Is Your House Priced Too High?
Is Your House Priced Too High? Every seller wants to get their house sold quickly, for as much money as they can, with as few headaches as possible. And chances are, you’re no different. But did you know one of the biggest things that could jeopardize your success is the asking price for your home? Pricing your house correctly is one of the most crucial steps in the selling process. So, how do you know if you’re missing the mark? Here are four signs your high asking price might be turning potential buyers away—and why leaning on your real estate agent is the best way to course correct. 1. You’re Not Getting Many Showings or Offers One of the most obvious signs your house may be overpriced is a lack of showings. If it's been on the market for several weeks and only a few buyers have come to see it—or worse, you haven’t gotten any offers—it could be a clear indication the price isn’t matching up with what buyers expect. Because buyers who have been looking for a while can easily spot (and write off) a home that seems overpriced. Your real estate agent will coach you through this, so lean on their experience for what you may want to try to bring more buyers in, including considering a price cut. 2. Buyers Have Consistent Negative Feedback after Showings And if after the showings you do have, comments from the potential buyers aren’t great, you may need to course correct. Feedback from showings is an important part of understanding how buyers see your house. If they consistently say it's overpriced compared to other homes they’ve seen, it’s time to reconsider your pricing strategy. Your agent will gather and analyze this feedback for you, so you can look at how your house stacks up in the market. They can also suggest specific improvements or staging changes to better justify your asking price, or recommend one that aligns with today’s buyer expectations. As the National Association of Realtors (NAR) explains: “Based on all the data gathered, agents may make adjustments to the initial price recommendation. This could involve adjusting for market conditions, property uniqueness, or other factors that may impact the property's value.” 3. It’s Been on the Market for Too Long And that lack of interest is ultimately going to lead to it sitting on the market without any serious bites. The longer it lingers, the more likely it is to raise red flags for buyers, who may wonder if something is wrong with it. Especially in today’s market with growing inventory, a long listing period means your house is stale – and that makes it even harder to sell. Your real estate agent will be able to give you perspective on how quickly other homes in your area are selling and walk you through what’s working for other sellers. That way you can decide together if there’s something you want to do differently. As a Bankrate article says: “Check with your agent about the average number of days homes spend on the market in your area. If your listing has been up significantly longer than average, that may be a sign to reduce the price.” 4. Your Neighbor’s House Sold Without an Issue And here’s the last one to watch out for. If similar homes in your area are selling faster than yours, it’s a clear sign that something is off. This could be due to things like a lack of upgrades, outdated features, or a less desirable location. Or, it may be priced too high. Your agent will keep you up to date on your competition and what changes, if any, you need to make your home more competitive. They’ll offer advice on small updates that could increase your home’s appeal or how to adjust your strategy to reflect the reality of the market today. Bottom Line Pricing a home correctly is both an art and a science. It requires a deep understanding of the market and buyer psychology. And when the price isn’t drawing in buyers, there’s no better resource than your agent on what you may want to do next.
Why Pre-Approval Should Be at the Top of Your Homebuying To-Do List
Why Pre-Approval Should Be at the Top of Your Homebuying To-Do List Since the supply of homes for sale is growing and mortgage rates are coming down, you may be thinking it’s finally your moment to jump into the market. To make sure you’re ready, you need to get pre-approved for a mortgage. That’s when a lender looks at your finances, including things like your W-2, tax returns, credit score, and bank statements, to figure out what they’re willing to loan you. After that process, you’ll get a pre-approval letter to show what you can borrow. Here are two reasons why this is essential in today’s market. Pre-Approval Helps You Know Your Numbers While home affordability is finally starting to show signs of improving, it’s still tight. So, it’s a good idea to talk to a lender about your loan options and how today’s changing mortgage rates will impact your monthly payment. The pre-approval process is the perfect time for that. In addition to determining the maximum amount you can borrow, pre-approval also helps you understand this piece of the puzzle. As Investopedia says: “Consulting with a lender and obtaining a pre-approval letter allows you to discuss loan options and budgeting with the lender; this step can clarify your total house-hunting budget and the monthly mortgage payment you can afford.” You should use this information to tailor your home search to what you’re actually comfortable with budget-wise. Since mortgage rates have inched down some lately, you may find you’re able to afford a bit more than you’d expect for your monthly payment, but you still want to avoid overextending. As CNET explains: “In many cases, a lender may preapprove you for more than you need to spend on a home. And while it can be tempting to look at houses outside your budget, it won’t help you in the long run. Before you start touring homes, figure out how much you can realistically afford and stick to your budget.” Pre-Approval Makes Your Offer More Appealing And once you do find a home you want in your budget, pre-approval has another big perk. It not only makes your offer stronger, it also shows sellers you’ve already undergone a credit and financial check. When a seller sees you as a serious buyer, they may be more attracted to your offer because it seems more likely to go through. As Greg McBride, Chief Financial Analyst at Bankrate, says: “Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns and bank statements. A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount.” As mortgage rates trend down, more buyers are going to be ready to jump back into the market. And while demand is still limited right now, there’s the potential for competition to pick back up, especially in hot markets. So, why not stack the deck in your favor and make sure you’re putting yourself in the best position possible when you find a home you love? Bottom Line If you’re planning on buying a home, don’t forget to get pre-approved early in the process. It can help you get a more in-depth understanding of what you can borrow and shows sellers you mean business.
How the Federal Reserve’s Next Move Could Impact the Housing Market
How the Federal Reserve’s Next Move Could Impact the Housing Market Now that it’s September, all eyes are on the Federal Reserve (the Fed). The overwhelming expectation is that they’ll cut the Federal Funds Rate at their upcoming meeting, driven primarily by recent signs that inflation is cooling, and the job market is slowing down. Mark Zandi, Chief Economist at Moody’s Analytics, said: “They’re ready to cut, just as long as we don’t get an inflation surprise between now and September, which we won’t.” But what does this mean for the housing market, and more importantly, for you as a potential homebuyer or seller? Why a Federal Funds Rate Cut Matters The Federal Funds Rate is one of the key factors that influences mortgage rates – things like the economy, geopolitical uncertainty, and more also have an impact. When the Fed cuts the Federal Funds Rate, it signals what’s happening in the broader economy, and mortgage rates tend to respond. While a single rate cut might not lead to a dramatic drop in mortgage rates, it could contribute to the gradual decline that’s already happening. As Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), points out: “Once the Fed kicks off a rate-cutting cycle, we do expect that mortgage rates will move somewhat lower.” And any upcoming Federal Funds Rate cut likely won’t be a one-time event. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says: “Generally, the rate-cutting cycle is not one-and-done. Six to eight rounds of rate cuts all through 2025 look likely.” The Projected Impact on Mortgage Rates Here’s what experts in the industry project for mortgage rates through 2025. One contributing factor to this ongoing gradual decline is the anticipated cuts from the Fed. The graph below shows the latest forecasts from Fannie Mae, MBA, NAR, and Wells Fargo (see graph below): So, with recent improvements in inflation and signs of a cooling job market, a Federal Funds Rate cut is likely to lead to a moderate decline in mortgage rates (shown in the dotted lines). Here are two big reasons why that’s good news for both buyers and sellers: 1. It Helps Alleviate the Lock-In Effect For current homeowners, lower mortgage rates could help ease the lock-in effect. That’s where people feel stuck within their current home because today’s rates are higher than what they locked in when they bought their current house. If the fear of losing your low-rate mortgage and facing higher costs has kept you out of the market, a slight reduction in rates could make selling a bit more attractive again. However, this isn’t expected to bring a flood of sellers to the market, as many homeowners may still be cautious about giving up their existing mortgage rate. 2. It Should Boost Buyer Activity For potential homebuyers, any drop in mortgage rates will provide a more inviting housing market. Lower mortgage rates can reduce the overall cost of homeownership, making it more feasible for you if you’ve been waiting to make a move. What Should You Do? While a Federal Funds Rate cut is not expected to lead to drastically lower mortgage rates, it will likely contribute to the gradual decrease that’s already happening. And while the anticipated rate cut represents a positive shift for the future of the housing market, it’s important to consider your options right now. Jacob Channel, Senior Economist at LendingTree, sums it up well: “Timing the market is basically impossible. If you’re always waiting for perfect market conditions, you’re going to be waiting forever. Buy now only if it’s a good idea for you.” Bottom Line The expected Federal Funds Rate cut, driven by improving inflation and slower job growth, is likely to have a positive, though gradual, impact on mortgage rates. That could help unlock opportunities for you. When you’re ready, let’s connect. That way you’ll be prepared to take action when the time is right for you.
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