When the Inspection report is not good...

What to do When the Inspection report isn’t good

BY AMERICAN HOME SHIELD |OCTOBER 15, 2020

Whether you’re representing the buyer or the seller, the home inspection can be a critical time in the real estate transaction process. When the home inspection report is good, a collective sigh of relief can often be detected from agents and clients alike. When the home inspection report isn’t good, it’s time for agents to swing into action. Here are some steps to consider:

Know your market.

To some extent, reaction to a less-than-stellar inspection report may be tempered by whether you’re dealing with a buyers’ or a sellers’ market. If it’s a buyers’ market, sellers may be on the line to fix most of the deficient items noted in the report before the deal can continue. In a sellers’ market, buyers may not have as much negotiating power. It’s important to understand the current real estate climate and explain to your clients how the market conditions factor into home inspection expectations.

Work with the other agent.

As soon as possible, contact the other agent in the transaction to discuss the inspection report findings. Acknowledge that the report contains bad news and start the conversation about next steps. As much as possible, try to get a sense of their reaction and willingness to make concessions.

Ask for more time.

The real estate contract often specifies a date or timeframe for removing the home inspection contingency. Requesting an extension of that date may give you and your clients the chance to consider the report, gather additional information or estimates, negotiate repairs, fix deficient items, or decide your next steps. If you think some extra time would help keep the deal on track, request it.

Get multiple estimates.

If the cost of repair work noted in the report concerns the buyer or the seller, gathering several quotes from qualified sources may help pinpoint what exact costs are likely to be. In some cases, repair costs may be lower than the client’s project, which can be reassuring. If the estimates come in higher than clients predict, they have the accurate information they need for negotiation and decide whether to move forward.

Communicate.

With accurate figures in hand, have a heartfelt conversation with your clients to understand how the inspection report affects their financial and emotional commitment to the deal. Be ready to communicate their position to the other agent clearly.

Negotiate.

After you’ve assessed market conditions, have an accurate understanding of costs involved, and have communicated with your clients, it’s time to negotiate. In some cases, you may be negotiating which repairs the seller needs to make before the deal can close. In other cases, you might negotiate a reduction in selling price or a credit at closing to cover the repair costs. If you’re facing an unusual inspection issue, seek advice from trusted colleagues who may have handled similar situations in the past.

Request documentation.

For everyone’s protection, specify that sellers submit documentation of repair work performed from qualified service professionals. It’s also a good idea to schedule a follow-up inspection or a walk-through to confirm that the negotiated work was satisfactorily completed.

Add American Home Shield® Home Warranty Coverage.

300,000 real estate transactions per year include American Home Shield home warranties, and for a good reason. In addition to offering important budget protection for covered items, American Home Shield coverage can help mitigate unexpected home inspection issues to keep transactions on track. Home warranty protection can also offer valuable reassurance to buyers, especially when the age or condition of covered home systems and appliances are in question.

When home inspection reports are disappointing, it’s important for clients to see their agent responding calmly and deliberately. They will always remember the valuable, professional, and steady guidance that you offer during a critical time.

For more helpful tips from our partners at American Home Shield, check out their blog!

Home Buyers | Jessica Harless | NextHome Realty Center

What’s On Your Must Have List? 2020 Home Buyers

Some Highlights

  • The word “home” is taking on a whole new meaning this year, and buyers are starting to look for new features as they re-think their needs and what’s truly possible.
  • From more outdoor space to virtual classrooms for their children, buyers have a growing list of what they’d like to see in their homes.
  • Let’s connect today if your needs have changed and your wish list is expanding too.

Virtual Classroom |Homes Sold By Jessica Harless |NextHome Realty Center

Some Highlights

  • With remote learning sweeping the nation this academic year, organized spaces with enough room for kids to learn effectively are high on buyer wish lists.
  • If you’re trying to make room for your family’s growing needs, multi-purpose rooms and dedicated workspaces may be features to consider in your next home.
  • Let’s connect today so you can find a home where your kids feel confident and comfortable too.
Home Buyers | Jessica Harless | NextHome Realty Center

What’s On Your Must Have List? 2020 Home Buyers copy

Some Highlights

  • The word “home” is taking on a whole new meaning this year, and buyers are starting to look for new features as they re-think their needs and what’s truly possible.
  • From more outdoor space to virtual classrooms for their children, buyers have a growing list of what they’d like to see in their homes.
  • Let’s connect today if your needs have changed and your wish list is expanding too.

Virtual Classroom |Homes Sold By Jessica Harless |NextHome Realty Center

Some Highlights

  • With remote learning sweeping the nation this academic year, organized spaces with enough room for kids to learn effectively are high on buyer wish lists.
  • If you’re trying to make room for your family’s growing needs, multi-purpose rooms and dedicated workspaces may be features to consider in your next home.
  • Let’s connect today so you can find a home where your kids feel confident and comfortable too.
Group of  paper airplanes, orange one is the first place, can be used leadership/individuality concepts. ( 3d render )

Why Is It so Important to Be Pre-Approved in the Homebuying Process?

You may have heard that pre-approval is a great first step in the homebuying process. But why is it so important? When looking for a home, the temptation to fall in love with a house that’s outside your budget is very real. So, before you start shopping around, it’s helpful to know your price range, what you’re comfortable within a monthly mortgage payment, and ultimately how much money you can borrow for your loan. Pre-approval from a lender is the only way to do this.

According to a recent survey from realtor.com, many buyers are making the mistake of skipping the pre-approval step in the homebuying process:

“Of over 2,000 active home shoppers who plan to purchase a home in the next 12 months, only 52% obtained a pre-approval letter before beginning their home search, which means nearly half of home buyers are missing this crucial piece of paperwork.

This paperwork (the pre-approval letter) shows sellers you’re a qualified buyer, something that can really help you stand out from the crowd in the current ultra-competitive market.

How competitive is today’s market? Extremely – especially among buyers.

With limited inventory, there are many more buyers than sellers right now, and that’s fueling the competition. According to the National Association of Realtors (NAR), homes are receiving an average of 2.9 offers for sellers to negotiate, so bidding wars are heating up.

Pre-approval shows homeowners you’re a serious buyer. It helps you stand out from the crowd if you get into a multiple-offer scenario, and these days, it’s likely. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war and land the home of your dreams.

Danielle Hale, Chief Economist for realtor.com notes:

“For ‘a buyer in a competitive market, it’s typically essential to have pre-approval done in order to submit an offer, so getting it done before you even look at homes is a smart move that will enable a buyer to move fast to put an offer in on the right home.’”

In addition, today’s housing market is also changing from moment to moment. Interest rates are low, prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals (a loan officer and a real estate agent) making sure you take the right steps along the way and can show your qualifications as a buyer at the time you find a home to purchase.

Bottom Line

In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. If you’re ready to buy this year, let’s connect before you start searching for a home.

Homes Sold By Jessica Harless | NextHome RealtyCenter

How Is Remote Work Changing Homebuyer Needs?

With more companies figuring out how to efficiently and effectively enable their employees to work remotely (and for longer than most of us initially expected), homeowners throughout the country are re-evaluating their needs. Do I still need to live close to my company’s office building? Do I need a larger home with more office space? Would making a move to the suburbs make more sense for my family? All of these questions are on the table for many Americans as we ride the wave of the current health crisis and consider evolving homeownership needs.

According to George RatiuSenior Economist for realtor.com:

“The ability to work remotely is expanding home shoppers’ geographic options and driving their motivation to buy, even if it means a longer commute, at least in the short term…Although it’s too early to tell what long-term impact the COVID-era of remote work will have on housing, it’s clear that the pandemic is shaping how people live and work under the same roof.” 

Working remotely is definitely changing how Americans spend their time at home, and also how they use their available square footage. Homeowners aren’t just looking for a room for a home office, either. The desire to have a home gym, an updated kitchen, and more space in general – indoor and outdoor – are all key factors motivating some buyers to change their home search parameters.

A recent realtor.com-HarrisX survey indicates:

“In a June poll of 2,000 potential home shoppers who indicated plans to make a purchase in the next year, 63% of those currently working from home stated their potential purchase was a result of their ability to work remotely, while nearly 40% [of] that number expected to purchase a home within four to six months and 13% said changes related to pandemic fueled their interest in buying a new home.

Clearly, Americans are thinking differently about homeownership today, and through a new lens. The National Association of Home Builders (NAHB) notes:

“New single-family home sales jumped in June, as housing demand was supported by low interest rates, a renewed consumer focus on the importance of housing, and rising demand in lower-density markets like suburbs and exurbs.”

Through these challenging times, you may have found your home becoming your office, your children’s classroom, your workout facility, and your family’s safe haven. This has quickly shifted what home truly means to many American families. More than ever, having a place to focus on professional productivity while many competing priorities (and distractions!) are knocking on your door is challenging homeowners to get creative, use space wisely, and ultimately find a place where all of these essential needs can realistically be met. In many cases, a new home is the best option.

In today’s real estate market, making a move while mortgage rates are hovering at historic lows may enable you to purchase more home for your money, just when you and your family need it most.

Bottom Line

If your personal and professional needs have changed and you’re ready to accommodate all of your family’s competing priorities, let’s connect today. Making a move into a larger home may be exactly what you need to set your family up for optimal long-term success.

Homes Sold by Jessica Harless | Next Home Realty Center

The Cost of Buying a Home – What Buyers Need to Know

Most buyers come into the home buying process with a budget already in mind. But if they match their home price to their available budget, they may end up in hot water come closing time. That’s why it’s so important to make sure as buyer,  you properly prepare for the hidden costs you’ll encounter on the road to homeownership. Here are a few expenses to be sure you are aware of.

Closing costs — Many of the closing costs are negotiable, but it’s common for buyers to pay most of them, particularly in a seller’s market. Mortgage fees, title insurance, recording fees, and appraisal fees are some of the small numbers that will add up to be the closing costs, which can vary and depends on the purchase price.
Moving costs — Once the closing is over and the home belongs to you, you’ll still have to shoulder the expenses of moving in. These numbers can vary depending on how far you’re moving and much of the moving labor you’re willing to do yourself, but you should know the answer to these questions before buying a home.

Utilities — While you may be able to afford the monthly mortgage payments, it’s important that you also consider the utility costs at your new home. Depending on their previous living situation, you may not think to consider the costs that come with water, electric, trash, and other necessary monthly utilities.

HOA Fees — If the property being considered is under the restrictions of a homeowner’s association, you could be looking at another few hundred a month in fees. Many HOAs provide services that you may find useful and worth the expense, but you may also want to look into what the HOA provides and make sure you feel comfortable signing on for the fees in exchange for whatever the service provides.

Property taxes — These are calculated based on the value of the property, as well as state and city regulations. This means that different properties even in the same city could come with different property taxes.

Insurance — Homeowners with a mortgage are almost always required to get homeowner’s insurance, so this is a non-negotiable expense for most buyers. The cost will depend on location and other factors, but you can expect their annual premium to be around a thousand dollars.

Once you have a complete understanding of the full financial picture of a home purchase, you may find that your budget has shifted. By getting this out of the way early, you will be looking at homes in your correct price range and will ultimately end up in a house that suits your needs and your budget.

Info courtesy of Russell Rhodes, SWBC Mortgage
Homes SoldBy Jessica Harless | NextHome Realty Center

Does Your Home Have What Buyers Are Looking For?

There’s great opportunity for today’s homeowners to sell their houses and make a move, yet due to the impact of the ongoing health crisis, some sellers are taking their time coming back to the market. According to Javier Vivas, Director of Economic Research at realtor.com:

“Sellers continue returning to the market at a cautious pace and further improvement could be constrained by lingering coronavirus concerns, economic uncertainty, and civil unrest.”

For homeowners who need a little nudge of motivation to get back in the game, it’s good to know that buyers are ready to purchase this season. After spending several months at home and re-evaluating what they truly want and need in their space, buyers are ready and they’re in the market now. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR) explains:

“A number of potential buyers noted stalled plans due to the pandemic and that has led to more urgency and a pent-up demand to buy…After being home for months on end – in a home they already wanted to leave – buyers are reminded how much their current home may lack certain desired features or amenities.”

The latest Market Recovery Survey from NAR shares some of the features and amenities buyers are looking for, especially since the health crisis has shifted many buyer priorities. The most common home features cited as increasingly important are home offices and space to accommodate family members new to the residence (See graph below):Does Your Home Have What Buyers Are Looking For? | MyKCMThe survey results also show that among buyers who indicate they would now like to live in a different area due to COVID-19, 47% have an interest in purchasing in the suburbs, 39% cite rural areas, and 25% indicate a desire to be in small towns.

As we can see, buyers are eager to find a new home, but there’s a big challenge in the market: a lack of homes available to purchase. Danielle Hale, Chief Economist at realtor.com explains:

“The realtor.com June Housing Trends Report showed that buyers still outnumber sellers which is causing the gap in time on market to shrink, prices to grow at a faster pace than pre-COVID, and the number of homes available for sale to decrease by more than last month. These trends play out similarly in the most recent week’s data with the change in time on market being most notable. In the most recent week homes sat on the market just 7 days longer than last year whereas the rest of June saw homes sit 2 weeks or more longer than last year.”

In essence, home sales are picking up speed and buyers are purchasing them at a faster rate than they’re coming to the market. Hale continues to say:

“The housing market has plenty of buyers who would benefit from a few more sellers. If the virus can be contained and home prices continue to grow, this may help bring sellers back to the housing market.”

Bottom Line
If you’re considering selling and your current house has some of the features today’s buyers are looking for, let’s connect. You’ll likely be able to sell at the best price, in the least amount of time, and will be able to take advantage of the low interest rates available right now when buying your new home.

« Mortgage Rates Hit Record Lows for Three Consecutive WeeksMortgage Rates Fall Below 3% [INFOGRAPHIC] »

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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Top Reasons to Own Your Home

Top Reasons to Own Your Home [INFOGRAPHIC] | MyKCM
Homes Sold by Jessica Harless | NextHome Realty Center

Some Highlights

June is National Homeownership Month, and it’s a great time to consider the benefits of owning your own home.
If you’re in a position to buy, homeownership might help you find the stability, community, and comfort you’ve been searching for this year.
Let’s connect today to determine if homeownership is the right next step for you and your family.

Homes Sold by Jessica Harless | NextHome Realty Center

Housing Market Positioned to Bring Back the Economy

 All eyes are on the American economy. As it goes, so does the world economy. With states beginning to reopen, the question becomes: which sectors of the economy will drive its recovery? There seems to be a growing consensus that the housing market is positioned to be that driving force, the tailwind that is necessary.

Some may question that assertion as they look back on the last recession in 2008 when housing was the anchor to the economy – holding it back from sailing forward. But even then, the overall economy did not begin to recover until the real estate market started to regain its strength. This time, the housing market was in great shape when the virus hit.

As Mark Fleming, Chief Economist of First Americanrecently explained:

“Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.”

Fleming is not the only economist who believes this. Last week, Dr. Frank Nothaft, Chief Economist for CoreLogic, (@DrFrankNothaft) tweeted:

“For the first 6 decades after WWII, the housing sector led the rest of the economy out of each recession. Expect it to do so this time as well.”

And, Robert Dietz, Chief Economist for the National Association of Home Builders, in an economic update last week explained:

“As the economy begins a recovery later in 2020, we expect housing to play a leading role. Housing enters this recession underbuilt, not overbuilt…Based on demographics and current vacancy rates, the U.S. may have a housing deficit of up to one million units.”

Bottom Line

Every time a home is sold it has a tremendous financial impact on local economies. As the real estate market continues its recovery, it will act as a strong tailwind to the overall national economy.

reprint KCM.com
Homes Sold By Jessica Harless | NextHome Realty Center

Will Home Values Appreciate or Depreciate in 2020?

With the housing market staggered to some degree by the health crisis the country is currently facing, some potential purchasers are questioning whether home values will be impacted. The price of any item is determined by supply as well as the market’s demand for that item.

Each month the National Association of Realtors (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for the REALTORS Confidence Index.

Their latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand) during this pandemic.

Buyer Demand

The map below was created after asking the question: “How would you rate buyer traffic in your area?”Will Home Values Appreciate or Depreciate in 2020? | MyKCMThe darker the blue, the stronger the demand for homes is in that area. The survey shows that in 34 of the 50 U.S. states, buyer demand is now ‘strong’ and 16 of the 50 states have a ‘stable’ demand.

Seller Supply

The index also asks: “How would you rate seller traffic in your area?”Will Home Values Appreciate or Depreciate in 2020? | MyKCMAs the map above indicates, 46 states and Washington, D.C. reported ‘weak’ seller traffic, 3 states reported ‘stable’ seller traffic, and 1 state reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the needs of buyers looking for homes right now.

With demand still stronger than supply, home values should not depreciate.

What are the experts saying?

Here are the thoughts of three industry experts on the subject:

Ivy Zelman:

“We note that inventory as a percent of households sits at the lowest level ever, something we believe will limit the overall degree of home price pressure through the year.”

Mark Fleming, Chief Economist, First American:

“Housing supply remains at historically low levels, so house price growth is likely to slow, but it’s not likely to go negative.”

Freddie Mac:

“Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand.”

Bottom Line

Looking at these maps and listening to the experts, it seems that prices will remain stable throughout 2020. If you’re thinking about listing your home, let’s connect to discuss how you can capitalize on the somewhat surprising demand in the market now.