Selling a House? 5 Reasons You Should Do It Now

 

by THE KCM CREW on JUNE 17, 2013 

Many are talking about why now is a great time to buy a home. Today, we want to look at why it might also be an opportune time to sell your house. Here are the Top 5 Reasons we believe now may be a perfect time to put your house on the market.

 

1.) Demand Is High

Homes are selling at the fastest pace since November 2009 when the market spiked in response to the home buyer tax credit. The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed that monthly sales increased 9.7% over the same month last year. Total sales have been above year-ago levels for 22 consecutive months. There are buyers out there right now (buyer traffic is 31 percent stronger than a year ago) and they are serious about purchasing.

 

2.) Supply Is Beginning to Increase

Total housing inventory last month rose 11.9% to 2.16 million homes for sale. This represents a 5.2-month supply at the current sales pace, compared with 4.3 months in January. Many expect inventory to continue to rise as more sellers escape the shackles of negative equity. Selling now while demand is high and before supply increases may garner you your best price.

 

3.) New Construction Is Coming Back

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers.

 

4.) Interest Rates Are Rising

According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year mortgage have shot up to 3.98% which represents a jump of more than ½ point since the beginning of the year. Even those trying to be the voice of reason on this issue are projecting higher rates. For example, Polyana da Costa, senior mortgage analyst atBankrate.com said: “Rates are unlikely to keep going up so quickly and should remain below 5%.” Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

5.) It’s Time to Move On with Your Life

Look at the reason you are thinking about selling and decide whether it is worth waiting. Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of your situation by putting the house on the market today. The time may have come for you and your family to move on and start living the life you desire. That is what is truly important.

Using credit cards to finance real estate investment

Using credit cards to finance real estate investment

By Paula Pant

Imagine: You're a beginner real estate investor. You want to flip a house for the first time. You don't have much money.

Someone recommends that you get a Home Depot or Lowe's credit card, which offers 0-percent financing for 12 months, and use that credit card to fund the material purchase costs for your flips. What little cash you have can be used to pay for labor (and/or your own sweat equity can be used for labor). You'll presumably sell the house within a few months, use the profits to pay off the credit card before a single penny of interest is due, and pocket a decent payout, as well. Should you do it? In my humble opinion: Abso-freaking-lutuely NOT. No, no, no, no, no.

I don't have insanely strong opinions when it comes to most real estate investing topics. If you ask me if you should flip houses, become a landlord, try wholesaling or stick to REITs, I'll shrug and say, "Well, that depends." Then I'll walk you through the pros and cons of each. If you ask me if you should buy rentals in stable vs. shaky neighborhoods, I'll tell you that it depends on your goals and risk tolerance.

But I'm a fundamentalist on the issue of credit cards. I firmly believe that if you can't pay a credit card in full, immediately, on the same day that you make a purchase -- don't use it! Why? I can explain my stance in one word:

Risk

You hope that everything goes according to plan. You hope that your labor and material costs are close to the amount you estimated. You hope that you don't find any nasty surprises. You hope that the city inspector doesn't throw a wrench in your plans. You hope that you can sell the house in the amount of time you estimated, for the amount of money that you estimated.

Oh, you know that not everything goes according to plan. So you made conservative estimates. You tacked a 20 percent margin of error onto the material and labor costs. You pinned a 10 percent margin of error onto the after-repair value. And you hope that those margins of error are sufficient. But hope cannot defeat the reality of risk.

ANYTHING could happen that might derail your plans. The city could condemn your home. A major earthquake could cause your home to collapse and insurance could refuse to pay for the damage. Or Wall Street financiers could buy subprime mortgages and sell them to Norway as AAA-rated collateralized-debt obligations, feeding a complex chain reaction that results in housing values plummeting by 50 percent. All those situations sound far-fetched, I know. But s--t happens.

If you've borrowed at reasonable interest rates (e.g. single-digits), the fallout from risk-gone-wrong won't be as bad. It'll still be a setback, of course, but assuming you've leveraged wisely, it will be manageable. If you have tens of thousands in debt on a credit card which suddenly escalates into a 29 percent interest rate, though, you've dug yourself into the deepest pit of a hole that's going to be excruciating to climb out of.

When Can I Use a Credit Card?

Refer to my rule: Don't use a credit card unless you can pay the bill in full, immediately, on the same day that you make a purchase. If you have $20,000 sitting in a savings account, earning 1 percent interest, and you want to make a $20,000 purchase on your credit card at zero-percent interest for a year, go ahead. You have the cash in the bank to pay the credit card in full at a moment's notice. And you'll pocket the 1 percent spread. Congratulations, now you have an extra $200. (Personally, I'd spare myself the trouble and just pay the card immediately, but if you want to pinch pennies, be my guest.)

But if you don't have the cash on hand, don't subject yourself to the risk of getting hit with high-double-digit interest rates. It's not worth the risk.

Paula Pant runs a content marketing company and writes a blog, Afford Anything, which discusses wealth, freedom and living life on your own terms. This article was originally published on BiggerPockets.com.

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.