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3 Ways to Make Your House Sellable for Potential Buyers

3 Ways to Make Your House Sellable for Potential Buyers

We meet with a number of sellers on a daily, weekly, and monthly basis, and one common feeling we’ve gathered from partnering with homeowners is selling a home can be a stressful process.

If you’re a homeowner who is looking to move and you ever thought “I don’t know how I’m going to sell my house.”

Trust us. You’re not alone.

We understand the thought of packing up your entire life and moving it somewhere else can feel overwhelming — especially when you never sold a home before and don’t know where to begin.

The Erica Rawls Team is here to help!

We sat down with our project manager Robbi Guthrie, who is also an interior designer and owner of Mika Interior Designs, to learn the three things homeowners must do before placing their house on the market.

If you have ever worked with us before, you may have seen Robbi collaborating with us in one of our seller’s consultations.

Robbi understands what makes a house harder to sell and the things homeowners can do to make their house appealing to potential buyers. She spoke with us to share tips for sellers to help get their houses off the market.

In our post, we’ll share Robbi’s advice and explain the following three things you must do before selling a home and why they’re important:

  1. Get a Pre-Listing Home Inspection Before Listing Your Property
  2. Make Repairs and/ or Upgrades (That You Can Afford!)
  3. Declutter/Depersonalize Your Home For Showings

Before we get into the tips, we first want to help our sellers to understand…

The Most Important Thing to Consider When Selling Your House Is … Your Potential Buyers

It’s important to make buying a home a seamless process for potential buyers, according to Robbi.

“You want them to come into the space and feel comfortable and confident, and you want them to feel like, you know, this could be home,” Robbi said.

Aside from aesthetics, your potential buyers will consider the price and convenience of owning your home, so as a seller you want to make sure buyers are confident in your property.

This leads us to the first thing we advise you to do before selling your home…

1. Get A Pre-Listing Home Inspection Before Listing Your Property

Getting a pre-listing home inspection can give your home a clean bill of health when you put it up for sale — and a clean bill of health will give you leverage, even in a competing market.

You want to confidently say to your buyer: “I’m giving you a certified home that’s inspected so we know there are no issues with the HVAC system or roof.”

As realtors, we often recommend buyers get an inspection on a new home they’re interested in so they have an understanding of it structurally and mechanically as well.

If you know your buyer is going to get their own inspection, wouldn’t you want to be sure your home will pass?

As Robbi explained, if there’s a leaking faucet, your potential buyer may take a closer look at other things and scrutinize the entire property.

“And you know, that could make a buyer go and look at other properties, where otherwise, they would have stayed and made an offer,” she said.

For example, Jameel Poteat, a realtor and buyer specialist on our team, saw first-hand what can happen when we take clients to view a home and the sellers did not get a pre-listing inspection.

Jameel’s clients were the first to tour a new home on the market, and they loved it!

However, the clients noticed one thing wrong with the home and it happened to be a deal-breaker for them — they no longer were interested.

If the sellers would have obtained a pre-listing home inspection, they could have fixed the issue before the buyers even knew it existed and sold their home.

The benefits of getting a pre-listing home inspection will easily outweigh the costs.

Once you have the inspection completed, you can move to the next step. Which is…

2. Make Repairs And/Or Upgrades to Your Kitchen, Bathroom, or Roof (That You Can Afford!)

One of the benefits of a pre-listing home inspection is learning what repairs are needed, and determining if there are any upgrades you can do to make the house more attractive to buyers.

We highly recommend making any repairs you can, especially things like the roof – no matter the cost – because you’ll get it back in return.

If you know you need to replace your roof, it’s better to do it before the buyer learns about it from their home inspection report.

If you don’t make repairs you should be prepared for a buyer to ask for a deduction on the home. For example, if it would cost you $50 to fix a leaking faucet and you don’t, a buyer may ask for $1,000 off the home’s listing price.

Is There Anything In The Home Not Worth Fixing Before Selling Your House?

It depends.

We know everyone can’t afford to make all the major repairs their home may need before selling it, so we suggest putting a small fund together and asking your realtor what is the most important thing or things to focus on.

Is It Worth Making Upgrades to Your Home?

Yes, if you can do it!

When it comes to determining what price to sell your home, upgrades can make a significant impact.

According to Robbi, if you want to get a little more for your home than where it’s sitting now, you should invest in the following high-value upgrades that buyer’s love, which include:

  • The kitchen
  • The bathroom
  • The roof

If the spaces have been recently upgraded or you can’t afford to repair anything that’s not required, there are other things you can tweak that will make a difference to potential buyers.

Think about the last time your carpet was replaced. Was it over five years ago? Consider replacing it.

Have pets? You never know what unpleasant smell could linger in the house, and because you’ve lived in your home for so long, you could be immune to it. Ask a friend what they smell when they first walk into your house.

After your home is inspected and you’ve made your necessary repairs and desired upgrades, you’re ready to begin showing your home to potential buyers. Before you do, Robbi highly recommends you…

3. Declutter / Depersonalize Your Home Before Showings

Once you know for sure you want to put your home on the market, you must begin to look at it from the eyes of the buyer, Robbi explained.

In today’s society, the first time your potential buyer may see your home is via pictures from an online listing. You want to allow the person to see themselves in the space, which means you need to have less of YOU in the space, Robbi said.

This means removing family photos and other personal items or painting bright or bold colored rooms and accent walls to neutral tones. Just because you love your red accent all doesn’t mean your potential buyer will.

This can be hard because your home can have sentimental value for several reasons:

  • You lived there for 10-15+years
  • You raised children or grandchildren there
  • You purchased the home single and now you’re selling it to get married
  • You love your first family home but you’ve outgrown it and need a bigger one

Despite all of the reasons you may be attached to your time, it’s time to depersonalize it for potential buyers, especially when it’s time to stage your house for showings.

Do Homes Sell Better Furnished or Unfurnished?

Furnished — every time.

As realtors who also work with buyers, we know they want to be emotionally tied to the house they’re looking to make their new home. Furniture plays a huge role in that.

According to the National Association of Realtors (NAR)’s 2019 Profile on Home Staging, when staging a home:

  • 83% of buyers’ agents said it made it easier for a buyer to visualize the property as a future home.
  • 28% of sellers’ agents stated saw staged home on the market for slightly shorter times
  • 22 % of sellers’ agents reported an increase of 1% – 5% of the dollar value offered by buyers, in comparison to similar homes.
  • 17% of respondents stated that staging a home increased the dollar value of the home between 6% and 10%.

Bottom line – furnished homes sell faster and for slightly higher prices than unfurnished homes.

However, there’s a difference between staging a furnished home and keeping everything in your house as-is for showings.

And that’s where Robbi’s role as an interior designer/project manager comes in.

“My job is to quietly and strategically tug at the heartstrings of the potential buyer,” Robbi said.

When staging is well done, you can walk into a room and it has an essence to it. A furnished home goes a long way to making a space feel comfortable.

Contact The Erica Rawls Team – Let Us Help You Sell Your Home Today!

Doing the right things in the right order when you place your house on the market will help you sell your house in the timeframe you need.

Are you preparing to sell your home and need some assistance learning what you should be doing in the process?

Let us help you!

If you’re not sure what things need to be improved in your home, contact The Erica Rawls Team!

Complete our online form or call us at 717.500.2116 today!

To learn more about Robbi’s interior design services visit www.mikainteriordesign.com.

3 Mistakes to Avoid When Selling a Home in 2020

3 Mistakes to Avoid When Selling a Home in 2020

It’s exciting to put a house on the market and to think about making new memories in new spaces, but we can have deep sentimental attachments to the homes we’re leaving behind, too. Growing emotions can help or hinder a sale, depending on how we manage them.

When it comes to the bottom line, homeowners need to know what it takes to avoid costly mistakes. Being mindful of these things and prepared for the process can help you avoid some of the most common mishaps when selling your house.

1. Overpricing Your Home

When inventory is low, like it is in the current market, it’s common to think buyers will pay whatever we ask for when we price our homes. Believe it or not, that’s far from the truth. Don’t forget that the buyer’s bank will send an appraisal to determine the fair value for your home. The bank will not lend more than what the house is worth, so be mindful that you might need to renegotiate the price after the appraisal. A real estate professional will help you to set the true value of your home.

2. Letting Your Emotions Interfere with the Sale

Today, most homeowners have been living in their houses for an average of 10 years (as shown in the graph below):3 Mistakes to Avoid When Selling a Home in 2020 | Simplifying The MarketThis is several years longer than what used to be the norm, since many homeowners have been recouping from negative equity situations over the past 10 years. The side effect, however, is when you live for so long in one place, you may get even more emotionally attached to your space. If it’s the first home you bought after you got married or the house where your children grew up, it very likely means something extra special to you. Every room has memories and it’s hard to detach from the sentimental value.

For some homeowners, that makes it even harder to negotiate, separating the emotional value of the home from the fair market price. That’s why you need a real estate professional to help you with the negotiations in the process.

3. Not Staging Your Home

We’re generally quite proud of our décor and how we’ve customized our houses to make them our own personalized homes, but not all buyers will feel the same way about your design. That’s why it’s so important to make sure you stage your home with the buyer in mind. Buyers want to envision themselves in the space, so it truly feels like their own. They need to see themselves in the space with their furniture and keepsakes – not your pictures and decorations. Stage and declutter your home so they can visualize their own dreams as they walk through your house. A real estate professional can help you with tips to get your home ready to stage and sell.

Bottom Line

Today’s seller’s market might be your best chance to make a move. If you’re considering selling your house, let’s get together to help you navigate through the process while avoiding common seller mistakes.

Why You Should Get Pre-Approved Before Looking for a Home

Why You Should Get Pre-Approved Before Looking for a Home

& How to Get Comfortable Talking to Mortgage Lenders

If you’re considering buying a home, you may wonder whether you should get pre-approved for a mortgage before you start looking for one.

While it’s common to look at homes before securing financing, you receive several benefits when you get pre-approved for a mortgage prior to shopping for your new home.

Finances are often one of the biggest hurdles for first-time homebuyers, and the thought of disclosing bank statements, credit scores, tax records and other financial information with mortgage lenders can be intimidating.

The Erica Rawls Team believes our home buyers are placed in the strongest position when they get pre-approved for a mortgage prior to shopping, especially when they know they may expect some issues to arise during the process.

So, to help potential homeowners become more comfortable talking with mortgage lenders about their finances, the Erica Rawls Team sat down with Angie Shaw, branch manager and loan originator at Fidelis Mortgage, to learn:

  • Why first-time homebuyers are hesitant to talk to lenders about their finances
  • Why so much paperwork is needed when getting a mortgage
  • Why mortgage lenders request bank statements & what they look for in them
  • Who underwriters are and what happens during the underwriting process
  • & much more!

So, Let’s Get Comfortable Getting Uncomfortable With Mortgage Lenders About Finances

As a first-time homebuyer, you may be nervous at the thought of sitting in front of a lender and having your credit score pulled, especially when it can determine your eligibility for something you really want — like a house.

Your credit score is one of the most important factors that will come into play when buying a home.

According to Angie, first-time homebuyers are hesitant to reveal their credit score to mortgage lenders for several reasons, such as:

  • They are nervous or insecure about what their credit score looks like
  • They are not monitoring their credit score
  • They have never pulled their credit score and they have no idea what it is

“Pulling your credit score is the first step to determining what we can do for you, and what kind of programs you qualify for,” Angie said.

There may be programs you qualify for and lenders can find that out upfront. You could think you owe a certain amount for your closing costs, but because a lender has collected your documentation, they might uncover that you qualify for some grant money, she explained.

Even if you attempt to obtain pre-approval for a mortgage and you are denied because of your score, or other factors, you can still obtain a house with a plan in place, our Realtor/Buyer Specialist, Sheena Lansanah, explained.

As real estate advisors, we want future home buyers to know you can talk to a lender without making a commitment on a home. You may know you want to buy a home, but you don’t have a plan for getting it, so it’s perfectly fine to talk to a lender before contacting a realtor. When you meet with the lender, you can simply have a conversation to learn what you can get pre-approved for.

If you don’t receive pre-approval at that time, it doesn’t mean it’s a “no” forever. Lenders can put you on a program to help you get to the point where your score is in a good place, Angie explained.

Why Is So Much Paperwork Required to Buy a House?

The amount of paperwork needed to purchase a home may seem daunting to you, but it’s necessary because of fraud.

People across the country — even if it’s only a small minority — try to create fake documents for others or themselves, and the U.S. Department of Housing and Urban Development (HUD), U.S. Department of Veterans Affairs (VA) and conventional underwriters are all under pressure to prove the information home buyers provide in their application is accurate, Angie said.

To cut down on paperwork, some lenders have docless options where you allow them to verify your information electronically by signing into your bank account.

For many, this method may feel like an invasion of privacy, but it’s not. You’re only signing in to authorize the bank to provide the lender with the information they need. You’re not giving out your username or password.

To get pre-approved for a mortgage, if you receive a regular W-2, you can expect to submit the following documents

  • W-2’s for the last few years
  • 1-2 months of recent pay stubs
  • Bank statements for the last 2 months
  • Tax returns for the last 1-2 years

If you pay or receive child support, have a divorce decree, or already own a home, additional documentation will be required.

“The reason why we want that information upfront is so that we can give you the most accurate pre-approval and put you in a program that best suits your lifestyle and your family’s needs,” Angie said.

Consider this analogy.

When you go to your doctor to receive a medical diagnosis, you have to provide your complete medical history, get exams — some that may be uncomfortable, even awkward — and fill out several pages of paperwork. You do all of this so your doctor can provide you with a complete and accurate diagnosis.

As our realtor Sheena put it, “When we know every piece of the puzzle we can definitely advise you in the best way possible. Once you know where you are, you know where you are going —”

“ — and that empowers you,” Angie added.

If you want to go house shopping with the Erica Rawls Team we believe in talking with a lender first because we truly believe in being properly prepared when purchasing a home.

Could you imagine going house shopping and falling in love with a home only to find out you can’t make an offer on it ? — for whatever reason.

That’s more disappointing than giving up all of your tax and financial information.

One of our responsibilities as realtors is to guide you properly to ensure you have all the tools necessary to make the best investments and decisions — whether it’s the money or the pre-approval you have — so you know everything before making that huge decision.

“Giving that paperwork and documentation upfront can really avoid heartbreak and at pain at the end,” Angie said. “The reason why we ask for a comprehensive list is so that we prepare your life, uncover anything we may not have talked about initially so that you’re not two weeks before settlement and we find out there’s an old tax lien somewhere in another county or state, and it never came up in our search.”

“We’re not judging how much you spend a month, if you go to Starbucks every day, or if you go out to eat every night. We don’t care about that,” she said.

What’s Involved in the Home Mortgage Underwriting Process?

When going into the home mortgage pre-approval process as a first-time homebuyer, you may experience fear of the unknown, particularly when it comes to not understanding what happens in the underwriting process.

You also want to know the personal and financial information you provided ends up in the right hands and remains secure.

We can tell you, as a loan originator, Angie is required to be licensed to take all of your personal information, pull your credit, and determine what program you qualify for in order to structure the mortgage from there. Then, your information is sent to a processor who examines the supporting documents, that were previously reviewed, before submitting them to an underwriter.

The underwriter has designations through HUD, Fannie Mae, Freddie Mac, VA, USDA, or the Federal Housing Administration (FHA) that allows them to underwrite a certain type of loan, like an FHA mortgage loan.

In the home buying process, an underwriter’s role is to audit your documents to determine you have the ability to pay back the mortgage

Underwriters follow processes to make sure the mortgage meets their underwriting guidelines for their designation, whether it’s for HUD, FHA or conventional. They run programs behind the scenes to check if there’s anything odd out there that wasn’t disclosed — not purposely, but we are going over a lot of information upfront and there are times clients forget about past obligations thinking they have been resolved, Angie explained.

The underwriter is the final decision maker, and signs your loan documents — and they are also the ones on the hook if your loan goes bad, too!

So, What Do Underwriters Look for In Your Bank Statements?

According to Angie, when reviewing your bank statements, underwriter’s look for the following potential red flags:

  • Large Deposits: If you have a side business and often make large cash deposits, underwriters will ask where the money came from. They want to be sure all funds must be sourced and accounted for when using the money to get a mortgage.
  • Changing Jobs More Than 3 Times in One Year: If you start a new job every three months that’s considered a red flag because it can make you look inconsistent. This, however, does not apply to freelancers or individuals who are self-employed. If you fall into one of those categories, your income is calculated differently. It’s important for freelancers and entrepreneurs to show they are making money along with two years of their tax returns.
  • Inaccurate or Inconsistent Information: Because they are auditing your financings and ability to pay back the mortgage, they need to verify the information submitted in your application is accurate and aligns with your bank statements.

Should You Get Pre-Approval For a Mortgage Before Looking For a House? Yes, It Benefits You!

When you get pre-approved for a mortgage before you start looking for a home, you can look securely knowing that if you write an offer you will go to the closing table.

And, if you’re not approved right away that’s okay! We will work with you to get you there.

“What’s great about Erica’s team is that I’ve been with them where we worked [with clients] for a year. We do not mind putting in the time. If we give you a plan and you’re sticking to it, they will stick with you and they will be there at the end when you finish the plan,” Angie said.

Are You Looking for A House Nearby? Contact The Erica Rawls Team Today!

If you’re ready to take the next steps to purchase your new home, complete our online form or give us a call at 717.409.6500 to contact the Erica Rawls Team online today!

2 Myths Holding Back Home Buyers

2 Myths Holding Back Home Buyers

In a recent article, First American shared how millennials are not really any different from previous generations when it comes to the goal of homeownership; it is still a huge part of their American Dream. The piece, however, also reveals,

 “Saving for a down payment is one of the biggest obstacles faced by first-time home buyers. Dispelling the 20 percent down payment myth could open the path to homeownership for many more.”

 Myth #1: “I Need a 20% Down Payment”

Buyers often overestimate how much they need to qualify for a home loan. According to the same article:

“Americans still overestimate the qualifications needed to get a mortgage, resulting in qualified potential buyers not even considering homeownership. Indeed, the Urban Institute report revealed that 16 percent of consumers believed that the minimum down payment required by lenders is 20 percent or more, and another 40 percent didn’t know at all.”

While many potential buyers still think they need to put at least 20% down for the home of their dreams, they often don’t realize how many assistance programs are available with as little as 3% down. With a little research, many renters may actually be able to enter the housing market sooner than they ever imagined.

Myth #2: “I Need a 780 FICO® Score or Higher”

In addition to down payments, buyers are also often confused about the FICO® score it takes to qualify for a mortgage, believing a ‘good’ credit score is 780 or higher.

To debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.2 Myths Holding Back Home Buyers | Simplifying The MarketAs indicated in the chart above, 50.23% of approved mortgages had a credit score of 500-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Believe it or not – your dream home may already be within your reach.

The #1 Reason to Sell Your House in the Winter

The #1 Reason to Sell Your House in the Winter

Many sellers believe spring is the best time to put their homes on the market because buyer demand traditionally increases at that time of year. What they don’t realize is if every homeowner believes the same thing, then that’s when they’ll have the most competition.

So, what’s the #1 reason to sell your house in the winter? Less competition.

Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months supply of listings from the National Association of Realtors.The #1 Reason to List Your House in the Winter | Simplifying The MarketAs you can see, the ‘sweet spot’ to list your house for the most exposure naturally occurs in the late fall and winter months (November – January). 

Temperatures aren’t the only thing that heats up in the spring – so do listings!The #1 Reason to List Your House in the Winter | Simplifying The MarketIn 2018, the number of homes on the market increased from December to May. Don’t wait for these listings and the competition that comes with them to come to the market before you decide to sell your house.

Added Bonus: Serious Buyers Are Out in the Winter

At this time of year, purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers.’ The lookers are at the mall or online doing their holiday shopping.

 Bottom Line

If you’ve been debating whether or not to sell your house and are curious about market conditions in your area, let’s get together to determine the best time to place your house on the market.

4 Keys to Buying a Home in Today’s Market

4 Keys to Buying a Home in Today’s Market

After a few months of thinking it over, you’ve finally made the decision to purchase your first home.

You picture the process to be fairly simple: find a realtor, tour a few homes until you find your dream home, obtain a mortgage, and then you have your new home,right?

Not exactly.

You meet with your realtor and view a few homes, but the houses you see don’t match up to what you imagined your forever home for your family would be. 

Because you’re ready to buy your first home, you feel annoyed and frustrated at the process. Then, it happens. Your realtor shows you a house for sale that meets all your requirements, but it has several competing offers. 

Your realtor says you need to be ready to make an offer to the seller soon so you don’t lose the property, and to have the best chance you should not ask for a seller assist.

Reality sets in, and you quickly realize you are nowhere near as ready to purchase a home as you initially thought, especially from a financial standpoint. 

It’s not uncommon for first-time home buyers to reconsider once they realize they may have to compete for a home and don’t fully understand what financial considerations are taken into account at that point in the home buying process. 

Fortunately for you, Erica Rawls Real Estate Advisors know buying a home can be complicated, and our job is to make it as simple as possible for you. 

To help first-time home buyers and others who are looking for a new home, we’ve shared four key things you need to know before buying a new home in today’s market. 

1. Save As Much Money As You Can Toward The Total Purchase Price

That’s right. The most important thing to do you can do when buying a home is saving money.

You may be afraid of not knowing exactly how much money it will cost to buy your new home, but if you have enough saved toward it, when the time comes, you will have a better chance at getting your home.

Here’s Our Tip: Have at least 7 % of the total purchase price saved. This amount includes the down payment, closing costs, and may not may not include money for future repairs and furniture.

Now, you may be thinking how much money is that? Let’s break it down with this example.

Let’s say the home you want costs $100,000, and you have to put a 5% down payment toward the cost, which would be $5,000.

You also need to plan for closing fees, which you can expect to pay, on average, 3% of your home’s purchase price, so that would be $3,000. Then, you know you want to have $3,500 saved for future repairs and furniture.

In this case, you’d ideally want to have $11,500 saved at a minimum ($5,000 + $3,000 + $3,500) to include the down payment, closing costs and repairs/furniture. 

You would only need about $7,000-$8,000 if you want to save 7% without factoring in future repairs or furniture.

If you’re in a competing offer for a home you don’t want to be in a position to ask for seller assistance, which can risk your chance of getting the house. 

Here’s a real-life scenario where having enough money saved benefited the potential buyer in a competing offer.

Our team worked with a millennial who saved $20,000 toward their dream home,which was between $130,000 – $150,000. When the millennial found out there was a competing offer, they told the seller they could make a $10,000 earnest money non-refundable deposit with no seller assistance — the millennial won the offer!

The amount of money you save is going to make or break you in today’s market, so save as much as you possibly can.

You may be thinking, I already have so many other bills and obligations, how can I begin to save for a home?

Don’t get discouraged.  Here are a few tips to help you with saving for your dream home 

  • Tip 1: Don’t make any large purchases, including furniture, until AFTER closing! Keep your focus on the down payment and closing costs.
  • Tip 2: Save a portion of money from your tax return! The beginning of the year is a great time to start a new savings plan. Jump-start your savings using your refund.
  • Tip 3: Find a program that will help you pay for your closing costs. There are even some programs will pay up to 100% of the costs!

2 . Understand Your Credit Score And/Or Work Toward Improving It

Aside from saving money toward the down payment and closing costs, your credit score is another important factor that you need to consider when purchasing a home in today’s market. 

If you know the importance of having a good credit score to buy a car, then you understand how imperative a good credit score will be for buying a new home. 

The higher your credit score is, the less risky you will appear to the lender. You will also have a lower interest rate on your mortgage over the life of the loan, which saves you money long-term. 

You may be wondering, “What credit score do I need to buy a home?”

Here’s Our Tip: Reach for a minimum of a 740 middle credit score across all three credit bureaus so you will have the most favorable terms available to you.

It’s possible to purchase a home with a credit score lower than 740, such as a 640 or 680, but you will pay at least one percentage point higher in interest, which is a significant amount of money over the life of a loan. 

There are some programs that may allow you to purchase a home with a score of 580 — we do not recommend going this route!

We want you to be financially successful when it comes to purchasing a home so you become a successful homeowner. 

If you’re credit score is not where you’d like it to be, work on ways to improve your score before you enter the home buying process. 

“What if I can make a big down payment? Does my credit score matter then?”

Your credit score doesn’t matter if you pay in cash. Otherwise, yes, it’s still a factor, even with a large down payment. 

If you make a larger down payment it will not fix a poor credit score. The down payment will only reduce the amount of the loan you will need. 

For example, the house you want is $250,000 and you qualify for a $150,000 mortgage. You can still get the home if you have $100,000 in cash to pay it off. 

3. Have and Maintain a Steady Job For At Least 2 Years

One thing lenders review when considering whether to grant you a mortgage is whether or not you have a steady income. 

Lenders like to see at least two years of employment when they’re considering you for a mortgage. They will review at least two years of your tax returns — whether you receive a W-2 from an employer or work as an independent contractor. 

Here’s Our Tip: If you’re considering leaving a job, wait until AFTER closing.

Lenders understand if you’re working in a position where you’re going from one job to another in the same field that would be considered a promotion, but it still makes the closing process more difficult with additional paperwork to file. 

4. Assess Your Finances – Can You Really Afford the Monthly Mortgage Payment?

The last thing to consider when buying a home in today’s market is how much you can actually afford to pay for your mortgage each month. 

Once you’ve saved the money for your closing costs, boosted your credit score to the ideal range and established you have a steady income, you need to determine how much you can afford for your monthly mortgage payment.

Just because you qualify for a certain mortage doesn’t mean you have to take it. If you qualify for a $250,000 mortgage but know you can’t afford more than $1200/month for a mortgage payment, you may consider taking a $150,000 mortgage instead.

Here’s our tip: Create a list to determine all of your monthly bills and expenses. This can give you an idea for how much you can afford each month for your mortgage.

You know your monthly financial obligations and personal desires better than anyone else. In your list factor things such as how much you shop, spend on bills, potential vacations, children’s expenses (if applicable), etc. 

Contact Erica Rawls Real Estate Advisors Team Today!

If you’re ready to take the next steps to purchase your new home, complete our online form or give us a call at 717.409.6500 to contact the team at Erica Rawls Real Estate Advisors today!

5 Reasons to Sell This Fall

5 Reasons to Sell This Fall

Below are 5 compelling reasons listing your home for sale this fall makes sense.

1. Demand Is Strong

The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase…and are in the market right now. More often than not, in many areas of the country, multiple buyers are competing with each other to buy the same home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory is still under the 6-month supply that is needed for a normal market. This means that in the majority of the country, there are not enough homes for sale to satisfy the number of buyers.

Historically, a homeowner would stay an average of six years in his or her home. Since 2011, that number has hovered between nine and ten years. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

Many homeowners were reluctant to list their homes over the last couple years, for fear that they would not find a home to move to. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and simpler, as buyers know exactly what they can afford before shopping for a home. According to Ellie Mae’s latest Origination Insights Report, the time needed to close a loan is 43 days.

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up. There is currently ample inventory for sale at higher price ranges. This means if you’re planning on selling a starter or trade-up home and moving into your dream home, you’ll be able to do that in the luxury or premium market.

According to CoreLogic, prices are projected to appreciate by 5.2% over the next year. If you’re moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage) if you wait.

5. It’s Time to Move on with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

Homeownership Will Always Be a Part of the American Dream

Homeownership Will Always Be a Part of the American Dream

On Labor Day we celebrate the hard work that helps us achieve the American Dream.

Growing up, many of us thought about our future lives with great ambition. We drew pictures of what jobs we wanted to have and where we would live as a representation of a secure life for ourselves and our families. Today we celebrate the workers that make this country a place where those dreams can become a reality.

According to Wikipedia,

Labor Day honors the American labor movement and the contributions that workers have made to the development, growth, endurance, strength, security, prosperity, productivity, laws, sustainability, persistence, structure, and well-being of the country.”

The hard work that happens every day across this country allows so many to achieve the American Dream. The 2019 Aspiring Home Buyers Profile by the National Association of Realtors (NAR) says,

“Approximately 75% of non-homeowners believe homeownership is part of their American Dream, while 9 in 10 current homeowners said the same.”

Looking at the number of non-owners, you may wonder, ‘If they believe in homeownership, why haven’t they bought a home yet?’. Well, increasing home prices and low inventory can be part of the reason why some haven’t jumped in, but that does not mean there is a lack of interest. The same report shows the increase in the desire to buy in the last year (as shown in the graph below):Homeownership Will Always Be a Part of the American Dream | Simplifying The MarketAs we can see, there are more and more people each quarter who want to buy a home. The good news is, as more inventory comes to the market, more non-homeowners will be able to fulfill their dreams. Finally, they’ll be able to move into that home they drew when they were little kids!

Bottom Line

If you’re a homeowner considering selling, this fall might be the right time, as there are buyers in the market ready to buy. Let’s get together to determine how you can benefit from the pent-up housing demand.

5 Real Estate Reality TV Myths Explained

5 Real Estate Reality TV Myths Explained

Have you ever been flipping through the channels, only to find yourself glued to the couch in an HGTV binge session? We’ve all been there, watching entire seasons of shows like “Property Brothers,”Fixer Upper,” and “Love It or List It,” all in one sitting.

When you’re in the middle of your real estate-themed TV show marathon, you might start to think everything you see on the screen must be how it works in real life. However, you may need a reality check.

Reality TV Show Myths vs. Real Life:

Myth #1: Buyers look at 3 homes and decide to purchase one of them.
Truth: There may be buyers who fall in love and buy the first home they see, but according to the National Association of Realtors, the average homebuyer tours 10 homes as a part of their search.  

Myth #2: The houses the buyers are touring are still for sale.
Truth: Everything is staged for TV. Many of the homes shown are already sold and are off the market. 

Myth #3: The buyers haven’t made a purchase decision yet.
Truth: Since there is no way to show the entire buying process in a 30-minute show, TV producers often choose buyers who are further along in the process and have already chosen a home to buy. 

Myth #4: If you list your home for sale, it will ALWAYS sell at the open house.
Truth: Of course, this would be great! Open houses are important to guarantee the most exposure to buyers in your area, but they are only one piece of the overall marketing of your home. Keep in mind, many homes are sold during regular showing appointments as well. 

Myth #5: Homeowners decide to sell their homes after a 5-minute conversation.
Truth: Similar to the buyers portrayed on the shows, many of the sellers have already spent hours deliberating the decision to list their homes and move on with their lives and goals.

Bottom Line

Having an experienced professional on your side while navigating the real estate market is the best way to guarantee you can make the home of your dreams a true reality.

The Benefits of Growing Equity in Your Home

The Benefits of Growing Equity in Your Home

Over the last couple of years, we’ve heard quite a bit about rising home prices. Today, expert projections still forecast continued growth, just at a slower pace. One of the often-overlooked benefits of rising home prices is the positive impact they have on home equity. Let’s break down three ways this is a win for homeowners.

1. Move-Up Opportunity

With the rise in prices, homeowners naturally experience an increase in home equity. According to the Homeowner Equity Insights from CoreLogic,

“In the first quarter of 2019, the average homeowner gained approximately $6,400 in equity during the past year.”

This increase in profit means if homeowners decide to sell, they’ll be able to put their equity to work for them as they make plans to move up into their next home.

2. Gain in Seller’s Profit

ATTOM Data Solutions recently released their Q2 2019 Home Sales Report, indicating the seller’s profit jumped at one of the fastest rates since 2015. They said:

“A look at the national numbers showed that U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since the original purchase of $67,500…the average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of the original purchase price.”

Looking at the amount paid when they bought their homes, and then the amount they received after selling, we can see that some homeowners were able to walk away with a significant gain.

3. Out of a Negative Equity Situation

Negative equity occurs when there is a decline in home value, an increase in mortgage debt, or both. Many families experienced these challenges over the last decade. According to the same report from CoreLogic,

“U.S. homeowners with mortgages (roughly 63% of all properties) have seen their equity increase by a total of nearly $485.7 billion since the first quarter 2018, an increase of 5.6%, year over year.

In the first quarter of 2019, the total number of mortgaged residential properties with negative equity decreased…to 2.2 million homes, or 4.1% of all mortgaged properties.”

The good news is, many families have moved beyond a negative equity situation, and no longer owe more on their mortgage than the value of their home.

Bottom Line

If you’re a current homeowner, you may have more equity than you realize. Your equity can open the door to future opportunities, such as moving up to your dream home. Let’s get together to discuss your options and start to put your equity to work for you.