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Here are five reasons listing your home for sale this summer makes sense.
1. Demand Is Strong
The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home.
Take advantage of the buyer activity currently in the market.
2. There Is Less Competition Now
Housing inventory is currently at a 4.2-month supply, well under the 6-months needed for a normal housing market. This means, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory could be coming to the market soon.
There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market this summer.
Also, builder’s confidence in the market has hit its highest mark in over 11 years. Experts are predicting that new construction of single-family homes will ramp up this summer.
The choices buyers have will continue to increase. Don’t wait until all this other inventory of homes comes to market before you sell.
3. The Process Will Be Quicker
Fannie Mae anticipates an acceleration in home sales that will surpass 2007’s pace. As the market continues to strengthen, banks will be inundated with loan inquiries causing closing-time lines to lengthen. Selling now will make the process quicker & simpler. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to a new low of 42 days, after seeing a 12-month high of 48 days in January.
4. There Will Never Be a Better Time to Move Up
If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by 4.9% over the next year, according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.
You can also lock in your 30-year housing expense with an interest rate around 4% right now. Rates are projected to increase in the next 12 months.
5. It’s Time to Move on with Your Life
Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.
That is what is truly important.
Licensed Real Estate Salesperson
SRES, CIPS, RSPS, CBR
Coldwell Banker Residential Brokerage
Port Washington/Manhasset NY
HECM for Purchase began with the passage of the Housing and Economic Recovery Act of 2008. Prior to this legislation, if a homeowner in retirement wanted to relocate, qualifying for the new home often proved difficult. They would have to be eligible to purchase a home though traditional means, establish their residency in the home, and then refinance with a HECM if desired.
Some baby boomers continue to reside in homes that are no longer ideal. Unfortunately, they are unaware of a home financing option that was built specifically for them – The Home Equity Conversion Mortgage for Purchase, or HECM for Purchase.
Older homeowners often find themselves wanting (or needing) to RELOCATE to be closer to family members, DOWNSIZE to a more manageable home, or even UPSIZE to a retirement dream home on the beach, golf course, or active adult community.
I often receive phone calls that highlight the need for this program, such as:
- “My grandmother wants to move south to be closer to her kids and grandkids.”
- “With my knee and hip problems, I need a single-story home, preferably one that requires little maintenance.”
- “I want to live near my friends in a 55 and over community on a golf course.”
When physical limitations become a reality, or when individuals desire a closer connection to family, a move may become necessary. The reverse mortgage can help them move AND keep more money in their pockets.
But how does it work?
With a traditional reverse mortgage, the lender offers a homeowner a percentage of the home’s value that can be used as needed. With a HECM for Purchase, however, those reverse mortgage funds are applied to a new home’s sales price. Depending on the age of the youngest participant, the lender is generally able to contribute 50% to 75% of the purchase price.
As always, no monthly principal and interest payments are required, and the homeowner gets to retain title and ownership of the home.
Most ideal purchase candidates are selling their current homes and relocating. If they use the HECM for Purchase to finance a large portion of the sales price, the homeowners can retain more cash reserves. This is a great opportunity to supplement retirement savings.
What’s in the fine print?
Reverse Mortgages are offered for “PRINCIPAL” residences only. This means that the homeowner must occupy the home, and the HECM for Purchase cannot be used for 2nd homes or investment properties. In fact, the borrower must occupy the home within 60 days of closing.
Because this loan product is federally insured, the HECM for Purchase will always require upfront, and ongoing, Mortgage Insurance Premiums (MIP). The initial MIP will depend on how much principal is used. Therefore, it may be wise for the borrower to only use 60% of the offered funds. The remaining 40% may be left in a line of credit. This will reduce the initial, one-time, premium from 2.5% to 0.5% of the home’s value. This is called “over-funding the purchase”, and may save the borrower 2% at closing.
Lastly, please be aware that sometimes mistakes are made when a Realtor writes a sales contract for a HECM. Federal guidelines related to new construction and seller-paid closing costs for reverse mortgages can be tricky. So it’s important that the Realtor works with an experienced reverse mortgage professional who can guide everyone through the process.
Seniors Real Estate Specialist
SRES, CIPS, RSPS, CBR
Coldwell Banker Residential Brokerage
Port Washington/Manhasset NY
By Suzan Haskins
I don’t much believe in mistakes. I see them only as momentary setbacks and learning opportunities. When a setback occurs, therefore, you always learn from it.
Yes, mistakes can sometimes be costly. And they can be a blow to your self-esteem. But there are always ways around and out…
If there is any single lesson I might share to help you on your expat journey, it would be this: nothing you do cannot be undone.
If you initially choose the wrong overseas community or even a country that’s not quite right for you, you can move on. Your feet aren’t encased in concrete.
Of course, it’s far easier to move on if you’re light on your feet to begin with. That’s why we always recommend that you rent instead of buy. And it’s why I’d suggest that before you ship all your worldly possessions, spend as much time as you can in a place to be sure it suits you.
On a more practical level, here are a few tips for things you can start working on to prepare for your expat journey before even leaving home:
Do your research.
There is no such thing as too much information. And when it comes to the expat experience, you may find lots of conflicting information. So be aware that there are not always definitive answers.
This is especially true when it comes to getting a resident visa in a foreign country. Everyone who goes through the process has a different experience. From the paperwork required to fees paid to the length of time it takes, I can pretty much guarantee that no two people will have the same experience. And no two immigration officials will give you the same information, nor can you rely on any official government websites for anything absolute. So be as prepared as you can be, and don’t sweat it…everything will work out in the long run.
Work on being more patient.
If there is anything to be learned from all this, it is the need to be patient. Things happen, but not always in the timeframe you’d like them to happen. Relax.
And that’s another point… The age-old adage “you can catch more flies with honey than vinegar” applies tenfold when you are an expat. A lesson I’ve learned over and over is that the more I smile and the more politely and respectfully I treat someone, the more willing they are to help me. A positive attitude takes you far.
Renew your passport before your move.
This is where your residence visa will live. And it can be painful and time-consuming to switch it from an old to a new passport. So start with a new one. And while you’re at it, renew your driver’s license, too.
Move everything online.
If you aren’t already banking and paying bills electronically, now is the time to start. You’ll need to keep a bank at home to pay your credit card and other bills, so be sure you know how these online systems work. Same goes for mail. Get as much of your correspondence as you can in a digital format.
Decide how you’ll access your funds.
You may or may not need a local bank. Sometimes you’ll need one to prove your financial wherewithal for your visa. In that case, you’ll want one that’s fiscally secure and, perhaps, one that is qualified to accept direct deposits of your Social Security benefits. And if you decide to run on ATM withdrawals from your bank at home, you’ll want to choose a bank that reverses foreign ATM fees.
There are lots of little common sense strategies like these that I could share. But in the interest of brevity, I’ll say once again: There is no such thing as too much research. Get as much information as you can and be as prepared as you can be. And, very importantly, relax and have fun.