10 Reasons 2015 Will Rock for Real Estate

10 Reasons 2015 Will Rock for Real Estate DAILY REAL ESTATE NEWS | WEDNESDAY, DECEMBER 31, 2014 After a slowdown in the market this year, housing analysts and economists have high hopes for 2015. The real estate market is expected to build momentum across the board nest year, mostly because of a strengthening economy. Here’s a recap of some of the real estate forecasts for 2015: Millennial force: Younger professionals are having more luck in the job market, which is expected to help more of them jump into home ownership in the new year. Overall, employment is on the rise, but jobs for Millennials — particularly those aged 25 to 29 — has risen by 3 percent. That’s one percentage point above the nationwide rate. According to some forecasts, Millennials are expected to drive two-thirds of household formations over the next five years. The forecasted addition of 2.5 million jobs next year, as well as an increase in household formation, will likely drive more first-time home buyers into home ownership, according to com® projections. Home prices stabilize: The double-digit price increases seen in 2013 have slowed, and more stable growth was the trend in 2014. As investors have retreated from the market, so have the rapid home prices in many markets. Home prices are expected to continue to edge up in 2015, with realtor.com® predicting a 4.5 percent gain. “After two years of abnormally high levels of home-price appreciation in 2012 and 2013, price increases moderated throughout 2014,” realtor.com® notes in its 2014 Housing Review. “We are now experiencing increases in home prices consistent with long-term historical performance.” Mortgage rates rising: Interest rates the last few months have been dipping below 4 percent, lowering the borrowing costs of home buyers and refinancing home owners. However, don’t expect the low rates to stick around much longer. Mortgage rates are expected to rise next year. Freddie Mac projects mortgage rates will likely average 4.6 percent but inch up to 5 percent by the end of 2015. Return of the 3 percent down payment: New programs are popping up to help more buyers break into home ownership with lower down payments. In early December, Freddie Mac and Fannie Mae announced conventional loan down-payment programs that will allow qualified first-time buyers to secure a fixed-rate mortgage with a 3 percent down payment. Prior to that, they needed at least 5 percent. Also, “there are many states as well as national programs, which offer grants that range from 1 to 5 percent to be used for a down payment or closing costs,” writes Damian Maldonado, co-founder of American Financing Corp., at CNBC. “These easing loan standards will allow more first-time buyers to enter the market.” Housing affordability...

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Fielding a Lowball Purchase Offer on Your Home

Fielding a Lowball Purchase Offer on Your Home By: Marcie Geffner Consider before you ignore or outright refuse a very low purchase offer for your home. A counteroffer and negotiation could turn that low purchase offer into a sale.   You just received a purchase offer from someone who wants to buy your home. You’re excited and relieved, until you realize the purchase offer is much lower than your asking price. How should you respond? Set aside your emotions, focus on the facts, and prepare a counteroffer that keeps the buyers involved in the deal. Check your emotions. A purchase offer, even a very low one, means someone wants to purchase your home. Unless the offer is laughably low, it deserves a cordial response, whether that’s a counteroffer or an outright rejection. Remain calm and discuss with your real estate agent the many ways you can respond to a lowball purchase offer. Counter the purchase offer. Unless you’ve received multiple purchase offers, the best response is to counter the low offer with a price and terms you’re willing to accept. Some buyers make a low offer because they think that’s customary, they’re afraid they’ll overpay, or they want to test your limits. 

A counteroffer signals that you’re willing to negotiate. One strategy for your counteroffer is to lower your price, but remove any concessions such as seller assistance with closing costs, or features such as kitchen appliances that you’d like to take with you. Consider the terms. Price is paramount for most buyers and sellers, but it’s not the only deal point. A low purchase offer might make sense if the contingencies are reasonable, the closing date meets your needs, and the buyer is preapproved for a mortgage. Consider what terms you might change in a counteroffer to make the deal work. Review your comps. Ask your REALTOR® whether any homes that are comparable to yours (known as “comps”) have been sold or put on the market since your home was listed for sale. If those new comps are at lower prices, you might have to lower your price to match them if you want to sell. Consider the buyer’s comps. Buyers sometimes attach comps to a low offer to try to convince the seller to accept a lower purchase offer. Take a look at those comps. Are the homes similar to yours? If so, your asking price might be unrealistic. If not, you might want to include in your counteroffer information about those homes and your own comps that justify your asking price.

If the buyers don’t include comps to justify their low purchase offer, have your real estate agent ask the buyers’ agent for those comps. Get the...

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5 Things That Could Devalue Your Home

5 Things That Could Devalue Your Home BY DAVID BAILEY Mortgage and Lending with The Mortgage Outlet NMLS   5 Things That Could Devalue Your Home When it comes to listing your home on the market, a common concern is wanting to increase its value and allow it to stay competitive in the local area. Many people work to remodel their property or make minor upgrades to increase the selling potential of their home. Although you should   take certain steps to increase what your home is truly worth, there are a few mistakes to avoid to prevent reducing its overall value. There are many different factors that determine the property value. If you know which ones are working against your home then you can prevent losing equity Using Bold Paint Colors To appeal to a larger group of buyers, use neutral paint on the walls and with the trim. Bold colors stand out like a sore thumb in neighborhoods and can allow them to look outdated or too customized. Similarly, using colors that are quirky or unpopular in the interior space can detract from the property value and is seen as an extra expense for buyer who will want to repaint the space. Stick with contemporary shades and use an accent wall in one or two rooms of the home for added detail that looks modern. A general rule of thumb is to avoid using colors that are too specific to your personal taste. Remodeled Kitchens Known as the most important room that buyers focus on when shopping for a property, kitchens are often remodeled and upgraded by homeowners in hopes of increasing their property value. Although having a kitchen that includes fancy appliances and a decorative backsplash can look appealing, it can also be overly done and appear awkward in the average house. Upgrade your kitchen to a certain degree without going overboard and causing the room to look awkward. It should still match the style and design of the rest of the home to ensure that it flows well and feels comfortable. Avoid overly customizing the space, but instead keeping it neutral to ensure that it appeals to more buyers. A Neglected Yard The yard and landscaping of your home is what ultimately makes the first impression with buyers and will determine their interest in the property. If you can’t win them over with the exterior of the home, then you likely won’t sell them on the interior space if you’ve already left a bad taste in their mouth. The lawn should be manicured and tidy without children’s toys or yard tools left out. Add shrubs, flowers, and potted plants around the house to fill in bare...

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