to eye-popping amounts. However, as mortgage rates have risen, buyer demand has cooled. 1 Consequently, home sellers who enter the market today may need to reset their expectations.
The reality is, it’s no longer enough to stick a “for sale” sign in the yard and wait for buyers to bang down the door. If you want to net the most money possible for your property in today’s market, you’ll need an effective game plan and a skilled team of professionals to implement it.
Fortunately, we’ve developed a listing strategy that combines our proven approach to preparation, pricing, and promotion—all designed to help you get top dollar for your home. But you will play an important role in the selling process, as well.
Here are some crucial steps you can take to set yourself up for success as a home seller in this market:
When you sell something, it’s important to consider what your customer wants to buy. And according to the National Association of Realtors, only 6% of today’s buyers report that they are looking for a DIY fixer-upper.2 The vast majority want a move-in-ready home, which means that any outstanding repairs or dated features can be a major turn-off.
Before your home goes on the market, we’ll conduct a thorough walk-through to identify any problems that could prevent it from selling. In some cases, we may recommend a professional pre-listing inspection. Finding and addressing issues like leaks, rot, and foundation problems up front can pay off in the final sale price. Plus, it prevents sales from falling through because of a red flag on the home inspection, a scenario no seller wants to face.
Beyond repairs, we’ll also help you identify the simple upgrades that offer the highest return on your investment. For example, new paint can give your home a fresh look at a reasonable cost. However, it’s important to choose the right colors. One study found that painting your bathroom light blue could lead to a 1.6% increase in the offer price!3 Similarly, minor landscaping improvements can pay off in a major way. A healthy lawn offers an estimated 256% return on investment.4
When buyers look at a home for sale, they’re trying to envision themselves living there. That’s hard to do if it’s chock-full of the current owner’s family photos, children’s artwork, and souvenir collections. Plus, cluttered homes look smaller, and older items can make them feel dated.
Decluttering before you put your home up for sale will help you in the long run—after all, you’ll need to move all your things to your new home eventually. Now is the time to shred, digitize, or organize old documents, donate old clothes, or move bulky furniture into storage. At a minimum, you’ll want to pack away excess items neatly before potential buyers view the home. Remove personal photos and other trinkets to create a blank slate that viewers can imagine decorating with their own prized possessions.
If you feel overwhelmed by this process, we’d be happy to make recommendations or refer you to a local service provider who can help.
Just as you take care to dress professionally for a job interview, you should always ensure your home looks its best for potential buyers. Home shoppers today are used to scrolling through Instagram and Pinterest, and they want to see the same wow factor when touring a home.
The process of making your home look its best and appeal to potential buyers is called staging, and it can be a game changer. According to the International Association of Home Staging Professionals, an average priced staged home sells 5 to 11 times faster than its unstaged counterpart. Even better, the majority of staged homes sell for 4% to 20% over list price!5
Some sellers hire a professional stager, who may bring in furniture and decor to increase the home’s appeal. Others choose to stage their homes themselves. We can help advise you on which route to choose and how much to invest in the process.
It’s also important to consider what buyers in your neighborhood are likely to be looking for in a home. We can help guide your staging choices with our local market insights. For example, in neighborhoods where a large share of residents work from home, it may be effective to stage one room as an office space so potential buyers can envision their day-to-day routine.
Most of us don’t live picture-perfect lives, and our homes reflect that (sometimes messy) reality. But when your home is on the market, it’s important to ensure that it is always ready for viewers, even on short notice. A missed showing is a missed opportunity to sell your home!
Before your home hits the market, it may be worth hiring professional cleaners to get in all the nooks and crannies. After, try your best to keep things spic and span. Just a few minutes a day wiping down counters, sweeping the floors, and vacuuming can make a big difference.
It’s also worth noting that most buyers will open cabinets, drawers, and closets—so try to make sure everything is as neat and organized as possible. Keep toiletries and small appliances off countertops, and secure valuables and sensitive documents in a safe or off-site.
Want help finding a cleaning service to make your home shine for buyers? Reach out for a referral!
In the past few years, you may have seen homes in your neighborhood sell for shocking amounts and wondered if you could get a similar price for your property. The temptation to list your home on the high side can be strong, but it’s best to be realistic from the start. Even in a hot market, some homes will sit for months. And the longer a property is listed, the more buyers worry that something is wrong with it.6
Of course, you also don’t want to set your price too low and lose out on potential profit. That’s why it’s essential to work with real estate agents (like us!) who know the ins and outs of our local market and what buyers are willing to pay today. In a quickly-evolving market, comparable sales from a few months ago can lag the current market reality.
Fortunately, if you’ve owned your home for several years, chances are good that it’s worth much more today than you paid for it. That means you stand to walk away with a handsome profit. In fact, recent reports show that homeowner equity is at an all-time high.7
The past few years of over-asking-price offers with few contingencies have set certain expectations for many sellers. It’s only natural to feel hurt or even offended if an offer comes in lower than what you think your home is worth.
However, it’s important to keep in mind that those market conditions were unprecedented, and we are now returning to a more typical market. Home sellers who act rationally, rather than emotionally, are going to get the best results.
Remember: You can always counter a low offer. The same goes for repair requests and contingencies—everything is negotiable. However, it’s important to accept that the market is adjusting and flexibility is key. Keep your expectations reasonable, and remain open-minded. And you can rest assured knowing that we’ll be by your side every step of the way to help you navigate the process and negotiate a great deal.
The economics impacting mortgage rates may be national, but real estate markets are hyperlocal. That’s why working with a professional agent who understands your neighborhood’s dynamics is essential. Through our experience, we’ve gathered insights that can help us position your home for success in this market. Plus, we have the resources to connect with qualified buyers searching for a home like yours.
Working with a knowledgeable agent is also the secret to getting as much money as possible for your home. We have access to extensive data on recent sales in your neighborhood, which we will use to price and promote your property. That’s one reason why homes sold by agents draw much higher prices than those sold by their owners alone. While for-sale-by-owner homes went for a median price of $260,000 in 2020, the median for homes sold by agents was $318,000.8 That’s a difference of $58,000—and money you don’t want to leave on the table.
YOUR AGENT AND ADVOCATE
Selling a home in a fast-changing market can be stressful. You’re likely to hear conflicting advice and opinions from people in your life, and decisions like what color to paint your front door or how much to list your home for can be overwhelming.
That’s where we come in. The market may be adjusting, but it’s still highly advantageous for sellers—and we’re here to help you make the most of it. We’re listing experts in our area, and we know what steps you need to take for a smooth, profitable transaction.
If you’re considering buying or selling a home, we invite you to reach out to schedule a free consultation. We’re happy to talk through your specific situation and goals and help you identify your next steps.
1. Yahoo! Finance –
2. National Association of Realtors –
3. Zillow –
4. Angi –
5. International Association of Home Staging Professionals –
6. Washington Post –
8. National Association of Realtors – https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers#purchased
Buy Now or Rent Longer?
5 Questions to Answer Before Purchasing Your First Home
Deciding whether to jump into the housing market or rent instead is rarely an easy decision – especially if you’re a first-time homebuyer. But in today’s whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership.
A real estate boom during the pandemic pushed home prices to an all-time high.1 Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down.
But is renting a better alternative? Rents have also soared along with inflation – and are likely to continue climbing due to a persistent housing shortage.2 And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future.
So, what’s the better choice for you? There’s a lot to consider when it comes to buying versus renting. Luckily, you don’t have to do it alone. Reach out to schedule a free consultation and we’ll help walk you through your options. You may also find it helpful to ask yourself the following questions:
You’ll get the most financial benefit from a home purchase if you own the property for at least five years.3 If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.
There are costs associated with buying and selling a home, and it may take time for the property’s value to rise enough to offset those expenditures.
Even though housing markets can shift from one year to the next, you’ll typically find that a home’s value will ride out a market’s ups and downs and appreciate with time.4 The longer you own a property, the more you are likely to benefit from its appreciation.
Once you’ve found a community that you’d like to stay in for several years, then buying over renting can really pay off. You’ll not only benefit from appreciation, but you’ll also build equity as you pay down your mortgage – and you’ll have more security and stability overall.
Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow.
If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area.
One helpful tool for evaluating your options is a neighborhood’s price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent.5 Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term.
According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing home 10 years ago would have gained roughly $225,000 in equity — all while maintaining a steady mortgage payment.6
In contrast, someone who chose to rent for the past 10 years would have not only missed out on those equity gains, but they would have also seen U.S. rental prices increase by around 66%.7
So even if renting seems like a better bargain today, buying could be the better long-term financial play.
Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is the better value in your particular neighborhood.
If you determine that buying a home is the better value, you’ll want to evaluate your financial readiness.
Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that’s a sign you may be better off waiting until you’ve built a larger rainy-day fund.
Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won’t be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs.
Still, you could find that the monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it’s not always the cheaper option.
Plus, even though you’ll be in charge of financing your home’s upkeep if you buy, you’ll also be the one who stands to benefit from the fruits of your investment. Every major upgrade, for example, not only makes your home a nicer place to live; it also helps boost your home’s market value.
If you want to buy a home but aren’t sure you can afford it, give us a call to discuss your goals and budget. We can give you a realistic assessment of your options and help you determine if your homeownership dreams are within reach.
If you’re prepared to handle the costs of homeownership, you’ll next want to look into how likely you are to get approved for a mortgage.
Every lender will have its own criteria. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment.
For example, lenders like to see evidence that your income is stable and predictable. So if you’re self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren’t at risk of becoming financially overextended.
In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate.
Whatever your circumstances, it’s always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you’re interested, and we’ll give you a referral to a loan officer or mortgage broker who can help.
How would owning a home change my life?
Before you begin the preapproval process, however, it’s important to consider how homeownership would affect your life, aside from the long-term financial gains.
In general, you should be prepared to invest more time and energy in owning a home than you do renting one. There can be a fair amount of upkeep involved, especially if you buy a fixer-upper or overcommit yourself to a lot of DIY projects. If you’ve only lived in an apartment, for example, you could be surprised by the amount of time you spend maintaining a lawn.
On the other hand, you might relish the chance to tinker in your very own garden, make HGTV-inspired improvements, or play with your dog in a big backyard. Or, if you’re more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners.
The great thing about owning a home is that you can generally do what you want with it – even if that means painting your walls fiesta red one month and eggplant purple the next.
The choice – like the home – is all yours.
HAVE MORE QUESTIONS? WE’VE GOT ANSWERS
The decision to buy or rent a home is among the most consequential you will make in your lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don’t hesitate to reach out for a personalized consultation, regardless of where you are in your deliberations. We’d be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals.
4. Federal Reserve Bank of St. Louis –
5. National Association of REALTORS – https://www.nar.realtor/blogs/economists-outlook/price-to-rent-ratios-by-state-from-2014-2019
6. National Association of REALTORS –
Mortgage rates have been on a roller coaster ride this year, rising and falling amid inflationary pressures and economic uncertainty. And even the experts are divided when it comes to predicting where rates are headed next. 1 This climate has been unsettling for some homebuyers and sellers. However, with proper planning, you can work toward qualifying for the best mortgage rates available today – and open up the possibility of refinancing at a lower rate in the future.
How does a lower mortgage rate save you money?
According to Trading Economics, the average new mortgage size in the United States is currently around $410,000.2 Let’s compare a 5.0% versus a 6.0% fixed-interest rate on that amount over a 30-year term.
With a 5% rate, your monthly payments would be about $2,201. At 6%, those payments would jump to $2,458, or around $257 more. That adds up to a difference of almost $92,600 over the lifetime of the loan. In other words, shaving off just one percentage point on your mortgage could put nearly $100K in your pocket over time.
So, how can you improve your chances of securing a low mortgage rate? Try these eight strategies:
1. Raise your credit score.
Borrowers with higher credit scores are viewed as “less risky” to lenders, so they are offered lower interest rates. A good credit score typically starts at 690 and can move up into the 800s.3 If you don’t know your score, check with your bank or credit card company to see if they offer free access. If not, there are a plethora of both free and paid credit monitoring services you can utilize.
If your credit score is low, you can take steps to improve it, including:4
● Correct any errors on your credit reports, which can bring down your score. You can access reports for free by
● Pay down revolving debt. This includes credit card balances and home equity lines of credit.
● Avoid closing old credit card accounts in good standing. It could lower your score by shortening your credit
history and shrinking your total available credit.
● Make all future payments on time. Payment history is a primary factor in determining your credit score, so make
it a priority.
● Limit your credit applications to avoid having your score dinged by too many inquiries. If you’re shopping around
for a car loan or mortgage, minimize the impact by limiting your applications to a short period, usually 14 to 45 days.5
Over time, you should start to see your credit score climb — which will help you qualify for a lower mortgage rate.
2. Keep steady employment.
If you are preparing to purchase a home, it might not be the best time to make a major career change. Unfortunately, frequent job moves or gaps in your résumé could hurt your borrower eligibility.
When you apply for a mortgage, lenders will typically review your employment and income over the past 24 months. 5 If you’ve earned a steady paycheck, you could qualify for a better interest rate. A stable employment history gives lenders more confidence in your ability to repay the loan.
That doesn’t mean a job change will automatically disqualify you from purchasing a home. But certain moves, like switching from W-2 to 1099 (independent contractor) income, could throw a wrench in your home buying plans.6
3. Lower your debt-to-income ratios.
Even with a high credit score and a great job, lenders will be concerned if your debt payments are consuming too much of your income. That’s where your debt-to-income (DTI) ratios will come into play.
There are two types of DTI ratios:7
What’s considered a good DTI ratio? For better rates, lenders typically want to see a front-end DTI ratio that’s no higher
than 28% and a back-end ratio that’s 36% or less.7
If your DTI ratios are higher, you can take steps to lower them, like purchasing a less expensive home or increasing your
down payment. Your back-end ratio can also be decreased by paying down your existing debt. A bump in your monthly income will also bring down your DTI ratios.
4. Increase your down payment.
Minimum down payment requirements vary by loan type. But, in some cases, you can qualify for a lower mortgage rate if you make a larger down payment.8
Why do lenders care about your down payment size? Because borrowers with significant equity in their homes are less likely to default on their mortgages. That’s why conventional lenders often require borrowers to purchase private mortgage insurance (PMI) if they put down less than 20%.
A larger down payment will also lower your overall borrowing costs and decrease your monthly mortgage payment since you’ll be taking out a smaller loan. Just be sure to keep enough cash on hand to cover closing costs, moving expenses, and any furniture or other items you’ll need to get settled into your new space.
5. Compare loan types.
All mortgages are not created equal. The loan type you choose could save (or cost) you money depending on your qualifications and circumstances.
For example, here are several common loan types available in the U.S. today:9
● Conventional — These offer lower mortgage rates but have more stringent credit and down payment requirements than some other types.
● FHA — Backed by the government, these loans are easier to qualify for but often charge a higher interest rate.
● Specialty — Certain specialty loans, like VA or USDA loans, might be available if you meet specific criteria.
● Jumbo — Mortgages that exceed the local conforming loan limit are subject to stricter requirements and may have higher interest rates and fees.10
When considering loan type, you’ll also want to weigh the pros and cons of a fixed-rate versus variable-rate mortgage:11
● Fixed rate — With a fixed-rate mortgage, you’re guaranteed to keep the same interest rate for the entire life
of the loan. Traditionally, these have been the most popular type of mortgage in the U.S. because they offer stability and predictability.
● Adjustable rate — Adjustable-rate mortgages, or ARMs, have a lower introductory interest rate than fixed-rate
mortgages, but the rate can rise after a set period of time — typically 3 to 10 years.
According to the Mortgage Bankers Association, 10% of American homebuyers are now selecting ARMs, up from just 4% at the start of this year.12 An ARM might be a good option if you plan to sell your home before the rate resets. However, life is unpredictable, so it’s important to weigh the benefits and risks involved.
6. Shorten your mortgage term.
A mortgage term is the length of time your mortgage agreement is in effect. The terms are typically 15, 20, or 30 years.13
Although the majority of homebuyers choose 30-year terms, if your goal is to minimize the amount you pay in interest, you should crunch the numbers on a 15-year or 20-year mortgage.
With shorter loan terms, the risk of default is less, so lenders typically offer lower interest rates.13 However, it’s important to note that even though you’ll pay less interest, your mortgage payment will be higher each month, since you’ll be making fewer total payments. So before you agree to a shorter term, make sure you have enough room in your
budget to comfortably afford the larger payment.
7. Get quotes from multiple lenders.
When shopping for a mortgage, be sure to solicit quotes from several different lenders and lender types to compare the
interest rates and fees. Depending upon your situation, you could find that one institution offers a better deal for the type of loan and term length you want.
Some borrowers choose to work with a mortgage broker. Like an insurance broker, they can help you gather quotes and find the best rate. However, if you use a broker, make sure you understand how they are compensated and contact more than one so you can compare their recommendations and fees.14
Don’t forget that we can be a valuable resource in finding a lender, especially if you are new to the home buying
process. After a consultation, we can discuss your financing needs and connect you with loan officers or brokers best suited for your situation.
8. Consider mortgage points.
Even if you score a great interest rate on your mortgage, you can lower it even further by paying for points. When you buy mortgage points — also known as discount points — you essentially pay your lender an upfront fee in exchange for a lower interest rate. The cost to purchase a point is 1% of your mortgage amount. For each point you buy, your
mortgage rate will decrease by a set amount, typically 0.25%.15 You’ll need upfront cash to pay for the points, but you can more than make up for the cost in interest savings over time.
However, it only makes sense to buy mortgage points if you plan to stay in the home long enough to recoup the cost. You can determine the breakeven point, or the period of time you’d need to keep the mortgage to make up for the fee, by dividing the cost by the amount saved each month.15 This can help you determine whether or not mortgage points
would be a good investment for you.
Unfortunately, the rock-bottom mortgage rates we saw during the height of the pandemic are behind us. However, today’s 30-year fixed rates still fall beneath the historical average of around 8% — and are well below the all-time peak of 18.45% in 1981.16, 17
And although higher mortgage rates have made it more expensive to finance a home purchase, they have also eliminated some of the competition from the market. Consequently, today’s buyers are finding more homes to choose from, fewer bidding wars, and more sellers willing to negotiate or offer incentives such as cash toward closing costs or mortgage points. If you’re ready and able to buy a home, there’s no reason that concerns about mortgage rates should sideline your plans. The reality is that many economists predict home prices to continue climbing.18 So you may be better off buying today at a slightly higher rate than waiting and paying more for a home a few years from now. You can always refinance if mortgage rates go down, but you can’t make up for the lost years of equity growth and appreciation.
If you have questions or would like more information about buying or selling a home, reach out to schedule a free
consultation. We’d love to help you weigh your options, navigate this shifting market, and reach your real estate goals!
2. Trading Economics –
4. Debt.org –
9. Consumer Financial Protection Bureau –
11. Bankrate –
13. Consumer Financial Protection Bureau –
14. Federal Trade Commission –
15. Bankrate –
17. Rocket Mortgage –
10 Pro Tips for a Smooth Home Move
The process of buying a new home can be both exhilarating and exhausting. But the journey doesn’t stop when you close on your property. On the contrary, you still have quite a bit to do before you can begin the process of settling into your new place.
Fortunately, you don’t have to do everything in a day. You don’t have to do it all alone, either. When you work with us to sell or purchase a home, you’ll have an ally by your side long after your transaction has closed. We’ll continue to be a resource, offering advice and referrals whenever you need them on packing, hiring movers and contractors, and acclimating to your new home and neighborhood.
When it comes to a life event as stressful as moving, it pays to have a professional by your side. Here are some of our favorite pro tips to share with clients as they prepare for an upcoming move.
1. Watch out for moving scams.
Maybe you receive a flyer for a moving company in the mail. Perhaps you find a mover online. Either way, never assume that you’re getting accurate information. According to the Better Business Bureau, moving-related fraud is on the rise. In 2021 alone, individuals and families reported more than $730,000 lost to moving scams, an increase of 216% over the previous year.1
How can you tell if a moving deal is too good to be true? Trust your instincts. If the price appears too low or you can’t pin down the mover’s physical business address, try someone else. The same goes for any moving company representative who dodges questions. Reputable movers should offer transparent pricing, conduct in-home estimates, and provide referrals and copies of their insurance documents upon request.2 For help finding trustworthy movers, reach out. We’d be happy to share our recommendations.
2. Insure your belongings.
Your moving company promises to take care of your custom piano or your antique furniture. But don’t just take their word for it. Ask to see how much insurance they carry and talk about how the claims process works. That way, you’ll know what is (and isn’t) covered in case of loss or damage.
Of course, some items are priceless because they’re irreplaceable. You might want to move your more sensitive valuables (jewelry, documents, family heirlooms, etc.) in your own vehicle just to be safe. For added peace of mind, call your rental or home insurance provider if you’re moving anything yourself. You might already be protected or be able to purchase extra insurance to cover your move. If those options are unavailable, you could opt for moving insurance from a third-party carrier.3
3. Start packing when you start looking for a new home.
As soon as your house hunting begins in earnest, think about packing away things you won’t need for the next few months. These could include seasonal or holiday decor, clothing, and books. Tackling just one or two boxes a day will give you a head start.
If you’re going to put your current home on the market, you’ll want to declutter anyway. Decluttering will make your home seem larger, and depersonalizing helps buyers envision their own items in the space. Consider selling, donating, or throwing out possessions you no longer need. The things you want to keep can be placed in storage until you officially start moving to a new place.
4. Pack to make unpacking easier.
Have you ever opened a packed box only to find that it’s filled with an assortment of items that don’t belong together? This isn’t efficient and will only make unpacking harder. A better way to pack is to bundle items from a single room in a labeled box. Labels can let movers know (and remind you) where to place each box, whether it’s fragile, and which side needs to be up. Some people like to assign colors to each room in their new home to make distributing color-coded boxes a breeze.
Feel free to unleash your inner organizer with this project. For example, you could create a spreadsheet and assign each box a number. As boxes are packed, simply fill in the spreadsheet with a list of contents. Anyone with access to the spreadsheet can log in and quickly find the desired item.
5. Think outside the box when transporting clothes.
Who wants to worry about boxing up clothes? If you plan on hiring professional movers, ask if you can leave clothing in your dressers. In many cases, they will use plastic to wrap the dresser so the drawers don’t fall out during transport. If keeping your clothes in your furniture makes it too heavy, the movers might be able to wrap and move drawers by themselves.
Another easy transport trick involves turning clean garbage bags into garment bags. Poke a hole in the bottom of a garbage bag, turn the bag upside down, slide it over five to seven garments on hangers, and lay the items flat in the back seat or trunk of your vehicle. The bags will help prevent wrinkling, and your clothes will be ready to hang up when you get to your new home.
6. Document prior to disassembling appliances and furnishings.
Few things are as confusing as looking at a plastic baggie filled with nuts, bolts, and screws from your disassembled dining room table or sorting through a box of electrical wires and cords to see which ones fit your TV.
The best workaround to easier reassembly is to document the disassembly process. Take photos and videos or thorough notes as you go. Whether it’s your headboard or treadmill, be very precise. And just a tip: Construct your beds first when you get to your new home. After a long moving day, the very last thing you want is to be assembling beds into the wee hours of the morning.
7. Prioritize unpacking kids’ rooms.
Children can become very stressed by a big move. To ease their transition, consider prioritizing unpacking their rooms as their “safe zones.”4 You aren’t obligated to unpack everything, certainly. However, set up your children’s rooms to be functional. That way, your kids can hang out in a private oasis away from the chaos while you’re running around and moving everything else.
Depending upon how old your youngsters are, you might want to give them decorating leeway, too. Even if it’s just letting them choose where furniture goes, it gives them a sense of buy-in. This can help ease the blues of leaving a former home they loved.
8. Be a thoughtful pet parent.
Many types of pets can’t handle the commotion of moving day. Knowing this, be considerate and seek ways to give your pets breaks from the action. You might ask a friend to pet sit your pooch or keep your kitty in a quieter room, like a guest bathroom.
Be sure to check in on your pet frequently. Pets like to know that you’re around. Give them treats, food, and water throughout the day. When it’s time to transport your pet, do it calmly. At your new property, give your pet access to just a room or two at first. Pets typically prefer to acclimate themselves slowly to unfamiliar environments.5
9. Plan for your move like you’re planning for an exciting vacation.
When you plan vacations, you probably look up local restaurants, shops, and recreational areas. Who says you can’t do the same thing when moving? Create a list of all the places you want to go and things you want to do around your newly purchased home. Having a to-explore list keeps everyone’s spirits high and gives you starting points to settle into the neighborhood.
And don’t feel that you have to cook that first night. Once the moving trucks are gone, you can always pop over to a local eatery or order DoorDash for major convenience. The first meal in your new home should be a happy, welcoming treat. And if you’re relocating to our neck of the woods, we would love to introduce you to all the hot spots in town and recommend our local favorites.
10. Pack an “Open Me First!” box.
You won’t be able to unpack all your boxes in one day, but you shouldn’t go without your sheets, pillows, or toothbrush. Designate some boxes with “Open Me First!” labels. (Pro tip: Keep a tool kit front and center for all that reassembling.)
Along these lines, use luggage and duffel bags to transport everyone’s personal must-have items and enough clothing for a couple of days. That way, you won’t have to rummage through everything in the middle of your move looking for sneakers or snacks.
When packing your “Open Me First!” boxes, think about which items you’ll need in those first 24 hours. For example, toilet paper and hand soap are musts. A box cutter will make unpacking a lot easier, and paper towels and trash bags are sure to come in handy. Reach out for a complete, printable list of “Open Me First!” box essentials to keep on hand for your next move!
LET’S GET MOVING
Getting the phone call from your real estate agent that your bid was accepted is a thrilling moment. Make sure you keep the positivity flowing during the following weeks by mapping out a streamlined, efficient move. Feel free to get in touch with us today to help make your big move your best move.
1. Better Business Bureau – https://www.bbb.org/article/scams/24198-bbb-scam-alert-avoid-moving-scams-this-national-moving-mont
2. Move.org –
4. New York Times –
7 Costly Mistakes Home Sellers Make (And How to Avoid Them)
No matter what’s going on in the housing market, the process of selling a home can be challenging. Some sellers have a hard time saying goodbye to a treasured family residence. Others want to skip ahead to the fun of decorating and settling into a new place. Almost all sellers want to make the most money possible.
Whatever your circumstances, the road to the closing table can be riddled with obstacles — from issues with showings and negotiations to inspection surprises. But many of these complications are avoidable when you have a skilled and knowledgeable real estate agent by your side.
For example, here are seven common mistakes that many home sellers make. These can cause anxiety, cost you time, and shrink your financial proceeds. Fortunately, we can help you avert these missteps and set you up for a successful and low-stress selling experience.
MISTAKE #1: Setting an Unrealistic Price
Many sellers believe that pricing their homes high and waiting for the “right buyers” to come along will net them the most money. However, overpriced homes often sit on the market with little activity, which can be the kiss of death in real estate — and result in an inevitable price drop.1
Alternatively, if you price your home at (or sometimes slightly below) market value, it can be among the nicest that buyers see within their budgets. This can increase your likelihood of receiving multiple offers.2
To help you set a realistic price from the start, we will do a comparative market analysis, or CMA. This integral piece of research will help us determine an ideal listing price based on the amount that similar properties have recently sold for in your area.
Without this data, you risk pricing your home too high (and getting no offers) or too low (and leaving money on the table). We can help you find that sweet spot that will draw in buyers without undercutting your profits.
MISTAKE #2: Trying to Time the Market
You’ve probably heard the old saying, “Buy low and sell high.” But when it comes to real estate, that’s easier said than done.
Delaying your home sale until prices have hit their peak may sound like a great idea. But sellers should keep these factors in mind:
Instead of trying to time the market, choose your ideal sales timeline. This may be based on factors like your personal financial situation, shifting family dynamics, or the seasonal patterns in your neighborhood. We can help you figure out the best time to sell given your individual circumstances.
MISTAKE #3: Failing to Address Needed Repairs
Many sellers hope that buyers won’t notice their leaky faucet or broken shutters during home showings. But minor issues like these can leave buyers worrying about more serious — and costly — problems lurking out of sight.
Even if you do receive an offer, there’s a high likelihood that the buyer will hire a professional home inspector, who will flag any defects in their report. Neglecting to address a major issue could lead buyers to ask for costly repairs, money back, or worse yet, walk away from the purchase altogether.
To avoid these types of disruptions, it’s important to make necessary renovations before your home hits the market. We can help you decide which repairs and updates are worth your time and investment. In some cases, we may recommend a professional pre-listing inspection.
This extra time and attention can help you avoid potential surprises down the road and identify any major structural, system, or cosmetic faults that could impact a future sale.3
MISTAKE #4: Neglecting to Stage Your Home
Staging is the act of preparing your home for potential buyers. The goal is to “set the stage” to help buyers envision themselves living in your home. Some sellers opt to skip this step, but that mistake can cost them time and money in the long run. A 2021 survey by the Real Estate Staging Association found that, on average, staged homes sold nine days faster and for $40,000 over list price.4
Indoors, staging could include everything from redecorating, painting, or rearranging your furniture pieces to removing personal items, decluttering, and deep cleaning. Outdoors, you might focus on power washing, planting flowers, or hanging a wreath on the front door.
You may not need to do all these tasks, but almost every home can benefit from some form of staging. Before your home hits the market, we can refer you to a professional stager or offer our insights and suggestions if you prefer the do-it-yourself route.
MISTAKE #5: Evaluating Offers on Price Alone
When reviewing offers, most sellers focus on one thing: the offer price. While dollar value is certainly important, a high-priced offer is worthless if the deal never reaches the closing table. That’s why it’s important to consider other factors in addition to the offer price, such as:
● Financing and buyer qualifications
● Deposit size
● Contract contingencies
● Closing date
● Leaseback options
Depending on your circumstances, some of these factors may or may not be important to you. For example, if you’re still shopping for your next home, you might place a high premium on an offer that allows for a flexible closing date or leaseback option.
Buyers and their agents are focused on crafting deals that work well for them. We can help you assess your needs and goals to select an offer that works best for you.
MISTAKE #6: Acting on Emotion Instead of Reason
It’s only natural to grow emotionally attached to your home. That’s why so many sellers end up feeling hurt or offended at some point during the selling process. Low offers can feel like insults. Repair requests can feel like judgments. And whatever you do — don’t listen in on showings through your security monitoring system. Chances are, some buyers won’t like your decor choices, either!
However, it’s a huge mistake to ruin a great selling opportunity because you refuse to counter a low offer or negotiate minor repairs. Instead, try to keep a cool head and be willing to adjust reasonably to make the sale. We can help you weigh your decisions and provide rational advice with your best interests in mind.
MISTAKE #7: Not Hiring an Agent
There’s a good reason 90% of homeowners choose to sell with the help of a real estate agent. Homes listed by agents sold for 22% more than the average for-sale-by-owner home, according to a recent study by the National Association of Realtors.5
Selling a home on your own may seem like an easy way to save money. But in reality, there is a steep learning curve. And a listing agent can:
● Skip past time-consuming problems
● Use market knowledge to get the best price
● Access contacts and networks to speed up the selling process
If you choose to work with a listing agent, you’ll save significant time and effort while minimizing your personal risk and liability. And the increased profits realized through a more effective marketing and negotiation strategy could more than make up for the cost of your agent’s commission.
We can navigate the ins and outs of the housing market for you and make your selling process as stress-free as possible. You may even end up with an offer for your home that’s better than you expected.
BYPASS THE PITFALLS WITH A KNOWLEDGEABLE GUIDE
Your home selling journey doesn’t have to be hard. When you hire us as your listing agent, we’ll develop a customized sales plan to help you get top dollar for your home without any undue risk, stress, or aggravation. If you’re thinking of buying or selling a home, reach out today to schedule a free consultation and home value assessment.
The last two years caught many of us off guard—and not just because of the pandemic. They also ushered in the hottest housing market on record, with home prices rising nationally by nearly 19% in 2021, driven primarily by low mortgage rates and a major supply shortage.1
But while some had hoped 2022 would bring a return to normalcy, the U.S. real estate market continues to boom, despite rising interest rates and decreasing affordability.
So what’s driving this persistent demand? And is there an end in sight?
Here are three factors impacting the real estate market right now. Find out how they could affect you if you’re a current homeowner or plan to buy or sell a home this year.
MORTGAGE RATES ARE RISING FASTER THAN EXPECTED
Over the past couple of years, homebuyers have faced intense competition for new homes—in part due to historically low mortgage rates that were a result of the Federal Reserve’s efforts to keep the economy afloat during the COVID-19 pandemic.
However, in response to a concerning level of inflation, the Fed is now reversing those efforts by raising the federal funds rate. And as a result, mortgage rates are rising, as well. Few experts predicted, though, that mortgage rates would go up as quickly as they have.
In January 2022, the Mortgage Bankers Association projected that rates would reach 4% by the end of this year.2 By mid-April, however, the average 30-year fixed mortgage rate had already hit 5%, up from around 3% just one year prior.3 On a $400,000 mortgage, that 2% difference could translate into an additional $461 per monthly payment.
Since then, mortgage rates have continued on an upward trend. So what impact are these rising rates having on demand? While many buyers had hoped for a cooling effect, experts warn that may not be the case.
Ali Wolf, chief economist at housing market research firm Zanda, told Fortune magazine, “Rising mortgage rates are having a counterintuitive effect on the housing market. Home shoppers are actually sprung into action in an attempt to buy a home before mortgage rates rise any higher.”4
Since inventory remains low, the resulting “race” has kept the homebuying market highly competitive–at least for now.
What does it mean for you?
While current 30-year fixed mortgage rates represent an increase over previous months, they remain well below the historical average of 8%.5 As inflation across the economy continues, the Fed is likely to raise rates further this year. Buyers should act fast to secure a good mortgage rate. We’d be happy to refer you to a lender who can help.
For sellers, speed is also of the essence. The pool of potential buyers may shrink as mortgages become more expensive. And if you plan to finance your next home, you’ll want to act quickly to secure a favorable rate for yourself. Contact us today to discuss your options.
HOME PRICES KEEP CLIMBING
History shows that higher interest rates don’t necessarily translate to lower home prices. In fact, home prices rose 5% between 1980 and 1982, a period of significantly higher mortgage rates and inflation.5
Forecasters expect that home prices will continue to go up throughout 2022, though likely at a slower pace than the 18.8% increase of the last 12 months.4 Bank of America predicts that prices will be up approximately 10% by the end of this year, while Fannie Mae estimates 11.2%.6,7
In addition to limited supply and a race to beat rising mortgage rates, home values are also climbing because of positive economic indicators, like low unemployment.8 Plus, rents are soaring–up 17% from a year ago–which is prompting more first-time homebuyers to enter the market.9 Add to that the continued popularity of remote work, and it’s easy to see why property prices continue to surge.
However, it’s not all bad news for prospective homebuyers. Economists expect that as mortgage rates rise, the rate of appreciation will continue to taper, though the effect may be gradual.
“Eventually mortgage rates will slow down home prices,” according to Ken Johnson, an economist at Florida Atlantic University interviewed by Marketwatch.10 “We should not see rapid upticks in prices as mortgage rates rise.” Forecasters agree—Fannie Mae expects price increases to slow to 4.2% in 2023.7
What does it mean for you?
While the pace of appreciation is likely to decrease next year, home prices show no signs of going down. However, current labor shortages are leading to higher salaries and better job opportunities for many workers. You may find that your income growth outpaces home prices, making homeownership more affordable for you in the future.
For homeowners, the outlook’s even brighter. You could find yourself sitting on a nice pile of equity. Contact us for a free home value assessment to find out.
INVENTORY REMAINS EXTREMELY LOW
As noted, one of the largest hurdles to homeownership is a lack of inventory. According to a February 2022 report by Realtor.com, there’s an expanding gap between household formation and home construction, which has resulted in a nationwide shortage of 5.8 million housing units.11
The origins of this shortage date back to the 2008 housing crisis, during which crashing home values led contractors to stop building new properties—a trend that has not been fully reversed.12
That decline in home construction also resulted in a decrease in the number of home building professionals, a trend that was exacerbated by job losses during the COVID-19 pandemic. Now, many builders are limited by their ability to find qualified labor.
Another major challenge is a staggering increase in the cost of materials. Pandemic-related supply chain shortages have been a significant driver, with home building material costs rising on average 20% on a year-over-year basis. The price of framing lumber alone has tripled since August 2021.13
These trends add tens of thousands of dollars to the cost of a typical home. Factors like a lack of buildable land in many areas, restrictive zoning, and a shortage of developers are also contributing to the issue.14
Most homebuying experts agree that the lack of inventory is the primary factor driving rising housing prices and unprecedented competition for homes. With available housing units near four-decade lows, the end of the current housing boom is not yet in sight.15
What does it mean for you?
Prospective buyers should be prepared to compete for a home, since low inventory can lead to multiple offers. You may also need to expand your search parameters. If you’re ready to look, we’re ready to help.
For sellers, the picture is rosier. In this strong market, your home may be worth more than you realize. Contact us to find out how much your home could sell for in today’s market.
WE’RE HERE TO GUIDE YOU
While national real estate trends can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood.
If you’re considering buying or selling a home, contact us now to schedule a free consultation. We can help you assess your options and make the most of this unique real estate landscape.
5. National Association of Realtors –
11. Realtor.com –
Our nation is in the midst of a serious housing crunch. Last year, a lack of inventory and soaring prices left many would-be homebuyers feeling pinched. But now, with interest rates climbing, many of them are also feeling desperate to lock in a mortgage—which has only added fuel to the fire.1
Fortunately, if you’re a buyer struggling to find a home, we have some good news. While it’s true that higher mortgage rates can decrease your purchasing budget, there are additional ways to compete in a hot market.
Yes, a high offer price gets attention. But most sellers consider a variety of factors when evaluating an offer. With that in mind, here are five tactics you can utilize to sweeten your proposal and outshine your competition.
We can help you weigh the risks and benefits of each tactic and craft a compelling offer designed to get you your dream home—without giving away the farm.
1. Demonstrate Solid Financing
The reality is, no one gets paid if a home sale falls through. That’s why sellers (and their listing agents) favor offers with a high probability of closing. Sellers particularly love all-cash offers because there’s no chance of financing issues cropping up at the last moment. But don’t despair if you can’t pay cash for your home. According to the National Association of Realtors, only about 1 in 4 home purchases are all-cash deals, which means the vast majority are financed with a mortgage.2
If sellers are assured that financing will come through, buying with a mortgage doesn’t have to be a big disadvantage. The most important step you can take as a buyer is to get preapproved before you start looking for homes. A preapproval letter shows sellers that you are serious about buying and that you will be able to make good on your offer.
It’s also important to consider the reputation of your lender. While sellers may not know or care about a lender’s reputation, their agents often do. Some lenders are much easier to work with than others, especially if you are pursuing certain types of mortgages like FHA or VA loans.3 If so, you’ll want a lender who specializes in these types of mortgages. If you’re unsure who to choose, we are happy to refer you to reputable lenders known for their ease of doing business.
2. Put Down a Sizeable Deposit
Buyers can show sellers that they’re serious about their offer and have “skin in the game” by putting down a large earnest money deposit.
Earnest money is a deposit held in escrow by a title company or the seller’s broker or lawyer. If the purchase goes through, it is applied to the down payment and closing costs—if the sale falls through, the buyer may lose some or all of that deposit.
While an earnest money deposit is typically around 1-2% of the sale price, offering a higher deposit can help demonstrate to the buyer that you are serious about the property.4 However, this strategy can also be risky. We can help you determine an appropriate deposit to offer based on your specific circumstances.
3. Ask for Few (or No) Contingencies
Most real estate offers include contingencies, which are clauses that allow one or both parties to back out of the agreement if certain conditions are not met. These contingencies appear in the purchase agreement and must be accepted by both the buyer and seller to be legally binding.5
Common contingencies include:
● Financing: A financing contingency gives the buyer a window of time in which to secure a mortgage. If they are unable to do so, they can withdraw from the purchase and the seller can move on to other buyers.
● Inspection: An inspection contingency gives the buyer the opportunity to have the home professionally inspected for issues with the structure, wiring, plumbing, etc. Typically, the seller may choose whether or not to remediate those issues; if they do not, the buyer may withdraw from the contract.
● Appraisal: Most lenders will not offer a mortgage on a home that costs more than it’s worth. An appraisal contingency gives the buyer an opportunity to get the home professionally assessed to ensure that its value is at or above the sales price. If an appraisal comes in low, the seller may be asked to renegotiate the contract.
● Sale of a prior home: Some buyers cannot afford to purchase a new home until they sell their previous one. If the buyer is unable to sell their current home within a specified window of time, this contingency enables them to withdraw from the contract without penalty.
Since contingencies reduce the likelihood that a sale will go through, they generally make an offer less desirable to the seller. The more contingencies that are included, the weaker the offer becomes. Therefore, buyers in a competitive market often volunteer to waive certain contingencies.
However, it’s very important to make this decision carefully and recognize the risks of doing so. For example, a buyer who chooses to waive a home inspection contingency may find out too late that the home requires extensive renovations, and a buyer who waives the appraisal may risk their mortgage falling through. If you back out of a home purchase without the protection of a contingency, you could lose your earnest money deposit.6 We can help you assess the risks and benefits involved.
4. Offer a Flexible Closing Date and/or Leaseback Option
When it comes to selling a house, money isn’t everything. People sell their homes for a wide variety of reasons, and flexible terms that work with their personal situations can sometimes make all the difference. For example, if a seller is in the process of planning a significant move, they may prefer a longer closing timeline that gives them time to find housing in their new location.
Similarly, short-term leaseback options, in which the sale is completed but the seller retains the right to rent the home for a specified period of time, can be compelling.7 These arrangements enable the seller to use the money from the sale of their home to purchase their next house. A leaseback agreement also makes it possible for them to avoid moving twice when their next home is not yet ready to occupy.
Flexible closing dates and leaseback options can provide a powerful advantage for first-time homebuyers. If you have a month-to-month or easily transferable lease, for example, you may be able to offer a more flexible timeline than a buyer who is simultaneously selling their existing home.
Of course, the value of these terms depends on the seller’s situation. We can reach out to the listing agent to find out the seller’s preferred terms, and then collaborate with you to write a compelling offer that works for both parties.
5. Work With a Skilled Buyer’s Agent
In this ultra-competitive real estate market, one of the greatest advantages you can give yourself is to work with a skilled and trustworthy real estate professional. We will make sure you fully understand the process and help you submit an appealing offer without taking on too much risk.
Plus, we know how to write offers that are designed to win over both the seller and their listing agent. The truth is, listing agents play a huge role in helping sellers evaluate offers, and they want to work with skilled buyer’s agents who are professional, communicative, and courteous.
Once your offer is accepted, we’ll also handle any further negotiations and coordinate all the paperwork and other details involved in your home purchase. The best part is, you’ll have a knowledgeable, licensed advocate on your side who is watching out for your best interests every step of the way.
Helping You Get to the Right Offer
In many cases, a competitive offer doesn’t need to be all-cash, contingency-free, or significantly above asking price. But if you’re serious about buying a home in today’s market, it’s important to consider what you can do to sweeten the deal.
If you’re a buyer, we can help you compete in today’s market without getting steamrolled. And if you’re a seller, we can help you evaluate offers by taking all the relevant factors into account. Contact us today to schedule a free consultation.
1. National Association of Realtors –
2. National Association of Realtors –
6. Home Buying Institute –