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The Peggy Graves Team

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What a Difference a Year Makes for Sellers

by The Peggy Graves Team

What a Difference a Year Makes for Sellers

What a Difference a Year Makes for Sellers | MyKCM

Over the last few years, many sellers have been hesitant to put their houses on the market because they feared not being able to find another home to buy.

We’ve reported on inventory shortages in the past, and it’s been a constant concern for potential buyers throughout recent years. New research shows the inventory concern is starting to decrease among potential buyers.

According to First American, the two leading obstacles to homeownership that buyers feel today are Affordability and Limited Inventory. This means the feeling that homes are less affordable has risen, while the fear of limited inventory has decreased, delivering a wealth of good news for sellers.What a Difference a Year Makes for Sellers | MyKCMAt the same time, over the past 12 months, we’ve seen a steady month-over-month increase in the number of homes coming to market for purchase. In the past, the lack of listings and available inventory slowed down the real estate market. This recent increase in current inventory has many buyers and sellers now thinking it is time to make their move – and rightfully so! For the last two months, we’ve seen over 4 months of inventory become available for sale, a promising number that’s been slowly increasing this year and creating more buying opportunities.What a Difference a Year Makes for Sellers | MyKCMTo further support the idea of an improving real estate market, Sam Khater, the Chief Economist at Freddie Mac says,

“…In the near-term, we expect the housing market to continue to improve from both a sales and price perspective.” 

Many experts, like Sam, believe the second half of 2019 will drive a stronger market than we saw at the beginning of the year. This is great news for homeowners who have put off getting their houses on the market and are now ready to make a move.

Bottom Line

What a difference we’ve seen over the course of this year! If you’re thinking of selling, now is the time as inventory is on the rise. Contact The Peggy Graves Team at 731-225-6920 and get your home 

Square Footage

by The Peggy Graves Team

Square footage is commonly used to determine if a home will fit a buyer's needs.  The price per square foot can be used to compare the costs of different homes and even, determine the value of a property.

The challenge is what is the source of the square footage measurement and how was it done.

County records use square footage to determine assessed value for property tax purposes.  They are assumed to be reliable but there can be inaccuracies in their tax rolls.  Another source of square footage could be from the house plans but the problem there is that the builder may have made modifications, or a subsequent owner could have made additions.

Appraisers are required to measure the home to determine square footage and they generally, adhere to a standard method which leads to uniformity in the industry.  The ANSI, American National Standards Institute, guidelines are considered the standard but there are no laws governing the process.

Because basements are below grade level, regardless of whether they are finished, they are typically not counted toward gross living area.  Attics because they are above grade level can be included in gross living area if they are finished to the same standard as the rest of the home and they meet the minimum height requirement of seven feet.

Unfinished areas are usually not considered in the square footage because it is not livable.

For detached properties, it is common to measure the perimeter of the house but to only include the living areas, not porches, patios or garages.  Gross living area includes stairways, hallways, closets with minimum height and bathrooms.  Covered, enclosed porches would only be considered if they use the same heating system as the house.

By contrast, condominiums, generally measure the inside area of the unit. Some appraisers may add six inches to account for the wall thickness.  If you were to compare the total of the interior room measurements of a detached home, it would be far less than the stated square footage using the normal method.

If the county records are significantly different from the appraisal or the plans, it will be necessary to determine which one is more accurate.  This may require getting the home measured by an appraiser which should be less than paying for a complete appraisal.

Top 5 Reasons You Should Not FSBO

by The Peggy Graves Team

Rising home prices coupled with a lack of inventory in today’s market may cause some homeowners to consider selling their home on their own (known in the industry as a For Sale By Owner). However, a FSBO might not be a good idea for the vast majority of sellers.

The top 5 reasons are listed below:

1. Online Strategy for Prospective Purchasers

Recent studies have shown that 95% of buyers search online for a home. In comparison, only 13% use print newspaper ads. Most real estate agents have an Internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

  • 50% on the Internet
  • 28% from a Real Estate Agent
  • 7% from a yard sign
  • 1% from newspapers

The days of selling your house by putting up a sign and listing it in the paper are long gone. Having a strong Internet strategy is crucial.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent, who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser, if there is a question of value

4. FSBOing Has Become Increasingly Difficult

The paperwork involved in the process has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 7% over the last 20+ years.

5. You Net More Money When Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, they may actually cost themselves more. One of the main reasons for the price difference at the time of sale is:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The more buyers that view a home, the greater the chance of a bidding war for the property. The study found the difference in price between comparable homes of size and location is currently at an average of 6%.

Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent without additional cost?

Bottom Line

Before you decide to take on the challenge of selling your house on your own, sit down with a real estate professional in your marketplace to discuss your needs.

Building Equity

by The Peggy Graves Team

Owning a home is the first step to building equity.  Tenants build equity but not for themselves; they build it for the owners.

Equity is the difference in the value of the home and what is owed on the home.  There are two dynamics that cause this to grow: appreciation and principal reduction.

As the home increases in value, it is said to appreciate.  Various authorities will annualize an appreciation rate based on average sales prices from one year to the next.  Since appreciation is based on supply and demand as well as economic conditions, it will not be the same year after year. 

If you looked at a ten to twelve-year period, some would be higher than others and there may even be some individual years that it is flat or even declined.  For the most part, values tend to appreciate over time.

Most mortgages are amortized which means that a portion of the payment each month is applied to the principal in order to pay off the loan by the end of the term.  A $300,000 mortgage at 4.5% for 30 years has $395.06 applied to the principal with the first payment.  A slightly larger amount is applied to the principal each following month until the loan is paid with the 360th payment.

If additional principal payments are made, it will save interest, build equity faster and shorten the term of the mortgage.  Using the previous example, if an additional $250.00 principal contribution was made with each payment, it would only take 270 payments to retire the loan instead of 360.  It would save $69,305 in interest and shorten the mortgage by 7.5 years.

To see the dynamics of equity due to appreciation and principal reduction, look at the Rent vs. Own.  To see the effect of making additional principal contributions on your equity, look at the Equity Accelerator.  

Redemption Road Rescue Open House

by The Peggy Graves Team

Saturday, June 22, 2019
11:00 AM 4:00 PM
130 Cooper Anderson Road Jackson, TN

Visit Redemption Road's Facebook page for details about this event. https://www.facebook.com/events/785084575200500/

Planning A Trip? Don't leave home without doing this...

by The Peggy Graves Team

Don't Leave Home Without...

You been planning this trip for some time and almost every detail has been considered...or has it? Have you thought about how to protect your home while you're out of town?  What's going to make sure that everything you left is still there in you return?

Nothing could ruin a trip more than coming back to find out your home has been burglarized or worse.  It makes sense to spend a little time before you leave on making sure your home is as safe and sound as it can be.

There are a host of devices to use across the Internet including camera door bells, video cameras, door locks, garage door openers, light and thermostat controls.  You can monitor your home whenever you have an Internet connection.  The question is whether you want the distraction from your trip.

Consider these low-tech suggestions along with your other normal efforts:

  • Tell your neighbors you'll be out of town and to be aware of any unusual activity.
  • Notify your alarm company
  • Discontinue your postal delivery
  • Use timers on interior lights to make it appear you're home as usual.
  • Don't make it easy for burglars by leaving messages on voice mail or posting on social networks.
  • Post on social networks after you've returned about your vacation.
  • Remove the hidden spare keys and give it to a trusted neighbor or friend.
  • Lock everything, double-check and set the alarm.
  • Take pictures of your belongings in case you need them.
  • Disconnect TVs and other equipment in case of unexpected power surges.
  • Adjust your thermostat.
  • Arrange for lawn care.
  • Consider disconnecting the garage door opener.
  • Put irreplaceable valuables in a safety deposit box.

It's nice to go out of town on a well-deserved trip and it's always nice to get back home...especially when it is just the way you left it.

Where's Your Water Going?

by The Peggy Graves Team

Temporarily Renting a Home

by The Peggy Graves Team

IRS has provisions for homeowners regarding the sale of a principal residence that allows for temporarily renting the home without losing the ability to exclude the gain if the home is sold under the correct conditions.

The rules for the exclusion of gain on the sale of a principal residence are:

  • Up to $250,000 of gain may be excluded for single taxpayers and up to $500,000 for married taxpayers filing jointly.
  • Ownership and Use must have been a principal residence for two of the five years preceding the date of sale (closing date).  This allows for a temporary rental for up to three years maximum.
  • Either spouse may meet the ownership test.
  • Both spouses must meet the use test.
  • No exclusion has been used in the previous 24-month period.

Let's pretend that a person had owned a home from more than two years.  This person married and moved into their new spouse's home two years, six months ago.  That person decided to sell the home and would have approximately $200,000 of gain in the sale.

If the property is put on the market, sold and closed prior to the three-years that they moved out, the home would still be eligible for the section 121 exclusion on the sale of a principal residence.  If the sales closes after that three-year period, the owner would owe tax on the gain.  If the long-term capital gains rate for the owner was 15%, they would owe approximately $30,000 in taxes.

If you or a person you know is in a situation like this, they should certainly seek professional tax advice as well as discussing the marketing and value of the property with their real estate professional.  This is something that I have experience with; call me at (731) 225-6920.  The timing is very important and critical to a favorable outcome.

Waiting Period to Buy Following a Distressed Sale

by The Peggy Graves Team

Time to Buy Again

For people who have experienced a distressed sale of a home and gotten their finances and credit back in shape, there can still be an unanswered question of "How long do we have to wait to qualify for another mortgage."  The loan types for the new loan will differ in amounts of time based on the event. 

The different lending authorities, VA, FHA, Fannie Mae (FNMA) and Freddie Mac (FHLMC), establish their own waiting periods.  A borrower may be eligible to qualify for one type of mortgage before another type, even though during this waiting period, that the person was current on all payments and maintained a history of good credit.

The following chart indicates how long a person might have to wait.

waiting period for distressed sales.png

A recommended lender can give you specific information regarding your individual situation and can make suggestions that will improve your ability to qualify for a mortgage.  This process should be started before looking at homes because of the time constraints listed here can vary based on current requirements and possible extenuating circumstances of your case.

We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between.  Call us at (731) 225-6920 for lender recommendations.

 

Military Relocation Assistance

by The Peggy Graves Team

As a certified Military Relocation Professional, let me and my team help you and your family navigate through the home buying process and take full advantage of military benefits and support .

Call The Peggy Graves Team at 731-225-6920 for details.

 

2018

Displaying blog entries 1-10 of 206

Contact Information

Photo of The Peggy Graves Team Real Estate
The Peggy Graves Team
COLDWELL BANKER REAL ESTATE NOW
327 North Pkwy.
Jackson TN 38305
Cell: 731-225-6920
Main Office: 731.668.1777

Lic. No. 00220561