Buying/Selling a Home | Patterson-Schwartz Blog

5 Tips for Making a Successful Offer

Today’s real estate market clearly has high home buyer interest and low housing inventory. With so many buyers competing for a limited number of houses for sale, it’s more important than ever to know the ins and outs of making a confident and competitive offer. Here are five keys to success for this important stage in the home buying process.

1. Listen to Your Real Estate Advisor

An article from Freddie Mac offers guidance on making an offer on a home today. Right off the bat, it points out how emotional this can be for buyers and why your trusted agent can help you stay focused on the most important things:

“Remember to let your home buying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.”

Your real estate professional should be your primary source for answers to the questions you have when you’re ready to make an offer.

2. Understand Your Finances

Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to get pre-approved for a loan early in the home buying process. Only 44% of today’s prospective home buyers are planning to apply for pre-approval, so be sure to take this step so you stand out from the crowd. It shows sellers you’re a serious and qualified buyer and can give you a competitive edge if you enter a bidding war.

3. Be Ready to Move Quickly

According to the Realtors Confidence Index, published monthly by the National Association of Realtors (NAR), the average property sale today receives over three offers and is on the market for just a few weeks. These are both results of today’s competitive market, showing how important it is to stay agile and vigilant in your search. As soon as you find the right home for your needs, be prepared to submit an offer as quickly as possible.

4. Make a Fair Offer

It’s only natural to want the best deal you can get on a home. However, Freddie Mac also warns that submitting an offer that’s too low can lead sellers to doubt how serious you are as a buyer. Don’t submit an offer that will be tossed out as soon as it’s received. The expertise your agent brings to this part of the process will help you stay competitive:

“Your agent will work with you to make an informed offer based on the market value of the home, the condition of the home and recent home sale prices in the area.”

5. Be a Flexible Negotiator

After submitting an offer, the seller may accept it, reject it, or counter it with their own changes. In a competitive market, it’s important to stay nimble throughout the negotiation process. You can strengthen your position with an offer that includes flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). Freddie Mac explains that there are, however, certain contingencies you don’t want to forego:

“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”

Bottom Line

Today’s competitive landscape makes it more important than ever to make a strong offer on a home. Connect with one of our local experts to make sure you rise to the top along the way. We’ve been guiding home buyers and sellers since 1961.

Source: “Things to Consider When Buying a Home” Spring 2021 Edition, courtesy of Keeping Current Matters

Why Low Inventory is a Win for Sellers

Real estate continues to be called the ‘bright spot’ in the current economy, but there’s one thing that may hold the housing market back from achieving its full potential this year: the lack of homes for sale.

Buyers are actively searching for and purchasing homes, looking to capitalize on today’s historically low interest rates, but there just aren’t enough houses for sale to meet that growing need. Nadia Evangelou, Senior Economist & Director of Forecasting for the National Association of Realtors(NAR), explains:

“These ultra-low mortgage rates make homebuying more attractive, boosting activity to the highest level since 2006…Nevertheless, inventory continues to fall, widening the gap between housing demand and supply.”

According to NAR, right now unsold inventory sits at a 2.5-month supply at the current sales pace. To have a balanced market where there are enough homes for sale to meet buyer demand, the market needs 6 months of inventory. Today, we’re nowhere near that number. If this trend continues, it will get even harder to find homes to purchase, and that may slow down potential buyers. Danielle Hale, Chief Economist for realtor.com, notes:

“While some buyers are frustrated, there are still plenty trying to make a move. This means that homes are still selling fast, and inventory is dropping despite an improving new listings trend.”

The Weekly Recovery Report from realtor.com keeps an eye on the number of listings coming into the market (houses available for sale) and the total number of listings staying in the market compared to the previous year (See graph below):

The number of total listings (the orange line) continues to decline even as new listings (the blue line) are coming to the market. Why? Buyers are scooping up homes faster than they’re being put up for sale. Hale emphasized:

“New listings are a necessary ingredient for further home sales, so additional improvement here will be important for home buyers and sustaining home sales activity.”

Does This Mean It’s a Good Time to Sell?

Yes. If you’re thinking about selling your house, this winter is a great time to make it happen. There are plenty of buyers looking for homes to purchase because they want to take advantage of low interest rates. Realtors are also reporting an average of 3.4 offers per house and an increase in bidding wars, meaning the demand is there and now is the opportune time to sell for the most favorable terms.

BOTTOM LINE

If you’re considering selling your house, this is the perfect time to discuss how you can benefit from the market trends in our local area. Connect with one of our local experts today.

Source: “Things to Consider When Selling Your House” Winter 2021 edition, courtesy of Keeping Current Matters

This Old House

Contributing blogger Charlie Schwartz, II, shares real estate insight steeped in family tradition in the January 2021 Schwartz Report

My father was fond of dispensing real estate bromides in the form of little parables that more often than not had snappy punch lines. They often left the receiver scratching their head trying to winnow out what he was intending. For example, take these two which are particularly appropriate to today’s inventory starved seller’s market: “You can’t sell fruit from an empty wagon”; or, “You wouldn’t go to Happy Harry’s if Happy Harry didn’t have anything on the shelf.” By which he meant to charge us with the need to urge more sellers to put their homes on the market NOW! For a buyer’s market when prices were too high and showing activity stagnant, there was this one: “Too much weight stops the freight.” That generates images of a little steam engine struggling to pull a heavy load up an impossible incline much like a seller trying to get more for his property than the current market will bear.

To a buyer, most appropriately to a first time buyer, there’s this gem: “Never buy a home on a road with a line down the middle of it.” This gets at the three most important things about residential real estate, location, location and location. Highway departments put lines on roads with significant traffic counts, don’t they? So stay away from them. Here’s one that will need some explaining. It gets to the subject at hand: “Never buy a home that is older than you are.” This seems like the most improbable dictate of them all. It might be difficult to follow especially in our three state market area where many homes date well into the last century and beyond.

photo scanned from “Houses, The Illustrated Guide to Construction, Design and Systems” by Henry Harrison

Here he was advising that you not take on more of a fixer upper than your age, finances, temperament and or experience will allow. A historic home, one full of “character”, which may have been the former residence of some important family, might just be a project that you take on at your peril, a bridge too far. The illustration above is one of 56 that appear in the first reference book that I bought after starting in the business. Houses, The Illustrated Guide to Construction, Design and Systems by Henry Harrison was published in conjunction with the National Association of Realtors in 1973 and many sections, particularly those dealing with classic home architecture, are still valid today. Want to know the difference between a Cape Cod Colonial and a Cape Ann Colonial or a Dutch Colonial and a Salt Box Colonial; it’s in there. You will find a Swiss Chalet and a Spanish Villa as well.

When you consider that European settlers began constructing homes on the Atlantic Seaboard in the early 1600’s and that many of those dwellings survive in one state of repair or another to this day, it’s not difficult to fathom the appeal of owning such a place. Perhaps fond memories linger of the This Old House show on WHYY where the team came to the rescue of a historic treasure.

But remember the lighthouse keeper is also responsible for the light house’s upkeep.

You will also meet an interesting and interested group of people who may at any moment become your not-so-silent partners in the endeavor. This is especially true if you have any changes in mind. Imagine something as simple as repainting the house in the exact same color that it has been for years and having to get someone’s approval to do it. A seller of mine who was the proud owner of a 200 plus year old farm house on the historical register referred to these preservationists as the “hysterical review committee”. That farmhouse is still there but the new owners started with not just “wide pine floors and cast iron latch door handles, horsehair plaster walls and antique wallpaper.” They also got “…windows that won’t close, sagging rafters and old water stains on cracked ceilings…” and “…an electrical system that consists of well-fed rats physically carrying tiny baskets of electricity to the lamps and appliances…” a reference no doubt to the knob and tube wiring. The preceding quotes are taken from Kris Frieswick’s “Historic Home Horror Show” that appeared in a MANSION section of the Wall Street Journal this past December.

Owning a historic home will make you proud but also be prepared to become the museum’s curator, the lighthouse’s keeper and as Kris Frieswich advises: “Put the following professionals on retainer: A master plumber, an electrician and a furnace specialist.” You might also throw in a master mechanic, carpenter and cabinet maker. And before you choose your team ask each of them, what is the oldest historic home they have ever worked on. If they can describe their experience positively and without breaking down they’re keepers.

About Patterson-Schwartz: A Sixty Year Legacy

Patterson-Schwartz Real Estate opened for business on December 1, 1961, when William D. Patterson, Charles E. Schwartz and a small group of associates left the firm of Hanby, Patterson-Schwartz, Inc., Realtors to form their own company. The fledgling group began business in a semi-detached house at 1013 Washington Street in Wilmington, Delaware, with a staff of just 10 people. Today Patterson-Schwartz has grown to a sales team and corporate staff of over 400 strong and has expanded to nine locations that stretch from Brandywine Hundred to the Delaware Beaches.

Why You Shouldn’t Wait Until Spring to Buy a Home

The housing market recovery has been nothing short of remarkable. Many experts agree the turnaround from the nation’s economic pause is playing out extremely well for real estate, so it’s framing up to be an ideal time to buy a home for those who are ready to make a purchase. Here’s a dive into some of the biggest wins for home buyers this season.

1. Mortgage Rates Are Low

In 2020, mortgage rates hit all-time lows more than a dozen times, falling below 3% for the first time ever. Continued low rates have set buyers up for significant long-term gains. realtor.com notes: “Given this means homes could cost potentially tens of thousands less over the lifetime of the loan.”Essentially, it’s less expensive to borrow money for a home loan today, a huge opportunity for buyers to capitalize on right now, before rates start to rise.

2. Buying Is More Affordable Than Renting

This trend toward low mortgage rates has made the typical monthly payment (including principal and interest) less expensive for buyers. According to realtor.com:“Over the past year, many counties have seen the difference between the cost to purchase a home compared to the cost to rent a home improve toward favoring buying a home.”Buying a home versus renting one may be a game-changer, as it amplifies long-term savings for homeowners. When paying a mortgage, as opposed to paying rent, that money is reinvested back in your favor. Instead of contributing to your landlord’s savings, you’re contributing to your own net worth. This is a term called equity, and it is one of the biggest financial benefits of owning a home.

3. Equity Is Growing

According to John Burns Consulting, 58.7% of homes in the U.S. have at least 60% equity, and 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear. In addition, CoreLogic notes the average equity mortgaged homes have today is $177,000. That’s a tremendous amount of forced savings for homeowners.With this much equity in place for the typical homeowner, the chance of the market seeing a rush of foreclosures is not likely. Today’s homeowners have many options to avoid foreclosure, such as selling their homes and leveraging that equity to protect their investment. As a buyer, you can rest assured that your homeownership investment is a sound one, and foreclosures are not expected to dominate the market as they did when the housing bubble burst over 10 years ago

4. Home Prices Are Appreciating

According to leading experts, home prices are forecasted to continue appreciating. Today, many experts are re-forecasting their projections in an upward direction, anticipating home prices to continue rising through 2021. Knowing home values are increasing while mortgage rates are so low should help you feel confident that buying a home this year is advantageous from a price perspective, and a strong long-term investment.

Bottom Line

If you’re considering buying a home, this may be your moment, especially with today’s low mortgage rates. Let’s connect to assess your changing needs and set you up for success in the home buying process.

Source: “Things to Consider When Buying a Home” Winter 2021 edition, courtesy of Keeping Current Matters

7 Steps to Prepare Your Home for Winter

All seasons affect your home, but perhaps no other season impacts it more than winter. The cold temperatures, wind, snow and freezing rain combine to make it a season not to be ignored.

To ensure you do not have any unnecessary repair costs this winter, follow these seven simple steps while preparing for winter. They are short and sweet—and can save you money in the long run.

Preparing a home for the winter can sound overwhelming, but these tips can usually be done within a weekend, and you will be better prepared for whatever weather comes your way.

1. Clean Your Gutters

You should do this every season, but right before winter might be the most critical time. If your area gets a lot of snow, your home will have to bear that additional weight. If your gutters get too much weight on them, they could be pulled from your home.

But perhaps the most important reason is that if you don’t clean your gutters, your home could get water damage. As snow and ice melts and refreezes overnight, the devastation inflicted on your home could cost thousands of dollars. Make sure the water has somewhere to go when it melts so it is kept well away from your house.

2. Re-caulk Your Windows and Doors

Re-caulk your windows and doors each year to prevent water damage and heat loss. A caulk gun and tube exterior caulk will cost you around $20, and you can easily do it in an afternoon.

To be clear, you should only caulk the outside perimeter of your windows and doors’ molding. Use exterior silicone caulk because it is less affected by extreme temperatures—meaning it won’t shrink and expand as the seasons change.

To caulk your windows and doors, cut the exterior caulking tube at a small angle using your caulk gun (most caulking guns have an internal blade for this). Insert the tube into the gun and crank the handle until the circular pad is pressed tightly to the tube. Caulking should start to come out of the hole you cut once enough force is applied.

Next, apply a thin line of caulk across the window or door molding to your house. Using a latex-gloved finger, lightly press down on the caulk to spread it out so it fills all of the tiny cracks and crevices until it is smooth.

3. Get Your Roof Inspected

This step is probably the most ignored yet most important step when preparing a house for winter. If you are unable to access your home’s roof, you can get it inspected by a contractor to look for loose or broken shingles.

Any contractor you hire to do an inspection should also be able to do any minor repairs in an afternoon (replacing shingles is usually a quick process). It might cost you more than you would like to spend, but neglecting it for an entire winter could easily lead to even more repair bills down the road.

Summer rainstorms are notorious for wreaking havoc on a roof, so it’s important you repair any damage before your roof gets its toughest test: packed snow.

4. Reverse Your Ceiling Fans

As you learned in high school, warm air rises. Reversing the direction of each of your fans will create an updraft, which in turn will push down any heated air pressed against your room’s ceiling. By keeping warm air circulating, you’ll use heat more efficiently, which should cut down on energy costs. Even if you don’t have any rooms with high ceilings, do this one as soon as the weather turns.

To reverse your fan’s direction, make sure the fan is off, then click the switch above the blades. If you have a remote-controlled fan, you should see an option for reversing the fan’s direction on the remote.

5. Get Your Chimney Inspected

To keep your family and home safe, get your chimney inspected and cleaned before each burning season—even if wood is not your primary source of heat, and you only use your fireplace for aesthetic reasons.

When you burn wood, deposits of creosote build up on the inside of your chimney. Creosote is cancerous and highly flammable. When enough of it builds up in your chimney, the smoke from a fire can cause it to ignite, which in turn can cause a chimney fire. Many home fires are caused by chimneys.

If you want to go the extra mile, consider installing a steel liner, which will help protect your home in the event of a chimney fire.

6. Drain the Fuel From Your Small Gas-Powered Engines

Gasoline doesn’t last forever; in fact, it decomposes quickly. When this happens in a small engine (such as a lawn mower or weed eater), it can cause the engine’s carburetor to gunk up, which means you may not be able to get it started again when winter is over.

To prevent this, you can either add a fuel stabilizer or let the machine burn through all of the gas by using it one last time in late summer/early fall and letting it run until it turns off. If you do this, your machines will last longer and start much more easily in the spring.

7. Check Your Insurance Coverage

Right before winter is a good time to check your insurance coverage. If you have done any renovations over the summer that could add value to your home, make sure the added value is covered by your policy in case anything happens in the winter. You should also check what your provider offers for things like roof and ice damage to see if you may want to add additional coverage.

The Bottom Line

Preparing a home for winter isn’t a marathon, but it does take a little bit of forethought. However, if you take the seven simple steps above, you will likely spend far less on maintenance than you used to.