6 Do’s and Don’ts for Selling Your First Home

Purchasing your first home is always an education process – you learn about the local market, mortgages, housing codes and zoning and negotiation. Depending on how quickly you have to move to be able to snap up a home, the purchasing process can be a bit of a whirlwind.

Then, a few years down the road, you’re ready to move to a new home that’s bigger, closer to work or has all the extra features you’ve been dreaming of. And while buying again is a whole re-education process with new market trends and regulations, this time you’ll also need to learn the ins and outs of being a first-time seller.

Again, it’s an education process, which is why you’ll want to enlist the help of a real estate agent you feel comfortable taking advice and instruction from to get your home ready.

While the housing market may appear to be ideal for sellers, with bidding wars common and many markets reporting all-time low inventories of properties on the market, sellers should keep perspective when it comes to sale prices. Just because your home’s value has increased doesn’t mean your home will go for millions when it was worth $700,000 a couple years ago.

To better prepare yourself for putting your property on the market, follow these six do’s and don’ts for first-time home sellers:

Do establish an offer due date. The key to selling your property for the price you want is positioning it so the right buyers get a chance to see it and mull it over.

For that reason, a strategy that’s proven effective, is to price a home slightly below expected value and place the property on the market, but don’t accept bids right away.

Hold off offers for approximately seven days, group show it and do a couple open houses, and that’s the best way to maximize your money.

By waiting, a successful purchase isn’t dependent on who’s able to make an offer first, but who’s serious about purchasing the property and able to put together the most appealing bid, whether that includes a flexible timeline or even an all-cash offer in addition to the right price.

It helps drive your price up and keeps everyone honest.

Don’t price too high from the start. Even in a hot seller’s market, an asking price that’s too high can keep buyers from even looking at your property. Overpricing your home from the get-go will cause the property to lose momentum, which can be the biggest killer for real estate sales success.

You don’t want the market to hesitate.

Of course, real estate agents are aware that it can be nerve-wracking for sellers to concede to a lower asking price than they want to see in the end. This is where hiring a real estate agent you trust is key.

It’s not natural for sellers to accept listing their property for a little bit less, but that whole less-is-more strategy works in today’s market.

Do what’s best in the current market. Your real estate agent will likely have a strategic plan for the sale of your home based on what works best in the market for achieving top dollar. Depending of the right price range for your home, that could mean anything from hosting multiple open houses to presenting it as a pocket listing.

As the market changes, caused by additional inventory or a drop in the number of active buyers, for example, agents and brokerage firms will adjust their strategy to fit demand and buyer preference.

Don’t assume you can only sell in spring. If you’re on a tight moving schedule or you have an eye on buying a home currently on the market, you don’t have to hold off until the traditional selling season in spring and summer.

Especially if you’re in a market where buyers are still outnumbering homes on the market, a sale for the price you want is still feasible.

The buyer-to-new-listing ratio is actually better over wintertime than it is during the spring and summer.

Because markets are strapped for listings particularly in fall and winter, active buyers will be eager to see the newest property for sale. All the energy is about the new listing coming on the market.

Do listen to your agent for home prep. Curb appeal, clutter and room updates are all things most sellers are going to hear about from their real estate agent – and they shouldn’t be taken lightly. Regardless of how fast homes are receiving offers, your home needs to look stellar to get the price you want.

Not everyone has the money to put in hardwood floors or replace countertops, and that’s OK. The most valuable changes to make are ensuring you have a well-manicured front yard and pleasant entry and clean rooms that allow buyers to focus on the home itself, not your stuff.

Don’t lead with contingencies. Tight seller’s markets throughout the U.S. mean it may be hard for you to find a new house to buy without getting stuck in a bidding war of your own, so you may need some extra time if your house sells fast.

You should not make the sale contingent on the purchase of a new home for you. It actually devalues the property, and this is the best way to avoid that.

Instead, you can include a 60-day use and occupancy clause. The limited leaseback option gives you the option of an extra 60 days to find a house, and the period also helps avoid any potential problems with the buyer’s mortgage approval.

A buffer of 60 days should be enough to let you find your own next home, or at least establish a plan for other temporary housing while you continue your search.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

3 Questions to Ask If You Want to Buy Your Dream Home

If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

Ask yourself the following 3 questions to help determine if now is a good time for you to buy in today’s market.

1. Why am I buying a home in the first place? 

This is truly the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

For example, a survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”

This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. They are:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of that space

What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the median price of homes sold in December (the latest data available) was $232,200, up 4.0% from last year. This increase also marks the 58th consecutive month with year-over-year gains.

If we look at the numbers year over year, CoreLogic forecasted a rise by 4.7% from December 2016 to December 2017.

What does that mean to you?

Simply put, with prices increasing each month, it might cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher price of the home you wish to buy.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.

The Mortgage Bankers Association (MBA), the National Association of Realtors, and Fannie Mae have all projected that mortgage interest rates will increase over the next twelve months, as you can see in the chart below:

Bottom Line

Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

4 Reasons to Buy Your Dream Home This Winter

As the temperature in many areas of the country starts to cool down, you might think that the housing market will do the same. This couldn’t be further from the truth! Here are 4 reasons you should consider buying your dream home this winter instead of waiting for spring!

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.3% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates are Projected to Increase

Your monthly housing cost is as much related to the price you pay for your home as it is to the mortgage interest rate you secure.

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage are currently at 4.08%. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way You’re Paying a Mortgage

There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

Ready to Make an Offer? 4 Tips for Success

making-offer

So you’ve been searching for that perfect house to call a ‘home’ and you finally found one! The price is right, and in such a competitive market you want to make sure you make a good offer so that you can guarantee your dream of making this house yours comes true!

Here are the 4 Tips they covered along with some additional information for your consideration:

1. Understand How Much You Can Afford

While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.

This ‘tip’ or ‘step’ really should take place before you start your home search process.

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and will allow you to make your offer with the confidence of knowing that you have already been approved for a mortgage for that amount. You will also need to know if you are prepared to make any repairs that may need to be made to the house (ex: new roof, new furnace).

2. Act Fast

Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.

According to the latest Existing Home Sales Report, the inventory of homes for sale is currently at a 4.7-month supply. This is well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream home.

Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as soon as possible.

3. Make a Solid Offer

Freddie Mac offers this advice to help make your offer the strongest it can be:

“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.” 

Consider ways of making your offer stand out! Many buyers write a personal letter to the seller letting them know how much they would love to be the new homeowners. Your agent will be able to help you figure out if there are any other ways your offer could stand above the rest.

4. Be Prepared to Negotiate

It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford.

Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.

If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home. If the inspection uncovers undisclosed problems or issues, you can typically re-negotiate the terms or cancel the contract.”

Bottom Line

Whether buying your first home or your fifth, having a local real estate professional who is an expert in their market on your side is your best bet to make sure the process goes smoothly.

 

Happy House Hunting!

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

New Listing & Open House this Sunday 1-3

Romaine

Newly Remodeled California Cottage

OPEN THIS SUNDAY 1-3
 
128 Romaine Drive – Santa Barbara
www.SantaBarbaraEnvy.com
 
Offered at $1,025,000
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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

Turn Your Small Front Yard into a Big Asset with Easy Landscaping Ideas

santa-barbara-front-yard

There are endless options for small front yard landscape design plans, no matter the style or size of your home.

Make it personal.

Remember, your front yard is your calling card to the neighborhood. Not only is it the space that makes a first impression to your neighbors, but also it’s the place to express your taste and personality. When choosing complementary plants and designs, keep the architectural style of your home in mind so that your small front yard represents the spirit of its traditional or contemporary style.

Size it right.

Small front yard landscapes are all about proportion. Think of your small front yard as the collar and your home as the shirt. If plants or trees are too tall, they can overwhelm the front of your home. The landscape and hardscape should match the scale of the house – and complement its façade. Ornamental trees such as cypress can be used to “mask” or hide parts of the front of your home you want hidden or create a privacy wall. Cutting a large tree from the front of your yard might diminish shade but also reveal and enhance your home’s character and style.

Go bold.

When it comes to flowering plants, there’s no limit to the amount of color you can use in your front yard. If you have a center walkway that leads to your front door, line the sides of the path with bright orange anemones or periwinkle blue bell flowers. Instead of planting hedges next to the house, a stand of Black-Eyed Susans makes a vibrant statement.

Grassy is not always classy.

Small front yards can have beautiful, well-trimmed lawns if they’re maintained properly. Yet, don’t feel like you must have grass in your small front yard. An unkempt front yard with a lawn that is poorly cared for can quickly become an ugly sight to you and your neighbors. If you’re considering exchanging your lawn for a stone courtyard or wide walkway, fill borders and remaining areas with mulched beds of your favorite annuals such as snapdragons or African daisies. Pea gravel or pebbles make an easy groundcover for tiny front yards. Line the ground with a weed-resistant mesh before applying the gravel, and remember to treat moss growth and mildew promptly.

 

As with the design of any landscape, the questions you must ask yourself about small front yards are these: How much work am I willing to put into the initial design and planting phase of this small front yard landscaping project, and how much time am I willing to spend on its maintenance after it’s installed? Knowing the answers will help you narrow down your choices and design a smart small front yard!

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Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

10 Top Bathroom Trends for 2015

Bathroom-Trends-Santa-Barbara-CA

Just like the kitchen, contemporary designs are growing in popularity in bathroom remodels. These contemporary touches in the bathroom equate to clean and open designs, with floating vanities and freestanding tubs.

Here are the top 10 overall bathroom design trends National Kitchen & Bath Association designers expect to be hot this year:

1. Clean, white, contemporary designs
2. Floating vanities
3. Open-shelving
4. Electric heated floors
5. Purple color schemes
6. Trough sinks
7. User experience (ease of use and low maintenance) and accessibility features
8. Extra amenities (like steam showers, anti-fog mirrors, lighted showers, and shower seats)
9. Innovative storage (such as drawer pullouts and rollouts to hold hair styling equipment)
10. Showers and freestanding tubs

Most popular colors: White and gray are the dominant colors for bathrooms. Half of designers expect to see gray growing in 2015, and several designers also mentioned the growing popularity of purple, lavender, and lilac tones gaining steam in bathroom designs. For fixtures, white continues its dominance.

Out of style: Jetted tubs, whether whirlpool or air, are decreasing in popularity, according to NKBA’s report. People are moving away from jetted tubs to more classic soaking tubs. Also, beige fixture colors are increasingly dropping in popularity.

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Looking to buy or sell a luxury estate, home, condominium or investment property?

Let me help you find everything you need to know about buying or selling a home. Call or email me today!

—————————————————-

Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com

4 reasons to sell your home now

two-story-glass-house Attention potential sellers sitting on the fence: It could be time to make a move.

Mid-March to mid-April is the best time to hang the sale sign nationally, with homes selling 15% faster and for 2% more than the average sale, according to Zillow. The window tends to be a little earlier for sellers in warmer climates and a little later in colder climates.

It’s still predominately a seller’s market, but less so than the last year or two. Some advantages are moving back to buyers; but largely and broadly it’s still favoring the sellers.

Here are four reasons you might want to list your home:

1. Low housing supply:

Tight inventory is a main reason the ball is still in the sellers’ court.
The level of unsold homes was 4.6 months in February, according to the National Association of Realtors. That means it would take a little less than five months for all available inventory to sell. In a normal market, a five-to-seven month supply is considered balanced.
Tight inventory tends to prop up home prices and can result in multiple offers and spur bidding wars.
But at the same time, low supply is also keeping some sellers in their homes. They aren’t typically going to sell and then rent. If sellers aren’t comfortable that they will be able to find a new home, it can keep them off the market. There needs to be more construction in the market to ease the pressure.

 
2. Fewer cash buyers:

All-cash and investment buyers helped boost home sales in the last couple years. And while the acceleration of home prices has slowed from its recent double-digit growth, experts still expect modest gains this year, but with fewer cash buyers.
All-cash offers made up nearly 31% of sales in 2014, according to RealtyTrac, a 13% drop from 2013 and the lowest level in four years.

3. Higher interest rates:

While mortgage rates remain low, experts predict more buyers will enter the market in the coming months.
The Federal Reserve’s recent hint that higher interest rates are coming sooner rather than later could prompt buyers to start their house hunt in order to take advantage of lower mortgage rates.
When interest rates are thought to be escalating, we see a wave up activity with people getting off the sidelines.

 
4. Rising rents:

Rising rental prices could motivate tenants to make the leap into home ownership. Rent prices have risen 15% nationwide in the past five years in 70 metro areas across the U.S. and income growth hasn’t kept up, according to NAR.
Every time there’s an increase, it triggers the decision processes on whether renters should go into the market and buy. Getting more buyers into the market, especially first-timers, can help sellers feel more comfortable about their prospects. It allows others to move up the chain in the market.

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Looking to buy or sell a luxury estate, home, condominium or investment property?

Let me help you find everything you need to know about buying or selling a home. Call or email me today!

—————————————————-

Jon Mahoney

Director, Luxury Homes Division

Professional Financial Planner

Keller Williams, Santa Barbara

(805) 689-0532

BRE# 01269717

info@JonMahoney.com

www.JonMahoney.com