Hedge Against Inflation with These 3 Real Estate Investment Types

April 17, 2022April 17, 2022 by silverelk

The annual inflation rate in the United States is currently around 7.5%—the highest it has been since 1982.¹ It doesn’t matter if you’re a cashier, lawyer, plumber, or retiree; if you spend U.S. dollars, inflation impacts you.

Economists expect the effects of inflation, like a higher cost of goods, to continue.² Luckily, an investment in real estate can ease some of the financial strain.

Here’s what you need to know about inflation, how it impacts you, and how an investment in real estate can help.

WHAT IS INFLATION AND HOW DOES IT IMPACT ME?

Inflation is a decline in the value of money. When the rate of inflation rises, prices for goods and services go up. Therefore, a dollar buys you a little bit less with every passing day.

The consumer price index, or CPI, is a standard measure of inflation. Based on the latest CPI data, prices increased 7.5% from January 2021 to January 2022.¹ A little bit of inflation is considered healthy for the economy, but 7.5% in a single year is high.

How does inflation affect your life? Here are a few of the negative impacts:

Decreased Purchasing Power

We touched on this already, but as prices rise, your dollar won’t stretch as far as it used to. That means you’ll be able to purchase fewer goods and services with a limited budget.

Increased Borrowing Costs

In an effort to curb inflation, the Federal Reserve is expected to raise the federal funds rate. Therefore, consumers are likely to pay a higher interest rate on new mortgages, car loans, and variable-rate credit cards.³

Lower Standard of Living

Wage growth tends to lag behind price increases. According to Moody Analytics, when adjusted for inflation, average weekly earnings in January were down 3.1% from a year earlier.⁴ As such, life is becoming less affordable for everyone. Inflation can force those on a fixed income, like retirees, to make lifestyle changes and prioritize essentials.

Eroded Savings

If you store all your savings in a bank account, inflation is even more damaging. As of February 2022, the national average interest rate for a savings account is 0.06%, not nearly enough to keep up with inflation. And economists don’t expect that rate to go much higher.³

One of the best ways to mitigate these effects is to find a place to invest your money other than the bank. Even though interest rates are expected to rise, they’re unlikely to get high enough to beat inflation. If you hoard cash, the value of your money will decrease every year and more rapidly in years with elevated inflation.

REAL ESTATE: A PROVEN HEDGE AGAINST INFLATION

So where is a good place to invest your money to protect (hedge) against the impacts of inflation? There are several investment vehicles that financial advisors traditionally recommend, including:

Stocks

Some people invest in stocks as their primary inflation hedge. However, the stock market can become volatile during inflationary times, as we’ve seen in recent months.⁵

Commodities

Commodities are tangible assets, like oil, livestock, and minerals. The theory is that the price of commodities should climb alongside inflation. But the classic choice–gold–hasn’t risen consistently during periods of inflation since the 1970s, according to data from Morningstar Direct.⁶

Inflation-Indexed Bonds

Treasury inflation-protected securities, or TIPS, are U.S. government-issued bonds that are indexed to the inflation rate. Bonds are considered low risk, but the returns they offer are generally low, as well.⁷

Real Estate
Real estate prices across the board tend to rise along with inflation and often rise faster than inflation.⁸That’s one of the reasons demand for real estate is soaring right now.⁹

We believe real estate is the best hedge against inflation. Owning real estate does more than protect your wealth—it can actually make you money. For example, home prices rose nearly 17% from 2020 to 2021, 10% ahead of the 7% inflation that occurred in the same timeframe.¹⁰

Plus, certain types of real estate investments can help you generate a stream of passive income. In the past year, property owners didn’t just avoid the erosion of purchasing power caused by inflation; they got ahead.

TYPES OF REAL ESTATE INVESTMENTS

Though there are myriad ways to invest in real estate, there are three basic investment types that we recommend for beginner and intermediate investors. Remember that we can help you determine which options are best for your financial goals and budget.

Primary Residence

If you own your home, you’re already ahead. The advantages of homeownership become even more apparent in inflationary times. As inflation raises prices throughout the economy, the value of your home is likely to go up concurrently. At the same time, you’ve locked in a set mortgage payment for the next 30 years, so you’ll be immune to rising rental costs.

If you don’t already own your primary residence, homeownership is a worthwhile goal to pursue.

Though the task of saving enough for a down payment may seem daunting, there are several strategies that can make homeownership easier to achieve. If you’re not sure how to get started with the home buying process, contact us. Our team can help you find the strategy and property that fits your needs and budget.

Whether you already own a primary residence or are still renting, now is a good time to also start thinking about an investment property. The types of investment properties you’ll buy as a solo investor generally fall into two categories: long-term rentals and short-term rentals.

Long-Term (Traditional) Rentals

A long-term or traditional rental is a dwelling that’s leased out for an extended period. An example of this is a single-family home where a tenant signs a one-year lease and brings all their own furniture.

Long-term rentals are a form of housing. For most tenants, the rental serves as their primary residence, which means it’s a necessary expense. This unique quality of long-term rentals can help to provide stable returns in uncertain times, especially when we have high inflation.

To invest in a long-term rental, you’ll need to budget for maintenance, repairs, property taxes, and insurance. You’ll also need to have a plan for managing the property. But a well-chosen investment property should pay for itself through rental income, and you’ll benefit from appreciation as the property rises in value.

We can help you find an ideal long-term rental property to suit your budget and investment goals. Reach out to talk about your needs and our local market opportunities.

Short-Term (Vacation) Rentals

Short-term or vacation rentals function more like hotels in that they offer temporary accommodations. A short-term rental is defined as a residential dwelling that is rented for 30 days or less. The furniture and other amenities are provided by the property owner, and today many short-term rentals are listed on websites like Airbnb and Vrbo.

A short-term rental can potentially earn you a higher return than a long-term rental, but this comes at the cost of daily, hands-on management. With a short-term rental, you’re not just entering the real estate business; you’re entering the hospitality business, too.

Done right, short-term rentals can be both a hedge against inflation and a profitable source of income. As a bonus, when the home isn’t being rented you have an affordable vacation spot for yourself and your family!

Contact us today if you’re interested in exploring options in either the long-term or short-term rental market. Mortgage rates are expected to rise, so you’ll want to act fast to maximize your investment return.

WE’RE INVESTED IN HELPING YOU

Inflation is a fact of life in the U.S. economy. Luckily, you can prepare for inflation with a carefully managed investment portfolio that includes real estate. Owning a primary residence or investing in a short-term or long-term rental will help you both mitigate the effects of inflation and grow your net worth, which makes it a strategic move in our current financial environment.

If you’re ready to invest in real estate to build wealth and protect yourself from rising inflation, contact us. Our team can help you find a primary residence or investment property that meets your financial goals.

The above references an opinion and is for informational purposes only. It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

8 Popular Home Design Features for 2022

April 17, 2022February 18, 2022 by silverelk

There’s a lot to consider when selling your home, from the market and appraisals to where you’ll go next. Don’t forget, however, that design is also a key factor. It’s often one of the first things buyers notice when they walk into a home, and it’s also a detail that you, as a seller, can easily control.

According to Realtor.com’s 2022 housing market forecast, home for-sale inventory will increase from last year, as will the projected number of overall sales.¹ This means, if you’re looking to sell in the near future, now is the time to consider how you can stand out.

Updating your home design is one way to do that. Changes like new security features or upgraded siding can add value to your home now and be highlighted when you market it for sale later. To get the most out of your updates, focus on these popular home design features that will wow buyers in 2022.

Keep in mind, not all of these will work well in every house. If you plan to buy, list, or renovate a property, give us a call. We can help you realize your vision and maximize the impact of your investment.

Eco-Friendly Fixtures

Millennials account for the largest share of current homebuyers, according to the National Association of Realtors.² Sustainable living tops the list of priorities for this generation. A recent Deloitte survey found that nearly one-third of millennials initiate or deepen their consumer investment in products or services that help the environment—this also includes the houses they choose to live in.³

Here are a few eco-friendly design features that will be attractive to these millennial buyers in 2022. Bonus, they can net a significant return on investment (ROI) for you, as a seller, too.

Energy-Efficient Windows: Heat gain or loss from low-performance windows drives 25–30 percent of home heating and cooling costs, according to Energy.gov.⁴ Therefore, energy-efficient windows can help homeowners save money.
Low-Flow Water Fixtures: According to the EPA, replacing your shower head with one that’s labeled with WaterSense can save four gallons of water with each shower.⁵ Doing the same with your faucet can save 700 gallons per year. This leads to cost savings and environmental support.
Native Landscaping: According to the American Society of Landscape Architects, 58 percent of members report increased client demand for native trees and plants as a means to combat biodiversity loss from climate change..⁶ Enhance the eco-friendly appeal of your home with some native plants in the front yard.

Wellness Retreat Nooks

The pandemic has had a significant impact on mental health. For example, in an effort to prioritize mental health, many people are relocating to quieter, more peaceful homes, with 22 percent of city dwellers planning a move to less congested residential areas, according to the Home Improvement Research Institute’s (HIRI) 2021 Insights Summit.⁷

However, no matter where you live, you can still intrigue buyers by jumping on this trend. At-home wellness amenities, which were once viewed as luxuries, are now on many homeowners’ must-have lists. Indoor spaces that function as a retreat for wellness and self-care have become extremely popular, according to HIRI.

Improve your quality of life in your home with reading nooks, spa-inspired bathrooms, and exercise or meditation spaces. Even if your house doesn’t have the square footage to section off an entire room for relaxation, making simple tweaks to natural light, air purifiers, and indoor plants can help you feel better in your home now while enabling future buyers to see the opportunity for their own space.

Calming Paint Colors

Paint colors that produce a calming atmosphere will also be a key selling point in 2022. Soft earth tones and natural hues will prevail this year, including various shades of blue, green, brown, and beige. Recent research suggests steering clear of trendy paint colors in favor of a more classic palette to bring the feel of nature indoors in a subtle and soothing way.⁸

In fact, the same research found that buyers are often willing to pay an extra $4,698 for a house with a light blue bathroom or an extra $1,491 for a house with a dark blue bedroom. Another crowd-pleasing hue to refresh the walls with is BEHR’s 2022 paint color of the year, known as Breezeway.⁹

This shade of green with silver undertones was created to mimic sea glass. As the BEHR website describes it, Breezeway “evokes feelings of coolness and peace, while representing a desire to move forward and discover newfound passions.”

Home Safety Features

Buyers want peace of mind more now than ever before. According to a 2021 survey from the American Institute of Architects, members report seeing an increase in the popularity of these home safety features¹⁰:

Emergency backup power generation
Accommodations for multiple generations
Wider accessible doorways and hallways
Home security monitoring equipment
Interior ramps and home elevator features

Consider how you can build home safety features like these into the design of your home to enhance your quality of life now and attract more buyers later. For example, you could install a backup generator in the garage and sell it with the house or update your major doorways to be wider.

Before making an investment in expensive home safety upgrades, contact us. We can help you determine what will deliver the greatest ROI for your location and goals.

Designated Work Spaces

It may come as no surprise that after the pandemic, 63 percent of homebuyers want their next house to feature room for a designated office, according to the National Association of Home Builders.¹¹ In addition, 70 percent of these buyers want the office to be at least 100 square feet (or a 10×10 room).

If you can, consider turning a bedroom or a den into a work-from-home office. When designing the space, make it both functional and aesthetically pleasing. Position a desk near the window for natural light, install a bookshelf unit, arrange a few succulents on the work surface, and hang a few framed posters or a cork bulletin board on the wall. You want the space to foster productivity as well as be a place in your home you enjoy spending time.

When you get ready to sell, we can help you highlight your designated work space. Given the high demand for this design feature, it can help you interest more buyers and attract more competitive offers—if marketed creatively.

Luxury Kitchen Retouches

The kitchen has always been a main focal point of interior design, and that’s no different in 2022. Families will always need this space to come together in their own homes.

This year’s buyers want a kitchen with new upgrades and retouches, but you don’t have to renovate the entire kitchen to make an impact. If you’re not sure where to start, here are a few tips on how to create a kitchen that buyers will love without spending too much money on renovations:

Repaint the kitchen, keeping the calm and nature-inspired colors in mind that are most popular right now. Taking a kitchen from dark to light by painting cabinets and walls can make all the difference.
Update the hardware. These kitchen “accessories” stand out and add personality to an otherwise standard kitchen.
Update light fixtures to bring in more light while also adding a fresh look and feel to the space.

Unique Accent Walls

In a recent interview with the National Association of Realtors, Brian Santos, the director of education for Fresh Coat Painters, explains that bold, unique accent walls are trendy right now.¹² An accent wall gives a home character while maintaining the calming feel of natural- and neutral-colored walls.

Santos also explains that this is part of a design aesthetic that draws inspiration from the Roaring Twenties, and it’s likely to remain a sought-after home feature in 2022. Here are some bold colors to consider for your home’s accent walls:

Solid black
Jewel or metallic tones
Textured wallpaper
Painted ceilings
Built-in shelves

If you’re planning to sell in the next year, talk to us before adding an accent wall. Depending on your target buyer, it may be a design feature that actually hurts your home’s value. We can run a free Comparative Market Analysis on your home to help you understand what would resell best in your neighborhood.

Exterior Siding Updates

A new exterior siding refresh is one of the most affordable renovation projects you can do to help increase a home’s resale value. The average cost is just $12 per square foot, but higher-end material options can push costs closer to $50 per square foot.¹³ What’s more, there are many siding materials available, from fiber-cement, brick, and wood to vinyl, metal, and stone.

While all these options can infuse the exterior with character and add curb appeal, fiber-cement and vinyl deliver the highest ROI. In fact, according to a 2021 Cost vs. Value Report, a vinyl siding replacement can boost resale value by $11,315 (68.3 percent cost recoup), and a fiber-cement siding replacement can boost resale value by $13,618 (69.4 percent cost recoup).¹⁴

Give your home this simple, affordable, and attractive facelift before putting it on the market. If you’re not sure how to get started yourself, our team can connect you with a trusted vendor to guide you through the process.

Keep These Home Design Features on Your Radar in 2022

These design features can infuse personality into your home while helping to close the deal if you plan to sell in 2022. The average buyer knows just what they’re looking for in a space they plan to call home, so with some investment and foresight, you can give your house an edge over the competition—and boost resale value in the process.

However, you don’t need to make all these changes to attract more buyers. We can help you determine which design features you should add to your home by sharing insights and tips on how to maximize the return on your investment. We can also run a Comparative Market Analysis on your home to find out how it compares to others in the area, which will help us decide what changes need to be made. Contact us to schedule a free consultation!

Sources:

Realtor – https://www.realtor.com/research/2022-national-housing-forecast/
National Association of Realtors – https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends
Deloitte – https://www2.deloitte.com/content/dam/Deloitte/global/Documents/2021-deloitte-global-millennial-survey-report.pdf
Energy.gov – https://www.energy.gov/energysaver/update-or-replace-windows
EPA.gov – https://www.epa.gov/watersense/about-watersense
American Society of Landscape Architects – https://www.asla.org/NewsReleaseDetails.aspx?id=60427
Home Improvement Research Institute – https://www.hiri.org/blog/4-major-home-wellness-trends-from-hiri-summit-speaker-dr-jie-zhao
Zillow – http://zillow.mediaroom.com/2021-07-15-Homes-With-Light-Blue-Bathrooms,-Dark-Blue-Bedrooms-Could-Sell-for-Up-to-4,698-More-Than-Expected
Behr – https://www.behr.com/colorfullybehr/behr-announces-2022-color-of-the-year-and-trends-palette/
American Institute of Architects – http://info.aia.org/AIArchitect/2021/0910/aia-interactive/index.html#
National Association of Home Builders – https://www.nahb.org/-/media/NAHB/news-and-economics/docs/housing-economics-plus/special-studies/2021/special-study-what-home-buyers-really-want-march-2021.pdf?_ga=2.188050984.1824982414.1639512139-1247360189.1639512139
National Association of Realtors – https://www.nar.realtor/blogs/styled-staged-sold/hot-home-trend-the-accent-wall-is-back
Forbes – https://www.forbes.com/advisor/home-improvement/how-much-does-siding-cost-to-install/
Remodeling Magazine – https://www.remodeling.hw.net/cost-vs-value/2021/

The State of Real Estate in 2022

February 8, 2022January 3, 2022 by silverelk

A Return to ‘Normal’?

Last year was one for the real estate history books. The pandemic helped usher in a buying frenzy that caused home prices to soar nationwide by a record 19.9% between August 2020 and August 2021.¹

However, there were signs in the fourth quarter that the red-hot housing market was beginning to simmer down. In the month of October, only 60.3% of sales involved a bidding war—down from a high of 74.5% in April.² While this trend could be attributed to seasonality, it could also be a signal that the real estate run-up may have passed its peak.

So what’s ahead for the U.S. housing market in 2022? Here’s where industry experts predict the market is headed in the coming year.

MORTGAGE RATES WILL CREEP UP

Most economists expect to see mortgage rates gradually rise this year after hitting record lows in late 2020 and early 2021.³

Freddie Mac forecasts the 30-year fixed-rate mortgage will average 3.5% in 2022, up from around 3% in 2021.⁴

The Mortgage Bankers Association predicts that rates will tick up to 4% by the end of the year. “Mortgage lenders and borrowers should expect rising mortgage rates over the next year, as stronger economic growth pushes Treasury yields higher,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association at their 2001 Annual Convention & Expo in October.⁵

However, it’s important to keep in mind that even a 4% mortgage rate is low when compared to historical standards. According to industry trade blog The Mortgage Reports, “Between 1971 and December 2020, 30-year mortgage rates averaged 7.89%.”⁶

What does it mean for you? Low mortgage rates can reduce your monthly payment and make homeownership more affordable. Fortunately, there’s still time to lock in a historically-low rate. Whether you’re hoping to purchase a new home or refinance an existing mortgage, act soon before rates go up any further. We’d be happy to connect you with a trusted lending professional in our network.

THE MARKET WILL BECOME MORE BALANCED

In 2021, we experienced one of the most competitive real estate markets ever. Fears about the virus and a shift to remote work triggered a huge uptick in demand. At the same time, many existing homeowners delayed their plans to sell, and supply and labor shortages hindered new construction.

This led to an extreme market imbalance that benefitted sellers and frustrated buyers. According to George Ratiu, director of economic research at Realtor.com, “Prices and sellers reached for the moon [last] year. It looks like we are now about to move back to earth.”⁷

Data from Realtor.com released in November showed that listing price reductions had more than doubled since February 2021. And the average days on market (an indicator of how long it takes a home to sell) has been slowly creeping up since June.⁷

What’s causing this change in market dynamics? The real estate market typically slows down in the fall and winter. But economists also suspect a fundamental shift in supply and demand.

At the National Association of Realtors’ annual conference last November, the group’s chief economist, Lawrence Yun, told attendees that he expects increased supply to come from an uptick in new construction—which is already underway—and an end to the mortgage forbearance program. “With more housing inventory to hit the market, the intense multiple offers will start to ease,” he said.⁸

Demand is also predicted to wane slightly in the coming year. Rising mortgage rates and record-high prices have made homeownership unaffordable for a growing number of Americans. And in a recent Reuters poll, nearly 80% of property analysts said they expect housing affordability to worsen over the next several years.⁹

What does it mean for you? If you struggled to buy a home last year, there may be some relief on the horizon. Increased supply and softening demand could make it easier to finally secure the home of your dreams. If you’re a seller, it’s still a great time to cash out your big equity gains! And with more inventory on the market, you’ll have an easier time finding your next home. Reach out for a free consultation so we can discuss your specific needs and goals.

HOME PRICES LIKELY TO KEEP CLIMBING, BUT AT A SLOWER PACE

“Normal” annual appreciation in North Texas is 3-4%. In 2021, Nationally, home prices rose an estimated 16.8%.⁸ But the average rate of appreciation is expected to slow down in 2022.

Danielle Hale, chief economist at Realtor.com, told Yahoo! News, “Home asking prices have decelerated in the second half of 2021, with median listing price growth slipping from a peak of 17.2% in April to just 8.6% in October.”¹⁰

But experts disagree about how much more property values can continue to climb this year. Goldman Sachs predicts that home prices will rise by 13.5%, while Fannie Mae and Freddie Mac are forecasting a 7.9% and 7% rate of appreciation, respectively.²

However, not all analysts are as bullish. The National Association of Realtors predicts a 2.8% rate of appreciation for existing homes and 4.4% for new homes, while the Mortgage Bankers Association expects the average home price to decrease by 2.5% by the end of the year.^10,2

According to Hale, “With prices near all-time highs and mortgage rates expected to rise, we expect this slowdown in prices to continue.”¹⁰

What does it mean for you? If you’re a buyer who has been waiting on the sidelines for home prices to drop, you may be out of luck. Even if home prices dip slightly (and most economists expect them to rise) any savings are likely to be offset by higher mortgage rates. The good news is that decreased competition means more choice and less likelihood of a bidding war. We can help you get the most for your money in today’s market.

RENTS WILL CONTINUE TO RISE

Along with home, gasoline, and used vehicle prices, rent prices rose dramatically last year. According to CoreLogic, in September, rents for single-family homes were up 10.2% nationally year over year.¹¹ And economists at Realtor.com expect them to climb another 7.1% in 2022.¹²

“Homes are expensive now…but for most people, the comparison that is most important is how that cost of homeownership is going to compare to the cost of renting,” Zillow Senior Economist Jeff Tucker told CNBC in November.¹³

Tucker also pointed out that rent is less predictable than a mortgage—and more likely to go up along with inflation.¹³

Real assets, like real estate, are often used as a hedge against inflation. That’s because property values typically rise with inflation.¹⁴ And when a homeowner takes out a mortgage, they lock in a set housing payment for the next 30 years.

In contrast, renters are at the mercy of the market—and they don’t gain any of the benefits of homeownership, like tax deductions, equity, or appreciation.

George Ratiu of Realtor.com told CNBC that he advises buyers to consider their budget and time frame. If you plan to stay in the home for at least three to five years, he believes it often makes sense to buy.¹³

Fortunately, it’s shaping up to be a better year for buyers. “I think 2022 has the promise of providing less competition, a lot more homes to choose from, and, as a result, a lot more approachable prices,” Ratiu said.¹³

What does it mean for you? Both property and rent prices are expected to continue rising. But when you purchase a home with a fixed-rate mortgage, you can rest assured knowing that your monthly mortgage payment will never go up. Whether you’re a first-time homebuyer or a real estate investor, we can help you make the most of today’s real estate market.

WE’RE HERE TO GUIDE YOU

While national real estate numbers and predictions can provide a “big picture” outlook for the year, 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 in 2022, 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.

Sources:

Fortune – https://fortune.com/2021/11/04/us-home-prices-real-estate-forecast-2022-outlook/
Fortune – https://fortune.com/2021/11/29/housing-market-real-estate-predictions-2022-forecast/
Freddie Mac – http://www.freddiemac.com/pmms/pmms30.html
Freddie Mac – https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-strong-housing-market-will-continue-even-rates-and
Mortgage Bankers Association – https://www.mba.org/2021-press-releases/october/mba-annual-forecast-purchase-originations-to-increase-9-percent-to-record-173-trillion-in-2022
The Mortgage Reports – https://themortgagereports.com/61853/30-year-mortgage-rates-chart
Realtor.com – https://www.realtor.com/news/trends/has-housing-market-peaked/
National Association of Realtors – https://www.nar.realtor/newsroom/nars-yun-says-housing-market-doing-well-may-normalize-in-2022
Reuters – https://www.reuters.com/world/us/rise-us-house-prices-halve-next-year-affordability-worsen-2021-12-07/
Yahoo! News – https://www.yahoo.com/now/where-home-prices-headed-2022-130012748.html
CNBC – https://www.cnbc.com/2021/11/16/inflation-rent-for-single-family-homes-surged-10percent-in-september.html
Realtor.com – https://www.realtor.com/news/trends/what-to-expect-in-2022-housing-market/
CNBC – https://www.cnbc.com/2021/11/23/rising-inflation-hot-housing-market-what-you-need-to-know-about-buying-a-home.html
Money – https://money.com/inflation-2021-stocks-bitcoin-gold-reits-commodities/

9 Tips for Buying and Selling Your Home at the Same Time

September 22, 2021September 22, 2021 by silverelk

! YOU’VE FOUND OUR NUMBER ONE BLOG POST OF THE YEAR !

Selling your home when you still need to shop for a new one can feel daunting to even the most seasoned homeowner––especially when the demand for new homes just keeps rising, while the supply feels like it’s dwindling.¹ You’re not alone especially if you’re already feeling drained by the complex logistics of trying to sell and buy a new home all at once. This is no longer real estate 101; navigating this experience is like skipping college and jumping into your masters degree. Why do that with only online publications or websites?

Online tools are so helpful for searching out a new home; we think it SHOULD be exciting, but most of our homebuyers admit that it can also be stressful with an unpredictable market with plenty of competitors. Unfortunately, waiting out a competitive housing market isn’t going to the best idea either since listings are expected to remain limited in the most coveted neighborhoods for some time.²

That doesn’t mean, though, that you should just throw up your hands and give up on moving altogether. In fact, as a current homeowner, you could be in a better position than most to capitalize on a seller’s market and make a smooth transition from your old home to a new one. For anyone buying a home please don’t allow pricing to intimidate you; you want to own your house, set a fixed overhead budget and grow equity.

As a seasoned team, we can guide you on how to grow your NET WORTH, shape your equity and capitalize on appreciation over the years instead of juggling unaffordable rental prices (and a leasing market that is just as competitive, which only benefits investors). Price is just one element. There are many ways wrestle that mortgage monkey; however waiting for a price drop isn’t one of them.

Gorden & I have built our business to help our clients prepare for the road ahead and answer any questions you have about the real estate market. We thought it might help you feel better to review some of the most common concerns we hear from clients who are trying to buy and sell at the same time.

“WHAT WILL I DO IF I SELL MY HOUSE BEFORE I CAN BUY A NEW ONE?”

This is an understandable concern for many sellers since the competitive real estate market makes it tough to plan ahead and predict when you’ll be able to move into your next home. But chances are, you will still have plenty of options if you do sell your home quickly. It may just take some creativity and compromise.

Here are some ideas to make sure you’re in the best possible position when you decide to list your home:

Tip #1: Flex your muscles as a seller.

In a competitive market, buyers may be willing to make significant concessions in order to get the home they want. In some cases, a buyer may agree to a rent-back clause that allows the seller to continue living in the home after closing for a set period of time and negotiated fee.

This can be a great option for sellers who need to tap into their home equity for a downpayment or who aren’t logistically ready to move into their next home. However, many lenders limit the duration of a rent-back to 60 days, and there are liability issues to consider before entering into an agreement. If this an option you want to pursue lets discuss what to expect during the rent-back period which may also be needed to win the sellers who own the home you desire.³

Tip #2: Open your mind to short-term housing options.

While it is definitely a hassle to move out of your old home before you’re ready to move into your new one, this has become a common scenario. You may be lucky enough to have family or generous friends who offer to take you in for a short duration. If not, you’ll need to find temporary housing. Vacation rentals from VRBO or Air BnB have become a popular source and month-to-month lease prices can be less than the weekly rates listed. If space is an issue, consider putting some of your furniture and possessions in storage.

You may even find that a short-term vacation to refresh after all the hard work is the best incentive to reward yourself and the kids for enduring the process; especially if online classes or remote work is available for 7-10 days before you move into your new home.

Tip #3: Embrace the idea of selling now and buying later.

Instead of stressing about timing your home sale and purchase perfectly, consider making a plan to focus on one at a time. Selling before you’re ready to buy your next home can offer a lot of advantages.

For one, you’ll have cash on hand from the sale of your current home. This will put you in a much better position when it comes to buying your next home. From budgeting to mortgage approval to submitting a competitive offer, cash is king. And by focusing on one step at a time, you can alleviate some of the pressure and uncertainty. Of course, this is ideal when combining that rent-back request from your buyers so you can pack, shop and prepare for a move after securing a sale contract.

“WHAT IF I GET STUCK WITH TWO MORTGAGES AT THE SAME TIME?”

WELL… this one of the most common concerns that we hear from buyers who are selling a home while shopping for a new one, and it’s realistic to expect at least some overlap in mortgages. To make sure you don’t get into a situation where you are carrying dual mortgages for longer than you can afford, examine your budget and calculate the maximum number of months you can afford to pay both.⁴ We will likely calculate this with you, so Gorden can set the appropriate pricing strategy to meet your goals. Yes, even in a “sellers market” setting the wrong price can create delays or discount bidding.

Rookie agents make big mistakes with pricing; Gorden is not only a Certified Listing Agent, he trains with appraisers annually to avoid gaps in expectations with the bank. His expertise in logistics and contract negotiations have undoubtedly improved the final equity position for all of our sellers.

If you simply can’t afford to carry both mortgages at once, then selling before you buy may be your best option. (See Tip #3 above.) But if you have some flexibility in your budget, it is possible to manage both a home sale and purchase simultaneously. Here are some steps you can take to help streamline the process:

Tip #4: As you get ready to sell, simplify.

You can condense your sales timeline if you only focus on the home renovations and tasks that matter most for selling your home quickly. For example, clean and pre-pack all of your common areas, refresh your outdoor paint and curb appeal, and fix any outstanding maintenance issues as quickly as possible.

But don’t drain unnecessary time and money into pricey renovations and major home projects that could quickly bog you down for an unpredictable amount of time.

We include a project punch-list advise you on the repairs and upgrades that are worth your time and investment as part of our agent services. Kemberly is also a Professional Staging Consultant.

Tip #5: Prep your paperwork.

You’ll also save valuable time by filing as much paperwork as possible early in the process. For example, if you know you’ll need a mortgage to buy your next home, get pre-approved right away so that you can shorten the amount of time it takes to process your loan.

We also recommend getting started to provide a clear title or property deed, which is required to transfer ownership and easy to select a reputable Title Company to get started on verifying county records as well as the key party to manage your contract terms from start to finish. Learning if there are any snags to address will keep a closing date on track before crunch time.

Similarly, set your home sale up for a fast and smooth transition by pulling together any relevant documentation about your current home, including appliance warranties, renovation permits, and repair records. That way, you’re ready to provide quick answers to buyers’ questions should they arise.

Tip #6: Ask us about other contingencies that can be included in your contracts.

Part of our job as agents is to negotiate on your behalf and help you win favorable terms. For example, it’s possible to add a contingency to your purchase offer that lets you cancel the contract if you haven’t sold your previous home.

We will always discuss the pros and cons of contingencies and tactics to protect you and what’s realistic given the current market dynamics.

It is our goal to minimize the risks you may face, while working hard to win the home of your dreams; so expect education and honest options every turn. No two contracts are alike.

“WHAT IF I MESS UP MY TIMING OR BURN OUT FROM ALL THE STRESS?”

When you’re in the pressure cooker of a home sale or have been shopping for a home for a while in a competitive market, it’s easy to get carried away by stress and emotions. To make sure you’re in the right headspace for your homebuying and selling journey, take the time to slow down, breathe and delegate as much as possible. Even our most experienced sellers, have noted our step-by-step protocol has taken the edge off, and surpassed former experiences when moving.

Our servant business model is one you can count on to keep each week focused on achievable goals. We work hard to anticipate obstacles and offer a safe place for reality checks along the journey.

Tip #7: Relax and accept that compromise is inevitable

Rather than worry about getting every detail right with your housing search and home sale, trust that things will work out eventually––even if it doesn’t look like your Plan A or even your Plan B or Plan C. We’ve learned to leave room for God to guide us around or away from pitfalls; and stay the course when it feels a bit turbulent.

Perfecting every detail with your home decor or timing your home sale perfectly isn’t necessary for a successful home sale and compromise will almost always be necessary to obtain your ultimate dream. That doesn’t mean you’ll settle for less than desired but it does mean the way we “get there” may be very unpredictable.

Luckily, by working with us you’ve got a good team of professionals and trusted vendors that have your back and are monitoring the details behind the scenes. Life always works better in teams.

Tip #8: Don’t worry too much if your path is straying from convention

Remember that rules-of-thumb and home-buying trends are just that: they are estimates, not facts. So if your home search or sale isn’t going exactly like your neighbor’s, it doesn’t mean that you are doomed to fail. See Tip #7 to keep your hopes up!

It’s possible, for example, that seasonality trends may affect sales in your desired neighborhood. According to the National Association of Realtors, the housing market tends to be more competitive during the summer and less competitive during the winter.⁵ This is one of those “trends” that should not be a hard and fast rule, as every real estate transaction is different. That’s why it’s important to talk to a local agent about your specific situation.

Tip #9: Enlist help early.

Which leads us to our final tip: If possible, call us early in the process.

We’ll not only provide you with key guidance on what you should do ahead of time to prepare your current home for sale, we’ll also help you narrow down your list of must-haves and wants for your next one.

Not only will you be prepared to act quickly, our ultimate goal is to build your confidence when it’s time to make your move. (Pun intended, here!)

It’s our job to guide you and advocate on your behalf. So don’t be afraid to lean on us throughout the process. We’re here to ease your burden and make your move as seamless and stress-free as possible.

BOTTOMLINE:

COLLABORATE WITH A REAL ESTATE PROFESSIONAL TO GET TAILORED ADVICE THAT WORKS FOR YOU

Buying and selling a home at the same time is challenging. It doesn’t have to become a nightmare, and it can even be fun. The key is to educate yourself about the market and prepare yourself for multiple scenarios. One of the best and easiest ways to do so is to partner with a knowledgeable and trustworthy agent.

As experienced agents, Gorden will not only help you evaluate your situation, we will also provide you with honest and individually tailored advice that addresses your unique needs and challenges. You can’t get that on the web or by clicking “I’m interested in this home”. The biggest stressor is not having a plan or a trusted expert to empower you with today’s latest tactics. With over 500,000 new agents joining the real estate industry since 2020, be mindful that these decisions revolve around the largest investment decision you may ever make. Choose wisely.

Depending on your circumstances, now may be a great time to sell your home and buy a new one. Or it may not. You can expect we won’t shy away from conducting a thorough assessment which may reveal you may better off pausing your search for a while longer. As part of the Silver Elk family, you’ll always feel confident about making wise decisions.

Contact us for a free consultation so that we can help you review your options and guide you to decide the best way forward.

Sources:

Board of Governors of the Federal Reserve System, FEDS Notes – https://www.federalreserve.gov/econres/notes/feds-notes/housing-market-tightness-during-covid-19-increased-demand-or-reduced-supply-20210708.htm
Federal Reserve Bank of St. Louis, FRED Economic Data – https://fred.stlouisfed.org/series/MSPUS
Realtor.com – https://www.realtor.com/advice/sell/what-is-a-rent-back-agreement/
Bankrate.com – https://www.bankrate.com/real-estate/sell-your-house-while-buying-another/
National Association of REALTORS – https://www.nar.realtor/blogs/economists-outlook/seasonality-in-the-housing-market

Everything You Need to Know About iBuyers and the “Instant Cash Offer”

June 24, 2021June 24, 2021 by silverelk

Technology is changing the way we do almost everything, and real estate transactions are no exception. In fact, a new crop of tech companies wants to revolutionize the way we buy and sell homes.

iBuyer startups like Opendoor, Offerpad, and Properly began expanding into new territories in 2019, and now established players, like Zillow, want to provide “instant offers”. These investors are known as Direct Buyers. They use computer algorithms to provide sellers with a quick cash offer to buy their home with a strategy to “fix & flip” or “buy and hold” to make their company profitable.

While the actual market share of iBuyers remains small, their big advertising budgets have helped create a noticeable buzz in the industry. Less than 3% of all real estate sold, was as a result of an iBuyer in 2020. This has left many of our clients curious about them and how they work. It’s quite tempting to choose a move out date, and cross the stress of marketing, showing or keeping a tidy home off of a Homeowner’s list of things to do.

In this article, we explain their business model, weigh the pros and cons of working with an iBuyer, and share strategies you can use to protect yourself if you choose to explore this new option to buy or sell your home.

FIRST, HOW DOES THE iBUYER PROCESS WORK?

While each company operates a little differently, the basic premise is the same. A seller (or seller’s agent) completes a brief online form that asks questions about the size, features, and condition of the property. Some also request digital photos of the home.

The iBuyer will use this information to determine whether or not the home fits within their “buy box,” or set of criteria that matches their investment model. They are generally looking for houses they can easily value and “flip.” In most cases, their ideal property is a moderately priced, single-family home located in a neighborhood with many similar houses. The property shouldn’t require any major renovations before listing.¹ These qualities make it easier to assess value (lots of comparable sales data) and help to reduce their risk as well as minimize carrying costs before they resell.

Once the iBuyer has used their algorithm to determine the amount they are willing to pay, they will email an offer to the seller, usually within a few days. The offer should also disclose the company’s service fee, which is typically between 7% and 12% of the purchase price.^2.GULP! There is a cost to convenience, so be sure and read the fine print before spending your equity.

If the seller accepts, an in-person visit and inspection are scheduled. Just like a traditional contract for sale, repairs are negotiated after a deeper look. Sellers should expect the iBuyer will ask for a reduction in price to cover any defects they find during the process. Once the sale closes, they will make the necessary updates and repairs and then resell the home on the open market.

WHAT ARE THE PROS AND CONS OF SELLING TO AN iBUYER?

Of course, the biggest benefit of selling your home to an iBuyer is convenience. For some homeowners, the stress and disruption of preparing and listing their home can feel overwhelming. And what busy family with multiple children, a dire illness or pets wouldn’t want to skip the hassle of keeping their house “show ready” for potential buyers? Additionally, many sellers like the predictability of a cash buyer and the flexibility to choose their closing date.

However, this added convenience does come at a cost. An iBuyer is an investor looking to make a profit. So their purchase offer is usually below true market value. In 2021 there may be more offers at list price, however with such low inventory cutting the public ability to bid or pick up closing costs, can still leave equity on the table. When you tack on service fees of up to 12% and deductions for updates and repairs, studies show that sellers who work with iBuyers net a lower amount than those that list the traditional way.³

Only in real estate can you expect to see a return on investment when you prepare a home properly for the market to bid or increase the listed “for sale” price. An experienced agent should estimate the expected return for any repairs, updates or disrepair before you set an opening sale price. An iBuyer is hedging a bet that you won’t do the work, which they can then mark up for profit. In fact, a MarketWatch investigation found that transactions involving iBuyers net the seller 11% less than if they would have sold their home with an agent on the open market.²

A house is the largest investment many Americans will ever own. If the same funds were tied to the stock market, no one would claim to watch a T.V. show then dive in or blindly follow a trend to improve financial standing.

WHAT ARE THE PROS AND CONS OF BUYING FROM AN iBUYER?

Buying a home from an iBuyer is a lot like buying a home from any investor. The pros are that it’s usually clean, neutral, and moderately updated. You’ll often find fresh paint and modern finishes. And because it’s uninhabited (no one is living there), you don’t have to work around a seller’s schedule to see the home.

However, there are some pitfalls to avoid when working with iBuyers. Speed is of the essence, so sometimes the renovations are rushed and the quality can suffer. Also, their investment margins don’t leave much room for negotiating a price reduction or additional repairs. That leaves buyers —who have already invested hundreds of dollars in an inspection—little recourse if any issues are uncovered.⁴

That’s one of the reasons we always recommend viewing properties with an agent. If the renovations were all trendy or cosmetic, you need to know what features an appraiser would assign value to the home for before you bid. During your visit, a real estate professional can point out any “red flags” at the home, provide background information about the neighborhood, and help you assess its true market value. That way, you don’t invest time and money in a high-risk or overpriced property. Safety is also a concern. Some companies allow buyers to access their homes via a smartphone app. While it may seem convenient, it provides an easy way for squatters and others to enter the home illegally.⁵

Luckily, since most iBuyers (and traditional sellers) pay a buyer agent’s commission, you can benefit from the guidance and expertise of a real estate professional … at no cost to you!

HOW CAN I PROTECT MYSELF IF I CHOOSE TO WORK WITH AN iBUYER?

While it may seem like the “quick and easy” way to go, working with an iBuyer can present some unique challenges. For example, they are notorious for presenting a strong initial purchase offer and then whittling it down with a long list of costly updates and repairs once they complete their inspection.² And unlike a traditional buyer who is incentivized to make a deal work, iBuyers can easily walk away if you don’t meet their demands.

Just like you wouldn’t go to court without a lawyer, you shouldn’t enter into a real estate transaction without an advocate to represent you. Having a professional agent on your side can be especially important when negotiating with an iBuyer. Remember, they employ sophisticated representatives and a team of lawyers who are focused on maximizing their profits, not yours. You need someone in your corner who has the skills and knowledge to ensure you get a fair deal and who understands the terms of their contracts, so you don’t encounter any unpleasant surprises along the way.

Overall, we think the emergence of new technology that helps to streamline the real estate process is exciting. And if we believe a client can benefit from working with an iBuyer, we present it as an option. But there is—inevitably—a cost to the convenience. After all, most iBuyers eventually list the properties they acquire on the open market, which is still the best place to find a buyer if you want to maximize the sales price of your home.

EXPLORE YOUR OPTIONS

Do you want to learn more about iBuyers and other options currently available in our area to buy or sell your home? We can help you determine the best path, given your unique circumstances. Contact us to schedule a free, no-obligation consultation! WE LOVE TO SERVE.

Sources:

5 Inspiring Home Design and Remodeling Trends for 2021

February 27, 2021February 27, 2021 by silverelk

We’ve all spent a lot more time at home over the past year. And for many of us, our homes have become our office, our classroom, our gym—and most importantly, our safe haven during times of uncertainty. So it’s no surprise to see that design trends for 2021 revolve around soothing color palettes, cozy character, and quiet retreats.

Even if you don’t have immediate plans to buy or sell your home, we advise our clients to be mindful of modern design preferences when planning a remodel or even redecorating. Over-personalized or unpopular renovations could lower your property’s value. And selecting out-of-style fixtures and finishes could cause your home to feel dated quickly.

To help inspire your design projects this year, we’ve rounded up five of the hottest trends. Keep in mind, not all of these will work well in every house. If you plan to buy, list, or renovate your property, give us a call. We can help you realize your vision and maximize the impact of your investment.

1. Uplifting Colors

Colors are gravitating toward warm and happy shades that convey a sense of coziness, comfort, and wellbeing. This year’s palettes draw from earthy hues, warm neutrals, and soothing blues and greens.¹

While white and gray are still safe options, expect to see alternative neutrals become increasingly popular choices for walls, cabinets, and furnishings in 2021. For a fresh and sophisticated look, try one of these 2021 paint colors of the year:

Aegean Teal (coastal blue) by Benjamin Moore
Urbane Bronze (brownish-gray) by Sherwin-Williams
Soft Candlelight (muted yellow) by Valspar

On the opposite end of the spectrum, indigo, ruby, sapphire and plum are showing up on everything from fireplace mantels and floating shelves to fabrics and home accessories. These classic, rich hues can help bring warmth, depth, and a touch of luxury to your living space.

To incorporate these colors, designers recommend using the “60-30-10 Rule.” Basically, choose a dominant color to cover 60% of your room. For example, your walls, rugs, and sofa might all be varying shades of beige or gray. Then layer in a secondary color for 30% of the room. This might include draperies and accent furniture. Finally, select an accent color for 10% of your room, which can be showcased through artwork and accessories.²

Photo by Tom Stringer Design Partners – Browse dining room ideas

2. Curated Collections

After a decade of minimalism, there’s been a shift towards highly-decorative and personalized interiors that incorporate more color, texture, and character. Clearly-defined styles (e.g., mid-century modern, industrial, modern farmhouse) are being replaced by a curated look, with furnishings, fixtures, and accessories that appear to have been collected over time.³

This trend has extended to the kitchen, where atmosphere has become as important as functionality. The ubiquitous all-white kitchen is fading in popularity as homeowners opt for unique touches that help individualize their space. If you’re planning a kitchen remodel, consider mixing in other neutrals—like gray, black, and light wood—for a more custom, pieced-together look. And instead of a subway tile backsplash, check out zellige tile (i.e., handmade, square Moroccan tiles) for a modern alternative with old-world flair.⁴

Photo by M Prevost Design – Search kitchen design ideas

3. Reimagined Living Spaces

The pandemic forced many of us to rethink our home design. From multipurpose rooms to converted closets to backyard cottages, we’ve had to find creative ways to manage virtual meetings and school. And designers expect these changes to impact the way we live and work for years to come.

For example, some home builders are predicting the end of open-concept floor plans as we know them.⁵ Instead, buyers are searching for cozier spaces with more separation and privacy. Cue the addition of alcoves, pocket doors, and sliding partitions that enable homeowners to section off rooms as needed.⁴

The necessity of a home office space is also here to stay. But what if you don’t have a dedicated room? Alternative workspaces have become increasingly popular. In fact, one of the biggest trends on Pinterest this year is the “cloffice”—essentially a spare closet turned home office. Searches for “home library design” and “bookshelf room divider” are on the rise, as well.⁶

Photo by Butter Lutz Interiors, LLC – Search home office design ideas

4. Staycation-Worthy Retreats

With travel options limited right now, more homeowners are turning their vacation budgets into staycation budgets. Essentially, recreate the resort experience at home—and enjoy it 365 days a year!

Bedrooms should provide a soothing sanctuary for rest and relaxation. But this year, minimalist decor and muted colors are giving way to bolder statement pieces. To create a “boutique hotel” look in your own bedroom, start with a large, upholstered headboard in a rich color or pattern. Layer on organic linen bedding and a chunky wool throw, then complete the look with a pair of matching bedside wall lights.⁷

Carry those vacation-vibes into your bathroom with some of the top luxury upgrades for 2021. Curbless showers and freestanding tubs continue to be popular choices that offer a modern and spacious feel, and large-format shower tiles with minimal grout lines make clean up a breeze. Add a floating vanity and aromatherapy shower head for the ultimate spa-like experience.⁴

Photo by Coda Construction LLC – More bathroom ideas

5. Outdoor Upgrades

From exercise to gardening to safer options for entertaining, the pandemic has led homeowners to utilize their outdoor spaces more than ever. In fact, backyard swimming pool sales skyrocketed in 2020, with many installers reporting unprecedented demand.⁸ But a new pool isn’t the only way homeowners can elevate their outdoor areas this year.

The home design website Houzz recently named 2021 “the year of the pergola.” They’re a relatively quick and affordable option to add shade and ambiance to your backyard.⁴ Another hot trend? Decked-out, custom playgrounds for exercising (and occupying) the youngest family members who may be missing out on school and extracurricular activities.⁹

But don’t limit your budget to the backyard. Landscapers are reporting an increase in front yard enhancements, including porch additions and expanded seating options. These “social front yards” enable neighbors to stay connected while observing social-distancing guidelines.¹⁰

Photo by Urban Oasis Design & Construction LLC – Look for deck pictures

DESIGNED TO SELL

Are you contemplating a remodel? Want to find out how upgrades could impact the value of your home? Buyer preferences vary greatly by neighborhood and price range. We can share our insights and offer tips on how to maximize the return on your investment. And if you’re in the market to sell, we can run a Comparative Market Analysis on your home to find out how it compares to others in the area. Contact us to schedule a free consultation and ASK FOR OUR FREE REPORT on R.O.I. vs RETURN in the Southwest US!

Sources:

Good Housekeeping – https://www.goodhousekeeping.com/home/decorating-ideas/g34762178/home-decor-trends-2021/
The Spruce –

https://www.thespruce.com/timeless-color-rule-797859

Homes & Gardens –

https://www.homesandgardens.com/news/interior-design-trends-2021

Houzz –

https://www.houzz.com/magazine/36-home-design-trends-ready-for-takeoff-in-2021-stsetivw-vs~142229851

Zillow – https://www.prnewswire.com/news-releases/the-end-of-open-floor-plans-how-homes-will-look-different-after-coronavirus-301080662.html
Pinterest – https://business.pinterest.com/content/pinterest-predicts/more-door/
Homes & Gardens – https://www.homesandgardens.com/spaces/decorating/bedroom-trends-224944
Reuters – https://www.reuters.com/article/us-health-coronavirus-pools/pool-sales-skyrocket-as-consumers-splash-out-on-coronavirus-cocoons-idUSKCN2520HW
Realtor.com – https://www.realtor.com/advice/home-improvement/2021-design-trends/
Realtor Magazine – https://magazine.realtor/daily-news/2020/12/09/4-outdoor-home-trends-that-may-gain-steam-in-2021

New Year, New Home? Set Homeownership Goals Whether You’re Buying, Selling, or Staying Put

February 27, 2021January 20, 2021 by silverelk

The start of a new year always compels people to take a fresh look at their goals, from health and career to relationships and finance. But with historically low mortgage rates, increased home sales and price growth, and a tight housing inventory, the time is right to also make some homeownership resolutions for 2021.

Home buyers, is this the year you work to improve your credit score, pay down some debt, or save for a down payment?

Home sellers, we’ve laid out plans for you to get top dollar for your property, including timing your home sale, making your property stand out from the crowd, and investing in your extra living space.

And even if you’re staying put for awhile, homeowners, you can resolve to improve your status quo by evaluating your home budget, finalizing your home maintenance schedule, or maybe investing in a second property.

So no matter your homeownership status, we’ve got some ideas and advice for you to make this year your best one yet. Read on to learn more.

HOME BUYERS

Resolution #1: Qualify for a better mortgage with a higher credit score.

Your credit report highlights your current debt, bill-paying history, and other key financial information. Importantly for your home-buying journey, it is also used by lenders and companies to calculate your credit score, which partly determines if you are qualified to obtain a mortgage. Therefore, before you start house-hunting, make sure your finances are in the best possible shape by checking your credit report from Equifax, Experian, and TransUnion (via AnnualCreditReport.com). You can also obtain your credit score for free from some banks and credit card companies.

Your credit score will be a number ranging from 300-850.¹ Generally speaking, a credit score of 740 or higher is considered very good to excellent.² If your FICO score drops below 740, you might need to work at boosting your score for a few months before you begin house-hunting. Ways to do this are to pay your bills on time every month, keep your credit card balances low, and avoid applying for new credit.

Resolution #2: Improve your credit health by paying down debt.

Do you have student loans, credit card debt, or car payments tying up your income each month? That debt is hurting your “buying power,” or the amount of home you can afford. Not only is it money that you can’t spend on your new home, but your debt-to-income ratio also affects your credit score, which we discussed above. The less debt you have, the higher your FICO score and the better mortgage you can obtain.

If you can, pay off some debt in its entirety—like a low balance on a credit card. Then apply that “extra” money you previously paid on that credit card to pay off bigger debt, like a car loan. Even if you can’t pay off all (or any) of your debt in full, reducing the balances of each account will help you qualify for the best possible mortgage terms.

Resolution #3: Create a financial safety net before applying for a mortgage.

Don’t forget that buying a home requires some cash as well. A down payment is typically 7% of a home’s purchase price, and closing costs currently average $3,700.^3,4 (You may qualify for 3.5% downpayment, or first time home buyer grants that cover 100% if you stay put for 3-5 years: contact us to learn to find out and set a realistic goal!)

You’ll also need money for moving expenses and any initial maintenance tasks that might pop up. And as the pandemic taught us, you never know when an unforeseen event might cause a job loss, drop in income, or health scare, so having some liquid savings will ensure that you can still pay your mortgage if a crisis occurs.

Dedicate some effort to building up your reserves. Cut down on unnecessary expenses, and consider having a portion of each paycheck automatically deposited into your savings account to avoid the temptation to spend it.

HOME SELLERS

Resolution #4: Decide on the right time to sell your home.

If you’re looking to maximize profit on the sale of your home, selling earlier in the year makes sense. Listing prices historically increase early in the year, peak in May, plateau through June, and decrease for the remainder of the year.⁵ And, according to the National Association of Realtors, “[w]ith both mortgage rates and the number of homes available for sale expected to remain relatively low, home prices are likely to continue to increase. [In] mid-January, home prices typically begin a quick ramp-up in a normal year.”^5.

In January 2021 the number of active listings are down nearly 43.4% in Dallas-Fort Wort, yet sales are up 17.6%… it’s an official sellers market with only 1.6 months of “inventory options” for buyers to choose from.

But sales price isn’t the only thing to consider. You might not be ready to sell your home yet because you don’t want to uproot your kids during the school year or because you need to tackle some minor upgrades before placing your home on the market.

This means that there is no one month or season that is the perfect time to sell your home. Instead, the right timeline for you takes into account factors such as when you’ll earn the highest profit, personal convenience, and whether your home is even ready to put on the market. As trusted real estate professionals, we can guide you through your specific needs to clarify when to sell your home.

Resolution #5: Boost your home’s resale value by making your property shine.

Housing inventory is at historic lows across the country, and that means the market is fiercely competitive.⁶ Selling your home in 2021 has the potential to net you a huge return right now, and you can maximize that amount with some simple fixes to make sure your property outshines your neighbors’ for sale down the street.

In your home, you might need to tackle a minor remodeling project, such as upgrading the flooring or adding a fresh coat of paint. According to the National Association of Realtors’ 2019 Remodeling Impact Report, simply refinishing existing hardwood floors recoups 100% of the cost at resale, and completely replacing it with new wood flooring recovers 106% of costs.⁷

Outside, you might consider improving your curb appeal by removing a dead bush, trimming a tree that blocks the front window, or power-washing your moldy driveway and sidewalks. In fact, real estate agents say cleaning the exterior of your house can add $10,000 to $15,000 to a home’s sale price.^8. We can attest, it will certainly sell faster when properly prepared to give buyers a reason to bid with confidence and lower risk of hidden concerns. By the way: according to a Virginia Tech study, improving a home’s landscaping may increase its value by 10 to 12%.⁹

A good agent should provide custom-tailored suggestions to ensure your property pops inside and out. Ask us about our local insider secrets that will make your home stand out from others on the market.

Resolution #6: Invest in your “extra” living space to meet current buyers’ needs.

Due to COVID-19, more people are staying at home to work, go to school, exercise, and stay entertained. And these lifestyle changes are showing up in home buyer preferences. For example, according to one study, buyers are looking more and more for homes with formal, outfitted home offices, private outdoor spaces, and updated kitchen appliances.¹⁰

So if you’ve got an underutilized room, consider turning it into an office, home gym, schoolroom, or multi-purpose room to meet current home buyer needs and attract better offers on your home. Got some underwhelming space outside? You could turn it into an outdoor entertainment area by adding a firepit, upgrading the patio furniture, or installing a grilling area. Be sure to consult with a local real estate professional before investing in a renovation, however, as each market’s buyers have different tastes.

HOMEOWNERS

Resolution #7: Evaluate your household budget to reflect financial changes.

After this past year, in particular, your financial picture may have changed. Maybe you were furloughed, had your hours reduced, or got a new job further from home. Perhaps you’ve kept the same job, but you’re now working remotely. A work-from-home arrangement could mean less money spent on gas, tolls, a professional wardrobe, and dining out for lunch.

But this could also mean new (or increased) expenses now that you’re working at home, such as new tech-related purchases, faster Wi-Fi, and higher energy bills. January marks the perfect opportunity to update your income and expenses and review last year’s spending habits, tweaking as needed for 2021.

For more specific ideas, view our free report “20 Ways to Save Money and Stretch Your Household Budget.”

Resolution #8: Save money now (and earn more later) with a home maintenance plan.

Having a schedule of regular home maintenance projects to tackle will save you money now and in the long-term. You’ll avoid some surprise “emergency fixes,” and when you’re ready to eventually sell your home, you’ll get higher offers from buyers who aren’t put off by overdue repairs.

Even if nothing necessarily needs fixing right now, you can lower your energy costs by maintaining and upgrading your home. According to the U.S. Department of Energy, simple fixes add up: replace five most frequently used bulbs with ENERGY STAR ones to save $75/year; repair leaky faucets to save $35/year; replace older toilets with low-flow models to save $100/year; and seal air leaks to save $83-$166/year.¹¹

For a breakdown of home maintenance projects to tackle throughout the year, contact us for our free report “House Care Calendar: A Seasonal Guide to Maintaining Your Home.”

Resolution #9: Invest in real estate for a better standard of living.

Even if you don’t plan on leaving your current residence, real estate is a great way to improve your quality of life in 2021.

Have cabin fever from the long quarantine? A vacation home in a getaway location you love lets you safely spread your wings. And if you have been looking for a second stream of income, an investment property might be your answer. Just be sure to consult with a real estate professional to get a realistic sense of a property’s true income potential.

Want more information on how a second property fits into your 2021 plans? View our free report, “Move Up vs Second Home: Which One Is Right For You?”

LET US HELP YOU WITH YOUR 2021 GOALS

Without a plan and a support system, 55% of Americans will break their new year’s resolutions.¹² Whether you’re looking to buy, sell, or stay put in your home, it helps to connect with a trusted real estate agent to keep you motivated and on track.

As local market experts, we have the knowledge, experience, and networks to help you achieve your homeownership goals, whatever they may be. Reach out to us today for a free consultation and commit to a happy and prosperous new year.

Sources:

USA.gov –
https://www.usa.gov/credit-report
Equifax –
https://www.equifax.com/personal/education/credit/score/what-is-a-good-credit-score/
NerdWallet –
https://www.nerdwallet.com/article/mortgages/the-20-mortgage-down-payment-is-dead
Zillow –
https://www.zillow.com/mortgage-learning/closing-costs/
Realtor.com –
https://www.realtor.com/research/we-should-be-in-a-buyers-market-right-now-but-covid-turned-everything-upside-down-best-time-to-buy-a-home
Business Insider –
https://www.businessinsider.com/how-2020-broke-the-housing-market-inventory-could-run-out-2020-9
National Association of Realtors –
https://www.nar.realtor/sites/default/files/documents/2019-remodeling-impact-10-03-2019.pdf
House Logic –
https://www.houselogic.com/save-money-add-value/add-value-to-your-home/adding-curb-appeal-value-to-home/
Virginia Cooperative Extension –
https://www.pubs.ext.vt.edu/content/dam/pubs_ext_vt_edu/426/426-087/426-087.pdf
HomeLight –
https://www.homelight.com/blog/top-agent-insights-for-q2-2020/
U.S. Department of Energy –
https://www.energy.gov/energysaver/articles/how-much-can-you-really-save-energy-efficient-improvements
Ipsos –
https://www.ipsos.com/en-us/urban-plates-ipsos-NY-Resolutions

2020 Design Trends

November 17, 2020 by silverelk

Top 5 Home Design Trends for a New Decade

Whether you’re planning a simple refresh or a full-scale renovation, it’s important to stay up-to-date on the latest trends in home design. Sellers who make tasteful updates can generate increased buyer interest and, in some cases, a premium selling price. And buyers should consider which features of a home will need updating immediately (or in the near future) so they can factor renovation costs into their overall budget.

Even if you have no immediate plans to buy or sell, we advise our clients to be thoughtful about the colors, materials, and finishes they select when planning a remodel, or even redecorating. Choosing over-personalized or unpopular options could hurt a home’s value when it does come time to list your property. And selecting out-of-style or overly-trendy elements could cause your home to feel dated quickly.

To help, we’ve rounded up five of the hottest home design trends for 2020. Keep in mind, not all of these will work well in every house. If you plan to buy, list, or renovate your property, give us a call. We can help you realize your vision and maximize the impact of your investment.

Photo by Rethink Design Studio – Browse living room ideas

1. IN: Sustainability / OUT: Fast Furniture

Consumers have become increasingly eco-conscious. Many are shunning the mass-produced, “fast furniture” popularized by retailers like IKEA, opting instead for higher-quality pieces that are built to last. And the availability of non-toxic, environmentally-friendly furniture and decor options is set to grow in 2020 and beyond.

At the same time, there’s been a noticeable shift toward individuality in today’s interior design. Instead of following the latest fad, more homeowners are opting to embrace their personal style and invest in items they believe will “spark joy” (à la Marie Kondo) for years to come.

Want to know more about Marie Kondo’s famous organization method and how it can increase your home’s value? Contact us for a free copy of our recent report, “Top 6 Home Organization Upgrades That ‘Spark Joy’ for Buyers.”

To incorporate this trend, designers recommend layering old and new pieces for a curated look that you can build over time. Instead of purchasing a matching furniture set from a big-box retailer, buy one or two sustainably-sourced pieces that complement what you already own. Try searching estate sales and Craigslist for vintage classics or well-built furniture that can be refinished. And to accessorize your room, mix sentimental items with newer finds to create a truly personalized space.

Photo by Wander Designs – More dining room photos

2. IN: Cozy / OUT: Cold

Designers are moving away from cool grays, industrial finishes, and stark modernism. In 2020, there’s a big emphasis on creating warm and cozy spaces through color, texture, and shape.

Gray has dominated the color palette for the past decade. This year, expect to see a move toward warmer neutrals, earth tones, and nature-inspired shades of blue and green. Warm metals, like gold and brass, will also continue to trend. And hardwood floors are heating up, as cool gray and whitewashed finishes fade in popularity. Expect to see a rise in classic choices like walnut, mahogany, and oak in richer and darker tones.

Furniture will also get cozier—and curvier—in 2020. From rounded sofas and curved-back chairs to oval dining tables, softened-angles are dominating the furniture scene right now. And designers expect softly-textured fabrics—like velvet, shearling, and mohair—to be big this year, as homeowners strive to add a touch of comfort.

Want to warm up your home decor? Try one of the top paint colors for 2020: Benjamin Moore’s First Light (soft pink), Sherwin Williams’s Naval (rich blue), or Behr’s Back to Nature (light green).

3. IN: Bold / OUT: Boring

Bold is back! After years of neutral overload, vivid colors and prints will take center stage in 2020. Expect to see geometric designs, color blocking, and floral and botanical patterns on everything from pillows to rugs to wallpaper.

The hottest trend in interior paint right now is bold trim and ceilings. Monochromatic rooms (e.g., walls, ceilings, and millwork painted the same color) will be big this year, as well as high-contrast pairings, like white walls with black trim. Color is coming back to kitchens, too, and two-toned color schemes continue to gain steam. In 2019, 40% of remodelers chose a contrasting color for their kitchen island.¹ While white was still the top choice for cabinets, blue and gray are increasingly popular alternatives.

If you’re ready to “go bold,” separated spaces like laundry and powder rooms are great places to start. It’s easier to incorporate busy wallpaper or a bright wall color in an enclosed area because it doesn’t have to flow with the rest of your decor. Accent pillows are always a temporary way invest without a permanent change and you can pack your style-to-go should you move.

Of course, clients always want to know how design choices could impact their home’s value. The reality is, neutral finishes are still the safest bet for resale. If you’re prepping your home to go on the market, stick with non-permanent fixtures—like artwork and accessories—to brighten your space.

Photo by CplusC Architectural Workshop – Discover staircase design ideas

4. IN: Nature / OUT: Industrial

Biophilic design has been big the past few seasons, and it isn’t going anywhere in 2020. It centers around the health and wellness benefits of connecting with nature, even while indoors, and it’s impacted the latest trends in color, prints, and materials.

As we mentioned previously, floral and botanical patterns are hot right now, along with nature-inspired hues, like blues, greens, and earth tones. We’re also seeing a heightened use of organic shapes and sustainable materials in furniture and furnishings, including wood, wicker, rattan, and jute. This infusion of nature coincides with a decline in the popularity of urban-industrial fixtures. Designers predict that concrete floors and Edison light bulbs are on the way out.

Want to bring in elements of biophilic design on a budget? Houseplants are a great place to start. But you can also enhance your home’s natural light and create a visual sightline to the outdoors by removing heavy curtains and blinds. And when the weather is nice, open your windows and enjoy the breeze, sounds, and smells of nature. These simple acts are scientifically proven to help reduce stress, boost cognitive performance, and enhance mood!²

Photo by Wickes – Browse kitchen photos

5. IN: Functional / OUT: Fussy

In 2020, homeowners want design that’s beautiful, but also liveable. With the rise in remote workplaces, online shopping, and virtual exercise classes, many of us are spending more time at home than ever before. Cue the growing appeal of multi-functional spaces, like a combination kitchen/office or gym/playroom. Real life—and rising housing prices—necessitates creative use of limited space.

Durable, low-maintenance materials will also surge in popularity this year. Engineered quartz—which is more stain, heat, and chip-resistant than natural stone—is now the #1 choice for kitchen countertops.1 Waterproof, wood-look luxury vinyl is the fastest-growing segment in the flooring industry.3 And improvements to water and stain-resistant performance fabric has made it a mainstream option for both indoor and outdoor upholstery.

Now that functional is hot, what’s not? Designers say that mirrored furniture, open shelving, and all-white kitchens are too impractical for today’s busy families.

So how can you start enjoying the time and energy-saving benefits of this design trend? Begin by structuring each room so that it best suits your needs. And when purchasing furniture or fixtures, choose options that are durable and easy-to-clean. The truth is, design fads come and go. But a comfortable and relaxed home (that you don’t spend every spare minute maintaining!) can help create memories to last a lifetime.

DESIGNED TO SELL

Are you contemplating a remodel? Want to find out how upgrades could impact the value of your home? Buyer preferences vary greatly by neighborhood and price range. We can share our insights and offer tips on how to maximize the return on your investment. Ask for our Professional Equity Assessment to help you invest wisely. And if you’re in the market to sell, we can run a Comparative Market Analysis on your home to find out how it compares to others in the area. Contact us to schedule a free consultation!

Sources:

Houzz –
https://www.houzz.com/magazine/2020-us-houzz-kitchen-trends-study-stsetivw-vs~129594531
Terrapin Bright Green – https://www.terrapinbrightgreen.com/reports/14-patterns/
Remodeling Magazine –
https://www.remodeling.hw.net/products/vinyl-ceramic-and-hardwood-oh-my-todays-popular-flooring-trends_o
Elle Decor –
https://www.elledecor.com/design-decorate/trends/g29859422/design-trends-2020/?slide=1
Forbes – https://www.forbes.com/sites/amandalauren/2019/12/23/twelve-interior-design-trends-well-see-in-2020/#43f81f044a5f
Wall Street Journal –
https://www.wsj.com/articles/the-top-6-interior-design-trends-for-2020-11577460357
Good Housekeeping –
https://www.goodhousekeeping.com/home/decorating-ideas/g29849170/home-decor-trends-2020/
Architectural Digest –
https://www.architecturaldigest.com/story/top-design-trends-of-2020
Los Angeles Times –
https://www.latimes.com/lifestyle/story/2020-01-11/2020-home-design-trends

Kemberly McLaughlin“Building Relationships & Investing in Dreams.” At Silver Elk Realty we are blessed to work together as married, and licensed sales agents… you get both of us on every sale and our goal is to Guide You Home! Real Estate is about relationships
and change management is an art. We are fully dedicated to serving our clients before, during and especially after each purchase & sale. Gorden is our lead agent & master negotiator. Kemberly sets up private tours, coordinates staging, marketing & client care programs.

Our SILVER STAR experience includes: Genuine Care, Effective Communication, Exceptional Education, and 100% Commitment to Your Goals.

Feel free to visit our company page www.SilverElkRealty.com to learn more about us and read our reviews.

We would love to meet you & support you with a strategic plan to Guide YOU Home.

5 Secrets about Virtual Home Tours

November 17, 2020October 11, 2020 by silverelk

For years now, virtual home tours have helped real estate buyers far and wide find the perfect home. From long-distance military personnel being relocated, to investors expanding their portfolio, to homeowners looking for a vacation getaway, this technology makes finding a house that’s a bit out of driving distance much easier. And for real estate agents, virtual tours have been a useful way to help buyers with their home search and to assist sellers in creatively marketing their listings.

Because of the pandemic, virtual home showing options recently experienced a huge spike in popularity. One survey found that nearly 33% of recent home tour requests were for virtual tours, as compared to just 2% pre-pandemic.¹ And it’s easy to see why.

Buyers want to quickly find their next safe haven, one that may need to serve as their office, gym, and even classroom for months to come. And sellers want to limit the number of strangers in their home, yet still have the ability to reach enough potential buyers to get the best offer on their property.

Virtual home tours are the popular thing right now, but that doesn’t automatically mean they’re the only option for your homebuying or selling experience. In this post, we’ll reveal five important secrets behind the virtual real estate scene. Read on to learn how they impact today’s home buyers and sellers.

SECRET #1: Virtual Tours Have Evolved

Lots of real estate professionals who had never used virtual tours before were forced to quickly adapt when the pandemic struck. Because of restrictions on time and resources, not everyone is able to create what would have been deemed a “virtual tour” last year. So instead, we’ve expanded the definition of the phrase by creating innovative new ways to show homes while keeping our clients safe and socially-distanced. Here are some terms you might come across as you explore homes with virtual tours.

Traditional virtual tours use 360° Photos, which are images that allow you to see all angles of a space. These are what allow virtual tour viewers to look up, down, and all around the interior and exterior shots of a home. Using a software program, 360° photos can be stitched together to create a digital model that looks like a dollhouse. This is called a 3D Tour. This may be the best way to EXPERIENCE a layout, but it doesn’t allow for scale or “wow” to connect with a home.

Sometimes agents will also add Virtual Staging, which decorates rooms with digital furniture and accents like wallpaper or paint. Boy are these an emotional let-down once you arrive in person, but might help you visualize an unusual room layout. Unfortunately, not every agent abides by our Realtor® Code of Ethics which requires any changes to house features to be disclosed or labeled openly.

Traditional virtual tours allow you to click to move from room to room in the home, but Online Walkthroughs feature the actual action of walking around. Either the seller or the agent (depending on factors such as time and safety requirements) will create a video by holding their camera or smartphone and simply moving through the home.

Online Walkthroughs can be filmed in advance or happen live. If they are live, they can also be referred to as Virtual Showings or Online Open Houses.

A Virtual Showing is often a scheduled, one-on-one event that mimics an in-person tour of the home, in which the agent and viewer start at the exterior and move their way through the property.

If your agent offers to FaceTime or Skype you from a home you’re interested in, for example, that would be a type of Virtual Showing. In contrast, an Online Open House is more freeform, allowing more viewers to pop in and out of a group video call on apps such as Facebook or Zoom.

SECRET #2: Virtual Doesn’t Mean Impersonal

All these styles of virtual tours showcase the property’s details better than static photos ever could. But for a purchase as intimate as your next home, details like a new refrigerator or the size of the master closet aren’t the only deciding factors. Luckily, virtual tours are exceptional tools for personal connection.

As a prospective buyer, virtual tours give you a feel for the property, inside and out, so you can easily picture yourself in the space and decide if the home’s flow and features work for your lifestyle. Live video walkthroughs with the real estate agent will give you insights on those crucial non-visual aspects, like creaky floors, super-fast internet speed, and neighborhood dynamics. Plus, you’ll be able to ask questions and get an insider’s perspective on what’s so great about the home.

For sellers, if your agent recommends using a virtual tour to market your home, you could attract more buyers.²And you can be sure that those interested buyers are still getting the up-close and personal look inside your home that will inspire their strongest offers.

The Silver Elk Group includes 3D Tours, Online walk-through videos and LIVE Online Open Houses to help filter serious buyers for those in-person or virtual agent tours during the pandemic. A complimentary “lifestyle tour” of the community and local ammenites is part of how we #GuideYouHome.

SECRET #3: Virtual Is Just The First Step To Safe Home Sales

Even as government restrictions begin to ease in some areas, virtual tours are still recommended as a safer way to buy and sell real estate.³ Buyers don’t have to worry about exposure to anyone who previously visited the property, and sellers cut down on the foot traffic in their home. Some data even suggest that virtual tours keep agents safer as well, since they’re hosting fewer in-person showings and open houses.⁴

But despite the variety of virtual tours available, buyer are still encouraged to visit a home themselves in order to feel confident enough to submit an offer; whenever possible. In this situation, listing agents and sellers will work together to come up with a procedure that ensures everyone feels safe and comfortable. You can expect interested buyers to present a pre-qualification letter, tours conducted by private appointment and only with essential parties, as well as buyers being asked to self-disclose whether they have COVID-19 or exhibit any symptoms.³

The day of the in-person tour, agents might ask buyers to remain in their vehicle until they arrive at the property, and to wear protective gear such as face coverings and gloves. Many will provide hand sanitizer and will ask buyers to refrain from touching any surfaces in the home. The new protocol should be for the agent (or seller, prior to the buyers’ arrival) to turn on lights, open doors, and pull back curtains for buyers to simply EXPERIENCE a home. Then, after everyone has left, the agent will return the home to its original state and disinfect it as needed.^3.

SECRET #4: The Speed of Closing Depends on Your Goals

Though maybe not literally, virtual tours are opening doors for both buyers and sellers in terms of options available to them. In 2019, buyers viewed an average of 10 homes over a period of 10 weeks before submitting an offer.⁵ But thanks to an increased prevalence of virtual tours saving them driving time, they’re able to peek inside that number of homes in a much shorter period to make their final choice.

With all this viewing activity, it makes sense that sellers whose listings feature virtual tours are receiving more offers on their properties. According to one study, virtual tours can add between two and three percent to the sales price of a home, in part because increased buyer interest has made sellers feel confident waiting for the exact right offer.²

So if you’re a buyer luxuriating in viewing homes from your couch, just remember that you’re not alone in your search. Your competition is virtually viewing the same properties you are, so it’s still important to work with your real estate agent to quickly submit a strong offer when you find the home of your dreams. And for sellers, if a speedy sale is important to you, carefully weigh that against the temptation to entertain more and more offers, which can keep your home on the market up to six percent longer.² Your agent can help you decide the right strategy for your priorities.

SECRET #5: Virtual May Not Always Be the Right Choice

Creating, editing, uploading, and marketing virtual tours for a listing can be pricey. Packages through popular 3D imaging platforms like Matterport and Immoviewers can cost hundreds of dollars on their own.⁶ Virtual staging will further bloat a listing’s marketing budget, and then there’s the advertising dollars needed. Even seemingly inexpensive options like video call walkthroughs still require time and energy on behalf of both the seller and agent.

These costs mean that a full virtual tour package might not always be the right choice for sellers. When you talk to an agent about marketing your home, it may be that an elaborate virtual tour, showing, and open house just don’t make sense. It could be that your potential buyers may not resonate with that type of marketing, that the investment-to-return ratio isn’t in your favor, or that there are more effective ways to get your listing seen by qualified buyers. Look no further to obtain top dollar for the sale of your home, as Silver Elk Group includes every one of the above options to bring the largest market to your doorstep in the safest possible manner.

Buyers, you may notice that some listings within your search parameters don’t offer virtual tours. That’s because those for-sale homes might not have needed a full virtual marketing package to entice buyers to submit offers, or those homes are better marketed through more traditional tactics. Don’t close the door on your dream home because it doesn’t have virtual events and features. Stay open-minded so you can consider the wealth of home options that fit your lifestyle, needs, and budget.

ARE VIRTUAL HOME TOURS IN YOUR FUTURE?

As technology develops, it will become easier and cheaper to create virtual tours. Coupled with the high demand for them, this means that virtual tour options are likely not only here to stay, but will continue to grow into a common addition to listings.

If buying or selling a home is on your mind, we’d be happy to discuss how virtual tours can play a part in your real estate experience. Reach out to us today for help finding local homes for sale that have virtual tours, or to chat about if adding a virtual tour to your upcoming listing is the right fit.

Sources:

Rocket Mortgage – https://www.rocketmortgage.com/learn/evolution-of-home-showings-during-covid-19
Radio Iowa – https://www.radioiowa.com/2020/07/28/trying-to-sell-a-house-ui-study-finds-virtual-tours-will-bring-more/
NAR Showing Guidance During Reopening – https://cdn.nar.realtor/sites/default/files/documents/Showing-Guidance-During-COVID-05-14-2020.pdf
NAR 2020 Member Safety Report – https://cdn.nar.realtor/sites/default/files/documents/2020-member-safety-report-08-31-2020.pdf
NAR 2019 Profile of Home Buyers and Sellers – https://cdn.nar.realtor/sites/default/files/documents/2019-profile-of-home-buyers-and-sellers-highlights-11-21-2019.pdf
Realtor.com – https://www.realtor.com/advice/sell/how-to-host-virtual-home-tours-almost-as-good-as-the-real-thing/

Move Up vs Second Home

November 17, 2020September 9, 2020 by silverelk

The pandemic has changed the way many of us live, work, and attend school—and those changes have impacted our priorities when it comes to choosing a home.

According to a recent survey by The Harris Poll, 75% of respondents who have begun working remotely would like to continue doing so—and 66% would consider moving if they no longer had to commute as often. Some of the top reasons were to gain a dedicated office space (31%), a larger home (30%), and more rooms overall (29%).¹

And now that virtual school has become a reality for many families, that need for additional space has only intensified. A growing number of buyers are choosing homes further from town as they seek out more room and less congestion. In fact, a recent survey found that nearly 40% of urban dwellers had considered leaving the city because of the COVID-19 outbreak.²

But not everyone is permanently sold on suburban or rural life. Instead, some are choosing to purchase a second home as a co-primary residence or frequent getaway. Without the requirements of a five-day commute, many homeowners feel less tethered to their primary residence and are eager for a change of scenery after spending so much time at home.

If you’re feeling cramped in your current space, you’ve probably considered a move. But what type of home would suit you best: a move-up home or a second home? Let’s explore each option to help you determine which one is right for you.

WHY CHOOSE A MOVE-UP HOME?

A move-up home is typically a larger or nicer home. It’s a great choice for families or individuals who simply need more space, a better location, or want features their current home doesn’t offer—like an inground pool, a different floor plan, or a dedicated home office.

Most move-up buyers choose to sell their current home and use the proceeds as a downpayment on their next one. If you’re struggling with a lack of functional or outdoor space in your current home, a move-up home can greatly improve your everyday life. And with mortgage rates at their lowest level in history, you may be surprised how much home you can afford to buy without increasing your monthly payment.^3,4

To learn more about mortgage rates, contact us for a free copy of our recent report!
“Lowest Mortgage Rates in History: What It Means for Homeowners and Buyers”

One major benefit of choosing a move-up home is that you can typically afford a nicer place if you spend your entire budget on one property. However, if you’re longing for that vacation vibe, a second home may be a better choice for you.

WHY CHOOSE A SECOND HOME?

Once reserved for the ultra-wealthy, second homes have become more mainstream. Home sales are surging in many resort and bedroom communities as city dwellers search for a place to escape the crowds and quarantine in comfort.⁵ And with air travel on hold for many families, some are channeling their vacation budgets into vacation homes that can be utilized throughout the year.

A second home can also be a good option if you’re preparing for retirement. By purchasing your retirement home now, you can lock in a low interest rate, start paying down the mortgage, and begin enjoying the perks of retirement living while you’re still fit and active. Plus, it’s easier to qualify for a mortgage while you’re employed, although you may be charged a slightly higher interest rate than on a primary home loan.⁶

One advantage of choosing a second home is that you can offset a portion of the costs—and in some cases turn a profit—by renting it out on a platform like Airbnb or Vrbo. However, be sure to consult with a real estate professional or rental management company to get a realistic sense of the property’s true income potential.

WHICH ONE IS RIGHT FOR ME?

You may read this and think: I’d really like both a move-up home AND a second home! But if you’re dealing with a limited budget (aren’t we all?), you’ll probably need to make a choice. These three tactics can help you decide which option is right for you.

Determine Your Time and Financial Budget

You may meet the bank’s qualifications to purchase a home, but do you have the time, energy, and financial resources to maintain it? This is an important question to ask yourself, no matter what type of home you choose.

Most buyers realize that a second home will mean double mortgages, utilities, taxes, and insurance. But consider all the extra time and expense that goes into maintaining two properties. Two lawns to mow. Two houses to clean. Two sets of systems and appliances that can malfunction. Second homes aren’t always a vacation. Make sure you’re prepared for the labor and carrying costs that go into maintaining another residence.

Of course, some move-up homes require more work than a second home. For example, if your move-up option is a major fixer-upper, you’ll probably invest more energy and capital than you would on a small vacation condo by the beach. Have an honest discussion about how much time and money you want to spend on your new property. Would a move-up home or a second home be a better fit given your parameters?

Rank Your Priorities

If you’re still undecided, make a wish list of the characteristics you’d like in your new home. Then rank each item from most to least important. This exercise can help you determine your “must-have” features—and which ones you may need to sacrifice or delay. Here’s a sample to help you get started:

#	FEATURE
	Dedicated home office
	Extra bedroom
	Pool
	Walk to the beach
	Big backyard
	Close to friends and family
	Short commute to the office
	Investment potential

Explore Your Options

Once you’ve determined your parameters and priorities, it’s time to begin your home search.

If you’re still not sure whether a move-up home or a second home is right for you, we can help.

Contact us to schedule a free consultation. We’ll discuss your options and help you assess the pros and cons of each, given your unique circumstances.

We can also send you property listings for both move-up homes and second homes within your budget so you can better envision each scenario. Sometimes, viewing listings of homes that meet your criteria can make the decision clear.

LET’S GET MOVING

Whether you’re ready to make a move or need help weighing your options, we’d love to help. We can determine your current home’s value and show you local properties that fit within your budget. Or, if your heart is set on a second home in another market, we can refer you to an agent in your dream locale. Contact us today to schedule a free, no-obligation consultation!

Sources:

Zillow –
https://www.zillow.com/research/coronavirus-remote-work-suburbs-27046/
The Harris Poll –
https://theharrispoll.com/should-you-flee-your-city-almost-40-have-considered-it-during-the-pandemic/
MarketWatch –
https://www.marketwatch.com/story/mortgage-rates-keeping-falling-so-will-they-finally-drop-to-0-2020-08-13
Toronto Star –
https://www.thestar.com/business/2020/08/07/you-can-get-a-fixed-rate-as-low-as-184-per-cent-which-is-unbelievable-low-mortgage-rates-driving-up-home-prices.html
Kiplinger –
https://www.kiplinger.com/real-estate/buying-a-home/601091/timely-reasons-to-buy-a-vacation-home
The Press-Enterprise –
https://www.pe.com/2018/11/17/5-tips-on-when-should-you-buy-a-retirement-house-hint-before-you-quit-work/