The next few winter months are looking to be a pretty optimal time to sell a home. The mortgage rates continue to remain very low, demand for homes is high and there continues to be a drop in inventory compared to inventory a year ago. Chief economist at the National Association of Realtors®, Lawrence Yun proclaimed, “It will be one of the best winter sales years ever.”
Nevertheless, selling a home during a world-wide pandemic can offer challenges and sellers are still looking for ways to sell safely and for top dollar. An article published by Realtor.com, reported Erica Sweeney, has detailed some tips for homeowners selling homes over the next few months.
From a safety perspective, it is important to have a virtual tour available on the listing. This will allow shoppers to view the home online to get a better sense of the home layout and features. Doing this will help to keep the number of in-person showings to a minimum. When in-person showings are scheduled, masks and social distancing should be encouraged and larger time gaps between showings will help ensure the safety of all visitors. Once the prospective home buyers and agents have left the house, sanitizing all high touch surfaces will keep the home clean for the residents of the home.
Sweeney also gave tips of preparing and pricing a home. She reports, ‘According to a realtor.com report, the national median home listing price jumped 13.4% in December compared with last year, reaching $340,000, and price per square foot rose 15.9%.’ Sellers and their agents should ensure that they are pricing the house to align with the current market pricing. To add, highlighting upgrades and updates that buyers won’t have to worry about upon moving in during the winter months as well as features that accommodate work from home and e-learning from home will appeal to buyers that are in the midst of spending more time than normal at home.
Read the entire article.
Photo Credit: Nathan Walker
Across the country, Americans have been sheltering in place and practicing social distancing in an effort to help slow the spread of COVID-19. Many normal activities have been modified or even put on hold. With the slow reopening of the country, many potential home buyers have emerged and seem to be ready to take the leap into home ownership.
Mortgage applications, according to an article published by CNBC.com, rose for the fourth consecutive week, up by an encouraging 11 percent. Despite the fact that, overall, mortgage applications are still about 10 percent lower than they were this time in 2019, it appears the gap is closing.
The article, written by Ty Wright, quotes MBA economist Joel Kan, ‘”We expect this positive purchase trend to continue — at varying rates across the country — as states gradually loosen social distancing measures, and some of the pent-up demand for housing returns in what is typically the final weeks of the spring home buying season.”’
Despite the fact that refinance applications have been on the decline, after a very busy early spring, it appears home purchases may fill that gap. In fact, according to the article, mortgage applications are up pretty significantly, “New York led the purchase demand with a 14% jump in those applications. Illinois, Florida, Georgia, California and North Carolina also had double-digit increases last week.” It seems buyers, anxious to return to some normal life activities and move forward with purchasing their first or next home, are encouraged by mortgage rates that are still below 3.5% for a 30 year period.
Read the entire article.
On Saturday, March 21, 2020 at 5:00 p.m., Governor, J.B. Pritzker issued a public order (“Order”) directing Illinois residents to shelter-in-place. The shelter-in-place is, for now, effective through April 7, 2020. During this time frame, how is your real estate transaction going to be affected?
The short answer is that real estate transactions will proceed as planned. Under the Order, there are several exceptions or permissible activities that may still be performed. These are called “Essential Businesses and Operations.” Under this category, Financial Institutions (i.e. banks, title companies) and Professional Services (i.e. legal services, accounting, appraisals) are allowed to continue operating. As such, real estate transactions can proceed as planned and deals can still close during this period.
However, as an added precaution and based on recommendations from the title companies in our area, the following procedures will be followed:
All cash transactions will be closed electronically via e-mail and/or DocuSign. Any funds to be provided at the closing will need to be sent via wire transfer to the title company. Documents required by the title company to be an original (i.e. Deed) should be dropped off or sent via overnight courier to the title company prior to closing. Once the transaction has concluded, copies of the pertinent documents will be sent via overnight delivery to all parties. Any proceeds due will either be wired or a check sent via overnight delivery. There is also the option to pick up your documents and check at the title company.
Transaction with a Lender
Seller(s): It is very common for sellers to sign their closing documents in advance, give their attorney a power of attorney for closing day and not attend the closing. Our office has always offered this service and will continue to do so during this time period. Moreover, title companies are encouraging sellers not attend closing and send their documentation prior to closing. Therefore, for our seller clients, our office will coordinate with you to get your signature on the necessary documents in advance of closing. The few documents requiring signing on the day of closing we will execute on your behalf under a power of attorney.
Once the transaction has concluded, copies of the pertinent documents will be sent via overnight delivery to all parties. Any proceeds due will either be wired or a check sent via overnight delivery. There is also the option to pick up your documents and check at the title company.
Buyer(s): Due to the fact that many loan documents are required to be wet signed and notarized, buyers must still attend the closing. Title companies are requesting that only the buyers required to sign the loan documents and their attorney attend the closing, so as to limit the number of people at the title company. The title companies have implemented some safety measures to ensure a safe and clean environment. All closing rooms will be cleaned with disinfectant after every closing. The pens used will be new and disposed of after closing. Also, they will limit the number of people allowed in the facility and practice social distancing recommendations when possible. Some title companies are also offering drive by closings, where buyers can pull up, sign the documents in their car, and hand them back to the title representative.
Once the transaction has concluded, copies of the pertinent documents will be sent via overnight delivery to all parties. Any proceeds due will either be wired or a check sent via overnight delivery. There is also the option to pick up your documents and check at the title company if you choose to wait after signing.
In short, your real estate transaction should proceed as planned with just some slight modifications for the closing. Lenders, attorneys and title companies are still working during the shelter-in-place period. Fournier Law Firm, Ltd. is committed to assisting our clients in making your closing as smooth as possible. As your closing nears, our office will be in contact with you to coordinate the necessary steps to get your deal closed.
The real estate market, like most areas of business world-wide, are adjusting to social distancing recommendations while trying to anticipate how the global pandemic will affect the economics of their business.
Economically, the mortgage rates are still low which, normally, would result in more buyers looking to secure a low rate and purchase a home. However, the economic uncertainty might keep some buyers from moving forward with a large purchase such as a home, and may keep sellers from listing their home if not necessary.
An article published by OCRegister.com indicates that some areas of the country are already seeing how the concerns about the economy are impacting both sellers’ and buyers’ decisions. “I am hearing (of) buyers and sellers cancel (deals) due to fear of job security and, really, just the unknown,” said Dilbeck Real Estate agent Lisa Kaul from the Santa Clarita area. “One seller canceled their new purchase even though their home was already sold.”
Of course, there are plenty of homes on the real estate market and many buyers who are still planning on purchasing a new home. However, the social distancing recommendations has impacted the way buyers are viewing homes for sale. Many owners are asking that their realtor not hold open houses. Guidelines for screening potential buyers for diseases, requiring those visiting homes to sanitize their hands are top discussions among sellers and their realtors. In this age of technology, however, virtual tours are becoming more and more common and are an ideal alterntative.
Read the entire article.
If you have been waiting for the right time to sell your home, there are many reasons experts are saying that the time has come. In an article written by Devon Thorsby, published by U.S. News and World Report, the reasons that 2018 might prove to be a good time to sell a home are listed.
First and foremost, the past few years of low inventory of homes for sale has left prospective home buyers more than ready to scoop up the perfect house. Their frustration with available homes has led many house hunters to begin their search earlier than normal with the hopes of purchasing a home before other buyers make their offer.
Additionally, interest rates are still relatively low. They have been slowly creeping up and are expected increase to 5 percent in 2019. Many home buyers are motivated to purchase a home sooner rather than later in order to secure a lower interest rate.
Thorsby details additional rationale for putting that “For Sale” sign up this year. Read the entire article here.
Mortgage rates have retreated again in response to weak financial data and global economic concerns, according to a report released Thursday by the Federal Home Loan Mortgage Corp. Specifically, the average 30 –year mortgage rate dropped to 3.6 percent. In fact, mortgage rates have not been above 3.7 percent in the past 10 weeks. This streak has allowed home buyers more time to take advantage of these historically low mortgage rates. Consequently, loan application volume increased 9.3 percent from the previous week.
The drop in the mortgage rates is a direct result of a weak jobs report, which was released last Friday. “Growing optimism about the state of the economy was quickly erased with May’s employment report,” Sean Becketti, Freddie Mac chief economist, said in a statement. The article published in The Washington Post, by Kathy Orton, also details some of the global economic concerns which have had an effect on the direction of mortgage rates.
Read the entire article.
According to an article published by the National Association of Realtors (NAR), the sale of existing homes nationwide has increased 6 percent since April 2015. Additionally, the median home price for existing homes is up 6.3 percent since last April. Although the total housing inventory is showing some upward movement, it is still lower than it was a year ago.
Lawrence Yun, NAR chief economist, indicated “The temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring, but there’s growing concern a number of buyers will be unable to find homes at affordable prices if wages don’t rise and price growth doesn’t slow.”
The supply of entry and mid-priced homes is still low and the market for these homes will likely be the most competitive in the coming summer months. However, proposed changes to FHA condo rules could eliminate some of the obstacles that stifle condo sales. These changes would allow more first time home buyers an opportunity to purchase a condo and enter the real estate market.
For more information, read the entire article.
Photo Credit: Marcel Suliman
It had been predicted that the Millennial Generation (18-34 year olds), would be key to a healthy rebound in the real estate market. However, based on new survey data released by Redfin, they might actually be responsible for the low inventory of homes for sale.
Millennials are, for the most part, more optimistic about the housing market. They have not seen home mortgage rates over 5 percent and have been able to build more equity than home owners of older generations. Additionally, they are confident they will see an increase in home values over the next year.
Therefore, according to the survey, millennials are more apt to rent out their home instead of selling their starter home. As a result, the supply of homes for sale will continue to remain low. A recent article on DSNews.com by Brian Honea indicates “…28 percent of millennials plan to rent out their house instead of selling it, compared to only 4 percent of homeowners ages 55 and older.”
For more information, read the entire article.
Over the past few weeks, mortgage rate averages had increased slightly. However, the rates actually dipped lower last week and could continue to drop further this week. This decrease is a direct result of the release of economic data which pushed investors to purchase bonds. Consequently, mortgage rates averages dipped in line with the long-term bond yields.
Specifically, the 30-year mortgage rate average dropped to a low 3.61 percent, hovering near the lowest rates of 2016. Similarly, the 15-year rate average drifted down to 2.86 percent. Freddie Mac chief economist , Sean Becketti, summarized the mortgage rate trends for the year, “…Since the start of February, mortgage rates have varied within a narrow range providing an extended period for house hunters to take advantage of historically low rates.”
An article released by the Washington Post by Kathy Orton, also noted credit availability has loosened as a result of programs from Freddie Mac and Fannie Mae which allow for a low down payment. Read the entire article.
Image Credit: Life’s A Beach Real Estate
This year’s real estate market has the potential to be the best we have seen in ten years. Experts from Freddie Mac have predicted that “total home sales, housing starts, and house prices will reach their highest levels since 2006…”
Several economic conditions are influencing the 2016 real estate market and are detailed in a recent article, “Is Housing Poised to Return to Pre-Crisis Glory?” published on DSNews.com by Brian Honea. Specifically, mortgage rates continue to remain low and are predicted to stay below 4 percent for the remainder of the year. Additionally, housing may become more affordable as the rate of home appreciation slows to a steady rate just below 5 percent. Lastly, the potential for very favorable labor conditions, such as increases in job growth and the potential for wage increases, are important factors which will also influence housing market.
For more details, read the article.
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