The True Cost of Selling Your House on Your Own

Selling your house is no simple task. While some homeowners opt to sell their homes on their own, known as a FSBO (For Sale by Owner), they often encounter various challenges without the guidance of a real estate agent. If you’re currently considering selling your house on your own, here’s what you should know.

The most recent Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) surveyed homeowners who’d recently sold their own homes and asked what difficulties they faced. Those sellers say some of the greatest challenges were prepping their home for sale, pricing it right, and properly managing the required paperwork, just to name a few.

When it comes to selling your most valuable asset, consider the invaluable support that a real estate agent can provide. By partnering with an agent, you can navigate the complexities of the selling process with confidence. Here are just a few of the many ways an agent is essential to your home sale:

1. Marketing and Exposure

Effective marketing is a key piece of attracting qualified buyers to your property. Real estate agents have access to various marketing tools and platforms, including MLS listings, professional photography, virtual tours, and extensive professional networks. They can create a compelling listing that highlights your home's best features and reaches a wider audience.

If you sell on your own, you may struggle to match the reach of agents, resulting in limited exposure and, ultimately, fewer potential buyers.

2. Managing Liability and Legal Considerations

Today, more disclosures and regulations are mandatory when selling a house. And all that paperwork and all the legal aspects of selling a home can be a lot to manage. Selling a house without professional guidance exposes homeowners to potential liability risks and legal complications.

Real estate agents are well-versed in the contracts, disclosures, and regulations necessary during a sale. Their expertise helps minimize the risk of errors or omissions that could lead to legal disputes or delays.

3. Negotiations and Contracts

Negotiating the terms of a home sale can be challenging, especially when emotions are involved. You may find it overwhelming to navigate these negotiations alone. Without an agent, you assume this responsibility on your own. This means you’ll have full accountability for working and negotiating with:

• The buyer, who wants the best deal possible.
• The buyer’s agent, who will use their expertise to advocate for the buyer.
• The home inspection company, who works for the buyer.
• The home appraiser, who assesses the property’s value to protect the lender.

Rather than going toe-to-toe with all these parties alone, lean on an expert. Real estate agents act as intermediaries, skillfully negotiating on your behalf and ensuring that your best interests are protected. They have experience in handling tough negotiations, counteroffers, and contingencies. When you sell your house yourself, you’ll need to be prepared to manage these vendors on your own.

4. Pricing and Housing Market Knowledge

Determining the right asking price for your property is crucial. It requires in-depth knowledge of the local real estate market, including recent sales data, neighborhood trends, and the current demand for properties. Real estate agents have access to comprehensive market data and the expertise to analyze it accurately.

When you sell your house on your own without this comprehensive information, you risk overpricing or underpricing your home. This can result in an extended time on the market and also the risk of leaving money on the table - which decreases your future buying power. An agent is a key piece of the pricing puzzle.

Bottom Line

While selling a home on your own might seem appealing at first, the challenges that come with it can quickly become overwhelming. The expertise that a real estate agent brings to the table is vital for a successful sale. Instead of tackling it alone, let’s connect to make sure you have an expert on your side.

Eco-Friendly, Energy-Efficient Homes Attract Buyers

Are you planning to sell your house? If so, you may be surprised to hear just how much buyers value energy efficiency and eco-friendly features today. This is especially true as summer officially kicks off.

In fact, the 2023 Realtors and Sustainability Report from the National Association of Realtors (NAR) shows 48% of agents or brokers have noticed consumers are interested in sustainability.

 So, if you’re considering selling your house, why does this matter to you? It helps you know what you can do to make your house even more appealing to today’s buyers. According to Jessica Lautz, Deputy Chief Economist and VP of Research at NAR: 

"Buyers often seek homes that either lessen their environmental footprint or reduce their monthly energy costs. There is value in promoting green features and energy information to future home buyers."

Consider Upgrading Your Home To Make It More Appealing

If you want to upgrade your house in a way that maximizes its green appeal, you need to work with a local agent to understand what buyers in your area are looking for. The same NAR report identifies the following green home features as most important to buyers at a national level: 

• Windows, doors, and siding
• Proximity to frequently visited places
• A comfortable living space
• A home’s utility bills and operating costs

While you can’t change the location of your house, you can take action to make sure it’s as comfortable as possible while also setting up the next owners for lower operating costs. ENERGY STAR shares some suggested upgrades as ones that may be worth considering:

• Heating and cooling: Ensure your HVAC system is properly maintained and regularly serviced to maximize its efficiency. Consider upgrading to a high-efficiency model, if needed.
• Water heater: Your water heater uses a lot of energy. Upgrading to a heat pump water heater can significantly reduce energy consumption and appeal to environmentally conscious buyers.
• Smart thermostat: A big part of your energy bill goes to heating and cooling. Install a programmable thermostat to better regulate temperature settings. This not only enhances comfort but can also lower energy usage.
• Attic insulation: Proper sealing and insulation in your attic help prevent air leaks and maintain a comfortable temperature, reducing the strain on heating and cooling systems.
• Energy-efficient windows: Replacing old, drafty windows with energy-efficient ones can minimize heat transfer and lower your energy bills.

 It's worth noting that you may be able to take advantage of tax credits and rebates for energy-efficient home installations and upgrades. These incentives could help offset a portion of the costs associated with eco-friendly home improvements.

As you prepare to sell your house, it's important to recognize that real estate agents are valuable resources. They can help you determine which upgrades would be most appealing for buyers in your area and provide guidance on which green features to highlight in your listing. If you’ve already made these updates recently, tell your agent so they can feature them in your listing.

Bottom Line

Focusing on energy efficiency and eco-friendly features can help make your house more appealing to buyers today. Let’s connect to ensure you’re choosing the right upgrades for our area.

This Real Estate Market Is the Strongest of Our Lifetime

When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point. 

1. The Current Mortgage Rate on Existing Mortgages

First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (FHFA), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):

Now, there’s a lot of talk in the media about a potential foreclosure crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can't go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they downsize, with today’s higher mortgage rates, it could cost more.

Here's why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.

2. The Amount of Homeowner Equity

Second, Americans are sitting on tremendous equity right now. According to the Census and ATTOM, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):

In the industry, the term for this is equity rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.

But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.

Bottom Line

We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.

Today’s Real Estate Market: The ‘Unicorns’ Have Galloped Off

Comparing real estate metrics from one year to another can be challenging in a normal housing market. That’s due to possible variability in the market making the comparison less meaningful or accurate. Unpredictable events can have a significant impact on the circumstances and outcomes being compared. 

Comparing this year’s numbers to the two ‘unicorn’ years we just experienced is almost worthless. By ‘unicorn,’ this is the less common definition of the word:

“Something that is greatly desired but difficult or impossible to find.” 

The pandemic profoundly changed real estate over the last few years. The demand for a home of our own skyrocketed, and people needed a home office and big backyard. 

• Waves of first-time and second-home buyers entered the market.
• Already low mortgage rates were driven to historic lows. 
• The forbearance plan all but eliminated foreclosures.
• Home values reached appreciation levels never seen before.

It was a market that forever had been “greatly desired but difficult or impossible to find.” A ‘unicorn’ year.

Now, things are getting back to normal. The ‘unicorns’ have galloped off. 

Comparing today’s market to those years makes no sense. Here are three examples: 

Buyer Demand 

If you look at the headlines, you’d think there aren’t any buyers out there. We still sell over 10,000 houses a day in the United States. Of course, buyer demand is down from the two ‘unicorn’ years. But, according to ShowingTime, if we compare it to normal years (2017-2019), we can see that buyer activity is still strong (see graph below):

Home Prices

We can’t compare today’s home price increases to the last couple of years. According to Freddie Mac, 2020 and 2021 each had historic appreciation numbers. Here’s a graph also showing the more normal years (2017-2019):

We can see that we’re returning to more normal home value increases. There were several months of minimal depreciation in the second half of 2022. However, according to Fannie Mae, the market has returned to more normal appreciation in the first quarter of this year.

Foreclosures 

There have already been some startling headlines about the percentage increases in foreclosure filings. Of course, the percentages will be up. They are increases over historically low foreclosure rates. Here’s a graph with information from ATTOM, a property data provider:

There will be an increase over the numbers of the last three years now that the moratorium on foreclosures has ended. There are homeowners who lose their home to foreclosure every year, and it’s heartbreaking for those families. But, if we put the current numbers into perspective, we’ll realize that we’re actually going back to the normal filings from 2017-2019.

Bottom Line

There will be very unsettling headlines around the housing market this year. Most will come from inappropriate comparisons to the ‘unicorn’ years. Let’s connect so you have an expert on your side to help you keep everything in proper perspective.

It May Be Time To Consider a Newly Built Home

If you’re looking to buy a house, you may find today’s limited supply of homes available for sale challenging. When housing inventory is as low as it is right now, it can feel like a bit of an uphill battle to find the perfect home for you because there just isn’t that much to choose from. If you need to open up your pool of options, it may be time to consider a newly built home.

 According to the latest data from the U.S. Census, there’s positive news when it comes to new home construction. When you look at the first three months of this year, you’ll find:

• More new homes were completed and are ready to sell. This gives you more move-in-ready options for your search.
• Builders broke ground and started construction on more single-family homes. This means there are more homes intended for one household in the beginning stages of construction, allowing you the opportunity to customize one to your liking.
• The number of permits for building new single-family homes ticked up. This shows builders are ramping up to start on even more home construction soon. 

And, while this is all good news for broadening your options for your home search, there are other perks that come with considering a newly built home.

Customization 

When you buy a new home under construction, you can tailor it to your unique needs and taste. Bankrate says: 

“Building means customizing. . . . instead of wishing your home had a certain kind of flooring, a sunroom or some other special amenity, you’ll be able to tailor the property to your exact needs.” 

Brand New Everything 

Another perk of a new home is that nothing in the house is used. It’s all brand new and uniquely yours from day one.

Minimal Repairs

And, because everything is new, you’ll likely find there are fewer maintenance and repair needs up front. As Realtor.com explains:  

“. . . if something does go wrong with your new home, not only are there likely some manufacturer warranties in place, but many builders also include additional home warranties . . .” 

Energy Efficiency 

Lastly, building a home gives you the opportunity to incorporate more energy-efficient options that can help lower your costs over time – which can feel especially important when inflation’s raising many of the costs around you.

Bottom Line

If you’re having trouble finding your dream home in today’s market, it may be time to consider newly built homes as an option. Let’s connect so you have an expert on your side to help you explore what’s available in our local area.

Why Buying a Home Makes More Sense Than Renting Today

Wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability is still a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census shows rents have been climbing pretty steadily since 1988. 

And, data from the latest rental report from Realtor.com shows rents continue to grow today, even though it’s at a slower pace than we saw at the height of the pandemic:

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732, up by $15 from last month and down by $32 from the peak but is still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

With rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years). 

Owning a Home Could Be More Affordable if You Need More Space

The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:

So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.

Homeownership Allows You To Start Building Equity

In addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth. 

And, as home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.

Bottom Line

If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options. With rents rising, it may make more sense to pursue your dream of homeownership.  

The Best Time to Sell: The Week of April 16-22

Article by: Hannah Jones | realtor.com

Home sellers on the fence waiting for that perfect moment to sell should start preparations, because the best time to list a home in 2023 is approaching quickly. 

The week of April 16-22 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year.

This selection comes from looking at seasonal trends from 2018-2019 and 2021-2022 data. Due to the onset of the pandemic, 2020 was an uncharacteristic year and has therefore been excluded from the analysis. We expect the 2023 housing market to behave similarly to 2021, 2022 and pre-pandemic years in terms of seasonality. Each week was scored based on favorability toward sellers — this included competition from other sellers (active listings and new listings), listing prices, market pace (days on market), likelihood of price reductions, and homebuyer demand (views per property on Realtor.com). Percentile levels for each week were calculated along each metric , and were then averaged together across metrics to determine a Best Time to List score for each week. Rankings for each week were based on these Best Time to List scores.

2022 was yet another remarkable year in housing, with prices reaching record high levels before the market cooled due to wide-spread unaffordability. Mortgage rates started climbing at the beginning of 2022, increasing the cost of financing a home purchase significantly as home price growth continued to accelerate compared to 2021. Home prices peaked at a median listing price of $449,000 nationally in June 2022, and price growth relative to the previous year continued through the end of the year. Red-hot buyer demand cooled around the home price peak as evidenced by fewer pending listings compared to the previous year, as well as homes spending an increased time on market. Though housing demand cooled in 2022 relative to the previous year, homes were still spending significantly less time on market than pre-pandemic, and inventory remained well below pre-pandemic norms. However, sellers responded to this market slowdown by pulling back significantly on new listings. Builders also responded by slowing the rate of single-family home construction starting in February. 

However, as 2022 concluded, mortgage rates fell slightly, enabling some buyers to re-engage with the housing market. Home sellers were less active in January 2023 compared to the previous year, but with home prices just 8.1% higher year-over-year–after a year of double-digit growth, and affordability slightly improved, the spring market could be advantageous for both buyers and sellers.

Benefits of Listing April 16-22, 2023

At a national level, this week represents a balanced selection of market conditions that favor sellers. While it does not have the highest price or the lowest time on market, this week offers higher than average prices and lower than average time on markets while also offering a higher than average number of buyers–measured as viewers per listing. While buyers vastly outnumbered sellers in recent years, we expect to see more balance between buyers and sellers in 2023. In more balanced housing market conditions, we expect the benefits of strategically listing during the most seasonally advantageous week to be greater.

Above-average prices – Homes during this week have historically reached prices 2.1% higher than the average week throughout the year, and are typically 12.1% higher than the start of the year. If 2023 follows the typical seasonal trend, the national median listing price could reach $8,400 above the average week, and $48,000 more than the start of the year.

Above-average buyer demand – The number of buyers looking at a listing can determine how many offers a home gets and how quickly it sells. The more buyers looking at a home, the better for the seller, and in most years buyers start earlier than sellers. Historically, this week garnered 16.4% more views per listing than the typical week, but in 2022 this week got 32.5% more views per listing than the average week throughout the year due to the latter part of the year’s drop off in buyer demand and increase in homes for sale.

Fast market pace – Thanks to above-average demand, homes sell more quickly during this week. Historically, homes actively for sale during this week sold 18.0% faster than the average week. In the fast-moving 2022 market, this week saw homes typically on the market for 32 days, 13 days faster than the year’s average, and 37 days faster than was typical in 2019. The 2023 market is not expected to move as quickly as in 2022, but the best week is still expected to see a more rapid market pace than the year’s typical pace.

Lower competition from other sellers –  A typical inventory trend would mean 9.3% fewer sellers on the market during this week compared to the average week throughout the year. With few exceptions, the number of sellers tends to increase from the beginning of the year until roughly November. Last year saw more significant inventory gains after the first four months as buyer demand cooled, but sellers responded by pulling back on listings once again by the end of the year. Active inventory was 65.5% higher at the start of 2023 versus 2022, but still 43.2% lower than pre-pandemic levels. This gap means there continue to be opportunities for sellers who enter the market this spring.

Market Dynamics Shift – Pent-Up Buyer Demand

Last year, sellers enjoyed sustained demand until mortgage rates caught up to buyers, pushing many out of the market altogether. As a result, inventory climbed and price growth eventually slowed (though continued to be higher than in 2021). For-sale inventory is still well below pre-pandemic levels, so sellers can expect demand to return with force as affordability improves.

• • Mortgage rates are expected to remain elevated. Mortgage rates climbed from 3.2% at the beginning of 2022, to more than 7% in November before settling back to 6.42% by the end of the year and have stayed above 6% so far in 2023. We expect mortgage rates to remain elevated through 2023 as the Fed continues its tightening cycle to bring inflation down to 2%. Though the Fed has slowed the rate of rate increases, they continue to emphasize their intent to continue raising rates until the inflation target is in sight. This means that buyers will continue to see high borrowing costs, which may take away from their home budget.
  • Supply does not match up to demand. 2021 saw the highest rates of home construction in the last decade-plus. However, 2022 slowed this trend as builders saw buyer demand dwindle, worsening the home supply gap. Buyer demand has fallen due to increasing unaffordability. While this may limit asking prices, it can benefit sellers who are cashing in on their record-high home equity. Sellers who are also buyers may be able to be more flexible in closing both a sale and a purchase this year.
  • Prices tend to peak later, as does competition. Likewise, sellers should consider that peak prices later in the season also come with greater competition from other sellers for a similar-sized pool of buyers. Historically, by the end of June, while prices reached near-peak levels (+15.0%) compared to the start of the year, new sellers also surged, increasing to nearly 1.5 times higher than at the start of the year (+43.7%). More sellers mean more options for buyers and therefore more competition among sellers. Sellers can mitigate that risk by being an early entry into the market, raising their already high odds of a successful close and likely negotiating favorable terms.
  • Strong Demand for Well-maintained, Fairly-Priced Homes – While overall buyer demand may not be what it was in the past couple of years, many sellers are still seeing competition for homes that are well-priced and move-in ready in prime locations. Buyers feeling the pressure of affordability will likely be choosier and less willing to shell out the big bucks for a less-than-ideal home.

What does this mean for sellers?

While we’ve identified April 16-22 as the best week to list for sellers, the housing market remains undersupplied, so a seller listing a well-priced, move-in ready home is likely to find success. Because spring is generally the high season for real estate activity and buyers are more plentiful earlier rather than later in the year, listing earlier in the spring raises a seller’s odds of a successful sale. Sellers will want to remember that it’s a process. In a recent survey we explored the steps sellers took to prepare their home for sale and how long it took them to get ready.

What does this mean for home buyers?

For buyers who have been facing still-high home prices, and elevated mortgage rates, there is a key takeaway: the usual seasonal dynamics of the housing market, builder sentiment, and seller sentiment suggest that it’s going to get better. Inventory improved in 2022, and continues to grow year-over-year, though lags pre-pandemic levels. However, so far in 2023, seller, builder and buyer sentiment have all improved, signaling that all parties involved are feeling a bit more optimistic about the housing market as we enter the spring. 

Historically, the number of views per listing has cooled in the late summer/early fall and tends to improve for buyers from that point forward. Additionally, by mid-August, the number of sellers with actively-listed homes increased 32% over the beginning of the year, which means more options for buyers. Thus, buyers who can persist in their home searches are likely to catch a bit of a break in the sense that they can expect some more options to choose from in the weeks ahead.

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