Hidden Costs of iBuying
Think of them as digital house flippers who scour mountains of data for typically off-market homes.
Known as iBuyers, these platforms buy houses for cash online. If the algorithms align well, homeowners who’ve submitted an online form will receive instant offers from interested iBuyers. The entire process usually takes place with no person-to-person contact. After buying the house sight-unseen (except for photos), iBuyers quickly resell, usually to other investors.
While iBuying may sound convenient, it has financial downsides. Industry experts say transaction fees can be significantly higher than in traditional home sales. Expect fee rates of around 7% of the home price, but be prepared for fee rates as high as 13%. Additionally, iBuyers most often make offers below market value.
Trust an Expert
You may think iBuyers can save you time and money. But an experienced real estate professional will work to get the best offer for your property and will be there to help find your next home.
When Is Buying More Affordable Than Renting?
Realtor.com® nailed it when they said the U.S. housing market was in for another whirlwind year. Its 2022 housing forecast predicted continued increases in housing prices, rent and mortgage rates in “a mixed bag of housing affordability challenges and opportunities.”
We’ve heard a lot about rising housing prices over the past few years, but rents are projected to increase at a pace of 7.1% compared to 6.6% for home sale prices. The report even goes so far as to say that buying a starter home would be cheaper than renting in some of the country’s largest metropolitan areas.
Choosing whether to rent or buy is a huge decision in any market. Fear of making “the wrong decision” intensifies as the market tightens. Still, you may be surprised to find that you can afford to buy after looking at your financial picture.
Consider these advantages of buying over renting.
Homeownership Is an Investment
At the end of a lease, you’ll walk away with nothing. At the end of a mortgage, you’ll own property with equity.
Rent payments can rise with every new lease you sign. A fixed-rate mortgage offers stability.
A rental property is not yours to change as you please. But when you buy a house, you have the freedom to turn it into your dream home.
When deciding to buy or rent, carefully examine your budget, and think about your lifestyle and goals. If you’re considering buying but are apprehensive about the current market, a real estate professional can help you understand what’s happening in your community.
Supply Chain Issues Affect Housing Market
It’s no secret real estate values increased during the pandemic, with an unprecedented number of homes selling in bidding wars. Due to material shortages, delivery delays and cost increases, new home construction has struggled to keep up with the demand for housing. Lumber prices tripled from pre-pandemic levels, and these costs are often passed along to home buyers.
Although single-family housing starts have decreased, the number of homes under construction is actually up because houses aren’t getting finished. Besides a shortage of building materials, construction – like other industries – has experienced major labor shortages, a considerable hurdle to completing projects.
Despite current construction woes, experts predict home builders will overcome supply shortages this year, enabling them to speed up construction to meet ongoing demands for new housing. More inventory should help keep prices in check and curb last year’s sizable increases in home values.
Analysts are hoping that a gradual tapering down in housing starts may provide some relief, allowing builders to catch up with the backlog of demand.
6 Home Maintenance Tips for Sellers
Routine maintenance can be just as important after you’ve accepted an offer as it is before listing your home. To keep your house well-maintained throughout the transition, Realtor.com® recommends tending to these six areas.
- Carefully maintain the yard and walkways. Clean out flower beds and keep the yard tidy and free from leaves and downed tree limbs.
- Keep your gutters cleared to prevent water damage. Check the roof before the inspection.
- Service your HVAC system. Check your furnace, clean out ductwork and replace filters.
- Keep critters out by covering any holes and vents.
- Wash your windows no matter what time of year it is.
- Keep up with the current season. Decorations for long-passed holidays and other telltale signs that nobody’s home can be a nuisance to your neighbors.
Home Seller Tips for the Closing Process
OK, squint a little. See that? That’s the finish line, just ahead of you! After all the anxiety, hard work and waiting, you’ve almost made it to closing day. Don’t end up disappointed about a deal gone wrong because you skipped a few steps.
As annoying as it is, complete all promised repairs. No, you won’t be able to enjoy them, but they can make or break your sale. Plan to have everything finished and in working order at least one week before closing. This will allow time for any last-minute adjustments. Save receipts and invoices, and take before-and-after photos of repaired or improved items.
When flying through those closing documents, slow down when you get to the settlement statement. Check all of these numbers carefully to make sure they match what you were expecting to receive from the sale.
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