Goodness, is it 2006 again? At the dawn of 2014, it feels like it.
Homeowners
enjoyed double-digit price growth in the first half of 2013, greatly
exceeding experts' predictions of a year ago and even settling into
pre-recession values in many markets. Though there was some softening in
the second half, sellers remain in their element and are turning the
screws on anxious buyers who fear further price spikes and escalating
interest rates. New-construction home sales are up, previously
underwater properties are in positive equity again and investors are
turning their attention to "secondary markets" to find value. Economists
expect house prices to rise another 4 percent to 5 percent in 2014,
meaning remaining bargains will get even more sparse.
With that in mind, here are 10 tips befitting the up-market of 2014.
Sellers: Jump-start the process.
You
may be an avowed procrastinator, but if you want to sell a house this
year, start planning now. The process, say sellers, always takes longer
than expected. So get your home inspected now; there may be unseen major
repairs to address. Declutter, clean closets and shelves, store
extraneous possessions and furnishings and other stuff that might keep
sellers from picturing themselves in your space. Attend an open house or
two to get an idea of how to stage yours. And move along: Owners still
waiting for the market to peak should beware that this real estate cycle
may be shorter-lived than last.
Buyers: Be credit-ready.
There's
a lot of competition out there for homes, so tarry not. Get your credit
report and start repairing any blips. If your scores are below 620 or
so, a conventional loan will be a challenge. But if they're under 740,
you still might not get the best rates. Many buyers get a
prequalification letter from the lender, but you can one-up them with a
preapproval, which comes after a more thorough evaluation of your
finances. A preapproval letter shows the seller that you're good to go
and can close quickly.
Sellers: Vet your real estate agent, then follow the agent's advice.
Sellers
lose time and money by hiring poorly. Interview several potential
agents. You'll want a full-timer who is Web savvy and uses mobile
technology, because at least 4 in 5 buyers view their homes first
online. Your agent should be a proven performer in your submarket and be
willing to walk you through the financial aspects of your deal. The
more the agent knows about schools, commutes and other local details,
the better. Once vetted, accept your agent's advice on pricing,
marketing and negotiation.
Buyers: Adjust your negotiating expectations.
Lowball
offers are off the table in this environment and could eliminate you
from consideration. Respond to counteroffers quickly to keep other
buyers from entering the picture; you don't want to encourage a bidding
war. If one breaks out, be prepared to get fewer concessions and pay
more money. And have a few other homes in mind so you can be willing to
walk away if the price soars.
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