Pricing | Page 3 of 30 | Venturi Realty Group | Albuquerque Real Estate Experts

Why You Need an Expert To Determine the Right Price for Your House

Jun 6, 2022 | For Sellers, Pricing, Selling Myths

If your lifestyle has changed recently and you’re ready to make a move, taking advantage of today’s sellers’ market might be just the answer for your summer plans. With homes continuing to get multiple offers, this could be your moment to get the contract you’re looking for on your house if you’re ready to sell.

And here’s the thing – you need an expert on your side to ensure you make all the right moves when you do, especially when it comes to pricing your house. Even in this competitive market, you can’t stick just any price tag on your home and get the deal you want. A key piece of the puzzle is setting the right asking price so you can help buyers notice your home (and get excited about it) from the very first time they view the listing. That’s where a real estate professional comes in.

Why Pricing Your House Right Is Important

The price you set for your house sends a message to potential buyers. Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with the property. Not to mention, if you undervalue your house, you could leave money on the table which decreases your future buying power.

On the other hand, price it too high, and you run the risk of deterring buyers. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.

In other words, think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value. Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see multiple offers, too. And if a bidding war happens, you’ll likely get an even higher final sale price. Plus, when homes are priced right, they tend to sell quickly.

To get a look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below:

Lean on a Professional’s Expertise

There are several factors that go into pricing your house, and balancing them is the key. That’s why it’s important to lean on an expert real estate advisor when you’re ready to move. A local real estate advisor is knowledgeable about:

The value of homes in your neighborhood
The current demand for houses in today’s market
The condition of your house and how it affects the value

A real estate professional will balance these factors to make sure the price of your house makes the best first impression and gives you the greatest return on your investment in the end.

Bottom Line

If you’re thinking about selling, pricing your house appropriately is key. Let’s connect to make sure your house is priced right for the local market, for your home’s condition, and to stand out from the competition.

History Proves Recession Doesn’t Equal a Housing Crisis [INFOGRAPHIC]

Jun 3, 2022 | For Buyers, For Sellers, Housing Market Updates, Infographics, Pricing

Some Highlights

It’s important to understand history proves an economic slowdown does not equal a housing crisis.
In 4 of the last 6 recessions, home prices actually appreciated. Home prices only fell twice – minimally in the early 90s and then by nearly 20% during the housing crash in 2008.
If you have questions, let’s connect to discuss why today’s housing market is nothing like 2008.

Sellers Have an Opportunity with Today’s Home Prices

May 24, 2022 | For Sellers, Housing Market Updates, Move-Up Buyers, Pricing

Sellers Have an Opportunity with Today's Home Prices | Simplifying The Market

As mortgage rates started to rise this year, many homeowners began to wonder if the value of their homes would fall. Here’s the good news. Historically, when mortgage rates rise by a percentage point or more, home values continue to appreciate. The latest data on home prices seems to confirm that trend.

According to data from CoreLogic, home price appreciation has been re-accelerating since November. The graph below shows this increase in home price appreciation in green:

This is largely due to an ongoing imbalance in supply and demand. Specifically, housing supply is still low, and demand is high. As mortgage rates started to rise this year, many homebuyers rushed to make their purchases before those rates could climb higher. The increased competition drove home prices up even more. Selma Hepp, Deputy Chief Economist at CoreLogic, explains:

“Home price growth continued to gain speed in early spring, as eager buyers tried to get in front of the mortgage rate surge.”

And experts say prices are forecast to continue appreciating, just at a more moderate pace moving forward. A recent article from Fortune says:

“. . . the swift move up in mortgage rates . . . doesn’t mean home prices are about to crash. In fact, every major real estate firm with a publicly released forecast model . . . still predicts home prices will climb further this year.”

What This Means for You

If you’re thinking about selling your house, you should know you have a great opportunity to list your home and capitalize on today’s home price appreciation. As prices rise, so does the value of your home, which gives your equity a big boost.

When you sell, you can use that equity toward the purchase of your next home. And at today’s record-level of appreciation, that equity may be enough to cover some (if not all) of your down payment.

Bottom Line

History shows rising mortgage rates have not had a negative impact on home prices. Now is still a great time to sell your house thanks to ongoing price appreciation. When you’re ready to find out how much equity you have in your current home and what’s happening with home prices in your local area, let’s connect.

Will Home Prices Fall This Year? Here’s What Experts Say.

May 10, 2022 | For Buyers, For Sellers, Housing Market Updates, Move-Up Buyers, Pricing

Many people are wondering: will home prices fall this year? Whether you’re a potential homebuyer, seller, or both, the answer to this question matters for you. Let’s break down what’s happening with home prices, where experts say they’re headed, and how this impacts your homeownership goals.

What’s Happening with Home Prices?

Home prices have seen 121 consecutive months of year-over-year increases. CoreLogic says:

“Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”

So why are prices climbing so much? It’s because there are more buyers than there are homes for sale. This imbalance is expected to maintain that upward pressure on home prices because homes for sale are a hot commodity in today’s low-inventory housing market.

Where Do Experts Say Prices Will Go from Here?

Experts say the housing market isn’t set up for a price decline due to that ongoing imbalance between supply and demand. In the latest home price forecasts for 2022, they’re calling for ongoing appreciation throughout the year (see graph below):

While the experts are forecasting more moderate price appreciation, the 2022 projections show price gains will remain strong throughout this year. First American explains it like this:

“While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”

What Does That Mean for You?

The biggest takeaway is that none of the experts are projecting depreciation. If you’re a homeowner thinking about selling, the higher price appreciation over the last two years has been great for your home’s value, but it’s also something you should factor in when planning your next steps. If you’ll also be buying a home after selling your current house, you shouldn’t wait for prices to fall. Waiting will only cost you more in the long run because climbing mortgage rates and rising home prices will have an impact on your next home purchase. Freddie Mac says:

“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”

Bottom Line

If you’re thinking of selling to move up, you shouldn’t wait for prices to fall. Experts say prices will continue to appreciate this year. That means, if you’re ready, buying your next home before prices climb further may make the most financial sense. Let’s connect to begin the process of selling your current home and looking for your next one before prices rise higher.

How Today’s Mortgage Rates Impact Your Home Purchase

May 9, 2022 | First Time Home Buyers, For Buyers, Interest Rates, Move-Up Buyers, Pricing

If you’re planning to buy a home, it’s critical to understand the relationship between mortgage rates and your purchasing power. Purchasing power is the amount of home you can afford to buy that’s within your financial reach. Mortgage rates directly impact the monthly payment you’ll have on the home you purchase. So, when rates rise, so does the monthly payment you’re able to lock in on your home loan. In a rising-rate environment like we’re in today, that could limit your future purchasing power.

Today, the average 30-year fixed mortgage rate is above 5%, and in the near term, experts say that’ll likely go up in the months ahead. You have the opportunity to get ahead of that increase if you buy now before that impacts your purchasing power.

Mortgage Rates Play a Large Role in Your Home Search

The chart below can help you understand the general relationship between mortgage rates and a typical monthly mortgage payment within a range of loan amounts. Let’s say your budget allows for a monthly mortgage payment in the $2,100-$2,200 range. The green in the chart indicates a payment within that range, while the red is a payment that exceeds it (see chart below):

As the chart shows, you’re more likely to exceed your target payment range as mortgage rates increase unless you pursue a lower home loan amount. If you’re ready to buy a home, use this as your motivation to purchase now so you can get ahead of rising rates before you have to make the decision to decrease what you borrow in order to stay comfortably within your budget.

Work with Trusted Advisors To Know Your Budget and Make a Plan

It’s critical to keep your budget top of mind as you’re searching for a home. Danielle Hale, Chief Economist at realtor.com, puts it best, advising that buyers should:

“Get preapproved with where rates are today, but also consider what would happen if rates were to go up, say another quarter of a point, . . . Know what that would do to your monthly costs and how comfortable you are with that, so that if rates do move higher, you already know how you need to adjust in response.”

No matter what, the best strategy is to work with your real estate advisor and a trusted lender to create a plan that takes rising mortgage rates into consideration. Together, you can look at your budget based on where rates are today and craft a strategy so you’re ready to adjust as rates change.

Bottom Line

Even small increases in mortgage rates can impact your purchasing power. If you’re in the process of buying a home, it’s more important than ever to have a strong plan. Let’s connect so you have a trusted real estate advisor and a lender on your side who can help you strategize to achieve your dream of homeownership this season.

Things That Could Help You Win a Bidding War on a Home

May 3, 2022 | Buying Myths, Down Payments, First Time Home Buyers, For Buyers, Move-Up Buyers, Pricing

With a limited number of homes for sale today and so many buyers looking to make a purchase before mortgage rates rise further, bidding wars are common. According to the latest report from the National Association of Realtors (NAR), nationwide, homes are getting an average of 4.8 offers per sale. Here’s a look at how that breaks down state-by-state (see map below):

The same report from NAR shows the average buyer made two offers before getting their third offer accepted. In this type of competitive housing market, it’s important to know what levers you can pull to help you beat the competition. While a real estate professional is your ultimate guide to presenting a strong offer, here are a few things you could consider.

Offering over Asking Price

When you think of sweetening the deal for sellers, the first thought you likely have is around the price of the home. In today’s housing market, it’s true more homes are selling for over asking price because there are more buyers than there are homes for sale. You just want to make sure your offer is still within your budget and realistic for the market value in your area – that’s where a local real estate professional can help you through the process. Bankrate says:

“Simply put, being willing to pay more money than other buyers is one of the best ways to get your offer accepted. You may not have to increase it by a lot — it’ll depend on the area and other factors — so look to your real estate agent for guidance.”

Putting Down a Bigger Earnest Money Deposit

You could also consider putting down a larger deposit up front. An earnest money deposit is a check you write to go along with your offer. If your offer is accepted, this deposit is credited toward your home purchase. NerdWallet explains how it works:

“A typical earnest money deposit is 1% to 2% of the home’s purchase price, but the amount varies by location. A higher earnest money deposit may catch a seller’s attention in a hot housing market.”

That’s because it shows the seller you’re seriously interested in their house and have already set aside money that you’re ready to put toward the purchase. Talk to a professional to see if this is something you can do in your area.

Making a Higher Down Payment

Another option is increasing how much of a down payment you’re going to make. The benefit of a higher down payment is you won’t have to finance as much. This helps the seller feel like there’s less risk of the deal or the financing falling through. And if other buyers put less down, it could be what helps your offer stand out from the crowd.

Non-Financial Options To Make a Strong Offer

Realtor.com points out that while increasing these financial portions of the deal can help, they’re not your only options:

“. . . Price is not the only factor sellers weigh when they look at offers. The buyer’s terms and contingencies are also taken into account, as well as pre-approval letters, appraisal requirements, and the closing time the buyer is asking for.”

When it’s time to make an offer, partner with a trusted professional. They have insight into what sellers are looking for in your local market and can give you expert advice on what levers you may or may not want to pull when it’s time to write an offer.

From a non-financial perspective, this can include things like flexible move-in dates or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). For example, you could make an offer that’s not contingent on the sale of your current home. Just remember, there are certain contingencies you don’t want to forego, like your home inspection. Ultimately, the options you have can vary state-to-state, so it’s best to lean on an expert real estate professional for guidance.

Bottom Line

In today’s hot housing market, you need a partner who can serve as your guide, especially when it comes to making a strong offer. Let’s connect so you have a trusted resource and coach on how to make the strongest offer possible for your specific situation.

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