If you’re thinking of selling your house, it may be because you’ve heard prices are rising, listings are going fast, and sellers are getting multiple offers on their homes. But why are conditions so good for sellers today? And what can you expect when you move? To help answer both of those questions, let’s turn to the data.
Today, there are far more buyers looking for homes than sellers listing their houses. Here are the maps of the latest buyer and seller traffic from the National Association of Realtors (NAR) to help paint the picture of what this looks like:
Notice how much darker the blues are on the left. This shows buyer traffic is strong today. In contrast, the much lighter blues on the right indicate weak or very weak seller traffic. In a nutshell, the demand for homes is significantly greater than what’s available to purchase.
What That Means for You
You have an incredible advantage when you sell your house under these conditions. Since buyer demand is so high at a time when seller traffic is so low, there’s a good chance buyers will be competing for your house.
According to NAR, in February, the average home sold got 4.8 offers. When buyers have to compete with one another like this, they’ll do everything they can to make their offer stand out. This could play to your favor and mean you’ll see things like waived contingencies, offers over asking price, earnest money deposits, and more. Selling when demand is high and supply is low sets you up for a big win.
If you’re also looking to buy a house, you may be tempted to focus more on just the seller traffic map and wonder if it means you’ll have trouble finding your next home. But remember this: perspective is key. As Danielle Hale, Chief Economist at realtor.com, says:
“The limited number of homes for sale is a lesson in perspective. This same stat that frustrates would-be homebuyers also means that today’s home sellers enjoy more limited competition than last year’s home sellers.”
If you look at the big picture, the opportunity you have as a seller today is unprecedented. Last year was a hot sellers’ market. This year, inventory is even lower, and that means an even bigger opportunity for you. Even though finding your next home in a market with low inventory can be challenging, is that concern worth passing on some of the best conditions sellers have ever seen?
As added peace of mind, remember real estate professionals have been juggling this imbalance of supply and demand for nearly two years, and they know how to help both buyers and sellers find success when they move. A skilled agent can help you capitalize on the great opportunity you have as a seller today and guide you through the buying process until you find the perfect place to call your next home.
Bottom Line
If you’re ready to move, you have an incredible opportunity in front of you today. Trust the experts. Let’s connect so you have expertise on your side that can help you win when you sell and when you buy.
There’s never been a truer statement regarding forecasting mortgage rates than the one offered last year by Mark Fleming, Chief Economist at First American:
“You know, the fallacy of economic forecasting is: Don’t ever try and forecast interest rates and or, more specifically, if you’re a real estate economist mortgage rates, because you will always invariably be wrong.”
Coming into this year, most experts projected mortgage rates would gradually increase and end 2022 in the high three-percent range. It’s only April, and rates have already blown past those numbers. Freddie Macannounced last week that the 30-year fixed-rate mortgage is already at 4.72%.
“Continuing on the recent trajectory, would have mortgage rates hitting 5% within a matter of weeks. . . .”
Just five days later, on April 5, the Mortgage News Dailyquoted a rate of 5.02%.
No one knows how swiftly mortgage rates will rise moving forward. However, at least to this point, they haven’t significantly impacted purchaser demand. Ali Wolf, Chief Economist at Zonda, explains:
“Mortgage rates jumped much quicker and much higher than even the most aggressive forecasts called for at the end of last year, and yet housing demand appears to be holding steady.”
Through February, home prices, the number of showings, and the number of homes receiving multiple offers all saw a substantial increase. However, much of the spike in mortgage rates occurred in March. We will not know the true impact of the increase in mortgage rates until the March housing numbers become available in early May.
Rick Sharga, EVP of Market Intelligence at ATTOM Data, recently put rising rates into context:
“Historically low mortgage rates and higher wages helped offset rising home prices over the past few years, but as home prices continue to soar and interest rates approach five percent on a 30-year fixed rate loan, more consumers are going to struggle to find a property they can comfortably afford.”
While no one knows exactly where rates are headed, experts do think they’ll continue to rise in the months ahead. In the meantime, if you’re looking to buy a home, know that rising rates do have an impact. As rates rise, it’ll cost you more when you purchase a house. If you’re ready to buy, it may make sense to do so sooner rather than later.
Bottom Line
Mark Fleming got it right. Forecasting mortgage rates is an impossible task. However, it’s probably safe to assume the days of attaining a 3% mortgage rate are over. The question is whether that will soon be true for 4% rates as well.
Selling A Rental: How Can You Sell Your Albuquerque Property with a Lease in Place?
(Transcript Snippet): “Tracy:
So this feeds right into the other story I wanted to get to today, we have had several investors who own properties that are wanting to sell. They feel like the market is at a high and they’re going okay, I’m ready to sell my rental. So selling a rental that still has a tenant in place. So we, we wanted to cover that because the questions come up a couple of times now with people who’ve reached out to us saying, well, how do I sell this property when I’ve got a lease in place and a tenant there? So let’s cover that quickly. I know we don’t have too much time left this week. No,
Tego:
That’s a great question. And I, I think that the first answer is if you have a lease in place, you can sell your property. If you have a tenant in there with the lease in place thing is you can’t break that lease,
Tracy:
Right? So the new buyer needs to honor the lease. So if it’s got six months or eight, eight months to go, and somebody wants to live in the house, they would need to honor that lease. So the loan, if there’s a loan to buy, it would need to be as an investment loan, not as a primary residence, if you can’t move in right away. A lot of times what we find is you’re getting our, our investors are getting close to the end of the lease terms and they’re going we’re too, or three months out, the house is gonna be coming up. You know, the lease is gonna be expiring. We’d like to make sure to sell it. When that happens. We don’t want to have to pay too many more months of the mortgage with it being empty. So how do we do that?
Tracy:
So we help structure that we kind of have a program for that too. Right? Tego. We’ve put this the plan in place. We go look at the property. A lot of times, these folks aren’t even here, right? They’re out of state or out of area. We can go look at the property, get an appointment, selling a property with a tenant in place has some pros and cons. Some pros, the tenant might have really beautiful furnishings and keep it nice. It shows really well. It photos really well, right? It could be, it happens. And and some of the cons sometimes tenants don’t wanna move out and they don’t wanna make it easy to see, and they don’t wanna make it clean and neat and attractive so they could hamper the ability to get top. So having your, having us go with you, if you’re in town or out of town and, and looking at the property and putting a plan together to see how cooperative the tenant will be, because in New Mexico, we have to give 24 hours notice to be able to show a, a property that’s occupied. There.
Tego:
There’s a lot to that. And, and, you know, tenants have, have, have rights, right? You can’t just say, well, I’m gonna sell the property and you have to allow to show it. It doesn’t, it doesn’t, it’s not that quite that simple.
Tracy:
Right? So a lot of times we’ve got the plan in place for right when the, the tenant is out. If they’re not as cooperative or they don’t make the house show as well, if they didn’t really wanna be moving out yet. But you know, there’s lots of ways to do it and
Tego:
Well, and we’ve seen deals where people purchase a home site, unseen with the tenant in place. And you know, basically roll the cars now does that, obviously they’re gonna put a, they’re gonna put a dollar value on the risk if they do that, but that people will do
With today’s real estate market moving as fast as it is, working with a real estate professional is more essential than ever. They have the skills, experience, and expertise it takes to navigate the highly detailed and involved process of selling a home. That may be why the percentage of people who list their houses on their own, known as a FSBO or For Sale By Owner, has reached its lowest point since 1985 (see graph below):
Here are five reasons why selling with a real estate professional makes more sense, even in today’s hot market:
1. They Know What Buyers Want To See
Before you decide which projects and repairs to take on, connect with a real estate professional. They have first-hand experience with today’s buyers, what they expect, and what you need to do to make sure your house shows well.
If you don’t lean on their expertise, you may spend your time and money on something that isn’t essential. That’s because, in today’s low-inventory market, buyers are willing to take on more of the renovation work themselves. A survey from Freddie Mac finds that:
“. . . nearlytwo-in-five potential homebuyers would consider purchasing a home requiring renovations.”
A professional can help you decide what you need to tackle. It’s not canned advice you could find online – it’s recommendations specific to your house and your area.
2. They Help Maximize Your Buyer Pool
Today, the average home is getting 4.8 offers per sale according to recent data from the National Association of Realtors (NAR), and that competition is pushing prices up. While that’s promising for you as a seller, it’s important to understand your agent’s role in bringing buyers in.
Real estate professionals have an assortment of tools at their disposal, such as social media followers, agency resources, and the MLS to ensure your house is viewed by the most buyers. According to realtor.com:
“Only licensed real estate agents can list homes on the MLS, which is a one-stop online shop of sorts for getting a house seen by thousands of agents and home buyers. . . . This is certainly one of many good reasons why the majority of home sellers decide to employ the services of a listing agent rather than going it alone.”
Without access to these tools, your buyer pool is limited. And you want more buyers to view your house since buyer competition can drive your final sales price higher.
3. They Understand the Fine Print
Today, more disclosures and regulations are mandatory when selling a house. That means the number of legal documents you’ll need to juggle is growing. That’s why Investopediasays:
“One of the biggest risks of FSBO is not having the experience or expertise to navigate all of the legal and regulatory requirements that come with selling a home.”
A real estate professional knows exactly what needs to happen, what all the paperwork means, and how to work through it efficiently. They’ll help you review the documents and avoid any costly missteps that could occur if you try to handle them on your own.
4. They’re Trained Negotiators
If you sell without a professional, you’ll also be solely responsible for all the negotiations. That means you’ll have to coordinate with:
Thebuyer, who wants the best deal possible
Thebuyer’s agent, who will use their expertise to advocate for the buyer
Theinspection company, which works for the buyer and will almost always find concerns with the house
Theappraiser, who assesses the property’s value to protect the lender
Instead of going toe-to-toe with all these parties alone, lean on an expert. They’ll know what levers to pull, how to address everyone’s concerns, and when you may want to get a second opinion.
5. They Know How To Set the Right Price for Your House
If you sell your house on your own, you may over or undershoot your asking price. That could mean you’ll leave money on the table because you priced it too low or your house will sit on the market because you priced it too high. Pricing a house requires expertise. Investopediaexplains it like this:
“. . . There is no easy or universal way to determine market value for real estate.”
Real estate professionals know the ins and outs of how to price your house accurately and competitively. To do so, they compare your house to recently sold homes in your area and factor in the current condition of your house. These factors are key to making sure it’s priced to move quickly while still getting you the highest possible final sale price.
Bottom Line
There’s a lot that goes into selling your house. Instead of tackling it alone, let’s connect so you have an expert on your side throughout the entire process.
Should YOU Be the Bank? Real Estate Contracts in Albuquerque
(Transcript Snippet): “Tracy:
I’m still anxious to get to the the topic of, should you be the bank, right? Should you sell a property and be the bank?
Tego:
Should you be the bank? And, and so one of the,
Tracy:
What does that mean? Should you be the bank? Yeah,
Tego:
No, it’s a, it’s a great question. So meaning you’re selling your home and maybe you could become the bank for the borrower maybe, or the borrower for
Tracy:
The buyer
Tego:
Or in this case, be the borrower also. But, but you become the bank. You, what we call it here is a seller seller financing is, is one term another their term is, or the vehicle is called a real estate contract.
Tego:
We hear E a lot. That’s the lingo. Sometimes they call ’em land contracts in other states, but generally New Mexico, we call ’em real estate contracts. And what a real estate contract is, or a, or a seller financing deal is what it is. It’s the seller is finance Ameen to the new buyer the new owner of the home, the, the, the property.
Tracy:
So does a house or a property that you’re selling have to be free and clear as in, you don’t have a loan on it to be the bank.
Tego:
I am, I am not gonna touch that one with a 10 foot pole Tracy, because good idea. Technically, when a, let me, let me say it this way. You’d, you’d wanna talk to an attorney about it, a real estate attorney about it. If you have a loan on a property and you’re gonna be selling it, and you’re gonna be selling it on a real estate contract, that, that mortgage now becomes wrapped into the real estate contract, we call it rap. That could be a problem for your current lender, cuz they, in most cases have what they call a do on sale clause. Meaning once you sell the property, you have to pay off that mortgage. So you’d want to consult an expert on that. And I, again, I’m not gonna touch
Tracy:
That one didn’t mean to go so deep, but I just thought it was gonna be a good question for our listeners.
Tego:
It is a good question. I think the, the answer is it depends and you just have to go into it eyes wide open. So let’s both the buyer and the seller,
Tracy:
Right? So let’s talk about a property where there’s no underlying loan on it, right? A free and clear property,
Tego:
Easy PEY. Yes. Yes.
Tracy:
The benefits of being the owner, finance whole older selling with owner financing, you’re getting
Tego:
Return on your money. You’re getting return on your capital, right? You’re getting return on that money. So you sell a property and you cash it out. Let’s say, let’s say you don’t need that cash to go by the next property. Right. Which, which is usually the situation. Maybe it’s an investment property. Maybe it’s part of an, the state maybe it’s whatever a piece of land could be this way too, where it’s, it’s free and clear, meaning there’s no loan, there’s no debt on that. That property. Be it again, vacant land or, or a home. And you don’t really need that, that cash in the sense of you’re just gonna go put it in the bank anyway. Well, if you offer seller financing now, well, first off, in many cases you can maybe push the sale price a little bit higher because now you’re, you’re offering favorable terms to a buyer. Well, now you’re also earning interest on that money too. And you know, these days, it, it depends, but well, we know mortgage rates have gone up, you know, almost two points now just in the last three months, you know? So, so real estate contracts generally are, you know, two, maybe three points higher than the going rate going rate these days is somewhere around four and a half five. So, you know, real estate contract might be seven, 8%. So you’re making 7%, 8% on that, that equity that you had in your home.
Tracy:
So a, a better way to invest that money. We call it
Tego:
Mailbox, mailbox, money,
Tracy:
Mailbox, money, you know, it’s it’s, if you need that in income, just every month coming in, somebody’s paying off the property, you sold to them. And they there’s a third party in here. We, we highly recommend, so we’ve got an escrow company, right? Yeah. So to protect you and the buyer, the buyer pays the escrow company, the escrow company pays you to make sure about the title and who’s ownership and things just to keep it fair.
Tego:
Yeah. We don’t need to get in the weeds on it, but I mean, there’s, there’s a lot of safeguards in place, so everybody’s protected and, and everybody knows what’s going on.
Tracy:
Right. And all the terms are negotiable. So if it’s a real house or property that you’re selling, obviously it’s in the seller’s best in to get a good down payment, right. We want the buyer to take care of the property and have some money out of pocket. And and then, but if it’s land, sometimes it’s low down payment, right. And you just have money coming in and land doesn’t, you know, doesn’t have rent on it for the most part. So it’s, it’s a good way to have some monthly income if, if you don’t need the money.
Tego:
So let me, let me offer a, a scenario where this may make sense for somebody you’ve got a rental property, Tracy, and you’re kind of tired of being a landlord, right? You don’t wanna be a landlord anymore. You don’t necessarily need to sell the whole property and cash it out. You kind of like having that, what we call of mailbox, money, just money coming in. So you could sell it on a real estate contract. You’re still getting your, your, your monthly installment. Now you you’ve done an installment sale right now. You’re, you’re getting your monthly income from that sale.
Tracy:
So instead of, but rent,
Tego:
But you don’t own the property any longer. Right. So instead of getting it from rent where you’re responsible for the property, now you’re getting the income just from the real estate contract and you’re not responsible for the property anymore.
Tracy:
Right. Right. And it may be, somebody’s moved in as a primary residence, or maybe it’s still a rental for whoever you sold it to. But in any event, you just get your money. So this,
Tego:
This whole real estate contract world is actually, it is kind of just like this sub world in the real estate world. And the, the truth is most, or let me rephrase that. A lot of real estate agents just don’t understand it and how it works. And, and so, you know, if you go down that road, get somebody that is experienced, like air con, our team is one is a pro at this. Right. Right. You know, I mean, I’ve done a bunch of ’em, so I’m pretty familiar with it. But you wanna get somebody that really understands how those things work and make sure it’s.