Category: Real Estate

4 Common Furniture Layout Mistakes | Realtor Magazine

The way the furniture is positioned in a room can have a big impact on how prospective buyers perceive the space. Apartment Guide recently highlighted some of the most common layout mistakes that designers see in a space. Here are four mistakes to avoid.

Placing furniture against the walls.“Not all furniture pieces need to go against a wall,” says Tammy Price, an interior designer and owner of Fragments Identity in Los Angeles. “Actually, you can create a very cozy space by building it out into the center of the room.” Designers recommend moving anchor pieces, such as sofas and chairs, away from the walls.

The rug is too small. “Make sure at least the two front feet (if not all four) of your pieces of furniture are on the area rug,” says Liz Toombs, owner of PDR Interiors. Too small a rug can ruin the rest of the layout of the room.

The dining room table is too big. Remove a table leaf if you can to get the proportions of the table to work better in a space, or “if you have a dining or eating table that is scaled too large for a space and gives you little room or not enough space for dining chairs, consider using benches for seating,” Price recommends. The bench can slide underneath the table so it doesn’t take up too much floor space.

Covering up the windows. Try to find a way to position pieces so they don’t cover up the windows. The more natural light that can flow into the space, the more open it’ll feel, designers say. “Look at sofas with low arms or no arms at all,” Toombs told Apartment Therapy. “It will help to make your room look bigger.”

Study: It Costs Sellers More to Work With iBuyers | Realtor Magazine

Home sellers who choose to sell directly to an iBuyer often end up paying higher fees than if they sold the traditional way with a real estate agent, according to a new study by Collateral Analytics, a real estate analytics firm.

iBuyers provide instant cash offers and quick closings, perks that are hard for sellers to ignore. Transactions involving iBuyers have been growing at a clip of more than 25% annually in recent years. But how profitable is it for sellers who choose this expedited route to a sale? The answer hasn’t been clear since iBuyers first surfaced in 2014 with the launch of Opendoor.

‘You Can’t Afford to Ignore iBuyers’

Collateral Analytics, in a white paper, looks to quantify the costs to sellers of working with iBuyers versus taking the traditional route of working with a real estate professional. Researchers estimate that sellers end up paying between 13% to 15% more when working with iBuyers. The percentage reflects differences in traditional real estate agency fees, as well as an allowance iBuyers often request for repairs and an additional 3% to 5% to cover the iBuyer’s liquidity risks and carrying costs. “Most iBuyers will inspect the home, assess a generous home repair allowance, and negotiate (an additional) credit to handle such repairs,” the Collateral Analytics report notes.

However, some iBuyers take on other costs that most traditional buyers wouldn’t. For example, companies such as OfferPad offer to pay the costs of a seller’s move up to 50 miles away. iBuyers may also allow a grace period after closing for the seller to vacate the property.

The chart below from Collateral Analytics shows quarterly median purchase prices on a per-square-foot basis for single-family homes in Phoenix bought by iBuyers and traditional buyers. The lion’s share of iBuyer transactions nationwide occur in Phoenix.

 

© Collateral Analytics

 

The report also notes that the iBuying model could make properties vulnerable to several financial risks, such as the use of automated valuation models that could inflate property values. Also, properties remain empty while in the possession of iBuyers, which could make the homes vulnerable to theft and other criminal activity.

Wall Street has been betting big on iBuyers in recent years. Opendoor has reportedly raised at least $1.3 billion and purchased more than 10,000 homes in 2018—three times that of its closest competitor, OfferPad. More real estate brokerages are launching their own iBuying models, including Keller Williams, Coldwell Banker, and Redfin. “For some sellers needing to move or requiring quick extraction of equity, this is certainly worthwhile,” according to the research paper. “But what percentage of the market will want this service remains to be seen.”

Your Buyers Might Not Face Bidding Wars This Year | Realtor Magazine

Bidding wars are growing a lot less common, real estate pros report. By one measure, only 11.2% of offers written by Redfin real estate agents for their clients faced a bidding war in July—down more than 45% from a year earlier. That is also the lowest rate since at least 2011.

Bidding wars have been gradually lessening in the housing market since peaking in March 2018, where 59% of real estate professionals reported competition in offers. Since November 2018, the bidding war rate has not surpassed 15%, Redfin reports.

“Mortgage rates have been mostly flat for the last month, and so has the home buyer competition, which was beginning a fast descent this time last year as mortgage rates were inching toward 5 percent,” says Daryl Fairweather, Redfin’s chief economist. “On a local level, it’s noteworthy that some of 2018’s fiercely competitive markets—San Jose, Seattle, Los Angeles—have seen their bidding war rates plummet the most year over year. Home prices in these expensive markets have also been falling annually.”

Overall, Fairweather predicts homebuying demand to strengthen in the second half of the year and the housing market to continue to stabilize. “But we may not see a big pop in bidding wars until early next year,” she adds.

While the numbers are down from a year ago, the following markets saw the highest number of bidding wars in July, according to Redfin’s index:

1. San Francisco: 35% (down from 72.4% a year ago)
2. San Diego: 21.3% (down from 61.5% a year ago)
3. Boston: 16.4% (down from 63.6% a year ago)
4. Los Angeles: 16% (down from 64.6% a year ago)
5. Philadelphia: 14.3% (down from 36.7% a year ago)
6. Denver: 14% (down from 48.8% a year ago)
7. Phoenix: 13.6% (down from 47.6% a year ago)
8. San Jose: 13.3% (down from 80% a year ago)
9. Sacramento, Calif.: 9.4% (down from 39.2% a year ago)
10. Washington, D.C.: 9.1% (down from 40.1% a year ago)

Americans Have Never Felt This Good About Real Estate | Realtor Magazine

Fannie Mae’s Home Purchase Sentiment Index surged to a new high as consumers became more upbeat about buying and selling, mortgage rates, and their jobs. Five of the six components measured by the index rose month over month.

“Consumer job confidence and favorable mortgage rate expectations lifted the HPSI to a new survey high in July, despite ongoing housing supply and affordability challenges,” says Doug Duncan, Fannie Mae’s senior vice president and chief economist. “Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category. However, recent financial market events following when the survey data were collected could weigh on consumer views looking ahead.”

Overall, the HPSI, based on a survey of 1,000 Americans, rose 7.2 points compared to a year ago to a record-high reading of 93.7 in July. Here are some highlights from the index’s latest readings:

• Buying: The net share of Americans who said now is a good time to buy a home rose 3 percentage points from June to 26%, up 2 percentage points from a year ago.
• Selling: The net share of consumers who say it’s a good time to sell rose 1 percentage point to 44%, up 3 percentage points from a year ago.
• Home prices: The share of Americans who say home prices will go up over the next 12 months fell 1 percentage point to 37%, down 2 percentage points from a year ago.
• Mortgage rates: The share of consumers who believe mortgage rates will drop over the next year rose 1 percentage point and is up 24 percentage points from a year ago.
• Job stability: Americans are more confident about their job situation, with the share who say they’re not concerned about losing their job over the next year rising 8 percentage points to 81%. This is up 16 percentage points from a year ago.
• Household incomes: The share of Americans who say their household income is significantly higher than 12 months ago rose by 1 percentage point to 21%, essentially unchanged from a year ago.

The Top Delays on the Road to the Closing Table | Realtor Magazine

Overall, the majority of contracts continue to be settled on time. Seventy-six percent of contracts made it to closing as scheduled from April to June, according to the REALTORS® Confidence Survey, based on responses from more than 4,000 members. Twenty percent of contracts saw a delay, while only 4% were canceled altogether.

The top contract problems causing a delay of settlements in June included:

1. Issues related to obtaining financing: 35%
2. Appraisal issues: 25%
3. Home inspection or environmental issues: 16%
4. Titling and deed issues: 9%

The majority of contracts—78%–faced a contingency in making it to closing, according to the survey. The most common contract contingencies were for home inspections (60%), obtaining financing (48%), and an acceptable appraisal (47%).

Twenty percent of home sellers offered incentives to buyers to close the transaction. The top incentives offered were paying for closing costs (11%) and providing a warranty (8%).

Mortgages Haven’t Been This Cheap Since 2016 | Realtor Magazine

© REALTOR® MAGAZINE

 

The 30-year fixed-rate mortgage averaged 3.60% this week, the lowest average since November 2016, Freddie Mac reports.

“There is a tug of war in the financial markets between weaker business sentiment and consumer sentiment,” says Sam Khater, Freddie Mac’s chief economist. “Business sentiment is declining on negative trade and manufacturing headlines, but consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 8:

• 30-year fixed-rate mortgages: averaged 3.60%, with an average 0.6 point, falling from last week’s 3.75% average. Last year at this time, 30-year rates averaged 4.59%.
• 15-year fixed-rate mortgages: averaged 3.05%, with an average 0.5 point, falling from last week’s 3.20% average. A year ago, 15-year rates averaged 4.05%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.36%, with an average 0.3 point, down from last week’s 3.46% average. A year ago, 5-year ARMs averaged 3.90%.

NAR: Home Prices Post More Gains in Second Quarter | Realtor Magazine

Home prices in the second quarter continued to rise in the majority of housing markets across the country. Ninety-one percent of 178 metros tracked saw home price gains in the second quarter, according to the latest report from the National Association of REALTORS®, released Wednesday.

5 Priciest Markets in Q2

1. San Jose-Sunnyvale-Santa Clara, Calif., metro area: $1,330,000 (median existing single-family price)
2. San Francisco-Oakland-Hayward, Calif.: $1,050,000
3. Anaheim-Santa Ana-Irvine, Calif.: $835,000
4. Urban Honolulu, Hawaii: $785,500
5. San Diego-Carlsbad, Calif.: $655,000.

5 Lowest Cost Markets in Q2

The five least expensive metro areas in housing in the second quarter were:

1. Decatur, Ill.: $97,500
2. Youngstown-Warren-Boardman, Ohio: $107,400
3. Cumberland, Md.: $117,800
4. Binghamton, N.Y.: $119,300
5. Elmira, N.Y.: $119,400.

The national median existing single-family home price was $279,600 in the second quarter, up 4.3% from a year ago. Ninety-three of the 178 metros tracked saw price growth of 5% or more. Ten metro areas posted double-digit increases, mostly in more modestly priced markets like Boise City-Nampa, Idaho; Abilene, Texas; Columbia, Mo.; Burlington-South Burlington, Vt.; and Atlantic City-Hammonton, N.J.

Tight inventory conditions, particularly at lower price points, are prompting home prices to accelerate in several markets, notes Lawrence Yun, NAR’s chief economist.

“Housing unaffordability will hinder sales irrespective of the local job market conditions,” Yun says. “This is evident in the very expensive markets as home prices are either topping off or slightly falling.”

In high-priced metro areas where the median home prices were $500,000 and higher, the single-family median prices fell when compared to a year ago, according to NAR. For example, the most costly area, San Jose-Sunnyvale-Santa Clara, Calif., posted a 5.3% drop. San Francisco-Oakland-Hayward, Calif., saw a 1.9% decrease in prices.

Home Sales Should Improve But …

Yun says home sales should be higher, but he is cautioning that greater economic uncertainty could hinder business.

“The exceptionally low mortgage rates will help with housing affordability over the short run,” Yun says. “But if the low interest rates are due to weakening economic confidence, as reflected from a correction in the stock market, then the low rates will not help with job growth and will eventually hinder home buying and home construction.”

Yun: Stock Volatility Signals What Could Come Next

Housing affordability is declining, despite recent progress in wages, NAR’s report notes. National family median incomes rose to $78,366 in the second quarter. However, greater home price growth contributed to an overall decrease in affordability compared to the last quarter. For instance, a home buyer making a 5% down payment would need an income of $62,192 to purchase a single-family home at the national median price, while a 10% down payment would require an income of $58,918, and $52,372 would be required for a 20% down payment.

 

© National Association of REALTORS®

 

 

What to Do Before the Movers Show Up | Realtor Magazine

Working with professional movers doesn’t mean the homeowner can escape the entire process. Homeowners will still need to prep the house for the moving company before they arrive to pack them up. Realtor.com® recently highlighted several of the items homeowners should do before the moving company arrives, including:

Protect your floors.

To help avoid damage to the house, remove anything fragile that could be in the path as furniture and boxes get moved. “Lightbulbs, fixtures, pictures, mirrors, wall hangings should be removed from the main areas where furniture will be moved,” Pat Byrne, operations manager of Moving Ahead Moving & Storage, a Long Island–based moving company, told realtor.com®.

Notify the movers about any hardwood flooring. “If you have hardwood floors or tile in any rooms, let your movers know ahead of time so they can prepare the right materials—and make sure your contract includes hardwood floor protection,” Miranda Benson, marketing coordinator at Dolly, a San Francisco–based moving company, told realtor.com®.

10 Ways to Make Moving Easier

A Moving Guide for Your Clients

Make a clear path.

Make the movers’ job easier and think ahead to a variety of potential obstacles on moving day. For example, consider the parking situation outside your home. Where can the movers leave their truck when packing up? “If you live in an apartment building or if there is limited parking in your area, ask the movers if they will handle the logistics or if you need to do so,” suggests Ali Wenzke, author of The Art of Happy Moving. You may even need the local city government to get involved to get appropriate signage and allowances. Also, ensure that the driveway and front access points of the home are clear of any debris, such as kids’ toys, or anything that could pose a slip hazard, Byrne says.

Be available.

Don’t supervise the mover by hovering as they pack you up, but be readily available to answer any questions. Alert the movers to anything special they should know that could impact how they move out your furniture and boxes.

“There are little things about your house that you only learn from living there: The hallway closet door never stays closed, the third step down has a slight bend, a pack of hornets tends to congregate around the back door, so use the front—these are all valuable things that make your movers’ lives easier,” Benson told realtor.com®. “On top of that, being available to answer questions, whether that’s in person or via phone, can make your move much smoother.”

3 Common Landscaping Mistakes | Realtor Magazine

Landscapers say they see homeowners repeatedly making the same mistakes in yard design, whether it’s using the wrong plants or not keeping up with maintenance. Landscapers recently shared with Apartment Therapy some of the most common yard mishaps they see, including:

Going too big. “Don’t be seduced by showy plants you see on the internet or at the nursery,” says Jenny Jones, senior landscape designer at Terremoto Landscape Architecture. “We see a lot of gardens populated with plants that are inappropriate, either because they are invasive, poisonous, or are simply out of context.” Jones cites feather grass, which can be invasive, or firestick cacti, which grow large and can overtake other plants.

Overpruning. “Pruning is an art,” Jones told Apartment Therapy. Homeowners can remove too much and jeopardize the look of their landscapes. “We cringe when we see natives sheared like boxwood, plants that are cut back so they don’t intermingle, and trees that are rudely trimmed,” Jones says. “Take your time and be thoughtful about it.”

Making it too colorful. Homeowners may want to add color to their yard, but it can be overdone. For example, landscape and interior designer Isabelle Dahlin of Dekor says using warm woods with cool stone is a big error. “People don’t think about how the stone will look,” she says. She suggests trying to keep plants to a color palette of three.

‘This Can Kill a Sale No Matter How Beautiful the Home’ | Realtor Magazine

The home may look great, but if you don’t get this one thing right, buyers won’t be buying, real estate pros say. And that all centers around the smell—the sense that too many home sellers neglect to pay attention to.

Some home sellers may be noseblind to their home’s scent, and they need the real estate professional to offer a fresh unbiased opinion.

“One of the easiest ways to evoke pleasant feelings about a space is to enhance the way it smells,” Ben Creamer, a managing broker in Chicago, told realtor.com®. “It’s often the first thing a person will notice upon entering a space—and it’s one of the things that, when done poorly, can kill a sale no matter how beautiful the home.”

To freshen up the smell, scrub all surfaces, wash all rugs, and have the carpets cleaned, suggests Barb Boehler, a real estate professional in Madison, Wis. “Until this is done, you’ll only be masking smells,” she says.

Real estate professionals offer some of the following tips:

• Clean the fridge: Clean out the refrigerator, which could be a culprit of any bad scents. Lisa Jacobs, an organizing professional and founder of Imagine It Done, suggests leaving a fresh box of baking soda on a shelf to help remove any lingering odors.
• Carpet cleaning: Carpets and rugs can be a culprit of smells. Get carpets and rugs shampooed or steam-cleaned regularly, and particularly prior to an open house, suggests Jennifer Snyder, owner of Neat as a Pin Organizing & Cleaning.
• Bake for a smell: Cedric Stewart, a residential sales consultant in Washington, D.C., told realtor.com® that he likes to take out pumpkin or banana bread from the oven prior to an open house. “This provides a great smell and treats seem to stick in the buyers’ mind after they leave,” he says. He says he’ll sometimes brew a fresh pot of coffee to go with it too.
• Use soap: Gather up all those unused bars of fancy soap over the years and place them in a pretty bowl on a bathroom counter, suggests Creamer. “It can fill a room with a remarkably clean, fresh scent for weeks,” he says. “You can even hide a bar or two in a walk-in closet to freshen the space.” Another trick to freshen up confined spaces: Use laundry dryer sheets, suggests Ben Mizes, a real estate professional in St. Louis. Tuck a dryer sheet in closets or other confined spaces to help make them smell like fresh laundry, he says.