Talking Real Estate - May 2020

Julie M. Hesselmann

HOMESELLERS’ ADVICE

Which Rooms Should Be Counted?

There are certain rules to the marketing of real estate that are designed to prevent buyer confusion and to protect sellers from misrepresenting their properties, but sometimes real estate isn’t so black and white. Here are some areas to question.  

Additions. Added square footage such as a bumped-out first floor master or den should have accompanying building permits that have been signed off by city inspectors. This prevents you from buying a home with shoddy construction. To confirm, tax roll data should include the updates.  

Conversions. Some sellers gain more living area by converting the garage, but not all conversions are properly permitted. You may have more living space, but the loss of a garage should be reflected in the pricing.

Guest houses and garage quarters. Detached guest house or garage quarters aren’t typically aren’t counted in the square footage of the main home but can be counted as “other features.” As a buyer, don’t assume you’re buying an Airbnb goldmine; such rentals may or may not be allowed in your HOA or town.

Basements. Most basements are below ground level and aren’t counted in the square footage of main house features.  One reason for this is that any “room” must have an entrance and exit point, in case of fire, whether it’s finished or unfinished.

From state to state, real estate customs vary. The best rule of thumb is to verify, verify, verify. Cross check listing data with tax records, copies of permits, and seller’s disclosures for accuracy.

HOMEOWNERS’ ADVICE

Are You Selling Your Home, Or Just Curious About Value?

All homeowners wonder at some point what their home is worth, but there’s a big difference between planning to sell and simply satisfying your curiosity. You can get a ballpark idea of what homes in the neighborhood are fetching by going online, or you could contact your Berkshire Hathaway HomeServices network professional for a comprehensive market analysis, a comparison between your home and other similar homes in your neighborhood. 

If you’re just curious, you can take your estimated sales price, subtract the customary closing costs in your area plus the closing costs on your new home (anywhere from about six to ten percent for both transactions). But then, what have you got? Without a plan of what you want to accomplish with your equity, your home’s worth doesn’t mean anything because it can change at any time. The economy, jobs, buyer preferences, and more can all make a difference.

If you’re really interested in selling your home, run some what-if scenarios. What are your goals? A bigger, nicer home? A home closer to work or family? Are there better programs for your children in a different school district? In short, you want to know how life will improve for each of your household members in a different home or location.  

Once you have the answers to these questions, you’ll be in a better position to sell your home with confidence. It’s not just about knowing how much your home is worth; it’s about providing quality of life to your household.  

FINANCIAL ADVICE

Buying a Home On the Dip

In mid-March, borrowing rates were slashed to banks to nearly zero percent and announced it would buy at least $700 billion in government bond purchases, channeling about $200 billion of the stimulus into mortgage-related bonds. Not since 2008 has the central bank made such a dramatic move to stave off the effects of a pandemic economic recession.

What does that mean to home buyers like you? Opportunity.

The Fed doesn’t set mortgage interest rates, but it does influence short-term borrowing and adjustable mortgage rates because banks follow the federal funds rate. Fixed rate mortgages tend to move with long-term Treasury yields, according to Bankrate.com. As more investors pile into Treasury bonds, the yield lowers, which means fixed rate mortgages will cost less.

According to Reuters, mortgage interest rates should remain low for some time. For example, the monthly payment on a $350,000 home purchased with a 20% down at 4% interest would be about $1,850. At 3%, the same payment would be about $1,700, allowing borrowers to buy homes more affordably.

The National Association of REALTORS® recently reported that only three percent of home sellers took their homes off the market in March in response to the coronavirus quarantines, which means there will be plenty of homes to choose.

Economic uncertainty typically causes home buyers to move to the sidelines, which can cause inventories to grow and housing prices to fall as well. The time to act is now while the costs of buying a home are dipping.

HOMESELLERS’ ADVICE

Five Ways to Show Courtesy at Showings

A seller’s home is their private sanctum, and that should remain true even when it’s on the market. You’ll enjoy showings or open houses more as well as protect the seller’s home with these five courtesies.

  1. Sign in. Sellers and listing agents need to know who’s been in the home so they can ask for feedback. If you tour builder’s homes or open houses unaccompanied, be sure to include your Berkshire Hathaway HomeServices network professional’s contact information so others know you’re already represented.
  1. Wear slip-ons. Especially during inclement weather, park your shoes at the front door to keep from dragging mud or other contaminants into the home.
  1. Establish rules for children. You may prefer to leave the kids at home for first and second viewings, but you’ll want to show them their next home eventually. Tell them to stay by your side, not to touch anything, and to refrain from running or horseplay.
  1. 4 Open closets, cabinets and drawers. Part of what you’re buying is storage and organization, so you have every right to open all closets, built-in cabinets and kitchen drawers. But if a piece of furniture is used instead of a built-in, such as a buffet table or china hutch, you should leave it alone.
  1. Wash your hands or use hand sanitizer. You introduce or take away germs when you enter any home, so make sure your hands are clean before you touch anything as well as after the showing is over.

MO Lic #: 2016026005
1007 E. St. Maartens Dr. Saint Joseph, MO 64506

©2020 BHH Affiliates, LLC. Real Estate Brokerage Services are offered through the network member franchisees of BHH Affiliates, LLC. Most franchisees are independently owned and operated. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc.® Information not verified or guaranteed. If your property is currently listed with a Broker, this is not intended as a solicitation. Equal Housing Opportunity.

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