WILL 2014 BE THE YEAR FOR MOVE-UP BUYERS?

The housing market has enjoyed a strong rebound over the past few years with sales and median prices steadily improving across the country and especially here in the Bay Area. For a variety of reasons, one segment of the market has not bounced back quite as fast: the “move-up” market. But that could change in 2014.

The recession took its toll on many homeowners, especially those who bought near the peak of the housing market. As property values dipped, many of these consumers found themselves “underwater” on their mortgage – that is, owing more than it is worth.

But as home prices continue to climb and home equity levels steadily improve, more homeowners are once again in a position to trade up. The National Association of REALTORS® expects the median sale price nationally to be up 11 percent in 2013 from the previous year. And some parts of the Bay Area have seen median prices jump 15-20 percent or more.

Move-up buyers are gradually coming back into the market due to improving equity, according to a new report from FNC, a real estate data and technology company.

If you have outgrown your existing home or simply want to buy another home in a more desirable neighborhood, now may be the time to make your move.

Interest rates may have ticked up a bit over the past year, but remain attractive. And your current home may be worth more than you think, giving you more money to put into a down payment on your next home.

Buying a home when you currently own one does have its challenges. If you sell first, you may be left scrambling to find a new place to live or forced to settle for a house that isn’t right for you. But if you buy first, you may not have the cash to put down on your next home – even if you do qualify for another mortgage. And you run the risk of having to make two house payments each month while you own both homes.

But some careful planning and the guidance of a professional REALTOR® can help you overcome these challenges and take advantage of the move-up market. Here are a few tips from the National Association of REALTORS® to get you started:

• Assess the market. Compare your current and future neighborhoods and determine which area is a buyer’s market and which is a seller’s market. If your current neighborhood is a hot seller’s market, you may be better off buying elsewhere first and then selling yours since it might be easier to find a buyer.
• Selling your home first. If you end up selling your home before buying another, you will need a place to live in the meantime. One option is to enter into an occupancy agreement with the buyers of your home to enable you to retain possession for a short period of time.
• Other temporary options. If the buyers of your home need to move into your home immediately after escrow closes you may be able to stay with family or find a short-term lease on an apartment. Many “extended stay” hotels and apartments offer leases for a month or longer. You’ll have to put many of your possessions in storage, but they’ll be packed and ready to go when it is time to move into your new home.
• Buying your next home first. If you end up buying your next home before selling your first one there are a couple of ways to come up with the new down payment. Check with your lender to see if you can secure a home equity line of credit. The interest rate may be tax deductible up to $100,000 and it could be paid off once you sell your home. Be sure to check with your lender before you make any decisions to determine what options may or may not be available.

With homeowner equity rising and interest rates still historically low, now may be the time to cash in on your existing property and make the move to the home of your dreams. I’m ready to help. Give me a call at (510) 314-6684 and we’ll get started today!  Visit me at www.RealtorLisaWu.com or email to RealtorLisaWu@yahoo.com

©2014 Coldwell Banker Real Estate LLC. All Rights Reserved. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each Coldwell Banker Residential Brokerage Office Is Owned by a Subsidiary of NRT LLC. If your property is listed with a real estate broker, please disregard. It is not our intention to solicit the offerings of other real estate brokers. We are happy to work with them and cooperate fully. CalBRE License #01908304

Have Your Friend Bought a Property at Real Estate Auction? How Do Buyers to Determine - It's a "Good or Fair" Deal or Value of the Property Bought? How Much The Closing Costs, Premium plus Offered Price?

Talking Points

• Many home buyers think that real estate auctions are the best way to get a good deal on a home.  While there are certainly deals to be had, auctions also can be dangerous for buyers.

• Buyers planning to attend an auction are advised to do their homework and know what the property is worth, especially since auctions generally do not offer appraisal contingencies.

• Buyers should know what repairs are needed and what it will cost to make the home livable.

• Setting and sticking to a maximum price and not forgetting to include the buyer’s premium is critical.

• Most importantly, maintain control.  Many auctions turn into feeding frenzies. The excitement of the moment leads to bidders getting carried away. 

www.RealtorLisaWu.com

Why & When do property come BACK on Market for sale or delay Escrow Closing

Talking Points

• Financing delays, low appraisals, title problems, home inspections, and even buyer’s remorse can interfere with a seller’s ability to close a sale.

• The good news though is that many of these problems are preventable if sellers are proactive and involved.

• Sellers should seek out a buyer who has been preapproved for a mortgage.  Typically, the buyer’s agent will be eager to share this information with the seller’s agent.

• Real estate agents report that low appraisals have prevented transactions in recent years, because appraisers – who are hired by the lenders to assess the value of the home – are overly conservative in their valuations, even though home prices are rising in many locations. To avoid appraisals problems, sellers should price their home in line with comparable homes for sale in the area.

• Some listing agents include a preliminary title report as part of their package, and a good agent will be able to spot red flags when reading that report for their client. Problems such as an unpaid sewage assessment, deed that was never recorded, or an easement that was granted which the owner is unaware of, should be addressed early on.

• Sellers also should encourage buyers to move quickly on things like the home inspection.  If a deal is going to collapse, it is better to know sooner rather than later so the home can go back on the market. 

 www.RealtorLisaWu.com