While any time is a great time to buy or sell a home, knowing whether market conditions favor buyers or sellers will help you to improve your own position and to navigate your transaction more easily.
A seller’s market takes place when financial conditions are positive. New employers are coming to town, there are plenty of jobs, workers are receiving bonuses and raises, and there’s a general sense of optimism that encourages people to buy their first home or move up to a bigger, better home. This creates demand for homes, higher home prices and often a shortage of available homes for sale. Homes don’t last long on the market, and soon, there are shortages for entry-level homes and other price points.
A buyer’s market reflects a receding economy. Employers stop hiring and salaries stagnate. If major employers exit the market, workers have trouble finding other employment. Confidence wanes, and sellers find that there’s less demand for their homes. Soon, inventories of homes for sale increase, bringing prices lower. A buyer’s market means buyers are cautious and expect sellers to sweeten the pot by presenting updated homes in premium condition.
Buyer’s and seller’s markets can be as localized as a single street within a neighborhood, a zip code, or a suburb. It’s all about the economy’s impact on demand.
Are you in a buyer’s or seller’s market? If you’re not sure, your Berkshire Hathaway HomeServices network professional can show you the sales trends for your area and price range.
The era of real estate-focused reality television is encouraging too many homeowners to put aesthetics before function in their remodeling projects, industry experts note in a recent Forbes.com article. For example, the trend toward no-door kitchen cabinetry, which has been made popular by home improvement shows, isn’t a smart choice for a homeowner who isn’t a neat freak or who doesn’t have matching dishes.
“Everyone wants a kitchen or bathroom that looks like it belongs in a showroom, but when you’re remodeling, there is such a thing as getting too into aesthetics,” the Forbes.com article reads. “If you make your remodel look magnificent but forget to take function into account, odds are good that you’ll be itching to remodel again sooner rather than later.”
Put Function First Experts suggest choosing timeless updates that can stand the test over many design cycles. Remodeling experts also say it’s critical to put function first before embarking on a home improvement project. That may mean having to let go of a few aesthetic details in the process if they don’t work in your home style, are beyond your budget, or just don’t make sense for your lifestyle.
Before taking on a remodel, experts recommend that homeowners ask themselves: How does this space function, and what do I wish was different? Will a renovation change how I use the space then?
Skipping the Permit
Obtaining a proper permit for the renovation could ensure fewer “function” issues after the work is complete, contractors say. Inspections of the renovation by local authorities are also crucial when an owner decides to sell later. Any issues with the work could derail a sale if they haven’t been addressed. A permit also protects the homeowner: A buyer who gets hurt as a result of unapproved work in the home could successfully sue the seller.
For homeowners who embark on home remodeling projects themselves, the responsibility of filing and getting a permit for the work falls on them. A professional contractor can help navigate the process and ensure everything is up to code.
Moving to a new home is a big decision, and you may be unsure if you really need to move. Should you buy a new home, or remodel your current home? Is your current home enough? Or will you regret not moving? There are many factors that play into this decision, and considering each one can help you decide, and feel confident in your decision.
Should I Buy a New Home or Remodel?
When deciding whether to buy a new home or remodel, the most important factor to consider is what you’re really looking for and what needs you want your new or improved home to fill. Some of these are simple to answer, and others require more deliberation. Most likely, different needs will influence your decision. To help you decide, ask yourself what your top priority is, and why this is so important.
New Location
If you are considering moving because you’re looking for better schools, new neighbors, more security, or a different lifestyle, you need a new location. Some homeowners, especially growing families, aren’t sure if or how they can afford the neighborhood that they want. The following are some solutions, depending on what you’re looking for.
Better Schools: Often, the neighborhoods with the best schools are also the most difficult to buy a home in. School of Choice rules in Michigan allow parents to send their children to schools outside their district. This means you can buy a new home in an adjacent neighborhood and still send your kids to the best schools without a long drive.
Secure Neighborhood: A secure neighborhood does not necessarily mean a gated community. To find a family-friendly neighborhood, look for the following; streets with low speed limits, parks with play structures, libraries, churches, public pools, community centers, schools, and sports fields.
Different Lifestyle: If you’re looking for a quieter, family-oriented community, look again near schools and parks. If you want a more active lifestyle with sporting events, arts, and culture, look near larger cities or universities. For the best of both worlds, look in suburbs that are just outside the city.
Growing Value: High-value neighborhoods can be difficult to get into. Some buyers look for fixer-uppers in more expensive neighborhoods to buy in at a good price. Looking at real estate data can also reveal up-and-coming communities where you can get a home at a great price that will increase in value over time.
Real estate transactions are a lucrative and growing target of opportunity for fraudsters. Why? The transactions are large, with many players involved, and email is commonly used for providing instructions for the sending of funds at closing. This creates the perfect opportunity for criminals to swoop in on unwary buyers, snatch funds, and disappear. Homebuyers who are aware of these schemes can protect themselves and make sure their purchase goes smoothly.
How Does Wire Fraud in Real Estate Work? Closing on a house generally requires a wire transfer, and this transaction is usually a large sum. This step in the closing process must be done with care. This is the stage when scammers are most likely to move in. Here’s how real estate wire fraud works.
A scammer gains access to the email of a participant in the transaction, usually the REALTOR® or title agent. Not only does this give the scammer access to the agent’s information—such as the buyers they’re working with—but it also allows the scammer to use the agent’s name and email to deceive buyers.
The fraudsters then forge the agent’s email and other details to make their email appear authentic. This message may look and sound very similar to the agent’s real emails, so this can be difficult to detect.
They monitor the transaction and at the time for the disbursement of funds they send an email to the buyer or financial institution with bogus wiring instructions to their account. This is usually not discovered until the title agency notifies the buyer or financial institution that they did not receive the funds. By this time the criminals have the money and it is rarely recoverable.
How Can This Be Avoided? All wiring instructions, no matter who they are from or appear to be from, should be confirmed by phone to a previously verified number of the alleged sender. This is one of the best ways to prevent wire fraud in real estate.
Keep in mind that phone numbers in scammers’ emails may also be fraudulent, so do not use the number included in the email. Also, be aware that scammers can call you from seemingly legitimate phone numbers using a technique called “spoofing,” so be sure you make the call to your agent.
Look over your homeowner’s insurance policy, and you may be surprised to learn you’re covered for water damage, but not flooding. Flood’s cause water damage, but there’s a difference for insurers.
According to the National Association of REALTORS, approximately half of all flood disaster declarations since 1990 occurred in land-locked states, and flash floods have been reported in all fifty states. Yet only 12% of U.S. homeowners have flood insurance.
Homeowner’s insurance covers most losses due to storms, hail, pipe freezing, and the weight of snow or sleet but it may not cover water damage due to these events. It also may not cover flooding due to leaking appliances, stopped up sinks, broken toilets, etc. Your homeowner’s insurance policy should cover any sudden and unexpected water damage due to a plumbing malfunction or broken pipe. However, most home insurance policies exclude damage to your home that occurred gradually, such as a slow, constant leak. Also, some damage, such as mold, may be excluded from your standard policy depending on the cause.
So why isn’t water damage from catastrophic events like flooding covered? “Adverse Selection” is an industry term that simply means that the insurer can’t collect enough in premiums to cover the risk. Some insurers offer private flood insurance to high-end homeowners in limited groups, or they may offer limited coverage to policyholders that are part of the National Flood Insurance Program (NFIP), a federal program designed to help homeowners coverage for up to $250,000 for the structure of the home and up to $100,000 for personal possessions.
Most homeowners don’t need flood insurance, but to be certain, doublecheck with your insurer what water damage is covered by your policy and if you need additional insurance.
Exterior of a new Cape Cod styled suburban house with recently planted shrubs and grass
Garage Door Replacement: 112% Value
Replacing your garage door is one of the few home improvements that can actually exceed the cost of investment. Since it is also one of the most affordable projects, it easily tops the list of best home improvements to increase value in 2019.
A new garage door improves your home in several areas that are important to buyers in Michigan. With especially cold winters, homebuyers are conscious of heating costs, and aware that a cold attached garage can quickly sap heat from the home. A new garage door helps to reduce drafts, and ultimately reduce heating costs.
The garage door is also a visual focal point of your home. This large, flat surface makes up a notable part of your home’s exterior facade, and scratches, dents, or other issues can quickly detract from the home’s appearance. On the other hand, a new garage door can elevate the exterior.
Finally, security is a concern for every homeowner. If a garage door doesn’t close or lock properly—or it appears not too—homeowners won’t see it as safe. Even if an older garage door functions properly, homebuyers might still find it suspect. A new garage door puts these concerns to rest.
Manufactured Stone Veneer: 111% Value
This home improvement can significantly elevate the look of your home, and isn’t as expensive as many might think. A manufactured stone veneer is also the only other investment that will actually make you money when you sell.
Manufactured stone veneer refers to partial faux stone siding around the home’s street-facing exterior. The stone segment covers the lower third of the home and an entry archway where possible. Ideally, the manufactured stone complements the colors of the roof, siding, and other exterior elements.
This is one of the best home improvements to increase value because of its dramatic effect on the appearance of the home. The stone veneer sets the home apart from other homes with common vinyl siding. It also gives the home a regal, distinguished appearance, which accounts for the notable increase in value. Stone veneer also has other, functional benefits, like additional water resistance and heat retention.
When considering stone veneer as a home improvement to increase value, manufactured stone presents significantly more benefits than natural stone. Manufactured stone is lighter, easier to work with, and it is much more affordable than natural stone.
Entry Door Replacement: 80% Value
This is the most affordable home improvement on the list, and one with the highest value.
Like the garage door, replacing the entry door of your home has considerable effects on the appearance, heat retention, and security of your home. A durable entry door, like the recommended 20-gauge steel unit, will be the most valuable replacement. This type of door is long-lasting and difficult to break through, especially when combined with a deadbolt lock, giving home buyers peace of mind.
To achieve the maximum aesthetic impact, choose a door that complements the rest of the exterior, and include a half glass panel for a look of elegance and charm.
Grand Entrance: 77% Value
When considering changes to your home’s exterior, particularly the entry door, you might also consider a grand entrance. This is another elegant home additional that can considerably change your home’s exterior. A grand entrance, along with manufactured stone veneer, can take your home from average to spectacular.
A grand entrance widens the door frame slightly, but leaves the actual door size the same. The additional space includes sidelights with tasteful glass panels to frame the door itself. A grand entrance makes an immediate and striking first-impression, setting the stage for the home from the first steps visitors take inside.
Besides the high ROI, a grand entrance makes the list of best home improvements to increase value because of its comparatively low cost and quick timeline. Experienced contractors can add a grand entrance in one day’s time. If you are considering replacing your entry door anyway, taking on both of these projects at once can net you substantial value.
Siding Replacement: 73% Value
Most homeowners know the value of clean, neat siding, but they don’t know the actual number figure behind it. Replacing worn-out side can win you back about 73% of your investment. Of course, this partially depends on how worn-out the siding is.
If you’ve lived in your home for several years, you probably don’t notice cracks, stains, or faded spots on your siding. However, homebuyers will. In some cases where the damage and wear around the siding is minimal, a new coat of paint may be enough. But, if the siding shows structural damage, like cracks, chips, or holes, if mold or rot has set in, or if has begun to warp, new siding will be the better investment.
Before deciding which home improvements are best for your home, decide how long you will continue to live in your home. If you plan on staying several more years, you’ll get enjoyment out of larger improvements, like siding replacement or a grand entrance, as well as additional value. If you want to sell in the next two years, start with the most affordable home improvements, like a new garage door or entry door. If you plan these renovations carefully, you can time them around the best times to buy and sell a home. Remember to start with the most affordable improvements, like a new coat of paint and a deep clean, and make a home improvement budget to stay on track.
If you’ve decided that 2019 is the year to sell your home you may be wondering about the timing. When is the best time to sell your home? What do you need to do to prepare, and when should you do it? This simple home selling real estate calendar will help you plan out the process easily, month by month.
January, February and March
The best time to sell your home is in the spring. Use the frigid winter months for cleaning and preparing a list of home improvements that will fit your budget. Start by taking a close look at your home and view it as a potential buyer would. Look for items that are outdated or damaged and put them on your list.
Scratched, nicked, or scuffed paint
Nicks or holes in drywall
Leaky sinks or pipes
Water damage on walls, floors or ceiling
Leaks in the roof
Outdated decor
Damaged or outdated fixtures, like lighting or knobs
Drafty, dirty, or damaged windows
Damaged or dirty siding
Clogged rain gutters
Many of these items can improve your homes sale price dramatically without requiring a huge investment. Number these items on your list by priority, so you have a plan for addressing them. Take care of inexpensive items first, like washing windows, cleaning carpets, repainting rooms, and managing gardens. Leave the most expensive items for last, like updating countertops, installing new carpets, or installing a new roof, as it’s easy to go over budget with these items.
Avoid loosing money on improvements by deciding up front how much you can spend. You might use money from your tax returns, some savings, or money you expect to get back from the sale of your improved home. If you’re counting on an improved sale price, it’s best to underestimate how much your improvements will earn, or the cost of improvements can end up eating into the sale price.
Tip: This is a good time to begin working with a real estate agent who can advise you about what improvements are worth the investment of time and money.
April, May and June
The best time to sell your home is in the spring. Increased daylight hours make it easier for buyers to visit homes in the evening. Buyers are enthusiastic and competition from other sellers hasn’t yet reached its peak. In April, weather permitting, you can put the finishing touches on your home. This means making your lawn, gardens and the exterior of your home neat and attractive as the snow melts. This also means staging the inside of your home by removing unnecessary items to make the spaces more open and replacing outdated decor to make the home more inviting. Your real estate agent can assist with staging.
July, August and September
If you listed your home in the Spring you could have already accepted a good offer and possibly closed by now. (The average home closes in approximately 45-50 days from accepted offer to closing day.) If not, consult with your real estate agent and consider what might be interfering with selling your home in what continues to be a “sellers market”. Your agent is a professional who will know from experience what needs to be done to sell your home.
Don’t worry if you’re just getting your home on the market. There will be plenty of buyers still shopping for a home. The supply of available Lansing area homes is far too low to satisfy the demand.
October, November and December
Sales tend slow down during the fall months. Schools are back in session. There is increasingly less daylight time making it difficult to view homes in the evening. Buyers who found a home are gone. Those who didn’t may have decided to leasing until next Spring.
Keep this in mind. Real estate in the greater Lansing area has its busier months as well as slower ones. However, homes are listed all year long and new buyers enter the market constantly.
Temperatures have dropped below freezing and the Lansing area has already had its first winter snowfall. Just because winter is upon us, doesn’t mean you need to wait until spring to put your home on the market.
Reasons to Consider Selling your home in the Winter
Less Competition In the winter months, the number of houses listed on the market drastically drop. This is because of a number of different reasons including the weather, the holiday season and other factors that typically put winter into a slow season. However, this could be viewed as an advantage to some home sellers. Placing your home for sale in the winter drastically reduces competition and appeals to homebuyers that are ready to buy now.
Motivated & Flexible Buyers
During the winter season you’ll typically be able to find motivated and flexible homebuyers. If a homebuyer is moving because of a job change for example, they need to purchase a home now in order to begin their new position. Home buyers may be more flexible during this time as well because of the time off they have during the holiday season. This will allow them to spend more time working with a realtor to view available houses and make a strategic offer. Motivated and flexible buyers mixed with low competition will mean higher return on your property.
Home Offers Consistent With Asking Price
Because the market is less competitive in the winter months, there’s a chance that a motivated buyer will be more competitive with their offer. If they have less options on the table to choose from, and have really fallen in love with your for sale home, they are more likely to give a home offer closer if not at or above the asking price. Use the low competition of homes in the price range of your home to your advantage to get a strong offer.
Higher Return For Heating Tune-Ups And Replacements
If you’ve spent time and money updating or replacing your furnace or other heating system, this big ticket update will be more top of mind for buyers. During cold winter months home buyers are more conscious about what type of heat the home has and how up to date the heating system is. Because of this, selling your home with a recently updated heating system will give you a greater return on your investment in the winter months.
Appeal To Buyers With Cozy Home Staging
Home staging is simple in the winter months. This time of the year homebuyers are looking for a warm and cozy feeling in the homes they walk through. Adding fabrics, candles and lighting the fireplace are quick and easy ways to set the stage for an effective home walk through.
When it’s a seller’s market and home sales are rising, it’s tempting to price your home even higher than nearby homes that recently sold. So you tell your listing agent that you want to “test” the market to see if you can get even more for your home.
Sometimes, it’s appropriate to choose a list price higher than recent comparable sold homes, but that strategy seldom works unless the number of buyers willing to make competitive offers is greater than the number of available homes for sale. In the Greater Lansing market that condition occurs in the Spring and early Summer months. By the end of July the frenzy tends to slow down. If you’re looking for a quick, hassle-free sale, you need to decide which is more important – getting more for your home or moving on to your new life somewhere else.
Let’s say your neighborhood’s highest, most recent home sale was $240,000, and your agent suggests a listing price of $245,000. You want to test the market at $260,000 – which is $15,000 more than your agent recommends, and $20,000 higher than the latest comparable.
Your home hits the market at $260,000 and has tons of showings the first week. Your strategy is working, except that you don’t receive any offers. By the second week, there are few to no showings. Agents are reporting back to your listing agent that their buyers said your home “needs work,” or that they “found something more suited to their needs.”
After months of making mortgage payments, you reduce your asking price and your home sells for $245,000. Meanwhile, you paid months of mortgage payments, taxes and overhead to gain $5000…the amount a reasonable buyer would pay for a home in your neighborhood.
Overpriced homes simply take longer to sell. If you’re tempted to “test the market”, remember that the market will test you.
As you look at your outdoor living spaces with an eye for upgrades, where will your time and money be best spent? Fresh landscaping? Sprinklers? A new fence? A firepit?
There are two ways to look at your improvements. 1. Curb appeal to make your home more attractive to buyers when you’re ready to sell. 2. Personal enjoyment while you live in the home.
If you’re thinking strictly of return on investment, regular lawn care, landscape maintenance and tree care and trimming each restore 100 percent or more of the costs. Regular attention to watering and drainage will prevent unsightly dead spots in your yard. Removing dead tree branches or limbs growing too close to the house prevents storm damage. Keeping bushes trimmed prevents overgrowth that obscures your home’s features.
But money isn’t everything. What about personal enjoyment, convenience and satisfaction? How about an irrigation system, a fire feature, a new wood deck, a water feature, and an overall landscape upgrade.
Curb appeal matters, and landscape improvement is money well spent. You’re adding beauty and convenience to your home, which future homebuyers will appreciate.
While any time is a great time to buy or sell a home, knowing whether market conditions favor buyers or sellers will help you to improve your own position and to navigate your transaction more easily.
