Month: September 2020

Move-Up vs. Second Home: Which One Is Right For You?

The pandemic has changed the way many of us live, work, and attend school—and those changes have impacted our priorities when it comes to choosing a home.

According to a recent survey by The Harris Poll, 75% of respondents who have begun working remotely would like to continue doing so—and 66% would consider moving if they no longer had to commute as often. Some of the top reasons were to gain a dedicated office space (31%), a larger home (30%), and more rooms overall (29%).¹ 

And now that virtual school has become a reality for many families, that need for additional space has only intensified. A growing number of buyers are choosing homes further from town as they seek out more room and less congestion. In fact, a recent survey found that nearly 40% of urban dwellers had considered leaving the city because of the COVID-19 outbreak.²

But not everyone is permanently sold on suburban or rural life. Instead, some are choosing to purchase a second home as a co-primary residence or frequent getaway. Without the requirements of a five-day commute, many homeowners feel less tethered to their primary residence and are eager for a change of scenery after spending so much time at home.

If you’re feeling cramped in your current space, you’ve probably considered a move. But what type of home would suit you best: a move-up home or a second home? Let’s explore each option to help you determine which one is right for you.

WHY CHOOSE A MOVE-UP HOME?

A move-up home is typically a larger or nicer home. It’s a great choice for families or individuals who simply need more space, a better location, or want features their current home doesn’t offer—like an inground pool, a different floor plan, or a dedicated home office. 

Most move-up buyers choose to sell their current home and use the proceeds as a downpayment on their next one. If you’re struggling with a lack of functional or outdoor space in your current home, a move-up home can greatly improve your everyday life. And with mortgage rates at their lowest level in history, you may be surprised how much home you can afford to buy without increasing your monthly payment.^3,4

To learn more about mortgage rates, contact us for a free copy of our recent report!
“Lowest Mortgage Rates in History: What It Means for Homeowners and Buyers”

One major benefit of choosing a move-up home is that you can typically afford a nicer place if you spend your entire budget on one property. However, if you’re longing for that vacation vibe, a second home may be a better choice for you.

WHY CHOOSE A SECOND HOME?

Once reserved for the ultra-wealthy, second homes have become more mainstream. Home sales are surging in many resort and bedroom communities as city dwellers search for a place to escape the crowds and quarantine in comfort.⁵ And with air travel on hold for many families, some are channeling their vacation budgets into vacation homes that can be utilized throughout the year. 

A second home can also be a good option if you’re preparing for retirement. By purchasing your retirement home now, you can lock in a low interest rate, start paying down the mortgage, and begin enjoying the perks of retirement living while you’re still fit and active. Plus, it’s easier to qualify for a mortgage while you’re employed, although you may be charged a slightly higher interest rate than on a primary home loan.⁶

One advantage of choosing a second home is that you can offset a portion of the costs—and in some cases turn a profit—by renting it out on a platform like Airbnb or Vrbo. However, be sure to consult with a real estate professional or rental management company to get a realistic sense of the property’s true income potential.

WHICH ONE IS RIGHT FOR ME?

You may read this and think: I’d really like both a move-up home AND a second home! But if you’re dealing with a limited budget (aren’t we all?), you’ll probably need to make a choice.  These three tactics can help you decide which option is right for you.

LET’S GET MOVING

Whether you’re ready to make a move or need help weighing your options, we’d love to help. We can determine your current home’s value and show you local properties that fit within your budget. Or, if your heart is set on a second home in another market, we can refer you to an agent in your dream locale. Contact us today to schedule a free, no-obligation consultation!

Sources:

1. Zillow –
   https://www.zillow.com/research/coronavirus-remote-work-suburbs-27046/ 
2. The Harris Poll –
   https://theharrispoll.com/should-you-flee-your-city-almost-40-have-considered-it-during-the-pandemic/
3. MarketWatch –
   https://www.marketwatch.com/story/mortgage-rates-keeping-falling-so-will-they-finally-drop-to-0-2020-08-13
4. Toronto Star –
   https://www.thestar.com/business/2020/08/07/you-can-get-a-fixed-rate-as-low-as-184-per-cent-which-is-unbelievable-low-mortgage-rates-driving-up-home-prices.html
5. Kiplinger –
   https://www.kiplinger.com/real-estate/buying-a-home/601091/timely-reasons-to-buy-a-vacation-home
6. The Press-Enterprise –
   https://www.pe.com/2018/11/17/5-tips-on-when-should-you-buy-a-retirement-house-hint-before-you-quit-work/

Receiving your first offer is one of the most exciting parts of selling your home. And while it might seem like the hard work is finally over, the negotiation process is actually just getting started. 

Even in a seller’s market, negotiating with a buyer can require quite a bit of time, skill, and guidance from your agent. However, with the right strategies, you can remain in the driver’s seat and maximize your profits.

Here’s How to Negotiate with Potential Buyers

When buyers submit an offer, they’re trying to get the best possible price, secure specific contingencies and financing, and close on their ideal timeline. As a seller, you’ll want to take their needs into consideration—but that doesn’t mean you have to give in to every concession.

Ready to hone your negotiation skills? Here are four easy tips to help you leverage a deal that gets you the price you want while keeping your buyer happy.

Review every offer with your agent

Even if you have some home selling experience, it can be hard to decipher all the elements of an offer. Most offers are just a small part of a purchase and sale agreement, which includes everything from price to contingencies to deadlines, so it’s important to review every detail with your agent.

While it might be tempting to decline any offers below your asking price, you still want to consider the bigger picture. It may be worth sacrificing some equity for fewer contingencies or a cash deal. Your agent can guide you through the pros and cons of each offer, as well as answer any questions.

Don’t compromise on your must-haves

Fortunately, low inventory and rising prices have given sellers a distinct advantage in today’s market. That means you probably won’t have to give up a lot of your must-haves—like a certain price or closing date—to secure your sale. 

While it’s okay to drive a hard bargain, you don’t want to appear unreasonable to buyers. In some situations, it’s common courtesy to agree to certain contingencies (such as a home inspection), offer credits for repairs, or even pay a portion of their closing costs.

Make a clear counteroffer

If you receive an offer that isn’t quite what you want, you have a few options. Most sellers choose to respond with a counteroffer, which proposes modified terms that are more beneficial to them. 

The biggest factor to consider is price—if a buyer offers less than you’re willing to accept, try countering with a more realistic number. However, you’ll also want to take financing, contingencies, and timing into account. For example, you may want to ask a buyer for a different closing date or say no to excessive contingencies, as they can slow down the transaction. Ultimately, the ball is in your court, so it’s worth weighing different options with your agent.

Don’t be afraid to say no

Generally, you should always submit a counteroffer to every reasonable offer. However, if it becomes clear that a buyer isn’t willing to budge on your deal-breakers, don’t be afraid to say no. It’s also best to automatically decline any lowball offers that are around 30% less than your list price.

While it may seem counterintuitive to turn down an offer, it’s not worth negotiating with someone who isn’t serious about your home. And because the market is extremely competitive right now, it probably won’t take long to find a buyer who’s willing to pay the right price.

Thinking of Selling Your Home Soon?

If you’re looking for the right agent to guide you through the negotiation process, we’d love to lend a helping hand! Get in touch with us today to learn the ins and outs of selling your home—we’re always on hand to answer any questions you might have.

Picture this: you’ve found a seemingly perfect home in just the right neighborhood. It has every single one of your must-haves, plenty of space, and even all of the features you want. But on the tour, your agent spots a few big problems, like a crack in the foundation or signs of water damage. Should you walk away from what seems like your dream house?

Unless you’re looking to tackle a fixer-upper, you may want to proceed with caution if you run into any of these red flags during a showing.

Watch Out for These 6 Red Flags During a Showing

As you tour homes, it’s important to remember that a seller may not always disclose (or know) the whole truth about their house. If you ever have any questions about a home’s condition, make sure to ask your agent. They’ll often be able to spot problems that you may not see yourself, and they can also help you decide whether or not a certain issue is a dealbreaker. 

And even though a property may appear well-maintained, there could be some lingering imperfections that aren’t visible to an untrained eye—here are a few examples.

Foundation issues

A faulty foundation is one of the biggest and costliest problems you can encounter in a home. If you spot any foundation cracks (both outside or inside) bigger than one third of an inch, it could mean a property has major structural defects.

Other signs of potential foundation issues include sticking doors, gaps around window frames, or sagging floors.

Outdated electric and plumbing systems

A leaky faucet or ungrounded outlet may seem like a quick fix, but they could signal a much larger problem. If you’re touring an older home, have your agent ask about the age of the plumbing and electrical wiring. It’s essential (and expensive) to bring these systems up to code to prevent potential floods or fires.

An old roof

Typically, roofs should be replaced every 12 to 15 years. So if you notice some missing or curling shingles, it could mean that a home’s roof has reached the end of its lifespan. If you’re not sure about a roof’s age, be sure to ask your agent—they can get in touch with the seller’s agent for more information.

Water damage

Take a look at a home’s ceiling and floors—do you see any dark spots? If so, this could be a sign of water damage, which is often a pricey fix. Be sure to check out a home’s drainage situation, too. A yard that isn’t properly graded could cause water to seep inside after a heavy rainstorm.

Homes that have basements are more prone to leaks than those that don’t, so don’t forget to head downstairs to look for water damage!

Unwelcome critters

Bugs, mice, and other pests can spell big trouble for a house, especially if the infestation is widespread. Termites in particular should be a huge red flag, as they can destroy a home’s entire structure before being detected.

If you see an overwhelming number of critters wandering around during your tour, you may want to move on right away. You should also check for mud tubes, hollow or rotting wood, and bug droppings, as these are common indications of termites.

Unpleasant odors

Notice a less-than-pleasant scent during a showing? These aromas could be signs of mold, mildew, water damage, pests, improper ventilation, and countless other issues. You should also be wary if a seller seems to be covering up smells with heavily scented candles or air fresheners.

Bottom line: Always have a home inspection

Even if you don’t spot any of these problems, it’s always best to have an inspection after your offer is accepted. A qualified inspector can spot problems both large and small and will provide a detailed report of everything that needs to be fixed.

From there, you can try to renegotiate the price of the home with the seller or ask them to complete the repairs. However, if a home is being sold “as-is,” you may be stuck doing the work yourself. 

Thinking About Buying Your Next Home?

When it comes to finding the right home, it pays to have an expert agent on your side to handle all the details. Give us a call today to learn more about the premier services we offer to our buyers. We’d be more than happy to answer any of your real estate questions, and we can also help you sell your current home, too!