September 1, 2016 by Jeff Lowen
What does the “Back to School” season mean for real estate? Or… how does the real estate market affect the back to school season? Great questions if you’re buying or selling a home.
Generally, from mid-July through early September, the back to school season has kids and parents alike in preparation mode. I might be so bold to say some of us are in a little bit of panic mode! Supplies, clothes, meet the teachers, friends…
Every year, the real estate market re-loads on the cusp of the back to school season. Now that school is in session, the excitement of the new school year settles down and although the last month may have seen a drop in prices and available homes for sale, traditionally, the market rebounds nicely through the holidays offering great selling and buying opportunities. Besides, with the kids in school, we parents have more time to focus on other things!
Rule #2: You’re in the company of those that must make a move and if you don’t, joining those ranks may keep you on the sidelines.
Waiting until another time of year, e.g. Springtime is not a strategy; it’s a fantasy. Yes, the cherry tree in the front yard is in full bloom in spring, and so are home buyers in full force. However, let’s not forget that Sellers love Spring, too. This equals more inventory, driving prices down, and also more buyers driving prices up. It truly depends on your local market. And this leads to…
Rule #3: It’s better to act now and begin making preparations than wait until you’re under time pressure.
This one’s not just for school season! Families with school-age children ideally want to get their kids settled into the preferred new school district early in the summer to allow time to adjust. Then the children are ready when classes begin. Selling a home (or buying one – See Rule #5) during this time is cumbersome at best, and it may be the same for the folks that are buying yours. Refer to Rule #2. So, if you’re making a move in the near future, begin doing your research now. This doesn’t necessarily mean have a love affair with Google. This means you’ll find, interview and select a professional to help you along the way. You wouldn’t select an attorney on the day you go to court, would you?
Rule #4: The myth of the MLS.
Just because your home is on the market and in the MLS (Multiple Listing Service), doesn’t at all mean it will sell. Dozens of real estate companies offer limited services that would only stab a sign in your yard and put your home in the local MLS. This is like having a great car on the NASCAR track, but not having any gas for it. Your home may look great on the internet, but if it’s not priced smartly, shows well and is marketed assertively and strategically, you may be in for the long haul. The national list-price-to-sale-price-ratio average is around 84%. That’s a whopping $48,000 you could be losing on a $300,000 home. So, unless you’re okay with the ‘average,’ take some time to meet with an agent that has the track record of getting homes sold at the top of the market. In other words, a full-service agent, and not just the illusion of full service.
And finally, Rule #5: Meet with a preferred lender way ahead of time.
Every year I read the National Association of Realtors Profile of Buyers and Sellers, and every year I notice that home buyers wait until they are out looking at homes with an agent before even talking to a mortgage lender. Every year I hear lots of stories from lenders about the curve ball they’re thrown because there was something on the buyer’s credit, paperwork that had to be obtained, etc. that takes a considerable amount of time to acquire. Yet still, these hard working lenders, who are under extreme scrutiny due to recent and ongoing federal regulations, are expected to get you qualified. Are we a culture that does absolutely no preparation, and then expects everyone else will help us with our emergency? NOTE: If you’re thinking of buying a home in 6-8 months, meet with a lender now. You won’t be locking in an interest rate, but you’ll get some valuable advice on where you are financially, and if you should take any actions or precautions to keep or put you in a great position to buy your dream home. Sure, you can wait ’til the last second, and that digg on your credit you didn’t know about won’t preclude you from getting a loan, just add a couple basis points = dollars on your monthly mortgage payment, that’s all. By the way, the U.S. average is 687.
Yes, Rule #5 was primarily for buyers, but you sellers out there take heed as well. Pay attention to those interest rates. I read an article on bankrate.com a while back that claimed for every 1/4 point of interest rate increase, a whopping 250,000 buyers get priced out of the market and may not be able to buy your home! Don’t feel left out in the cold, though; Rule #4 was especially for you Sellers! All in all, it just makes sense in dealing with the largest asset and purchase most will make in their lifetime, to get a head start. Waiting until the last minute will cost you your hard earned money… In back to school – or any season!
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