Date Archives: June 2021

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Real Estate Tips | 25 Posts
June
23

Get Ahead of the 30 Minute Showing


Back in the days of abundant inventory, buyer used showings as a way to explore whether or not the property was a fit for their needs and goals, and they usually had an hour to do it. Those days are no longer here. In this market, you'll rarely have the opportunity to spend an hour touring a property. Rather, you might receive half an hour, and you may not be the only buyer touring!

Given that you're making such a big decision, and half an hour seems like so little time, I have advice for you.

Consider the showing as a way to confirm, rather than a way to explore. Use the resources available online to determine whether or not a listing is likely to be a fit for you prior to the showing. If the answer is yes, schedule! If the answer is no, don't. I mean it.

This perspective shift could be a breakthrough in your home search, and it ties into previous advice I've given that buyers need to be picky when scheduling showings. To briefly recap, you should determine what the most important goals are for your home search, and stay true to those. This means that if location is most important, and you want to be in a walkable community near downtown Mount Vernon, you don't look at properties in say, Howard. If you're really needing a home with more than 1,500 square feet because your family is expanding, then it's important that you don't spend precious time looking at homes with 1,000 square feet.

So, how can you determine whether or not a listing is likely to be a fit without walking through it?

Well, agents got creative during the pandemic, and starting offering more information about their listings online. This includes more detailed photos (sometimes, even basement and garage photos, or photos of the mechanicals!), and 360 tours where you can essentially walk through the home from the comfort of your couch. It's important that you use these resources, look through all of the photos, watch the video tours, and open the property disclosures if they are available to you. All of these resources are often included in the multiple listing service or agent websites.

Another thing you want to do is look at the location on a map. Figure out how far the property is from your place of work, from shopping and restaurants, etc. Again, your time is precious in this process, and it will just discourage you to drive to a showing only to discover that the location is inconvenient for you.

I promise, all of this work on the front end will be worth it because it will save you time and hassle.
This process will put you a step ahead of other buyers.
It will also provide you the clarity you need in order to do what it takes to win it. That is, if the showing confirms it's a fit!

Isn't this empowering? If I'm getting a sense of one thing from my buyers right now, it's that they feel like they have little control, but that's not always the case. This shift places you back in the driver's seat. These complex market conditions do not have to control your home search if you don't let them.

Until next time,
Cassie Johnson
Key Realty - John Yoder Team

June
16

Buyers, Be Picky!


This week, the team has some advice for buyers that may seem counterintuitive, but I promise that I am not messing with you!

In this ultra competitive market with very low inventory, it's easy to want to look at every listing that comes up. It's very natural for buyers to want to take a look at homes that don't really meet their criteria "to see" if they can make it work.

We have been recommending a different approach, encouraging buyer to be picky. Hear me out…

If you're considering buying right now, it's extremely important that you decide which criteria is highest priority, and then stay committed to those criteria. Don't know what those criteria may be? 

Start by asking yourself what the biggest pain point is for you in your current living situation. Maybe it's location, or the amount of space. Maybe you're very concerned with the age of the home or need more land. Whatever it may be, your goal should be to solve that pain point.

With that goal in mind, you should evaluate each listing that comes up in terms of whether it will help you meet your goal. Luckily, homes that are listed have loads of information available. Recently, listing agents have also included helpful resources like virtual tours and floor plans so that prospective buyers can have a clearer picture of the property's flow and layout.

All of this information will help you determine whether the home is a fit before you even schedule the showing. If it looks like this property will help you meet your goals, then scheduling a showing will help confirm that.

Why is this perspective shift beneficial to you? It will help you avoid buyer fatigue. In this market, buyers are extremely vulnerable to disillusionment and frustration. It's not helpful for you to look at everything that comes up, rather, this strategy will wear you out and make an already emotionally taxing process even more overwhelming.

Being picky in terms of which properties you look at will help you maintain clarity throughout the process, and alleviate much of the frustration that other buyers are dealing with.

If you find the home that fits your goals, you will likely be in the right frame of mind to make a competitive offer, increasing your chances of winning.

Now, don't hear what I'm not saying. I'm not encouraging you to pick a house apart! There will likely be factors that you will need to compromise on, but those factors should be of lesser importance to you or things that can be changed or improved easily.

I hope you found this information helpful! The team would love to hear from you. If you would like to discuss your goals, please feel free to contact us here on our website.

Until next time,

Cassie Johnson
Key Realty - John Yoder Team

June
9

How Do Agents Price Listings?

Have you ever been looking at listings online, wondering how the agent and their client came up with the asking price? Well, the process usually involves research and some strategy, and it's rarely arbitrary.

The most common way to chose a list price is to compare the property to be listed with similar properties that have sold recently. Agents will look at the sold price of homes that are similar in square footage, condition, bedrooms and bathrooms, and in the same neighborhood. They'll use those sold prices, often in terms of price per square foot as a base point.

When it comes to sales comparison, there are other relevant factors to look at as well. Days on market will give a glimpse of the market reaction to a listing. If the property sold quickly, that tells you it was priced at or below market value. In other words, prospective buyers thought the price was right and wasted no time moving forward on a purchase. If the days on market is high, or if never closed, that might signal that the property was overpriced, unappealing in terms of condition, or marketed ineffectively. Your agent can compare the initial list price to the actual sold price, and any price drops in between by taking a look at the listing history.

Additionally, your agent might be aware of appreciation rates in your area. Between 2019-2020, home values appreciated at a rate of 10.4% in Knox County. It's possible that your agent will use an appreciation factor to narrow in on an appropriate list price. Using this factor, if your property appraised for $200,000 in 2019, it was likely worth around $220,000 in 2020. We don't have enough data to know the current appreciation rate, but agents who have a pulse on the market will be able to estimate based on the trends they are seeing in neighborhoods like yours. This strategy is more speculative than using comparable sales, but it is helpful!

Of course, there are unique homes out there that do not fit the mold of their neighborhood, making it difficult to price according to comparable sales. In this case, your agent will do their best to find the closest comparables possible. If you have a truly unique home, your agent may recommend a pre-listing appraisal in order to have a clear picture of your property's value. This can be a powerful tool for you when it comes time to list, because you and prospective buyers can enter into contract much more confident that the value will hold up.

I hope you found this information helpful! If you are interested in knowing your home's value, please feel free to reach out to us. We would be happy to offer you a free home valuation with no pressure to list. We want to equip you with the information you need in order to take the next step— whether that is listing or staying put!

Talk soon,
Cassie Johnson
Key Realty - John Yoder Team

June
7

Buy-Then-Sell Strategies That Can Make Your Life Easier in This Market

Has anyone taken the time to tell you that you may not need to sell before you buy your next home? Our team has had this discussion with our friends and clients, and we've found that many homeowners are delaying their plans to sell because they are afraid of being homeless. This makes complete sense— I wouldn't want to face homelessness either. This market is ultra-competitive, and while drastic home appreciation creates a major opportunity for homeowners, current market conditions present challenges as well.

But what if I told you that you could purchase your next home before you sell your current one— and do it without a home sale contingency? Wouldn't that be a game changer?
The roadblock that many homeowners face when purchasing their next home is their downpayment. Not everyone has 20% saved in cash. Most of the time, people leverage their equity for their downpayment, and this is the right idea! In fact, a lot of people have been doing this through simultaneous closings over the years. In past and less competitive market seasons, the process usually looks something like this: 1. List current home and get it in contract, 2. Find next home and get it in contract with a home sale contingency, 3. Work out timeframes for a simultaneous closing, where you close on both homes within a very short timeframe. But can you see how this process is problematic in this market?
One tweak in this order of operations can make your life so much easier. I recommend looking into loan products that will leverage your equity first, before you sell your current home. Let's take a closer look at these products:
A home equity line of credit can be particularly useful to homeowners that have paid their loan down significantly and have a lot of equity in the home. A line of credit will be a loan that borrows against that equity so that you can use it as a downpayment on your purchase— possibly even for repairs, if those are necessary. Once you sell your current home, you can pay off both the mortgage and the line of credit with the proceeds.
A bridge loan will be loan that covers both your current home and your next home for a short period of time. Often, these loans are principal and interest only, which can make this option surprisingly affordable in the meantime. This product allows you to secure your next home, then sell your current one. Once you sell, the loan will get refinanced to cover only your new home.
A float down loan is similar to a bridge loan, but it does not involve refinancing. You'll apply for a fully amortized loan that covers both your current property and your next one, and usually these payments are higher because they include both properties, taxes and insurance. Once you sell your current property, the proceeds are applied to the loan and the payment "floats down" without being refinanced.
These loan products benefit you in three major ways:
  1. All of these strategies increase your negotiating leverage because they eliminate the need for a home sale contingency. You'll likely be competing with buyers who do not need to sell a property, and now you can be one of them!
  2. The timeframes will work better for you. Wouldn't it be wonderful to move into your next home before listing so that you don't have to be inconvenienced with the flood of showings?
  3. It alleviates the pressure by giving you time to find a home that fits your criteria. Believe me, this is a major benefit. When I listed my first home four years ago, it went into contract within 48 hours. Market conditions weren't quite as hot as they are now, but things were already trending up and getting competitive. My husband and I had about a week to find our next house in order to work within the contract deadlines, and the pressure was overwhelming. We ended up purchasing a home we didn't love. It needed work, and we had to live in a home we were renovating. We made it work, but it wasn't ideal! These loan products, however, have been borne out of this market as an alternative so that you don't have to go through what I went through.

Slam dunk, right? Of course, I am not a lender. You will definitely want to discuss these products with a lender directly to make sure they are a good fit for your situation.

Our team would love to hear from you! If you would like to learn more about buy-then-sell strategies like these, please contact us right here, on our website. One of our agents would be happy to discuss your real estate goals.

Until next time!
Cassie Johnson
Key Realty - John Yoder Team

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