Home buyers seeking an edge during offers are increasingly writing personal offer letters directly to the seller to try to win over their hearts. But a new article at realtor.com® calls into question whether this popular strategy works. In some cases, it may backfire, some agents say.
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Many real estate professionals still point to the advantages of an offer letter, however. For one, buyers can share their personal story in the hopes of connecting with the seller. Tracey Hampson, a real estate professional with Realty One Group Success in Valencia, Calif., told realtor.com® that she has a listing with three offers and favors the offer from a couple who shared that they’re having their first child and want to raise him in a safe neighborhood. She says she can relate, since she and her husband were in the same situation when they first moved into the home.
The personal letter can also be used to address any questions or concerns the seller may have about the buyer’s ability to finance the home. The buyer can use the letter to offer reassurance of their intention to close and get the purchase financed.
But some real estate agents say that personal offer letters can jeopardize a sale.
“There’s a belief that a letter tips the scales to the seller when negotiating the price and the inspection,” Karen Kostiw of Warburg Realty in New York City told realtor.com®. “The seller may interpret the letter as the buyers ‘showing their hand,’ and it could weaken their position to negotiate.”
Other real estate agents say they’re advising their clients not to write one for the fear that it could lead to discrimination. “Most letters consist of the buyers explaining their lives to add a touch of emotion to their otherwise dry contact, which is why it has worked so long,” April Macowicz, a broker associate and team lead at the MAC Group RE in San Diego, told realtor.com®. However, buyers may reveal personal information that could even prejudice the sellers against them.
“The Fair Housing Act states that buyers and sellers cannot discriminate on the basis of race or color, sex, religion, national origin, disability, or familial status,” Macowicz notes. But this doesn’t mean that discrimination won’t occur, she notes.
Homes near charging stations for electric vehicles command higher sales prices, according to a new analysis from realtor.com®. Researchers found that the combined median listing price for areas that are most accommodating to electric vehicles is $782,000—1.5 times more than their surrounding areas and 2.6 times higher than the rest of the country.
“Our data shows there’s definitely a link between the prevalence of electric vehicle charging stations and higher home prices,” says realtor.com® Chief Economist Danielle Hale. “But there’s a difference between correlation and causation. The trend we’re seeing in the data is most likely a result of the fact that wealthier homeowners are more likely to purchase expensive electric vehicles. But regardless of the cause, if you’re shopping for a home in a ZIP code with an abundance of electric-vehicle charging stations, you’ll likely pay a premium.”
Realtor.com® used data from OpenChargeMap to track 19,743 charging stations across 6,980 ZIP codes. They then analyzed the housing markets of the top 20 areas with the most electric vehicle charging stations. Irvine, Calif., had the most charging stations.
Existing-home sales fell 4.9 percent in March, with all four major regions of the U.S. seeing a decline, the National Association of REALTORS® reported Monday. The drop follows a surge in sales the previous month. “It is not surprising to see a retreat after a powerful surge in sales in the prior month,” says NAR Chief Economist Lawrence Yun. “Still, current sales activity is underperforming in relation to the strength in the job markets. The impact of lower mortgage rates has not yet been fully realized.”
Total existing-home sales—completed transactions for single-family homes, townhomes, condos, and co-ops—dropped 4.9 percent from February to a seasonally adjusted annual rate of 5.21 million in March. Sales are down 5.4 percent from a year ago, NAR’s data shows.
Yun notes that sluggish housing inventories and tax policy changes may also impact housing. “The lower-end market is hot while the upper-end market is not,” Yun says. “The expensive home market will experience challenges due to the curtailment of tax deductions of mortgage interest payments and property taxes.”
Here’s a closer look at some key indicators from March home sales, according to NAR’s latest housing report.
Home prices: The median existing-home price was $259,400 in March, up 3.8 percent from a year ago.
Days on the market: Forty-seven percent of homes sold in March were on the market for less than a month. Properties remained on the market an average of 36 days in March, up from 30 days a year ago.
Housing inventories: At the end of March, inventories rose to 1.68 million, a 2.4 percent increase from a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace. “Further increases in inventory are highly desirable to keep home prices in check,” says Yun. “The sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”
Cash sales: Deals in which the buyer paid cash comprised 21 percent of all transactions in March, up from 20 percent a year ago. Individual investors tend to account for the bulk of cash sales. They purchased 18 percent of homes in March, up from 16 percent a year ago.
Distressed sales: Foreclosures and short sales represented 3 percent of sales in March, down from 4 percent a year ago. One percent of sales last month were short sales.
Nearly one in four millennial buyers say they want to buy a home before deciding to tie the knot, according to a new study from LendingTree.
Young adults are getting married later in life. In 1980, the median age of a first marriage for men was 24.7 and 22 for women; by 2018, those numbers rose to 29.8 for men and 27.8 for women.
But young adults—those between the ages of 22 to 37—say they aren’t waiting on homeownership for marriage, according to LendingTree’s study of more than 2,000 adults ages 22 and older. Millennials comprise the largest share of home buyers at 37 percent, according to the National Association of REALTORS®’ newly released2019 Home Buyers and Sellers Generational Report. Over the next two years, they are expected to enter the housing market in even higher numbers, too.
More young adults believe marriage and parenthood should come after homeownership. Twenty-seven percent of millennial buyers say they are postponing parenthood until after they purchase a home, and 22 percent are waiting to get a pet until they have a home of their own.
For the third week in a row, mortgage rates inched upward, but economists were quick to reassure home buyers and potential refinancers that rates remain still remain well below year-ago averages.
“After dropping dramatically in late March, mortgage rates have modestly increased since then,” says Sam Khater, Freddie Mac’s chief economist. “While this week marks the third consecutive week of rises, purchase activity reached a nine-year high—indicative of a strong spring homebuying season.”
Freddie Mac reports the following national averages with mortgage rates for the week ending April 18:
30-year fixed-rate mortgages: averaged 4.17 percent, with an average 0.5 point, rising from last week’s 4.12 percent. Last year at this time, 30-year rates averaged 4.47 percent.
15-year fixed-rate mortgages: averaged 3.62 percent, with an average 0.5 point, rising from last week’s 3.60 percent average. A year ago, 15-year rates averaged 3.94 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.78 percent, with an average 0.3 point, falling from last week’s 3.80 percent average. A year ago, 5-year ARMs averaged 3.67 percent.
West Coast buyers are in luck: Home buyers in that region tend to stand the best chance of winning the first home they make an offer on, according to a new analysis from Redfin. San Jose, Seattle, and San Diego posted the largest year-over-year increases in the share of home buyers winning the first home they made an offer on.
thelesleyshow – Morguefile
All home buyers may be faring better on that front, though: Fifty-six percent of buyers nationwide who purchased a home in the first quarter closed on the first home they made an offer on, the highest first-offer success rate in three years, Redfin notes. Redfin researchers analyzed the home offer and purchase data for thousands of buyers who purchased homes with a Redfin agent nationwide for the past five years.
“Last year home buyers had to pull out all the stops to land a home in competitive West Coast markets, but this year there are more homes for sale and the odds are more in the buyer’s favor,” says Daryl Fairweather, Redfin’s chief economist. “In San Jose, the market has dramatically slowed from a year ago, and it’s actually now easier to get an offer accepted in San Jose than in many other parts of the country.”
For example, in the San Jose metro area, 63 percent of buyers who purchased a home in the first quarter of this year successfully purchased the first home they made an offer on. A year ago, only 25 percent of San Jose home buyers were successful with their first offers.
In San Diego, more than half—53 percent—of buyers last quarter closed on the home they made their first offer on, up from 38 percent a year earlier.
Homeowners significantly underestimate the costs involved when planning a home improvement project, finds a new study from Discover Home Equity Loans, based on a survey of 1,200 Americans.
Estimated Cost of Common Interior Remodeling Projects
Eighty-two percent of consumers believe the home they own is a financial asset, the study says. As such, they want to tackle home improvement projects to increase the value of their home even more. More than half—52 percent—of consumers say they plan to take on a home improvement project in the next year. Kitchen and bathroom remodels lead in projects. (Read more: Design TV Shows Are Inspiring Optimistic Home Renovators)
But many consumers have failed to save enough. Sixty-four percent of consumers say their home improvement project will cost under $15,000. However, bathroom remodels can cost anywhere from $19,000 upwards to $61,000; significant kitchen remodels can cost upwards to $125,000, according to the study.
Given their low estimates for projects, homeowners are falling short in paying for their projects. Only a quarter say they’ll have enough funds to cover the likely cost of the project, the study showed.
“Home improvement projects can quickly add up and oftentimes cost more than someone anticipates,” says PK Parekh, senior vice president of Discover Home Equity Loans. “Which is why people should be financially prepared and determine which payment method makes the most sense within their own financial situation.”
Homeowners differ on how they’re financing their home improvement projects. Thirty-four percent prefer to use cash for a home improvement project, followed by 23 percent who say they plan to use a credit card. Other owners say they are considering borrowing against the equity in their home, such as through a home equity line of credit (18 percent), home equity loan (13 percent), or cash-out refinance (7 percent).
House renovation and design television programs may be prompting more buyers to shed some of their fixer-upper fears. Nearly 60 percent of home shoppers recently surveyed said that home renovation television has made them more optimistic about renovations, according to a new realtor.com® survey of about 1,000 consumers who are planning to buy a home in the next 12 months.
As inventories remain tight in some markets, home buyers are eyeing properties they once cast aside to look at them under a new lens of how they could renovate it. Nearly 60 percent of the home buyers surveyed say they are considering buying a home that needs renovation, the survey showed.
“Whether it’s seeing the project unfold in a tidy 30-minute segment, or just getting inspired by the before-and-after shots, home shoppers are turning to home renovations to make their dream home when finding one as-is turns out to be difficult,” the survey notes.
Rising home prices and a limited number of entry-level homes are helping springtime home shoppers consider other homes that need renovating, says Danielle Hale, realtor.com®’s chief economist. “Replete with inspiration at their fingertips—like Pinterest, Instagram, and various home renovation TV shows—some home shoppers are comfortable tackling home renovation jobs to find a home that balances their needs with their budget,” she says.
Buyers expect their renovations to make a big difference on the value of the home, too. Ninety-five percent of buyers say they expect some home remodeling will result in a positive return on their investment. Nearly a quarter of buyers surveyed say they expect a positive return of more than 50 percent from their remodels.
They’re willing to spend the big bucks, but is it enough? Slightly more than half of home buyers who are considering a home that needs some TLC say they are willing to spend more than $20,000 on the remodel. Twenty-eight percent are willing to spend up to $10,000, and 22 percent are willing to spend between $10,001 and $20,000. However, a kitchen remodel costs around $66,000, and even a minor kitchen remodel will cost about $22,000, according to realtor.com®. A kitchen upgrade was the top home renovation project that buyers said they would consider. Other popular projects include a bathroom renovation or a hardwood flooring refinish.
Regardless if a buyer wants to DIY or not, it’s important that clients fully understand the benefits and setbacks that can come with taking on a home project, as opposed to hiring professionals to complete the task.
Architectural styles are getting mixed up in home exteriors, but a few trends are emerging. A recent article on Houzz, a home remodeling site, highlights some of the biggest trends in home exteriors, based on the most popular exterior photos uploaded to the site so far this year.
An inviting front porch can offer some nostalgia of sitting outside in a rocking chair or a porch swing, gazing upon the neighborhood. Every one of the most popular front-exterior photos uploaded to Houzz has shown off a front porch, the article notes.
This style blends traditional farmhouse architectural features—such as gabled roof lines, board-and-batten siding, and metal porch roofs—with a modern flair, such as contrasting colors and open floor plans.
Garage doors are gaining more prominence in dressing up exteriors. Opaque glass garage doors are enhancing homes, including modern farmhouse styles. When double garage doors take up most of the front of the home, a glass garage door can lighten the clunky look and offer a shiny touch.
After all, pets have a big say in real estate. Eighty-one percent of Americans say animal-related considerations play a role when deciding on their next living situation, according to a 2017 report from the National Association of REALTORS®. Eighty-nine percent of those surveyed said they would not give up their animal because of housing restrictions or limitations. Twelve percent of pet owners have moved to accommodate their animal, and 19 percent said that they would consider moving to accommodate their animal in the future. REALTORS® surveyed said that one-third of their pet-owning clients often—or very often—will even refuse to make an offer on a home because it’s not ideal for their animal.
Pet ownership is booming across the country. Seventy percent of U.S. households own pets, up from 50 percent a generation ago, according to ProShares Pet Care ETF, an exchange traded fund focused on the pet care industry. Ninety-five percent of pet owners consider their pets part of the family, according to a Harris Poll.
“Dogs are part of the family, so it’s important to factor in our furry friends when choosing a place to live,” says Daryl Fairweather, Redfin’s chief economist. “Highlighting dog-friendly amenities like a spacious yard or a mudroom for dirty paws in your listing can make it easier for buyers to find the home of their dog’s dreams.”
What are some of the top pet-friendly amenities in homes? Real Trends recently highlighted several home essentials that buyers crave for their pets: ample outdoor space, pet nooks (like a tucked away nook with a built-in bed), a pet chat system (a way to communicate with your pet from anywhere using video or audio devices), pet washing stations (like in a mudroom or laundry room), and a pet door (a door insert so pet cans let themselves out and back in).
Some real estate professionals are adopting pet-friendly niches to express their love of pets, showing off their own pets on social media or even reaching out at dog parks with treats to connect with pets and their owners.
Redfin and Rover, a networking platform for pet sitters, recently ranked the top pet-friendly cities. They analyzed data from 14,000 cities based on popularity of dog walkers and pet sitters and how frequently the word “dog” appeared in online listing descriptions of homes for sale. The top pet-friendly cities (along with cities’ most popular breeds) are:
