7 Factors That Complicate the Home Selling Process (and Why You Need a Real Estate Agent)

Selling a property is never as straightforward as it seems. It can be exciting to see your house on the market, but many people underestimate how complicated the process can be.

Here are seven factors that could complicate your property sale and why you should always enlist the help of a professional property manager.

Negotiating With Buyers 
Negotiation is an essential part of selling a property, but it can often be difficult for sellers to navigate. Having an experienced property manager who understands the local market and knows how to negotiate effectively can make all the difference when it comes to getting you the best price for your home.

Legal Issues 
Most people don’t realize that there are many legal issues involved in selling a property, from contracts to disclosure forms and more. An experienced property manager will know how to handle all of these legal issues and make sure everything is taken care of correctly.

Valuation and Appraisals 
Another complication when selling a house is figuring out the value of the home, which is determined by appraisals and information about nearby sales or current listings in your area. A property manager will know how to accurately assess your home’s value so you get the most out of your sale.

Tax Implications 
Selling a house also has tax implications that need to be considered, such as capital gains taxes or depreciation recapture taxes if applicable. A good property manager should have experience dealing with these types of taxes and can help you understand what you owe before you sign any documents related to your sale.

Inspections and Repairs 
Before closing on a sale, buyers may request inspections or ask for repairs to be made in order for them to proceed with their purchase offer. A knowledgeable property manager will know what types of inspections and repairs are necessary before putting your house on the market so that these steps won’t delay or derail potential deals later on down the line.

Staging and Preparing Your Home 
Staging a home properly can make all the difference when it comes time to sell it, as prospective buyers want to walk into a clean and inviting space that feels like home right away without having any major renovations needed after they move in. A great property manager will understand this step in detail and take care of staging your home so it looks its best when potential buyers come through for showings or open houses.

Working With Real Estate Agents 
Finally, working with real estate agents is another factor that complicates selling properties because agents have different personalities and levels of experience than one another (not all agents are created equal). A decent property management company can help you find agents who fit well with both yours and your potential buyer's needs so everyone involved remains satisfied throughout each transaction!

Whether you’re new to selling properties or already have some experience under your belt, enlisting help from an experienced real estate agent or professional property management company can go a long way towards making sure that things go smoothly during every transaction. They’ll understand each step involved in selling a house better than anyone else, which means no surprises along the way for either yourself or any potential buyers interested in purchasing your home. Best of luck as you embark on this journey!

Get more like this on Keeping Current Matters.

Related Links

• Here’s what the Federal Reserve’s 25 basis point interest rate hike means for your money

• What old sitcoms reveal about America’s rising cost of housing

• With Mortgage Rates in Flux, Is ‘Buy Now, Refinance Later’ Good Advice?

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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With Mortgage Rates in Flux, Is ‘Buy Now, Refinance Later’ Good Advice?

If you’re in the market for a home but are discouraged by the current high mortgage rates, you’ve probably heard the advice “buy now and refinance later”—maybe from your mortgage lender, real estate agent, or a well-meaning friend.

This seemingly simple solution might empower you to stretch your budget now, with the plan to refinance when mortgage rates drop.

But is “buy now, refinance later” the win-win it’s cracked up to be?

Let’s take a look at this homebuying strategy from all angles and explore the ways in which it could help—or hurt—buyers down the line.

Mortgage rates on the rise

Mortgage rates have been climbing amid stubborn inflation, with a 30-year fixed-rate mortgage currently averaging 6.73%, according to recent numbers released by Freddie Mac. Just a year ago, the 30-year fixed-rate was 3.85%.

And where mortgage rates will go next is anyone’s guess.

“Predicting mortgage rates in the coming months can be challenging, especially considering the current economic climate and various factors affecting the market,” says Joy Aumann, a licensed real estate agent and founder of Luxury SoCal Realty in San Diego. “While some experts believe that rates may remain relatively stable or even decrease slightly, others argue that inflationary pressures and monetary policies could push rates higher.”

What does ‘buy now, refinance later’ actually mean?

“Marry the home, date the rate”—we’ve heard this homebuying approach phrased a number of ways, but the goal is to offer buyers the promise of a better, more financially viable tomorrow.

The idea is that buyers who take out a loan now with a company can refinance in the future when rates drop.

Don Chambers, a Georgia-based real estate investor, says some mortgage lenders are even offering buyers a promotion of “one free refinance” (during the life of their loan) once rates have dropped. This would mean the buyer wouldn’t have to pay refinancing fees and other costs. For example, closing costs for a refinance are typically 2% to 5% of the loan principal amount.

The goal, Chambers says, is to get buyers the home they want now, with the hope that their monthly payments will ease up when rates drop.

How much do mortgage rates have to drop?

Nobody has the ability to predict if and when rates will drop. But for a “buy now, refinance later” strategy to make financial sense, rates would need to drop by a certain amount. For some buyers, rates might never go low enough for a refinance to actually save them money.

Typically, a 1% rate drop is enough to warrant a refinance.

But Troy Shaffer, founder of Blu Corporate Housing in Phoenix, points out that a drop of 2% might be needed to truly make a dent in monthly payments.

Ultimately, it all depends on your individual loan scenario.

“On a $100,000 loan, rates are going to have to drop a lot more than on a $1 million loan to make refinancing a viable option,” says Jennifer Beeston, a senior vice president of lending at Guaranteed Rate Mortgage. “The type of loan you are doing may be easy to refinance or not even possible without an equity gain.”

Loans made for military veterans, for example, are the easiest to refinance. This is because they do not require an appraisal, which can garner additional fees, Beeston says.

“A 3% down conventional loan is a different story, because to refinance you are either going to need the house to go up in value or have cash to do the refinance and meet loan-to-value guidelines,” she explains. “The same goes for low-down-payment jumbo loan options. This is why it is imperative to discuss the future with your lender, if you are hoping to refinance.”

Consider refinancing fees and closing costs

When considering a mortgage refinance, you also have to factor the additional fees associated with refinancing. Closing costs, for example, include the appraisal fee, title services, and attorney fee. As mentioned above, buyers can expect to pay 2% to 5% of the loan principal amount in closing costs.

So even if mortgage rates do actually drop 1% to 2%, crunch the numbers and decide if refinancing would even save you enough money to make it worthwhile.

History shows us that buying more house than you can afford is a terrible idea. So if you can only swing a house purchase because you’re banking on refinancing in a few years, take a step back.

“You shouldn’t buy the house if a refi is essential,” Chambers says. “It’s possible that there will be no rate decrease over the life of the loan.”

Today’s buyers should monitor mortgage rates and consult with a mortgage broker to make an informed decision on the loan that’s right for them.

Related Links

• Here’s what the Federal Reserve’s 25 basis point interest rate hike means for your money

• What old sitcoms reveal about America’s rising cost of housing

• 10 Surprising Cities Where New-Home Construction Is Booming

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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What old sitcoms reveal about America’s rising cost of housing

Carrie Bradshaw’s life on “Sex and The City” wasn’t quite as unrealistic as you might think.

There’s no way she could have afforded routine purchases of Manolo Blahnik shoes and designer dresses on her estimated ~$60k-$70k salary as a freelance New York City magazine columnist. But her ability to afford her apartment, a West Village alcove studio, wasn’t so far-fetched in the late 1990s.  

Classified ads from the time showed West Village studios for as low as $1k per month. Even a fancy Lower Manhattan studio with a doorman went for ~$2.2k/month on average.

But as rents have skyrocketed beyond incomes, there’s no way a modern-day Carrie Bradshaw could afford to live alone in the West Village.

• The average rent for a Manhattan studio last month was ~$3.1k, and West Village studios go from ~$3k-$4k+. 

• The median freelance journalist in New York City makes ~$69k annually, according to ZipRecruiter, offering less purchasing power than what Bradshaw made more than two decades ago. 

As millions of Americans stream “Sex and the City” and other old sitcoms, warm nostalgia has been accompanied by a cold dose of skepticism about the characters’ apartments and houses. 

Were they paying far beyond their means, or are we judging with a 2020s perspective? 

The Hustle analyzed the salaries and living situations of several famous sitcom characters over the past few decades as a lens on today’s housing market.

What we found is that not every sitcom was a fantasy. But with many young people priced out of cities, and average families unable to buy homes, it just feels that way today. 

Income vs. housing costs

When sitcoms began populating the airwaves, housing costs — both for homeownership and rent — tended to rise in tandem with income and wages. From 1960 to 1970, US median household income barely lagged growth in median rent and actually exceeded the increase in median home sales prices.     

But the trends began to change after the ’70s. 

• In 1970, the median home sales price in the US was ~$23k ($161k in 2021 values), and the median gross rent was $108 ($756). The median household income back then was ~$9k (~$63k). 

• By 2021, the median home sales price had increased 18x to ~$424k, the median gross rent 11x to ~$1.2k, and the median household income 7.7x to ~$69k.

The increases in recent years have been particularly dramatic. Housing prices climbed steadily in the early 2000s, cooled during the Great Recession, and rose by ~24% in the 2010s, compared to a ~17% rise in income, adjusted for inflation.

And then came the wild pandemic housing market, when the median sales price jumped ~39% from mid-2020 to mid-2022. 

The run-up in housing prices has led more people to rent, but rent increases, too, are crushing — outpacing inflation and income growth since 2001. In 2022, cities like Boston and Miami saw rents rise ~20%-40% YoY. 

Keep reading on The Hustle.

Related Links

• Here’s what the Federal Reserve’s 25 basis point interest rate hike means for your money

• Foundation Repair Tips Your Home Can’t Do Without

• 10 Surprising Cities Where New-Home Construction Is Booming

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Just Listed: Newly Updated Kitchen in Beautiful Two-story Thornton Home!

Welcome home to Thornton!

This beautiful 2 story home is the perfect place to relax, entertain, and enjoy all the things you love about living in Colorado. Whip up appetizers in the newly updated kitchen while your guests gather in the large backyard, or enjoy a cup coffee in one of the amazing living rooms. With 4 bedrooms + 3 fully updated bathrooms, there is plenty of space for your dream gym, WFH office, art studio, or guest room. Everyone will be to school on time, with Skyview Elementary being 2 blocks away and Shadow Ridge Middle School located less then 1/2 a mile away. Conveniently located near the light rail station, commuting is easy as your home offers easy access to Denver and beyond. With numerous shops, services, and restaurants right outside the door - your next adventure is never far. You're going to love living here!

Listed by Kasie Foster for West + Main Homes. Please Contact Kasie for current pricing + availability.

 

Have questions?
West + Main Homes
(405) 652-6635
hello@westandmain.com

Presented by:
Kasie Foster

720-329-0605

kasie@westandmainhomes.com

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Just Listed: Mid-Century Modern Fixer Upper in Wheat Ridge!

Great location in Applewood Villages!

Less than a mile from Wheat Ridge Greenbelt Open Space & Recreation Center, this mid-century modern home is a tremendous opportunity for investors or anyone looking for a live-in fixer upper. With some updates and a little love, this home will truly shine! Thinking bigger? Situated on a 1/4 acre lot, there is ample space to add an accessory dwelling unit (ADU). Entertain friends & family from the open kitchen & dining room around the passthrough fireplace or over a bbq in the backyard. Unwind after a long day to your personal retreat in the basement bonus room. Some truly great possibilities! You will love this quiet neighborhood with shops & restaurants within 2 blocks, including Sprouts & Starbucks. Home is being sold AS-IS.

Listed by Nick DiPasquale for West + Main Homes. Please Contact Nick for current pricing + availability.

 

Have questions?
West + Main Homes
(405) 652-6635
hello@westandmain.com

Presented by:
Nick DiPasquale

720-745-2722

nick@picknickforrealestate.com

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