Selling a Home in 2021: Mortgage Refinancing, Sellers’ Market, What You Need to Know

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Sellers: it’s your time. If you are already a homeowner, your home is probably worth a lot more today than it was a year ago. Median home prices have risen 14% in the past 12 months, according to data from Redfin, with high-end single-family homes in high demand.

But before homeowners pull out the moving boxes and grab the “for sale” sign expecting a big payday, here are a few things to keep in mind.

You’ve just refinanced your mortgage. Should you sell?

You might want to wait. Many people have refinanced their mortgages in the past 12 months to take advantage of extremely low rates. Just be aware that it often takes a year or more to recoup the costs associated with refinancing.

“When someone refinances, they should go through the thought experiment, ‘Can I stay in this house long enough to make it worth it? Said Mike Fratatoni, chief economist of the Mortgage Bankers Association.

Consider how the potential profit from your current home could offset the costs of refinancing and the savings you might derive from the new loan terms. Follow up with your mortgage lender to discuss the terms you agreed to when refinancing. They may be able to help you overcome potential pitfalls.

Which sellers have an advantage now?

Minors and retirees. Those who have built up a significant amount of equity in their homes are in the best position, said Brooke Baenen, a real estate agent in Green Bay, Wisc.

It’s also a great time for those who are retiring, said Samuel Rad, certified financial planner at Affluencer Financial and instructor at the University of California, Los Angeles.

“Retired sellers are winning in this market,” he said. “You’ve owned your house for a while, so you have a ton of equity, and you have the availability and affordability to move to a more profitable location. They can buy better homes and have better retirement. ”

A sign for sale is on a street in Sacramento, California.


Photo:

Salgu Wissmath for the Wall Street Journal

Which sellers don’t?

Those about to be buyers. “I tell people, ‘I could sell your house tomorrow, but where are you going to live?’ Ms. Baenen said.

The sellers are the big winners of the moment, the supply of available housing being so scarce. The problem is, they will be on the other side of the equation when they buy, faced with the same low inventory and the same fierce auctions that have increased their profits on the sell side.

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“Unless you move to an apartment or chalet or already have a second home, you’re going to find yourself in the same situation as everyone else,” Ms. Baenen said. “So I definitely asked some salespeople, ‘Maybe we’ll wait a bit. Maybe I could get those extra 20,000 people, but am I going to spend it all trying to rent a place? ”

If you are spending on a rental, ask yourself if it is really worth selling your current home. And if you’re happy with where you live, ignore the housing market.

How can you avoid additional costs if you sell now?

Anyone looking for ways to sell their home is bound to find different tips on how to save as much money as possible. Online sellers. Two agents representing both buyers and sellers. Even sell your house yourself. But financial planner Mike Metzger says he’s advising his clients to be extremely careful right now, especially with so many people looking to ease the pressure of low inventory.

“I know people don’t like paying commission fees, but there are so many caveats in a hot housing market like this,” Metzger said. “Work with a knowledgeable real estate agent. It’s the traditional route for a reason. ”

Should You Try To Take Last Minute Steps To Increase The Value Of Your Home Before You Sell?

Probably not. In years past, Ms. Baenen’s clients have considered renovating their homes or purchasing new appliances before putting them on the market. Now she sees buyers grabbing whatever is available.

“Previously, a salesperson had to serve this house on a platter with everything clean and all the mess tidy,” she says. “Now it could be dirty, the paint could peel off, there could be trash everywhere. People don’t care. I say to my salespeople, “Leave it. Why bother? The house will sell in two days. ”

Write to Julia Carpenter at [email protected]

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