Top 7 Tips To Attract the Best Offers for Your Home
Not long ago, home sellers were in their heyday, as historically-low mortgage rates triggered a real estate buying frenzy. However, the Federal Reserve shut down the party when it began raising interest rates last year.1 Now, it’s not as simple to sell a home. While pandemic-era homebuyers were racing the clock—trying to lock in a low mortgage rate and gain a foothold in the market—current buyers are more discerning. Higher prices and mortgage rates have pushed their limits of affordability, leading them to prioritize cost, condition, and overall value.2 The reality is, home inventory remains low, so most properties will still sell with some basic prep, the right price, and a good real estate agent. But owners who go the extra mile are more likely to sell faster and for a higher amount. If you have plans to sell your home and want to net the most money possible, this list is for you. Here are our top seven strategies to attract the best offers and maximize your real estate returns. 1. UNDERGO A PRE-LISTING INSPECTION Many homebuyers hire a professional to complete a home inspection before they close. But did you know that a seller can order their own inspection, known as a pre-listing inspection, before they put their home on the market? Having a pre-listing inspection on hand and ready to share shows interested buyers that you’re committed to a transparent transaction. This can help you market your home, strengthen your negotiating position, and minimize roadblocks to closing.3 Of course, it’s always possible that a pre-listing inspection—which looks at the home’s major systems and structures, among other things—could turn up a significant problem. This does carry some risk, as you’ll be required to either fix or disclose any issues to potential buyers. However, in most cases, it’s better to know about and address deficiencies upfront than to find out mid-transaction, when it could cost you more in the form of concessions, a delayed closing, or a canceled sale. We can help you decide if a pre-listing inspection is right for you. And if it identifies any concerns, we can advise on which items need attention before you list your home. 2. CONSIDER STRATEGIC UPGRADES Embarking on major renovations before putting your home on the market doesn’t always make financial (or logistical) sense. However, certain upgrades are more likely to pay off and can help elevate your home in the eyes of buyers. For example, refinishing hardwood floors results in an average 147% return on investment at resale and new garage doors typically pay for themselves.4 Similarly, research shows that professional landscaping can boost a home’s value by as much as 20%.5 Often, even simpler and less expensive fixes can make a big difference in how your home comes across to buyers. A fresh coat of paint in a neutral color, modern light fixtures and hardware, and new caulk around the tub or shower can help your property look its best.5 But before you make any changes to your home, reach out. We know what buyers in your neighborhood are looking for and can help you decide if a particular investment is worthwhile. 3. HIRE A HOME STAGER To get standout offers, you need potential buyers to fall in love with your home—and they’re much more likely to do so if they can envision themselves in the space. That’s where home staging comes in. Staging can include everything from decluttering and packing away personal items to bringing in neutral furniture and accessories for showings and open houses. According to the National Association of Realtors, home staging can both increase the dollar value of home offers and help a property sell faster. In fact, 53% of seller’s agents agree that staging decreases the amount of time a home spends on the market, and 44% of buyer’s agents see higher offers for staged homes.6 There’s plenty of strategy and research behind the process, so it’s smart to consider a professional. Reach out for a connection to one of our recommended home stagers who can help your property show its full potential. 4. EMPLOY A COMPETITIVE PRICING STRATEGY While it’s tempting to list your property at the highest possible price, that approach can backfire. Homes that are overpriced tend to sit on the market, which can drive away potential buyers—and drive down offers.7 Alternatively, if you price your home competitively, which is either at or slightly below market value, it can be among the nicest that buyers see within their budgets. This can ultimately lead to a higher sales price and fewer concessions. To help you list at the right price, we will do a comparative market analysis, or CMA. This integral piece of research will help us determine an ideal listing price based on the amount that comparable properties have recently sold for in your neighborhood. Without this data, you risk pricing your home too high (and getting no offers) or too low (and leaving money on the table). Combined with our local market insights, we’ll help you find that sweet spot that will attract the best offers while maximizing your profit margin. 5. OFFER BUYER INCENTIVES Sometimes, sweetening the deal with buyer incentives can help you get the best possible offer. Incentives are especially helpful in the current market, when many buyers are struggling with affordability and concerned about their monthly payments. Options that can pay off include: Buying down their interest rate – You can pay an upfront sum to reduce the buyer’s mortgage rate. This approach can save far more than that cost over the life of the loan, meaning it’s worth more to the buyer than a simple price reduction.8 Offering closing cost credits – You might pay a set amount or a certain percentage of the buyer’s closing costs. Paying HOA costs – You could cover homeowner association or condominium fees for a set period of time. Including furniture or appliances in the sale – If your buyer is interested, throwing in the furniture or appliances that they want and need can make your property more appealing. Buyer incentives vary and valuing them can get complicated. We’re happy to talk through the options that might make sense for you. 6. USE A PROVEN PROPERTY MARKETING PLAN Gone are the days when it was enough to put a “for sale” sign in your yard and place a listing on the MLS. A strategic marketing plan is now essential to get your home in front of as many interested and qualified buyers as possible. The truth is, buyers who don’t know about your house can’t make an offer. That’s why we utilize a multi-step approach to marketing that starts with identifying your target audience, effectively positioning your home in the market, and communicating its unique value. We then use a variety of distribution channels to connect with potential buyers and performance-based metrics to monitor and improve our campaign results. Our proven approach can have a big impact on the success of your sale. Reach out to learn more about our multi-step marketing plan and discuss how we can use it to generate interest and offers for your home. 7. WORK WITH AN AGENT WHO UNDERSTANDS YOUR AREA To get the best offers possible, you need a real estate agent who knows your area inside and out. Any agent can pull comparable sales data, but in a quickly-evolving market, even the latest comps can lag the current market reality. We have our fingers on the pulse of the local market because we’re working directly with sellers like you. We also represent local buyers who are active in the market, searching for homes like yours. That puts us in an ideal position to help you price your home for a quick sale and maximum profit. And since we hear first-hand what local buyers want, we can help you prep your home to broaden its appeal and highlight its most-coveted features. Additionally, we can use our extensive network of local agents to solicit feedback and get your home in front of more potential buyers. All of these factors can add up to a significant difference in your profit: In 2021, the typical home sold by owner went for $225,000 compared to a median price of $330,000 for agent-assisted home sales.9 LET’S GET MOVING Are you ready to get a great offer for your home? Our multifaceted approach can help you maximize your real estate returns. Reach out for a free home value assessment and customized sales plan to get started! The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. Sources: S. Bank - https://www.usbank.com/investing/financial-perspectives/investing-insights/interest-rates-impact-on-housing-market.html National Association of Realtors -https://www.nar.realtor/sites/default/files/documents/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf Bankrate -https://www.bankrate.com/real-estate/prelisting-inspection/ National Association of Realtors -https://www.nar.realtor/sites/default/files/documents/2022-remodeling-impact-report-04-19-2022.pdf Bankrate -https://www.bankrate.com/homeownership/landscaping-increase-home-value/ National Association of Realtors -https://www.nar.realtor/infographics/staged-for-success The Balance -https://www.thebalancemoney.com/looking-twice-at-overpriced-homes-1798671 S. News & World Report -https://money.usnews.com/loans/mortgages/articles/a-guide-to-seller-paid-mortgage-rate-buydowns National Association of Realtors -https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics
Read MoreIncome Properties Are Trending, But Is Landlord Life for You?
If the thought of investing your money into brick and mortar—or perhaps some stylishly-painted siding—excites you, join the club. Investing in real estate has long been one of Americans' favorite ways to grow their wealth. In fact, over 70% of single-family rental properties are currently owned by individual investors rather than corporations, according to Census data.1 Moreover, a decade's worth of Bankrate surveys has found that Americans often prefer real estate for long-term wealth building over other investments. According to Bankrate's latest survey, for example, Americans have historically embraced real estate, in part, because of the strong return on investment it can offer—especially to investors willing to stick with a property over time.2 It’s also a popular way to hedge against inflation since both rental income and property values tend to rise in tandem with overall prices.3 Now, as higher interest rates continue to push priced-out homebuyers to the sidelines, a new crop of “mom and pop” investors are eyeing the mushrooming rental market as a potential goldmine.4 Interest in buying a home to both live in and rent is also on the rise, especially amongst cash-strapped buyers looking to supplement their mortgage payments.5 But how do you know if you’re well-suited to take advantage of these real estate investment opportunities? Here are three signs that owning a rental property could be right for you. YOU'RE A HOMEBUYER WHO WANTS HELP COVERING THE MORTGAGE If you're looking for a creative way to buy a home without overspending, “house hacking” could be the answer. Increasingly popular with first-time homebuyers and budget-conscious investors, house hacking simply means buying a home that you intend to live in while renting out a portion of it to one or more tenants.5 House hacking also tends to be easier to break into than traditional real estate investing since you don't need as high a credit score or as large a down payment to qualify for a mortgage. In fact, some government-backed mortgage programs will let you buy a primary residence with little to no money down.6 Buying a home you don't plan to live in, by contrast, may require you to put down as much as 15% to 25% to qualify for a loan.7 If you house hack, the money you collect for rent each month can help cover your mortgage and other homeownership expenses. Depending on your setup, you may also be able to save on utility bills by splitting them with your tenant or tacking a portion onto their monthly rent. Another major advantage of house hacking is that it entitles you to certain tax benefits and deductions available only to landlords.8 When it's time to start your search, we can help you find a property that's ideal for house hacking, such as a house with a walkout basement, a multifamily unit, or a home with enough outdoor space to build an accessory dwelling unit or garage apartment. YOU'RE AN INVESTOR LOOKING FOR STEADY AND RELIABLE INCOME If you’re not crazy about the idea of a live-in tenant but still desire an additional stream of income, a dedicated long-term rental property could be a better option for you. Besides the monthly proceeds, purchasing a rental home can also add diversity and long-term stability to your investment portfolio and help you build wealth over time.9 According to data from the Federal Reserve, real estate owners have historically prospered. In early 2020, for example, the median home was worth almost triple what it was 30 years prior. Then, during the pandemic-era real estate boom, average home prices grew at an especially frenzied clip, climbing by nearly 50%, on average, in just two and a half years.10 However, the rate of appreciation can be hard to predict, so it’s prudent to invest in a property that also offers positive cash flow, which means the rent you take in exceeds your expenses. This strategy helps to ensure that you’ll put money in your pocket each month, even if the property’s value takes time to grow. While today’s higher mortgage rates can make it more challenging for landlords to turn a profit, investment opportunities aren’t reserved for cash buyers. In fact, currently, almost 60% of real estate investors take out a loan to finance their purchase, according to Thomas Malone, an economist at the real estate data firm CoreLogic.4 He also notes that more small investors are stepping in to meet demand for rental housing, which has grown since many would-be buyers remain priced out of the purchase market.4 If you want to explore opportunities for a residential rental property that's good for your wallet and attractive to renters, we can help. Reach out with questions or to schedule a free consultation. YOU'RE AN EXPERIENCED INVESTOR LOOKING TO MAXIMIZE YOUR POTENTIAL RETURNS Another increasingly popular way to draw income from an investment property is to convert it to a short-term vacation rental. But beware: This strategy can be riskier as some municipalities have tightened rental restrictions and others are suffering from market oversaturation.11,12 With that said, if you're an experienced investor who can afford to take on some uncertainty, then investing in a short-term rental could make sense for you. If you find the right property, for example, you could earn significantly more renting it short-term on a platform like Airbnb than if you rented the home to a long-term tenant.11 The key is to keep it occupied as much as possible at a premium nightly rate. To do that, you’ll need some marketing savvy, hospitality skills, and business acumen. Of course, you can always hire a professional property manager, but you’ll need to factor the cost into your budget. The vacation rental market enjoyed a boom during the pandemic, and some inexperienced investors are finding they bit off more than they can chew. As a result, there's an opportunity to snap up some of these properties, but you'll need some cash on hand and a willingness to learn the business.12 We can help you scout opportunities in our local market or, if you’re interested in investing in another area, we can refer you to an agent there for assistance. BOTTOM LINE Investing in real estate can be a great way to build your wealth long-term and earn some extra income. But to make the most of your investment, it pays to be strategic. Call us for a consultation so we can discuss your goals and budget. We'll help you discover neighborhoods with the best income potential, point out the homes most suited to renting, and help you brainstorm the best investment strategy for you. Before you take the plunge, make sure you can answer “YES” to these three questions: Are you ready to be a landlord? Owning a rental property can take a lot of time and energy. You're not just buying passive income, you're also building sweat equity since the time you spend maintaining, marketing, and managing your rental can add up quickly. So be prepared to do some soul-searching to ensure you’ll not only flourish as a landlord, but actually enjoy it. If you want to invest in real estate but aren’t prepared to put in the day-to-day effort required, we can refer you to a property management service for help. Can you afford to invest in real estate? The last thing you want is to get over-extended with your new real estate venture. Besides the cost of purchasing the property, you’ll need to consider additional expenses, like property taxes, insurance, administrative costs, and maintenance and repairs. You will also need a cash reserve for unexpected issues or potential vacancies. We can help you run the numbers to determine whether you can charge enough rent to offset your expenditures. Have you found the right income property? Even if you’ve got your finances in order and are emotionally ready to invest, your success as a landlord will also depend on the property you buy. The criteria for a good rental home and a good family home are often different, so it’s important to lean on professionals for advice. We can help you find an ideal rental property, taking into account your budget, risk appetite, and investment goals. If you decide to invest in a different area, we'll connect you with an agent who's more plugged into that community. Reach out today to schedule a free consultation. The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. Sources: PR Newswire - https://www.prnewswire.com/news-releases/census-data-show-individuals-continue-to-own-largest-share-of-single-family-rental-homes-301725024.html Bankrate - https://www.bankrate.com/investing/survey-favorite-long-term-investment-2022/ Forbes -https://www.forbes.com/sites/forbesbusinesscouncil/2022/04/14/why-income-generating-real-estate-is-the-best-hedge-against-inflation/?sh=1081ce921746 MarketWatch -https://www.msn.com/en-us/money/realestate/another-challenge-for-homebuyers-more-investors-are-snapping-up-homes-and-40-of-them-are-using-cash/ar-AA1foWSB com - https://www.realtor.com/advice/buy/on-the-house-house-hacking-your-way-into-your-first-home/ NerdWallet - https://www.nerdwallet.com/article/mortgages/government-home-loans LendingTree - https://www.lendingtree.com/home/mortgage/down-payment-for-rental-property/ Quicken Loans - https://www.quickenloans.com/learn/house-hacking Investors Business Daily - https://www.investors.com/etfs-and-funds/personal-finance/rental-properties-investing-experts/ Louis Fed FRED Economic Data - https://fred.stlouisfed.org/series/MSPUS Story by J.P. Morgan - https://story.jpmorgan.com/real-estate-news/thinking-about-investing-in-short-term-rentals-heres-what-to-know Skift - https://skift.com/2023/07/21/short-term-rental-saturation-leads-to-a-correction-and-lots-of-home-sales/
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