An increasing number of home buyers are adopting the competitive spirit when shopping for the perfect home. Bidding wars are making a return due to the lack of homes for sale on the market.
In our previous blog post, we talked about NOW being the best time to purchase a property. We talked about it being in the potential buyer’s best interest to nab their dream home before interest rates increase and the market improves. However, in an economy where short sales and foreclosures prevail, how can a seller compete?
Realtormag.com wrote an article titled “5 Ways to Sell a Home Faster, For More Money” referenced by 24/7 Wall St. In this article, real estate experts and organizations assessed how sellers can sell their property at the best price in the shortest timeframe.
Here are the 5 ways:
1. Curb Appeal- Remember how important first impressions were in high school? Well, take that concept and apply it to real estate. When someone walks towards your home, they have to see themselves coming home from work everyday and feel good about it. Make sure the driveway is in good condition, the porch is inviting and the exterior looks freshly painted.
2. Pricing It Right- Make sure to set a realistic price from the beginning. If you overprice, your house will be sitting on the market for a while. And the more it sits, the more unattractive it looks to any potential homebuyer.
3. Going Green Goes A Long Way- Not only does becoming more energy efficient make you feel like a good Samaritan, it’s also cost effective for the buyer. If your home has energy-efficient windows or appliances, then advertise it!
4. Great Photographs- What stands in the way of having your property disregarded or looked over online? Using a highly pixelated shot or an outrageous picture angle as your feature photo. Realtor.com states that more than 6,300 photos are viewed per minute on its site so make sure your photos are professional and clean.
5. Move-In Ready- Have a leaky faucet? Are your children’s toys all over the living room floor? Make sure to have your home as presentable as possible. Anything that poses as a distraction might get in the way of your homebuyers envisioning themselves living there.
All in all, what short sale and foreclosure properties can’t offer is the TLC that went into showing a potential homebuyer that your home is what they’ve been searching for. In other words, it comes down to aesthetics and maintenance. And for the right person, they’ll take “finding the right fit” over “strike while the iron is hot” any day.
Is now a good time to buy? A recent survey by Fannie Mae Housing cites that 73% of Americans are feeling the pressure of purchasing rather than renting their next home. With the anticipation of home prices and mortgage rates increasing in the next 12 months, anxious homebuyers are finally feeling ready to take the plunge.
According to Fannie Mae’s Chief Economist, Doug Duncan, some potential homebuyers feel that renting is becoming more costly than home ownership because 48% of Americans are expecting rent prices to continue to increase. Sounds like the next logical step would be to invest in a property yourself, right? Especially when the same survey reports “44 percent expect their financial situation to improve in the next year.”
But is it safe to accurately project a timeline of the recovery process, and then plan accordingly?
It would seem advantageous for anxious homebuyers to purchase in a market where short sales prevail. Not only is a short sale purchase a good option for the homebuyers, but “banks are realizing that short sale transactions usually sell for higher prices than foreclosures,” according to an article on RealtorMag. In result, banks are speeding up the short sale process and taking steps towards making it a more seamless transaction for the homebuyer.
Existing home sales saw a 2.6 percent decline, from 4.60 million in February to 4.48 million in March, but the numbers are much better than March of last year’s (5.2 percent above the 4.26 million-unit). While sales will vacillate from month to month, “job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year,” says Lawrence Yun, NAR chief economist.
So is it a good time to buy? If Yun’s projections are correct, and the economy is slowly but surely bouncing back, then now would be a good time to invest in a home while prices are low.
Many RI housing developers and investors are pushing for a reintroduction to the state’s historic tax-credit program. Eliminated in 2008 for its lack of return in state investment, this program allowed property owners to claim up to 30 percent in tax-credits for the restoration of historic properties in Rhode Island.
Inactive for the past four years, this bill continues to be a trending topic among many supporters, including Rep. Jeremiah O’Grady, who strongly argues that NOW is the time to re-instate the tax program. Supporters of the O’Grady bill such as statewide local interest group, Grow Smart Rhode Island, hope it acts as a catalyst to a revival in the job and housing market in RI.
Since 2008, many abandoned, unfinished, or underdeveloped projects in areas such as Warwick, Pawtucket and downtown Providence have remained vacant. Yet there is still hope that there is potential for a new market. An article in PBN describes the abandonment of this stimulus incentive as a “baited hook with no barb.” In other words, maybe lawmakers gave up too soon on this program. As it stands, many developers are hesitant to take on historic projects without a tax-credit.
According to O’Grady, the revised bill is “leaner” in quantifying its tax credits, so much that lawmakers shouldn’t fear that the current budget crisis would impede on its development. The estimated total project cost will decrease from 30 percent (in 2008) to 20 percent. Developers may be eligible for a 25 percent tax credit if a quarter of the property or an entire first floor is allocated for commercial purposes. Additionally, federal tax credits of up to 20 percent may also be earned if federal requirements are met.
Not so bad of an investment, in terms of providing a softer cushion for the state. All in all, developers may earn up to a combined 40-45% in tax credits, both state and federal. It’s also important to mention the revised bill will cost the state $10 million dollars less than it did four years ago. However, the question of whether or not this bill is even feasible remains.
The argument is that reinstating tax credits on historic properties will create opportunities where it couldn’t be found otherwise. With Gov. Chafee scrambling to fill in the potholes of our state budget, can we hope that the returns will be lucrative enough in the foreseeable future? Or are we investing into a great economic incentive at the wrong time?