Sales of single-family homes will rise modestly again in 2016 and median sales prices should be up 3% to 5%, trade groups and researchers say. While rising mortgage rates and a shortage of first-time buyers may temper that outlook some, the coming year should be another seller's market for real estate.
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Steve Taplin | Best Real Estate Tips
1. Best Real Estate Tips For 2016
Steve Taplin has been the Founder, Managing Partner, President, and/or
CEO of numerous real estate investment companies and has been a
principal in thousands of investment property transactions in numerous
states totaling over $200 million worth of real estate.
2. Real Estate Tips
• Sales of single-family homes will rise modestly again in 2016 and median
sales prices should be up 3% to 5%, trade groups and researchers say. While
rising mortgage rates and a shortage of first-time buyers may temper that
outlook some, the coming year should be another seller's market for real
estate.
• Despite an upsurge in construction, home inventories remain low and multiple
offers are still common.
• While a 6-month home supply is considered a balanced housing market, most
markets are well below that, some significantly. Moreover, supporting
fundamentals are far more solid than about a decade ago in the pre-bust
years of 2006-2007.
• With that as a backdrop, here are 10 tips for buying and selling real estate in a
presumed up-market in 2016.
3. Buyers: Don't overreach
A bidding war might spur you to overspend, but paying an inflated price can make it tough to resell
when prices stabilize or sink.
A decision to pay a premium isn't always an errant one, though, when you plan to live in the house
long term. Rather than focus on overheated developments, look at comparable homes in neighboring
areas with the same access to the schools and amenities that you value. Set a bid ceiling, and try to
have a few other deals in the works so you're less inclined to overbid.
4. Sellers: Exercise your clout, but
don't overplay it
If you set a price from 5% to 10% above
the market, you're more apt to get an
offer close to your home's real value
than if you start much higher and force
your listing to go stale. However, if your
home has better qualities than area
comps, you have a bit more latitude.
No need to pay closing costs or offer
other incentives to the buyer, especially
if it means keeping your in-demand
home off the real estate market. For
example, a sale contingent on the
buyers selling their home is reasonable
but only with a contractual escape for
you, often called a "kick-out" clause.
That gives you the right to continue
marketing your home. If a less-
encumbered bid comes in, you then offer
the initial buyers a set time of 48 or 72
hours to withdraw their contingency.
5. Buyers: Be ready, be early, be
flexible
Are the best houses still getting snapped
up quickly? Then don't wait until you find a
home to go loan shopping. Keep your
preapproval letter, as opposed to a basic
prequalification letter, in tow. Winnow your
neighborhood choices before you shop.
Line up an action-ready inspector for an
immediate property visit.
Have your agent ask what the sellers
would value most in the sale. If you can
accommodate a fast settlement or short-
term, rent-back condition or fewer
contingencies and conditions, that can
make you stand out when that dream
home is hanging in the balance.
6. Sellers: Know your agent's
commission split
A heated market is causing sellers to question why they should pay the full 6%
commission.
Hence, sellers' agents are accepting less, then offering less of a split to buyers' agents in
a practice known as "sell to the commission."
When the co-op fee is low, buyers' agents tend to be less than enthusiastic in showing
such houses, and yours will typically take longer to sell.
7. Buyers: Buying new?
Get what you pay for. Builders are cranking
production to pre-recession levels. But some
are cutting corners by hiring untrained help, not
waiting for concrete to cure, painting walls
without primers or quietly substituting cheaper
materials such as a lower grade of countertop
granite, or installing inadequate plumbing or
HVAC units.
Consider hiring an independent inspector to
oversee construction (at $400-plus). Builders
may tell you not to worry because they'll hire
one. Ahem!
And, be sure the builder is established and that
you research online reviews, complaint pages
and consumer ratings. Ask specific questions
about the crew's experience and certifications.
8. Sellers: Know your influential
rooms
Upgrades rarely pay for themselves, but there are 2 spaces that can make or break a home sale: the
kitchen and master bath. Because kitchens are the heart of the home, or the "new living room," make
yours homey. Hide the coffee maker and toaster. Add simple decorative touches to the wall behind the
sink. Sure, new granite countertops and appliances are optimal, but new hardware for cabinets, new
faucets, new lighting fixtures and fresh (neutral) wallpaper are inexpensive touches that carry weight.
Thoroughly scour and depopulate the fridge and take magnets off it, please. For bathrooms, always
display a sparkling bathtub and commode. A new tub liner, or "shell," can make that marred tub look like
new and save you from replacing it. A new faucet, new lights, fresh caulking, a new towel rack or new
mirror may be in order. Clean out the medicine cabinet. Of course, this doesn't mean you shouldn't
declutter, depersonalize, paint and scrub the rest of your space, too.
9. Buyers: Beware hidden costs
Origination fee: On a $200,000 mortgage for a
$250,000 home, assuming 3.5% interest and no
points, you'd pay the lender about $1,800.
Home inspection: Even if the mortgage insurer
doesn't require one, get one for peace of mind.
Property taxes: You'll usually pay a few months
upfront.
Appraisal: The bank will need to determine how
much the place is really worth.
Private mortgage insurance, or PMI: This
depends on your down payment and credit
rating.
Other pre-occupancy costs should include
home insurance, title insurance and deed-
recording fee, and possibly title insurance,
survey costs, credit report fees, flood insurance
and homeowners association dues/insurance.
10. Sellers: Consider the replacement
You're getting multiple offers on your home,
with several over asking price. Wow, that was
fast! But can you find your next home in time to
move once you sign?
If not, one option would be to request a lease-
back from the buyer, allowing you to remain in
your old home for the time you need to shop for
the replacement. This will be contingent on
when the new owners need to occupy, and the
period is usually limited to 60 days.
The other option is to slow the selling process
by asking for a longer period before closing.
Whatever you do, get your prospects and
finances lined up (see tip No. 3!). Yes, a seller's
market swings 2 ways!
11. Buyers: Seek out an up-and-
coming neighborhood
• Things to look for include proximity to a new or
resurgent business center, the addition of a
major employer, a light-rail station, a city
cleanup initiative, young people moving there,
crime watch and other neighborhood groups
being formed, multiple renovations underway
and other up-and-coming neighborhoods
abutting it.
• New retailers, restaurants and other commercial
tenants are also a good sign. Research by
RealtyTrac shows that homes in ZIP codes that
have a Trader Joe's grocery store appreciated
40% on average since the homes were last
purchased. Homes with a Whole Foods nearby
appreciated 34% on average.
12. Sellers and buyers: Don't play the
bubble game
• Thousands of would-be sellers and buyers are
agonizing over how they can time their next sale
or purchase to coincide with the "pop" of this
housing bubble, either by selling soon for
optimal profit or swooping in with cash to
pounce on post-pop pricing.
• True, the bust of 2007-2008 was a loud and
robust one, but don't look for anything
catastrophic this time. The present froth is being
fueled by narrow supply and widespread
demand, not easy credit and "liars' loans."
• Most real estate cycles don't explode like the
last one; they just deflate slowly. Real estate
continues to be a reliable long-term investment
prone to usually modest peaks and valleys,
done on a deal-by-deal basis and subject to
local economies
13. STEVE TAPLIN REAL ESTATE
INVESTMENTS
Steve Taplin has had an impressive career and track record as a real estate investing
expert. Mr. Taplin has completed 2,673 real estate transactions as of August 2015 valuing
over $300,000,000 worth of real estate. This track record has been audited by 2 separate
firms.
REAL ESTATE BROKERAGE SERVICES
Mr. Taplin has been a licensed real estate professional since 2003. As the licensed Broker
and owner of TAP Realty, LLC he brings his experience of completing thousands of real
estate transactions to his clients benefit. Get more information on TAP Realty.
MORTGAGE SERVICES
Mr. Taplin has owned and operated numerous Mortgage brokerages and is also a licensed
mortgage loan originator in Arizona. His focus has been on investment property financing
and hard money loans.