Polishing the Crystal Ball: Real Estate in 2018

Whether you’re planning to become a home buyer in 2018 or hoping to sell your current property, it can be hard to forecast the way the real estate market will go. Here are some trend predictions, gathered from several sources, which maydominate in 2018:

A recent report from the Urban Land Institute and PricewaterhouseCoopers brings good news: the usual boom-and-bust cycle isn’t behaving typically, so what could have been a bust may be a gentle downturn instead.

Smartcitiesdive.com, which highlighted elements of the PWC/Urban Land Institute report, suggests the real estate industry has begun to take an interest in a new generation.

This is not to detract from the importance of millennials who, incidentally, are expected to become more interested in purchasing a home in 2018 than in previous years. A new generation, “Gen Z,” is indicating an even stronger interest in becoming homeowners at an earlier age than their millennial counterparts. Born after 1995, Gen Zers are enthusiastic about fixer-uppers and do-it-yourself projects and may lead the way in gentrifying distressed urban neighborhoods.

The Internet of Things is changing everything, so why not real estate? Smart home automation is driving the industry to incorporate the latest tech in new home builds and attract tech-savvy buyers by focusing on tech amenities in listings. The PWC/Urban Land Institute report suggests the industry has been lagging behind, technologically speaking, so 2018 may well be the year of the high-tech home.

Little is known yet about the economic and political factors affecting the industry across North America.

Notes Smart Cities Dive: “A number of other changes potentially arriving in 2018 – such as tax reform and interest rate hikes – also could affect the real estate market and cities’ development.

However, none of the known factors appear drastic enough to derail the market’s long glide and instead send it into a nosedive.”

Gardening Can Be a Bed of Roses: Try These Tips

Dreaming of a bed of roses or rows of tasty tomato plants is easy; the reality may feel like a nightmare, particularly to first-timers.

If you’re planning on seeing whether your thumb is green this summer, note that gardeners are just as varied as gardens, and even those who grew up surrounded by high-rise buildings can nurture something from a plot of earth.

You don’t even need your own backyard; thanks to locavores, the local food movement is spawning community gardens galore.

Before you take that first step, read gardening blogs and books. Talk to gardeners. Learn from them. Then check out these DIY tips:

Know your space. Gardens can occupy most of a backyard or a square-foot box. Consider where you’ll plant. Walk around your yard at different times of day so you can see what areas get the most shade, and when.

Make sure you have the necessary materials. Have water buckets and/or a hose that’s long enough. Invest in good tools and the space to store them.

A word about water. Many areas in North America are suffering from serious drought conditions, while others have the opposite problem: too much water. Both issues shape the way individuals on this continent garden today.

Know your soil. Different plants grow better in different soil types. It’s important to know the pH level of your soil. You can purchase a home test, or you can submit soil samples to a lab and have experts look at it.

Know your strengths. Gardening takes time. For some, weeding, watering, pruning, and keeping your plants safe from insects and animals is part of the joy of gardening. If all that seems like drudge work, you may have to accept that gardening isn’t for you.

Know your plan. Successful gardeners plan ahead. During June, for example, you need to plant fast-growing summer annuals and heat-tolerant vegetables that can endure hot summers.

Homeowners Ramp Up Spending on Remodeling

Remodeling is back in fashion – as many discovered during this spring’s Kitchen and Bath Industry Show. Attendance at the Las Vegas show increased to more than 30,000 visitors, a jump of 145 percent over 2012 figures.

According to recent U.S. Census Bureau data, American consumers increased spending on their homes by 3.1 percent in 2013, compared to 2012, and spending on remodeling now totals $130 billion. BuildFax, which tracks industry activity, notes that remodeling permits have risen by 5.1 percent over 2012.

Homeowners are growing increasingly confident about the future as the equity in their homes increases. Plus, we’re finding it easier to obtain home equity loans. Home-equity lending – which reached a 10-year low point in 2010 – was up by 18 percent last year to $123.4 billion, as estimated by Moody’s Analytics.

Quoted in a Wall Street Journal article, “Americans Boost Spending on Remodeling,” Joseph LaVorgna, chief U.S. economist for Deutsche Bank, notes: “If home prices are going up and people have more equity in their home, things like remodeling and refurbishment will do well, because it’s effectively the way of playing the reinvestment game.”

While some are reinvesting, others are sprucing up their homes to sell. Both kitchen and bath remodels are popular ways to increase the value of homes (as well as their asking price). It’s also worth noting that many of today’s projects are significant – going well beyond changing up spaces with a splash of paint and new flooring or countertops.

As the American Institute of Architects’ most recent Home Design Trends Survey indicates, most of the renovation projects completed or underway are kitchen focused. Remodelers say that kitchens are now the center of the home, and computer areas are being added to cooking spaces, along with recharging stations.

Finally, it seems size matters; 89 percent of architects reported that kitchen projects were either “stable” or “increasing” in size.

How to Ensure Your Home’s Safety During Showings

When you’re selling your home, your agent doesn’t just put up a sign: There are procedures involved in showing your home. And that means both sellers and agents have responsibilities.

While it’s the real estate professional’s responsibility to ensure the safety and privacy of the home, it’s the seller’s responsibility to make it easy for agents to show it. The lock box (also called key box) facilitates this.

The lock box is an indispensable tool that makes it easier to show the home and affords access whether or not the seller is present.

That means that when the seller agrees to allow a lock box on the residence, he or she is not only trusting their agent, but agents from other offices who are members of the Multiple Listing Service (MLS), and who will be showing the home to their clients.

Through MLS instructions, the listing agent should tell “cooperating” or “buyer” agents how to enter and show the property. It’s up to these cooperating agents to be courteous to the sellers by following the instructions. As well, the high-tech lock box enables the homeowner to know when the home has been accessed, so both agent and seller will be able to follow up should the rules not be followed.

Occasionally, the listing agent fails to include showing instructions and, since the key box is not an open invitation to inspect the property without first checking these instructions, it’s essential that the “cooperating agent” contact the listing office broker for permission and instructions.

Save Your Big Investment From Big Trouble

For six years, Sydney Walters wondered why his home was so hot in summer and so cold in winter. And why his family developed allergies and asthma.

There was a reason for that: When Walters purchased the home from its original owners, he hadn’t hired a home inspector. That home inspection could have revealed that the home’s attic had no insulation – resulting in wild temperature fluctuations and mold.

Buying a home is often the biggest investment a family can make. While you may not want to spend extra money, a home inspection can reveal a host of problems needing repair. Without it, your big investment is vulnerable to big trouble.

According to associations of home builders, a typical home inspection will include examination of a home’s heating and central air conditioning systems, plumbing and electrical systems, roof, attic and visible insulation, foundation, and structural components.

It should be done by a certified professional who can spot things an untrained eye may not.

When choosing among home inspectors, be sure to look at their credentials and certifications. They should be members of a professional association of home inspectors.

The cost of a home inspection varies and can be based on such factors as the size and age of the home.

While incurring an additional cost during the home buying process is frustrating, it can save you thousands of dollars by alerting you to areas of concern and give you much needed peace of mind that your big investment won’t cause you big trouble.

Housing Sector Still Contributing in a Big Way

If you’ve purchased a home recently or intend to purchase soon, you may not realize you’re part of a vast industry that has made a significant contribution to the North American economy.

Consider the following from an April 2012 report by the National Association of Realtors® (NAR):

“Research has consistently shown the importance of the housing sector on the economy and the long-term social and financial benefits to individual homeowners. The economic benefits of the housing market and homeownership are immense and well documented. The housing sector (in the U.S.) directly accounted for approximately 15% of total economic activity in 2011.”

That includes such things as mortgage lending; home construction; real estate agents’ commissions; lawyers’ fees; and home appraisal costs, as well as moving costs. And the sector generates taxes and other forms of income for government at all levels.

But the housing industry also produces economic ripples that extend well beyond the home purchases and related expenses. Real estate transactions create jobs and economic growth in a number of sectors you might not even consider.

A NAR study on the economic impact of real estate in Oregon tells the tale: For every house sold in the state in 2011, there were additional expenditures on consumer items, such as furniture, appliances and paint, totaling $5,234. An Oregon home priced at $229,500 had a total economic impact of $67,003.

When you consider the number of homes sold across North America, you realize the numbers of manufacturers, suppliers of goods and services, tradespeople and sales forces that are dependent on the housing industry. The industry remains one to be reckoned with.

Naysayers notwithstanding, it will continue to be so. Even now with housing markets in flux, homeownership remains ingrained in our psyche. The North American dream is still very much a reality for many people.

Ask the Agent: This Month’s Question

What things concern sellers most about the selling process?

As a seller you are often told to consider buyers’ concerns when placing your home on the market. And that makes sense. But you also have concerns, and they’re not about renovations.

A recent survey found many sellers are more concerned about understanding the legal documents and processes involved in selling their homes than they are with their homes’ physical appearance. Unlike the quick-fix decorating solutions offered on TV shows, legalese is confusing and overwhelming.

Your listing agent will likely recommend an experienced real estate lawyer to provide these answers.

Real estate agents can help address your other concerns, such as the state of the current real estate market. Like the lawyer who can explain complex legal documents, your agent can demystify the real estate market.

 

Trust Your Agent to Negotiate a Win-Win Deal

You’re about to make one of the most important purchases of your life – a home for you and your family. But here you are, handing over those all-important home purchase negotiations to your real estate agent.

Relax. Your negotiations are in good hands.

Strong negotiating skills are among the many reasons you use an agent. He or she has been specially trained in negotiations and has many years of experience putting this training into practice.

Here are some of the reasons you should trust your agent to bargain on your behalf:

  •  While your agent wants to make the best deal possible for you, he or she knows that, by definition, negotiating requires some compromise to make it work. (For example: “Give on the price, we’ll loosen our demands for a 30-day close.”) Both parties should emerge from negotiations feeling they’ve gotten a good deal – a win-win.
  •  The adage that everything is negotiable in real estate isn’t necessarily true. You don’t want to go for everything, because you may end up with nothing. Your agent will decide what mountains to die on according to your priorities. And let’s face it – that refrigerator you want but the seller won’t surrender, probably doesn’t qualify as that mountain.
  •  Your agent has the experience to correctly size up the seller, which can give you a major advantage during negotiations. Is the seller motivated and prepared to give concessions, or are there other offers waiting in the wings?
  •  Most important, your agent negotiates based on facts, not emotion. He or she can table a home inspector’s report proving that repairs are needed without recriminations and present stats to support your offer without arguing over value.

So you can relax; your agent’s negotiating skills will get you that deal. And chances are it will be a win-win.

Impress Buyers:Feng Shui Brings Harmony Home

Want to infuse your home with energy to make it attractive to buyers? Why not consider feng shui – an ancient Chinese science that focuses on creating harmony and maintaining balance so energy flows well through your house.

You can’t control everything (such as the view from your backyard) but a tidy property will stand you in good stead. Most important, keep your house well-lit and clutter-free.

These tips may impress buyers looking for good feng shui:

  •  Invest in your front door – where energy enters the home. Remove distractions leading up to it, such as garbage cans and scruffy planters. Make sure door decorations fit the season. Paint the door in fire (reds and oranges) or wood (greens, browns) colors. Maintain hardware. And address squeaking hinges.
  •  Focus the energy in the main entrance. Create a focal spot but keep it simple, such as a table with flowers nicely arranged in a vase or a colorful rug. Never put a mirror facing the front door. If you can’t remove it, put a plant in front of it.
  •  Keep the energy flowing in each room. For the kitchen, this means good light; paint it yellow. In the bedroom, keep beds away from doors and windows and make sure they have lots of space around them.

Need more help? Call a feng shui master to help you determine if the house you want to sell – or buy – is harmonious and balanced.

Save Your Big Investment From Big Trouble

For six years, Sydney Walters wondered why his home was so hot in summer and so cold in winter. And why his family developed allergies and asthma.

There was a reason for that: When Walters purchased the home from its original owners, he hadn’t hired a home inspector. That home inspection could have revealed that the home’s attic had no insulation – resulting in wild temperature fluctuations and mold.

Buying a home is often the biggest investment a family can make. While you may not want to spend extra money, a home inspection can reveal a host of problems needing repair. Without it, your big investment is vulnerable to big trouble.

According to associations of home builders, a typical home inspection will include examination of a home’s heating and central air conditioning systems, plumbing and electrical systems, roof, attic and visible insulation, foundation, and structural components.

It should be done by a certified professional who can spot things an untrained eye may not.

When choosing among home inspectors, be sure to look at their credentials and certifications. They should be members of a professional association of home inspectors.

The cost of a home inspection varies and can be based on such factors as the size and age of the home.

While incurring an additional cost during the home buying process is frustrating, it can save you thousands of dollars by alerting you to areas of concern and give you much needed peace of mind that your big investment won’t cause you big trouble.

‘Convergence’ Is Shaping Urban America

A swing toward urbanism is shaping “Big City, North America.”

It’s those darn demographics again. Only this time it’s not just a baby boomer thing; it’s what some experts are calling a “convergence” between boomers and millennials, also called “Generation Y” and born between 1981 and 2000.

In their home searches, empty-nester boomers are looking for smaller houses in centrally located neighborhoods within walking distance of everything.

Meanwhile, Gen Yers simply prefer the urban lifestyle. The result is an influx of buyers to downtowns and away from suburbia.

The heightened demand for these urban neighborhoods is exceeding supply. In some cities, a rental boomlet is under way, as Gen Yers are finding the urban lifestyle they want in rental apartments and condos.

Size matters, too. Both boomers and Gen Yers are finding that small is beautiful, purchasing smaller urban properties with postage stamp-sized yards or tiny downtown condos with expansive views.

The urban lifestyle also has some new fans: Single women now represent 21% of U.S. first-time buyers compared to 12% for single men, according to a survey by the National Association of Realtors.

The full impact of the new urbanism has yet to be felt.

But it’s a good bet it will change the shape of cities – and suburbs – for some time to come.

How to Leap Those First-Time Buyer’s Hurdles

First-time home buyers have plenty of obstacles to overcome.

There is an intricate maze of details that need to be carefully navigated.

Following are five obstacles that first-time buyers have to overcome when looking to buy a home:

Down Payment:

Saving enough for the down payment is not sufficient. Closing costs must also be considered. Closing costs are additional fees such as the lawyer’s fees, escrow charges, appraisal fees, financing fees and utility adjustments. A good rule of thumb is 2% of the purchase price will cover the closing costs. So for a $200,000 home with a 5% down payment, you would require $14,000 to cover both the down payment and closing costs.

Mortgage Preapproval:

Many first-time home buyers overlook the preapproval process. This mistake can cost you your dream home. Visit a mortgage professional to see what kind of mortgage you qualify for and closely examine the actual cost of the money you must borrow to purchase a home.

Use a Real Estate Agent:

Some home buyers think they can go it alone. Buying a home is a complex legal process, and buyer representatives have the knowledge and know-how to make your home-buying experience a happy one.

Know the Difference Between What You Need and What You Want:

It is fine to dream big, but the home-buying process can be very frustrating when you have a $200,000 budget and $500,000 taste. It is essential to the buying process to identify what your home must have and what you would like it to have.

Believe in Yourself:

It seems that when you are buying your first home, everyone has an opinion about the purchase. This can be confusing because unsolicited advice clouds your decision. Believe in your ability to assimilate the facts, look at the property and decide what to buy.

 

Selling Your Home? Here’s How to Make it Lovable

Today’s buyers love vibrant red and orange accent walls, usually in contrast to earth-toned neutrals. They also love stoves with super-quiet exhaust fans, kitchen islands, and recessed lighting combined with hanging pendant fixtures.

In the bathroom, they love glass and stone finishes with brushed nickel faucets and floating vanities. And don’t forget the open floor plans that blend kitchen, dining room and family room into a single open space. Seducing today’s buyers is almost a necessity in today’s real estate market. But how far should you go to cater to buyers’ wants?

It depends. Unless you’re selling a luxury property, you don’t have to buy a professional-grade stove. However, you may want to consider trading your outdated avocado appliances for stainless steel and buying an inexpensive island on casters to make the kitchen feel more modern.

Kitchens and bathrooms sell houses, so it makes sense to spend the majority of your renovation dollars to upgrade these spaces. In the bathroom, new fixtures, a soft color for the walls and sconce lighting will make a world of difference. Add fluffy white towels, flowers and candles, and you have a spa that buyers will love.

A fresh coat of neutral paint is always a cost-effective solution. And an accent wall can make a space look bigger, warmer and more up to date.

Carpeting is out and exotic woods and travertine floors are in. However, your buyers will likely be as impressed with less-expensive flooring options.

 

How to Help Your Agent Sell Your Home Quickly

While your real estate agent may be working flat out to sell your home, you – as the seller – also have an important role to play.

It’s up to you to prepare your home for sale.

While your real estate agent may suggest, recommend and even cajole, selling your home is your job, and no one else can do it for you.

You have only one chance to make a first impression.

It’s so true.

A recent survey indicated that more than 60% of buyers knew the property was for them the minute they walked in the door.

So make sure you put a lot of your effort into that first impression.

Cut the grass or shovel the snow to make it easy to get to your front door.

Repair stairs and railings and remove all the usual clutter.

For a great first impression, paint the front door a color that coordinates with your trim and add new hardware.

De-clutter the foyer and make it a grand entrance. A mirror over a hall table reflects light and gives your entrance a finished look.

In the living areas, remove some of your furniture and paint the walls a neutral color to give them a spacious feel. Use lighting, even in the daytime, to brighten dark corners. In the bedrooms, organize your closets to make them seem roomier.

Kitchens and bathrooms can sell – or not sell – your home. If you can afford it, replace outdated appliances and fixtures. If you can’t, go for a good first impression with uncluttered, sparkling-clean counters.

In the bathroom, new fluffy towels and accessories may help visitors overlook the dated vanity.

While it’s listed, your home should always be kept clean, tidy and smelling fresh. Help your real estate agent and you’ll find that between the two of you, 60% of buyers may just find your house is “the one.”

Five Ways to Take Advantage of a Down Market

Real estate remains a bargain in much of the United States. For many home buyers this is the ideal time to jump into the housing market with a long-term investment strategy. Following are five tips to help you take advantage of a down market.

Use a Buyer’s Agent: A buyer’s agent can help you navigate a rapidly changing marketplace and let you know how to maximize your real estate dollar.

Get Preapproved for a Mortgage: Sitting down with a mortgage professional before you begin your search will help refine what you are looking for. This will allow you to set your budgets and narrow your search criteria. Note that a mortgage prequalification is not the same as a preapproved mortgage.

Make a List of Your Needs and Wants: Understand what you need and what you want. Wants are the things you can live without but you would like. Sitting down with your real estate agent will help speed up the home-buying process.

Invest for the Long Term: Buying in a down market offers affordable prices and greater home selection. Long-term investment in real estate is the surest way to maximize your initial investment.

Be Patient and Ask Questions: Down markets allow home buyers to be more patient. Surplus housing inventory means that there are fewer buyers competing for homes, allowing buyers to ask questions and ensure that they are selecting the home that is going to be right for them.

With real estate bargains in much of the United States and with market improvement across the country, this is the ideal time to jump into the housing market.

Why It Pays to Use a Buyer’s Agent

These days, a click of the mouse can open a world of dream homes to you.

But when you’re facing down a determined seller or trying to figure out what to offer, it literally pays to have a buyer’s agent on your side.

Real estate is all about negotiation.

On one side there’s the seller and his or her listing agent, who is bound by a legal agreement to represent the seller’s interest.

On the other side is the buyer – you – who wants to walk out a winner,

having paid a price you’re comfortable with for a home you love.

To get there, you’ll need comparables to establish a fair price; an educated perspective on the local real estate market; connections to home inspectors, lawyers and mortgage brokers; and someone who is bound by a legal agreement – a buyer’s agreement – to represent your interests and yours alone.

That would be the buyer’s agent. He or she puts you on level ground with the seller.

In tough negotiations with multiple offers, you need someone who will advise on strategy and is required by law to treat everything you share in confidence.

In “as is” situations or home inspections that turn up expensive surprises, you need a professional to advise you.

Even when things are going smoothly, another perspective is often important.

An agent can also negotiate unemotionally and professionally on behalf of the buyer.

Effectively, your buyer’s agent is your new best friend. Don’t leave home without one.

Selling a Property Quickly? What You Should Do

If you’ve just purchased your dream home and have to sell it because you’ve been transferred to another city or you’re overmortgaged and sinking fast, there are a few things you should not do.

First, don’t go it alone. Second, be careful not to overprice your home.

Sellers are often tempted to sell their homes themselves, particularly if money is tight.

It’s best to resist the temptation, though, especially if you are in a hurry to sell a home.

It’s a fact that homes that are sold by their owners often take longer to sell than those sold through a real estate agent.

As well, selling yourself takes up a lot of your valuable time.

And time, as they say, is money.

Overpricing is the main reason many homes are slow to sell.

Sellers often have an exaggerated idea of their home’s value.

They may be blind to its faults and overestimate its good points.

For a reality check, visit neighborhood open houses.

It’s also wise to review local listings for prices of similar homes in your area.

Your best bet to move that house quickly is to find a local real estate agent who can bring special expertise about your neighborhood.

Such an agent will have networks of contacts who may be looking for properties in your area.

Sellers should listen to their real estate agent.

The agent will know the comparables and be able to advise you on changes that could make the property more salable.

The real estate agent will also study comparable properties to establish the true value of your home.

That way you can price it correctly and develop a marketing strategy that will work for you.

Should You Make Those Repairs Before Selling Your Home?

Just how much should you invest in repairs to sell your home?

It comes down to how desperate you are to sell and what changes are needed.

Significant structural problems or major electrical or plumbing repairs must be disclosed to potential buyers. If you are unaware of these problems and they are discovered during the home inspection, they will have to be fixed at your expense or you’ll have to hand over an equivalent amount to allow the buyers to fix them themselves.

So if you are aware of significant repairs that need to be made, why not avoid the hassles and fix them before the “for sale” sign goes up?

For less significant changes, you can make repairs. But be aware you won’t necessarily recoup your investment. Don’t overspend. Many an unwary homeowner has made changes that effectively price him or her out of the neighborhood, meaning it’s become a good house in a poor neighborhood.

Buyers looking in the area may not be prepared to pay for state-of-the art windows or a slate roof. They may be impressed, however, by an uncluttered home with a fresh coat of paint.

Alternatively, you can decide not to make changes, betting that your proximity to transit or a deck with a hot tub will sell your house despite its flaws.

If this sounds good, be prepared to wait for a buyer who wants a fixer-upper.

And be aware that in its current condition, your house won’t go for top dollar – even to do-it-yourselfers.

How to Bargain for a Lender-Owned Property

There are bargains to be had in today’s depressed housing market. When buying a lender-owned property, though, you need to be especially savvy to come up with an offer that will satisfy the beneficiary bank or agency. First, be aware that lenders are anxious to sell what is now a nonperforming asset. They also don’t want to lose much on the deal. That means you’ll have to submit a particularly well-thought-out offer on a real-estate-owned home. Following are strategies to consider:

  • Ask your buyers’ agent to find out the bank’s purchase price for the property. Offer an amount that is between the balance owed on the mortgage and the sale price.
  • A little research goes a long way. Your agent can look at sales of similar properties in the neighborhood over the past few months as a way of assessing the value of the property.
  • Consider the competition. Other potential buyers of your property will likely base their offers on active listings. Stay current with prices of advertised homes in the same neighborhood, add a few extra dollars and beat out your competitors.
  • Get preapproved by your lender of choice, but also get a preapproval letter from the lender’s own company. This is a simple way to establish your credentials. A bank will be less inclined to trust a competitor’s approval than one from its own mortgage department.
  • Be prepared to do fix-ups yourself. Even if a real-estate-owned home is not sold “as is,” don’t ask the lender to make repairs in the initial offer. It likely will send your offer to the bottom of the pile.

Even if it is your dream home, don’t get emotional. View your offer on a “bargain” home as a transaction. Save the self-congratulations for closing.